CHP 9

INVENTORY MANAGEMENT
1. INTRO:
• Inventory management is the process of overseeing a company's
inventory, including how it's produced, ordered, stored, and sold.
• Effective inventory management involves maintaining the right balance
between supply and demand.
• Inventory management refers to the process of storing, ordering, and
selling of goods and services.
• The discipline also involves the management of various supplies and
processes.
• One of the most critical aspects of inventory management is
managing the flow of raw materials from their procurement to
finished products.
• The goal is to minimize overstocks and improve efficiency so that
projects can stay on time and within budget.
• Both for small businesses and big corporations, having a proper
inventory management system is very important for any business.
• It can also help you manage sudden changes in demand without
sacrificing customer experience or product quality.
• The goal of any good inventory management system is to help
warehouse managers keep track of the stock levels of their products.
• Inventory management helps companies identify which and how
much stock to order at what time.
• It tracks inventory from purchase to the sale of goods.
• Once sold, inventory becomes revenue.
• Before it sells, inventory (although reported as an asset on the
balance sheet) ties up cash.
• Therefore, too much stock costs money and reduces cash flow.
• There are three types of inventory to include: Raw Materials, Work in
Process, and Finished Goods.
• Raw Materials are stock used to make an end product.
• Work in Process consists of the raw materials that are being made
into finished goods.
 • And, Finished Goods are the final products that get produced for sale
to consumers.
• Inventory management tracks how much physical inventory you have
in your organization.
• It monitors stock at other locations, such as distributors or
subcontractors.
• When you have clear visibility into your inventory, you know when to
order, where to store it, and when you need to stop selling.
• Inventory management aims to have the right products in the right
place at the right time.
• Inventory management requires inventory visibility, knowing when
to order, how much to order and where to store stock.
MEANING: nventory management is the process of managing a
company's inventory, which includes the ordering, storing, and selling
of products. It also involves managing the flow of raw materials and
components from procurement to finished products.
2. FEATURES:
• Enhanced Inventory Control: This feature allows businesses to track
all the inventory information in the best possible ways. The system
effectively keeps a soundtrack of the stock levels, history of the products,
and other product specifications. This helps in the operation of the
inventory management system more accurately. Furthermore, if you wish
to maximize operational efficiency across your inventory levels, then
investing in customized solutions for developing warehouse management
software could serve as your strategic solution.

• Tagging and Barcode: With tagging, businesses can assign unique

identifiers or labels to each item in their inventory. This makes it easy to

track and locate specific items quickly. On the other hand, barcodes are

those little black-and-white lines you can often see on products. You can

generate and scan barcodes to streamline adding or removing items from

your inventory.
• Complete Reporting and Analysis: It allows firms to generate

comprehensive reports and gain valuable insights into their inventory data.

With reporting, you can create custom reports that provide details of your

inventory status, such as stock levels, sales trends, and order history. With

analysis, you can take a step further by using advanced algorithms and data

analytics to uncover patterns, trends, and correlations within your

inventory data.

• Purchase Order Generation: An inventory management

system automatically builds and transmits purchase orders to the vendors,

simply outlining the items it needs. This feature lets you quickly generate

purchase orders based on your inventory needs. It considers factors like

stock levels, reorder points, and supplier information to automatically

create purchase orders for the items you need to restock.

• Reorder Point Purchasing: It is a great feature that allows for

maintaining optimal inventory levels. You can set a reorder point for each

item in your inventory. This is the threshold at which you want to replenish

the stock. When the quantity of an object reaches or falls below the
recorder point, the software automatically generates a purchase order for

that item.

• Order Management: It helps you to efficiently handle and track all

aspects of your orders, from creation to fulfillment. You can easily create

and manage custom orders within the software with order management. As

a business, you can input order details such as customer information, item

quantities, and shipping preferences. The feature allows you to generate

 order confirmations and invoices for your customers. It helps manage

order fulfillment, including picking, packing, and shipping.

• Inventory tracking: Inventory tracking, or traceability, helps you monitor

the status and movement of products and materials in the supply chain.
When you need to find a product again, for example, inventory tracking helps
you find the exact required item. Without inventory tracking, you’ll run the
risk of having to search all items and waste your valuable time.

• Inventory report: Instead of collecting data from multiple sources and placing
formulas manually on an Excel file, you should look for solutions that include
inventory reports. They are a must-have tool when your business grows and scales
up. It plays a key role in understanding your customers’ business practices and
habits.

• Inventory forecast: As its name suggests, inventory forecast helps you forecast
future demand and sales. Inventory forecast can even tell you when demand may
be higher than expected, like during certain holidays and peak time. Taking
advantage of inventory forecast can reduce stock unavailability, which can lead to
lost sales opportunities. This gives you a better and clearer assessment of when and
how many stocks to buy.

3. OBJECTIVES:
1.Material Availability: One of the main objectives of inventory management is to ensure
that materials required for production or sales are consistently available without
interruptions. This objective is crucial for manufacturers, where a shortage of key materials
can halt production lines, leading to delays and financial losses.
2Minimum Wastage: Another inventory management objective is minimising waste in
inventory, thereby saving costs and promoting sustainable practices. This involves strategies to
avoid over-purchasing, efficiently utilizing materials, and reducing spoilage, especially in
industries dealing with perishable goods. For example, a grocery store chain might implement a
dynamic inventory system that adjusts orders based on sales trends to minimize food waste.
3.Improving Customer Service: Another objective of inventory management is to
enhance the customer experience by reliably meeting their demand for products. This
involves having popular products available when customers need them, which requires
accurate demand forecasting and efficient inventory replenishment processes. Retailers
 may use customer relationship management (CRM) systems combined with inventory
data to understand customer buying patterns and adjust inventory accordingly.
4. Sufficient Stock: Sufficient stock maintenance is one of the objectives of inventory
management. It helps in maintaining an adequate level of inventory to meet customer
demands without overstocking. This requires a balance between having enough stock to
satisfy customer orders and not so much that it incurs unnecessary holding costs or risks
obsolescence. For instance, a seasonal clothing retailer must carefully manage inventory
levels to align with changing fashion trends and seasons. Businesses often use inventory
optimization tools that consider historical sales data, seasonal trends, and current
market conditions to maintain optimal stock levels.
5. Increasing Product Sales: Another inventory management technique is using
inventory management to maximize sales opportunities. Proper inventory management
ensures that products are available for sale when customers want them, thus increasing
revenue potential. A good example is a consumer electronics store that stocks up on the
latest gadgets before the holiday season to capitalize on increased consumer spending.
6. Reducing Cost Value of Inventories: Inventory management’s objective also includes
lowering the costs associated with holding and managing inventory. This includes
strategies to reduce costs such as storage, insurance, taxes, and shrinkage. Businesses
might adopt JIT (Just-In-Time) inventory practices to minimize the time goods spend in
storage, thereby reducing storage and handling costs.
7. Cost-Effective Storage: One of the important objectives of inventory management
involves optimizing storage solutions, maximizing space utilization and minimizing
storage costs. This involves using warehouse space effectively and implementing storage
systems that are cost-efficient yet ensure easy access and product safety. Warehouses
may employ warehouse management systems (WMS) that optimize the placement and
retrieval of goods, reducing the time and labor associated with storage and retrieval.

4. IMPORTANCE:

• Increases market competitiveness

Consistently having enough inventory and a wide range of product options
in stock when customers want them can help ensure that customers return.
This can lead to higher profits, which can allow businesses to compete more
effectively in local and global markets. When a business is more competitive,
it can often lower prices for customers.
• Builds company or brand reputation
Customers rely on businesses to meet their needs. When customers can
trust a specific company to have what they require consistently, it typically
improves that company's reputation. Happy customers not only return
more often, but they typically tell others about their positive experiences.
• Generates customer loyalty
Customers often develop a relationship with a business or brand when it
consistently meets their expectations. Loyal customers usually rely on a
specific brand and search for it actively. This can be beneficial for a brand
that hopes to introduce new products.
• Improves customer service
Having enough inventory in stock can make it easier for customers to return
or exchange items without having to wait. Companies that have a wide
range of inventory are typically better equipped to meet customer needs.
For example, if a company carries products in different sizes, colours, and
price ranges, it's more likely to have inventory in stock to help customers
quickly.Related: Tips on How to Provide Good Customer Service (With
Benefits)
• Lowers customer costs
When a company can maximize its resources and manage inventory costs
effectively, it can often afford to pass these savings onto its customers. An
example of this is lower pricing for the same quality product found
elsewhere. Lower prices can often make a company more competitive.
• Improves productivity
An organized and up-to-date inventory database can often save employees
time. This might improve their overall productivity. For example, when an
inventory management system lists a product's availability, its location, and
other pertinent information, it can save employees time by not having to
search for it.Related: What Is a Periodic Inventory System, and How
Does it Work?
• Optimizes product fulfilment
Having a good supply of in-stock inventory can allow a business to process
and ship orders faster. For customers, this can be a significant benefit that
can often encourage them to become loyal, repeat customers. Reliable
service delivery is an essential aspect of maintaining customer satisfaction.
• Raises product awareness: Effective inventory management can
help a business monitor market trends and adjust its product
offerings accordingly without interrupting customer purchasing flow.
For example, if customers consistently buy more black hats than pink
 ones, a company can order more black hats. This can reduce the
likelihood of under-stocking this item and overstocking others.
• Organizes multiple inventories

For large companies like retail chains that have several locations, having a universal
accounting of all inventory can typically help improve customer relations, organize
inventory more efficiently, and reduce costs. For example, employees can help a
customer find items in other locations quickly when they're not available in one
store. This saves employees and customers time looking for an item, which also
reduces the employer's costs and can improve customer relations.

5. FUNCTIONS:
1.Meeting Customer Demand: One of the primary functions of inventory is to ensure
that an organization can meet customer demand promptly. Having products readily
available allows for timely order fulfillment, leading to customer satisfaction and repeat
business.
2. Buffering Against Variability: Inventory acts as a buffer to absorb fluctuations in both
supply and demand. It helps mitigate the effects of unexpected changes in production,
delivery delays, or spikes in customer orders.
3. Seasonal and Cyclical Demand: Businesses often experience fluctuations in demand
due to seasonality or cyclical trends. Inventory allows them to prepare for peak seasons
and ensure a continuous supply of products.
4. Economies of Scale: By maintaining inventory, organizations can take advantage of
economies of scale in production. Ordering materials and goods in larger quantities
often leads to cost savings.
5.Facilitating Production and Operations: Raw materials, work-in-progress, and finished
goods inventory support the production process. Having these items on hand ensures
that operations can continue smoothly.
6. Supplier Relationships: Maintaining inventory levels allows for better negotiation with
suppliers, as businesses can provide more accurate order forecasts and secure favorable
terms.

6.TECNIQUES: (TB)
7. IMPORTANT INVENTORY CONTROL (TB)
 CHP 10
LOGISTICS COSTING
1. INTRO:
• Logistics costs are the expenses a business incurs when managing and
transporting goods from their origin to the consumer. These costs can
include:
• Transportation
• Warehousing
• Inventory carrying
• Order processing
• Administrative costs
• Resource acquisition
• Product distribution
• Labor
• Equipment and supplies
• Logistics costs can vary depending on the business and industry, and
can be very high because they include costs for many different
elements.
• To reduce logistics costs, it's important to understand the types of
costs and how to fine-tune the activities that contribute to them. This
can help ensure that products or services are delivered on time and at
a cost-effective price.
• A logistical cost refers to any expense incurred by a business to
manage its logistics.
• Logistics costs include expenses related to resource acquisition,
product distribution, and other expenses that make up a company
chain of production, sales, and delivery.
• Good management of logistics costs goes beyond making the
product reach the consumer.
 • It includes decision making on how to use financial resources best
and, of course, ensuring savings in all these processes.
• Logistical costs are those related to demands for the movement of
products and services in a business's supply chain , that is, all the
company's logistical expenses.
• Logistics costs are all of the expenses incurred moving product —
from sourcing raw materials to delivering customer orders and
every step in between.

2. APPROACHES TO LOGISTICS COSTING:

INTRO (TB)
• Customer Service Level Costs: Most business people find it
difficult, if not impossible to measure this cost. The cost
associated with alternative customer service levels is the cost of
lost sales (not only the margin lost by not meeting current sales
demand, but the present value of all future contributions to profit
forfeited when a customer is lost due to poor availability, long lead
times, or other service failures). with decrease in customer service
levels, management can improve profitability or increase
expenditures for other components of the marketing mix in an
effort to maintain or improve market position.
• Transportation Costs: Costs associated with the transportation
function can be identified in total and be segments (i.e. inbound,
outbound, by vendor, by customer, by mode, by carrier, by
product, or by channel).. If transportation costs are not currently
available in any other form, management can determine them at
a relatively low cost by sampling product flows and auditing
freight bills (for common carriers) or corporate accounting records
(for private fleets).
• Warehousing Costs: Warehousing costs are all the expenses that
can be eliminated or that must be increased as a result of a
change in the number of warehousing facilities. Warehousing
costs should be separated into two distinct categories:
1. Throughput Costs: These costs are associated with selling product in a given
market by moving it into and out of a warehouse in that market, and the
fixed costs associated with the facility. Example is charges that public
warehouses assess for moving product into and out of their facilities, and
the costs of leased and owned facilities for the movement of the goods.
2. Storage Costs: Warehousing costs related to inventory storage should be
included in inventory carrying costs. These warehousing costs change with
the level of inventory held in a specific warehouse and tend to be negligible
in a company- owned or leased warehouse. Throughput costs should be
included instead in warehousing costs so that the increments can be easily
added or subtracted when the logistics system configuration system
changes.
• Order Processing and Information Costs: Order processing and
information costs include the cost of order transmittal, order
entry, order processing, related handling costs, and associated
internal and external communication costs. When establishing
these costs management should remember to include in the
analysis only those costs that will change with decision being
made.
• Lot Quantity Costs: Lot quantity costs are those production
related or purchasing/acquisition costs that will change as a result
of a change in the logistics system. Generally it consists
of production preparation costs, capacity lost due to
changeover, materials handling, scheduling and expediting. The lot
quantity costs associated with purchasing are the costs of buying
in various quantities.
• Inventory Carrying Costs: Conceptually inventory carrying costs
are the most difficult costs to determine next to the costs of lost
sale. Inventory carrying costs should include only those costs that
vary with the level of inventory stored and that can be categorized
into 4 costs.
• Capital costs
• Inventory service costs
• Storage space costs
• Inventory risk costs.
3. PRINCIPLES: (TB)
4. MISSION BASED COSTING: (TB)
5. ACTIVITY BASED COSTING:
INTRO:
• Activity-based costing (ABC) is a cost accounting method that assigns
costs to products and services based on the activities that consume
resources.
• ABC can help companies understand their true costs, reduce
inefficiencies, and improve their cost management and pricing
strategies.
• how ABC works:
1. Identify all activities associated with production, such as product design,
setting up machinery, and distribution
2. Split fixed overheads into activities, called cost pools
3. Identify the cost driver for each cost pool
4. Calculate a cost per unit of cost driver
5. Allocate costs to products based on how much they use the cost driver .
• ABC can help companies identify activities that don't add value and cut
them out.
• It can also help companies rethink their business strategy and make
process improvements.
• ABC is commonly used in industries with complex production processes
and multiple cost drivers, such as manufacturing and services.
• ABC provides an alternative to traditional costing.
• ABC costing can help with:
• Budgeting
• Overhead decisions
• Product pricing
• It enhances cost control and decision-making by focusing on activities as the
primary cost drivers.
• The ABC process begins with identifying the activities involved in the
production or delivery process.
• We can divide them into two categories: value-added and non-value-
added. Value-added activities directly contribute to producing or delivering
a product or service, while non-value-added activities do not.
• The method of determining the cost for each production activity is called
Activity-based costing (ABC).

FEATURES:

• ABC is a two-stage product costing method that assigns cost to

activities undertaken to manufacture products, at the first stage and
then charges the cost of activities to various cost objects based on their
consumption of activities as reflected through number of activity cost
drivers.

• Its principal emphasis has been on improved assignment of overheads

to cost objects. Instead of allocating overheads in terms of unit -based
or volume-related measures such as, direct labour hours, machine
hours, or material cost etc. ABC uses non-volume related measures
which are much larger in number than the bases adopted in
conventional costing and more logical in linking the overheads to the
end-products.

• ABC approach helps an organisation in bringing accuracy in

distributing overhead costs to final product or cost units and avoids
product-cost cross subsidization i.e. overcosting of some products at
the cost of undercosting of some other products. More accuracy in
determining product costs is brought about by enhancing the
understanding of cost behaviour.

• Identification of cost to various activities and their causes not only

helps in computation of more accurate cost of a product or a job but
also eliminates non value-added activities. The elimination of non-
value added activities would help in bringing down the cost of the
product.

• ABC approach has provided a methodology for costing product lines

and for directing managerial attention to areas where action may
result in cost benefit to the organisation concerned. It is intended to
provide cost information for strategic design and operational control
decisions.

IMPLEMENTATION OF ABC:
• Activity Identification: First, activities must be identified and
grouped together in activity pools. Activity pools are the supporting
activities that tie in to a product line or service These pools or buckets
may include fractionally assigned costs of supporting activities to
individual products as appropriate during the second step.
• Activity Analysis: ABC continues with activity analysis, clearly
identifying the processes which support a product and avoiding some
of the systemic inaccuracies of traditional costing. ABC costing
requires activity analysis, similar to the process mapping found in lean
manufacturing. This activity analysis identifies indirect cost
relationships and allows assignment of some percentage of that
activity to an end product directly.
• Assignment of Costs: Based on the findings of step #1 and #2, costs
are assigned to an activity pool. For example, human resources costs
would be assigned to indirect administrative or indirect management
costs. These pools will each have some contribution to object cost.
• Calculate Activity Rates: Initial analysis may include direct labor
hours, or indirect support labor. These activities must be assigned a
value in real currency. All weightings must be added at this step. For
instance, production labor hours should be in terms of a weighted
labor rate including benefit costs.
• Assign Costs to Cost Objects: Once activity costs, pools and rates are
identified and clearly defined, the next step is to assign them to cost
objects. Objects are generally defined as the results offered to a
customer. In both manufacturing and non-manufacturing
environments, this product should have some saleable value to
compare to the assigned costs.
• Prepare and Distribute Management Reports: Once ABC costing
analysis is complete, that cost data should be placed in a concise and
coherent manner for cost object and process owners. This
communication of the costing analysis is critical to justify the cost of
the analysis, as often this is not an inconsequential cost.

BENEFITS OF ABC: (TB)

• ABC provides a more realistic picture of production costs by

separating overhead costs into different cost pools.
 • ABC helps companies improve their pricing decisions by providing a
more accurate picture of the costs involved in creating a product.
• ABC helps companies make informed decisions about which activities
to spend on, which activities to automate, and what products to focus
on
• ABC can help companies streamline their processes by providing a
better understanding of manufacturing overhead.
DEMERITS OF ABC: (TB)
6. DIFF BW TRADITIONAL AND TCA (TB)
7. DIFF BW TRADITIONAL & MISSION (TB)
8. DIFF BW TCA, MISION & ABC (TB)
9. DIFF BW ABC & TRADITIONAL: (INDIA FREE NOTES)

CHP 11
LOGISTICAL PERFORMANCE MEASUREMENT:
1. INTRO:
• Logistics performance measurement is the process of
evaluating an organization's logistics and distribution activities
to improve efficiency, customer satisfaction, and
competitiveness.
• It's important for organizations to measure their performance
because it helps them:

• Identify areas for improvement: By tracking key performance

indicators (KPIs), companies can identify bottlenecks or
inefficiencies in their operations.
• Control costs: Measuring performance can help companies reduce costs.

• Enhance customer satisfaction: Companies can provide better customer

service by measuring performance.

• Stay competitive: Measuring performance can help companies maintain a

competitive edge in the global market.
 • Logistics performance measurement can cover different dimensions, such
as cost, time, quality, reliability, flexibility, and sustainability.
• Measuring logistics performance is important for import/export
operations for several reasons.
• First, it helps you to identify and eliminate waste, inefficiencies, and
errors in your logistics chain. This can reduce your operating costs,
increase your profit margins, and enhance your competitiveness.
• Second, it helps you to meet and exceed your customers' expectations
and requirements. This can improve your customer loyalty, retention, and
satisfaction, and create more opportunities for repeat and referral
business.
• Third, it helps you to comply with the legal and regulatory standards of
the countries and regions where you operate. This can avoid penalties,
fines, and delays, and protect your reputation and credibility.
• Fourth, it helps you to adapt and respond to the changing market
conditions and customer demands. This can increase your agility,
flexibility, and resilience, and enable you to seize new opportunities and
overcome challenges.
DEFINITION: Logistical performance measurement is the process of
evaluating how well a company is delivering value to its customers and
stakeholders.
MEANING: (TB)

2. OBJECTIVES: (TB)
• Monitoring. Monitoring focuses on reporting on the current status of the
operations. For example, a financial monitoring system will report to the
management the total funds outgo and inflow on a particular day.
Similarly, the monitoring system for marketing will report on the total
orders booked, orders cancelled and the orders completed. The
information may be monitored on a daily, weekly or monthly basis,
depending on the volumes and the criticality.
• Controlling. Control measures compare the actual performance with the
set standard or objectives. They report deviations from the set goals.
Similarly, a percentage increase in product damages during handling will
prompt the management to change the logistical packaging or go in for
mechanized product handling instead of the manual that is currently in
practice. Decrease in warehouse productivity is a cause that will help to
improve on the storage layout, material handling methods and product
unitization.
 • Directing. The objective of the performance measurement system is to
motivate the individual in the system to enhance individual performance,
resulting in improvement in the overall system performance. The
performance measure system will help the management to evolve an
incentive scheme for the operating people who cross the targeted
productivity level. For example, the warehousing workforce engaged in
material handling may be motivated through rewards to cross the
targeted tonnage of goods dispatches within a particular time frame.
3. TYPES (TB)
4. DIMENSIONS (TB)
5. THE PERFECT ORDER:
INTRO:
• A perfect order is when a product is delivered to a customer in the correct
quantity, condition, time, and place, with the right documentation and cost.
• The percentage of orders that are delivered perfectly is called the Perfect Order
Rate (POR).
• A company's POR reflects the quality and accuracy of its order fulfillment
process.
• Imperfect orders can lead to: increased labor costs for shipping, need to
provide replacement products, and lower revenue due to lost sales and
customers.
• it means meeting customer demand without errors or delays to the highest
degree possible.
• It is a key element of supply chain management and is critical to any business
that sells physical goods or is responsible for maintenance, repair and operations
(MRO) supplies.
• To achieve perfect order, a company must have an efficient inventory
management system that optimizes inventory levels, tracks inventory movement
and ensures accurate order fulfillment.
• Achieving perfect order can help businesses reduce costs, improve customer
satisfaction and loyalty, increase sales and maintain a competitive advantage.
Perfect order performance is a measure of how well a company fulfills customer
orders.
• A perfect order is one that meets all of the following criteria:

• The order is complete, meaning all products or services ordered are

delivered.
• The products or services delivered meet all quality specifications.
• The products or services are delivered on time.
• All documentation required for the transaction is accurate and complete.
• There are no damaged goods or missing items.
• The customer is satisfied with the overall experience.
• In the logistics industry, achieving a perfect order is the ultimate goal for
every shipment.
• Perfect order fulfillment means meeting and exceeding customer expectations
by delivering accurate orders on time, every time, with complete
documentation.
• On the other hand, achieving perfect order fulfillment opens the door to
additional gains that offer a competitive edge in the market.
• It also involves meeting customer demand without errors or delays.
DEFINITION: A perfect order is an order that is delivered to a customer in the
right quantity, condition, time, and documentation, and meets all other quality
specifications.
MEANING: (TB)

FEATURES OR CHARACTERISTICS: (TB)

• On-time delivery: The order is delivered on time.

• Damage-free delivery: The order arrives without damage.

• Complete delivery: The order is delivered in full.

• Accurate documentation: The order is accompanied by accurate

documentation.

• Correct order contents: The order contains the correct items.

• Product quality: The product is of good quality.

BENEFITS: (TB)
• Improved customer satisfaction: Happy customers are more likely to
return, buy more often, and recommend the business.

• Reduced costs: A perfect order can help businesses lower costs by using
better technology to process orders faster.

• Increased sales: Happy customers are more likely to buy more often.

• Competitive advantage: A perfect order can help businesses maintain a

competitive advantage.

• Efficient supply chain: A perfect order can help businesses run more
efficiently by carrying less inventory, having fewer stockouts, and
experiencing shorter cash-to-cycle times.

• Reduced returns: A perfect order can help businesses reduce the cost
and instance of returns processing and rework.
CHP 12
LOGISTICAL NETWORK ANALYSIS
1. INTRO:
• Logistics network analysis is a tool that can help improve the efficiency and
effectiveness of a supply chain.
• It can be used to: Reduce supply chain disruptions, Support expansion into
new markets, and Drive cost reduction efforts.
• A logistics network is a system that coordinates the movement of goods
between suppliers, manufacturers, wholesalers, retailers, and consumers.
• It's a key component of the supply chain, and its efficiency affects the health
of the supply chain and customer demand.
• It can be used to:

• Reduce disruptions: Help prevent disruptions to the supply chain

• Expand into new markets: Support expansion into new markets

• Reduce costs: Help reduce costs

• Identify weaknesses: Identify weaknesses in the current system

• Mitigate weaknesses: Determine ways to mitigate weaknesses

• Select the best carrier: Select the best carrier, mode, and route for specific
situations

• Maintain supply chain quality: Maintain supply chain quality and align with
company goals

• Adapt to the target market: Adapt in real-time to the target market

• Logistics network analysis can help businesses serve their customers
effectively and maintain customer loyalty.
• It can also help businesses save money, deliver faster, and minimize
environmental impact.
MEANING (TB)

2. BENEFITS: (TB)
• Cost savings: By analyzing the supply chain network, businesses can make informed
decisions to reduce costs.
• Faster delivery: Businesses can use network analysis to find the quickest paths for
delivery.
• Reduced supply chain disruptions: Network analysis can help businesses reduce the risk
of supply chain disruptions.
 • Expansion into new markets: Network analysis can help businesses support expansion
into new markets.
• Improved customer service: Businesses can use network analysis to improve customer
service levels.
• Better alignment with company goals: Businesses can use network analysis to ensure
they are aligned with their company goals.
• Real-time adaptation: Businesses can use network analysis to adapt to the target market
in real-time.
• Reduced environmental impact: Businesses can use network analysis to minimize their
environmental impact.
3. NEED (TB)
4. FACTORS INFLUENCING (TB)
5. LOGISTICS/SUPPLY CHAIN NETWORK DESIGN PROCESS:
INTRO:
• Logistics network design is the process of planning and managing the movement of
goods between different points in a supply chain.
• The goal is to create a network that is reliable, cost-effective, and able to meet
customer expectations. Logistics network is a key component of the supply chain
that links manufacturers, suppliers, wholesalers, retailers and consumers.
• Logistics network design involves devising transport, inventory and location
strategies, keeping in mind the customer service goals, ensuring the total package
achieves the best service at the lowest cost.
• The best design must be able to deliver the goods to the customers at the least cost
while satisfying the customer’s needs.
• The goal is to create a reliable, cost-effective, and flexible network that can meet
supply and demand needs.
STAGES (TB)

6. TRANSPORTATION NETWORK DESIGN:

INTRO:
• Transportation network design is a strategic plan that aims to move goods
and services efficiently and cost-effectively.
• It involves selecting the best modes, routes, carriers, and facilities to
optimize supply chain performance and profitability.
• Transportation networks generally refer to a set of links, nodes, and lines that
represent the infrastructure or supply side of the transportation.
• Transportation network design is the process of creating a plan for moving
goods and services from one location to another in a cost-effective and
efficient manner.
• It involves making strategic decisions about the network's routes, modes,
facilities, capacity, location, and connectivity.
 • The goal is to optimize the performance and profitability of the supply chain.
• Transportation network design refers to creating an efficient system for
moving people and goods.
• It involves considering infrastructure, transportation modes, routes, and
logistics.
• It involves choosing the best modes, routes, carriers, and facilities to optimize
the performance and profitability of your supply chain. a good design is not
enough to ensure a successful implementation. You also need to consider the
operational, organizational, and technological aspects of your transportation
network.

7. RORO TRANSPORT:
INTRO: (TB)
• Roll-on/roll-off (RoRo) is a shipping method that uses vessels to transport
wheeled cargo without cranes.
• RORO, or roll-on, roll-off, is a shipping term that refers to a method of
loading and unloading cargo onto and from a vessel.
• RORO is a safe and reliable way to transport vehicles, trucks, buses, boats,
mining equipment, and agricultural machinery.
• It's often the preferred choice for industries like automotive, mining, and
construction.

• RORO is generally cheaper than container shipping.

• RoRo is a secure and efficient process that requires less lifting and is not
weather-dependent.

• Roro shipping is a safe and reliable way of transporting vehicles, mining

equipment, trucks, buses, boats, and agricultural machinery overseas by
sea.

BENEFITS OF RORO TRANSPORT: (TB)

• Cost-effective: Ro-Ro shipping is a cost-efficient method of

transporting large numbers of vehicles over long distances.
• Safer: Ro-Ro shipping reduces the risk of damage to vehicles because
they are driven or towed onto the ship, rather than lifted into
containers.
• Environmentally friendly: Ro-Ro shipping is a more environmentally
friendly alternative to transporting vehicles by truck or rail because it
reduces the need for long-distance land transportation.
• Efficient: Ro-Ro ships are considered the most efficient way of
transporting wheeled cargo, saving time and resources compared to
traditional cargo ships.
• Versatile: Ro-Ro ships can transport a variety of cargo, including
wheeled or tracked cargo like heavy plant machinery.
• Minimal handling: Ro-Ro shipping involves minimal lifting, ensuring a
safe shipping process.
• Short turnaround times: Ro-Ro ships have short turnaround times in
ports.
• No expensive haulage or container costs: There are no expensive
haulage or container costs associated with Ro-Ro shipping.
• Port and customs procedures: Port and customs procedures are not
too complex or time-consuming.

BENEFITS OF RORO SERVICE: (TB)

• Speed: Vehicles can be driven onto the ship at the loading port and off at the
destination port, which speeds up the loading and unloading process.

• Time savings: Vehicles can land minutes after docking and continue their
route to their destination.

• Reduced risk of damage: Vehicles are driven or towed onto the ship, which
reduces the risk of damage compared to lifting them into containers.

• Cost-effectiveness: RoRo shipping can be more cost-effective for large,

heavy cargo or vehicles.

• Versatility: RoRo vessels can carry a wide range of cargo, from small cars to
oversized machinery.

• Environmentally friendly: RoRo vessels have lower carbon footprints than

airfreight and other shipping alternatives.

• Reliability: RoRo shipping is more reliable than 100% road service.

• Predictable schedule: RoRo services are offered on a fixed, predictable

schedule.

• Lower ocean carriage costs: RoRo ocean carriage costs can be lower than
breakbulk prices.
• Operational Efficiency and Time Savings in RoRo Shipping. ...
• Reduced Risk of Damage and Safer Cargo Handling in RoRo Shipping. ...
 • RoRo Shipping Versatility in Cargo Types and Capacities. ...
• RoRo Shipping Environmental Benefits through Streamlined Operations.

8. LASH TRANSPORT:
INTRO:
• LASH stands for Lighter Aboard Ship, which is a maritime practice of
transporting barges on larger ships.
• LASH barges are used to transport bulk cargo between inland waterways and
open seas.
• LASH barges were developed in the late 1960s.
• They are commonly used to transport goods from larger vessels that are too
big to enter certain ports.
• LASH vessels are a type of ship that is specifically designed to transport
barges.
• These ships have a large deck crane that can load and unload the barges
through the stern section, which projects over the water.
• LASH vessels are also known as LASH carriers, barge carriers, kangaroo
ships, or lighter transport ships.
• LASH was also expensive to operate and maintain.

BENEFITS: (TB)

• Preventing cargo from shifting: Lashing materials prevent cargo from falling or
shifting during transit.
• Minimizing the risk of accidents: Lashing materials minimize the risk of accidents
and damage to the cargo and surrounding infrastructure