INTERNATIONAL LOGISTICS MANAGEMENT PROF.DR.C.

ANBALAGAN
PROFESSOR OF MBA SCHOOL OF MANAGEMENT SCIENCES K.L.UNIVERSITY,GREEN FIELD VADDESWARAM,GUNTUR-DT ANDHRA PRADESH

DEFINITION OF INTERNATIONAL LOGISTICS

According to The Council of Logistics Management, International Logistics is the process of Planning, Implementing and Controlling the flow and Storage of Goods, Services and related information from a point of origin to a point of Consumption located in a different Country.

DECISIONS IN LOGISTICS MANAGEMENT the various decisions in Logistics management that need examination for an integrated systems are, 1. Product Design 2. Plant Location 3. Choice of Markets/ Sources 4. Productions Structure 5. Distribution/Dealer Net works Design 6. Location of Ware Houses

7. Plant Layout and Logistics 8. Allocation Decision 9. Production Planning 10. Inventory Management-stocking level 11. Transportation-mode choice 12. Shipment Size and Routing design 13. Transport Contracting 14. packaging 15. Materials handling 16. Warehouse Operations

ROLE OF GOVERNMENT The Government plays a significant role in logistics. Some of the important Legislation that affect Logistics are, 1. Central sales tax and Local Sales tax 2. Consignment tax 3. Excise Duties 4. Octroi and Entry Tax 5. Use of Packaging materials 6. Motor Vehicles Act and similar Acts for other modes 7. Distribution Policies

CLASSIFICATION OF LOGISTICS APPLICATION 1. 2. 3. 4. 5. 6. 7. Decision wise Actor-wise Inbound and Outbound Logistics Private Vs Public Sector Single of Multiple Plants Nature of Product Made to Stocks Vs Made to Order

TOTAL LOGISTICS COST 1. Important element of Logistics product inventory at sources 2. Pipeline inventory 3. Product inventory at warehouses and dealers 4. Transits Losses/Insurance 5. Storage Losses/insurance 6. Handling and warehouse operations 7. Packaging 8. Transportation 9. Customer shopping

MODELS IN LOGISTICS MANAGEMENT

1. Forecasting Models 2. Mathematical Programming Models Location-allocation model-distribution network designing model 3. Inventory Model - inventory vs. transportation cost - Inventory vs. stocks out cost - inventory vs. spoilage and material handling costs 4. Routing Model 5. Scheduling Model 6. Alternative Analysis

LOGISTICS AND INFRASTRUCTURE 1. 2. 3. 4. 5. Right of way Vehicle Motive power Terminals Operations/systems

SUPPLY CHAIN MANAGEMENT DEFINITION According to Mentzer supply chain management is defined as the systematic strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across business within the supply chain for the purpose of improving the long-term performance of the individual companies and to supply chain as whole.

The supply chain encompasses all activities associated with the flow and transformation of goods from the raw materials stages through to the end user as well as the associated information flows. Materials and information flow both up And down the supply chain. Supply chain management(SCM) is the integration of these act5ivities, through improved supply chain relationships, to achieve a sustainable competitive advantages

OBJECTIVES

OF

SC

1. to achieve supply channel process goals that will more the firm toward its overall objectives. 2. the desire to develop a logistics activity mix that will result in the highest possible return on investment over time. 3. two dimensions to the goal a). The impact of the logistics system design on the revenue contribution and b). The operating cost and capital requirements of the design.

SCOPE OF MODERN SUPPLY CHAIN

Company Suppliers customers

Suppliers suppliers

customers/end users

Global supply chain management

Global supply chains pose challenges regarding both quantity and value: 1. Supply and Value Chain Trends 2. Globalization 3. Increased cross border sourcing 4. Collaboration for parts of value chain with low-cost providers 5. Shared service centers for logistical and administrative functions 6. Increasingly global operations, which require increasingly global coordination and planning to achieve global optimums 7. Complex problems involve also midsized companies to an increasing degree,

CHANNEL STRUCTURE
Business and Supply Chain Channel Strategy supply chain initiatives are optimized to meet various channel strategies. The differences between channels of distribution, such as specific customer or product needs, can have a major impact on supply chain solutions. In developing improved channel strategies, 1. Articulation of contributions from different customers and customer groups, perhaps through cost to serve analysis. 2. Gaining clear direction as to how to achieve optimum profitability from different channels 3. Ensuring service alignment to meet profit objectives 4. Creating cost alignment to meet profit objectives

A review of distribution channel strategy can often highlight opportunities for shared distribution. Many companies have shied away from this in the past , fearing a loss of cost and service differentiation in the market place, but attitudes are now changing. Logistics Bureau have undertaken a number of reviews recently that have assessed the potential benefits of competitors sharing distribution facilities and/or delivery transport. This type of work is undertaken within a strict set of agreed boundaries to ensure that each companies information is handled with the appropriate degree of confidentiality.

Channels
A number of alternate 'channels' of distribution may be available: 1. Distributor, who sells to retailers, 2. Retailer (also called dealer or reseller), who sells to end customers 3. Advertisement typically used for consumption goods

Managerial concern
1. Channel membership 2. Channel motivation 3. Monitoring and managing channels

marketing channel
1. Intensive distribution - Where the majority of resellers stock the 'product' (with convenience products, for example, and particularly the brand leaders in consumer goods markets) price competition may be evident. 2. Selective distribution - This is the normal pattern (in both consumer and industrial markets) where 'suitable' resellers stock the product. 3. Exclusive distribution - Only specially selected resellers or authorized dealers (typically only one per geographical area) are allowed to sell the 'product'.

Supply chain management problems

Supply chain management must address the following problems: 1. Distribution Network Configuration: number, location and network missions of suppliers, production facilities, distribution centers, warehouses, cross-docks and customers. 2. Distribution Strategy: questions of operating control (centralized, decentralized or shared); delivery scheme, e.g., direct shipment, pool point shipping, cross docking, DSD (direct store delivery), closed loop shipping; mode of transportation, e.g., motor carrier, including truckload,LTL, parcel; railroad; intermodal transport, including TOFC (trailer on flatcar) and COFC (container on flatcar); ocean freight; airfreight; replenishment strategy (e.g., pull, push or hybrid); and transportation control (e.g., owner-operated, private

continuous
3. Trade-Offs in Logistical Activities: This activities must be well coordinated in order to achieve the lowest total logistics cost. Trade-offs may increase the total cost if only one of the activities is optimized. For example, full truckload (FTL) rates are more economical on a cost per pallet basis than less than truckload (LTL) shipments.

continuous
4. Information: Integration of processes through the supply
chain to share valuable information, including demand signals, forecasts, inventory, transportation, potential collaboration, etc. 5. Inventory Management: Quantity and location of inventory, including raw materials, work-in-progress (WIP) and finished goods. 6. Cash-Flow: Arranging the payment terms and methodologies for exchanging funds across entities within the supply chain.

Developments in Supply Chain Management

1. Creation Era

2. Integration Era 3. Globalization Era 4. Specialization EraPhase One: Outsourced Manufacturing and Distribution 5. Specialization EraPhase Two: Supply Chain Management as a Service 6. Supply Chain Management 2.0 (SCM 2.0)

Components of SCM
1. Planning and control 2. Work structure 3. Organization structure 4. Product flow facility structure 5. Information flow facility structure 6. Management methods 7. Power and leadership structure 8. Risk and reward structure and 9. Culture and attitude

the current economic conditions, the emphasis has shifted back to cost reduction, with particular emphasis being focused on the area of strategic sourcing, as 81 percent of [North American] firms and 73 percent of those in Europe indicate they will be rethinking sourcing points," according to the key findings. In MFG.com's MFGWatch Survey earlier this year, 64 percent of industrial professionals said they prefer to source with North American manufacturers, while 19 percent of respondents favor China for their sourcing needs and 7 percent conduct their sourcing business in Europe. The remaining 10 percent source in South America, Africa and other countries. Prime Advantage Group Outlook Survey found that 80 percent of industrial manufacturers agreed that the level of direct goods they purchase from U.S.-based vendors over the next 12 months will either stay the same (52 percent) or rise (28 percent).

"Given

For non-U.S.-based vendor purchases: 66 percent said they will look to China as their low-cost country of choice; 14 percent said they will look to Mexico; 5 percent said they will look to India; and 15 percent said they will look outside these three locations. According to Prime Advantage's findings, top sourcing concerns for the second half of 2009 include focusing on such business process issues as cost savings and efficiency measurement (36 percent), followed by managing costs of raw materials (32 percent) and components (31 percent).

Following a review of overall responses, the 2009 Global Survey of Supply Chain Progress offered the following calls for action as firms move forward with their supply chain sourcing efforts, 1. Don't let the drive to overcome poor economic conditions destroy good work that went into supply chain collaboration and supplier relationships. When looking for savings in the market, work with suppliers who show an inclination to seek mutual values. They need new savings as much as the buyers, and the best results often come from a joint effort to reduce mutual costs. 2. Use the downturn as an opportunity to find new values by collaborating with network partners. CSC's report provides strong evidence that supply chain leaders simply do not accept economic conditions as an excuse for poor performance and are hard at work finding the next level of savings in their supply chains. Rather, they have taken a proactive approach to working with important network constituents to find new values.

3. Take a lead from the European respondents and use post-sales support for customers as an example of how to enhance relationships with key customers. Dig into the source problems and reduce the need for returns, repairs and maintenance. 4. Rid the firm of the technology paradox. While only 46 percent of respondents said technology enablement (i.e., applying technology to the supply chain management effort to create added value) is helping, leaders have demonstrated that a close working relationship between supply chain professionals and IT and the CFO yield superior results. 5. Although greater attention is being applied to lessons learned from past failures and analyzing root causes for failure, risk management is no closer to where it should be across supply chains. It's time to have an understanding of the potential supply chain risks and have a contingency plan ready for action when problems are encountered.