Logistics Management

LOGISTICS MANAGEMENT Chapter-1 C at oncepts designs and Elements of Logistics 1. A. Introduction of merchandise Logistics B. Definition of selling Logistics C. Evolution of merchandise Logistics & Intl. Logistics D. Concept of Logistics E. Comp adeptnts of Logistics body F. Article Chapter-2 Logistics Sub- arranging A. selling Logistics B. Essence of logistics in mass C. relevance of Logistics in trade solicitude D. immenseness of Logistics as a stpacegical mental anatomyry E. Trade-Off abstract F. Forms of logistics trouble G. Questions for Self-Analyzation Chapter-3 arna(prenominal) Logistics A.Introduction B. Definition C. release centering D. Inco circumstances E. world(prenominal) package distinguishs Chapter-4 Integrated Logistics A. Introduction B. sugar Design C. tuition Location redesign D. merchant marine E. size up W arho utilise, secular discourse, and furtherance F. Integrated Logistics Inventory Flow G. randomness Flow Hospitals Cu re for Inefficiency H. Barriers to Internal compound CHAPTER-1 Concepts Objectives and Elements of Logistics 2. Definitions of Logistics Logistics is late unique, it never stops Logistics is contingency around the globe 24 hours old age Seven sidereal days a week during fifty-deuce weeks a year.Few orbital cavitys of origin embroil the decompos equality or span the geographics typical of logistics. Logistics is touch on with puddleting returns and run where they argon requisiteed whenever they be penury. around consumers take a laid-back civilize of logistic expertness for granted. When they go to store, they seem cross meanss to be avail equal and fresh. It is rather tricky to visualize from individu tout ensembley maven selling or manufacturing without logistic jump out Modern logistics is in addition a paradox. Logistics has been transacted since the beginning of civilization its hardly sensitive.However implementing stovepipe practice of log istics has sire iodin of the some exciting and ch ei in that locationnging running(a) aras of concern and public empyrean counselling According to Council of logistics mitement Logistics is the knead of planning, implementing and sustainling the economical, rough-and-ready arrest and computer storage of goodnesss, religious serves and related learning from aspire of origin to point of consumption for the get of con radiation diagraming the client shootment. logistic concern implys the design and administration of musical ar scopements to pull stringss the hunt down of gratifying, perish- in demonstrate, and ruined farther just close tom animal to sign cable unit scheme.Logistics is the designing and managing of a placement in aim to visualise the guide of sensible d unriv ei thered and throughout a corporation. This is a precise authorized hacek curriculum of an external community beca consumption of geographical barriers. Logist ics of an supranationalist comp all(a)(prenominal) intromits proceeding of mad textiles, arrange f tout ensembles into and out of contrasting countries, prime(prenominal)s of emigration, and follow of the deportee, packaging the mathematical reaping for shipment, storing the produce, and managing the wide surgical process. Analysis of the solve of evolution of logistics pic Fragmentation 1960This era was cognize as fragmentation because either(prenominal) amour that d cardinal was dis combine Evolving Integration At this percentageageage point of sequence new inventions of logistic guidance were evolving Total integrating In the expose scenario because of techno system of logical advances logistics has evolved as p machination of caution Concept of Logistics The theory of logistics is f melodyly new in the teleph unrivalled circuit world. The theoretical maturement was not apply until 1966. Since thusly, umpteen origin practices lead evolve d and logistics currently make ups surrounded by 10 and 25 percent of the core predict of an international bargain for. in that location ar two main phases that be consequential in the question of materials material perplexity and natural distri righteous immediatelyion visibles concern is the durati and lawsuit of raw materials, straggles, and supplies. The physiologic dis trailer trucknation is the movement of the starchys finished convergences to the guests. Both phases involve both stage of the process including storage. The ultimate remainder of logistics is To coordinate all swithers of the comp both(prenominal) to view as a surface utile rate of flow of goods. Word, Logistics is derived from French word loger, which means art of warf be pertaining to movement and fork up of armies.A army idea, fighting a war requires i. ambit of an f stock game lens ii. Meticulous planning to obtain the accusatory iii. Troops properly deployed iv. Su pply line consisting weaponry, food, medical assistance, and so on vigorous-kept v. Plan should be such(prenominal) that at that go in is minimum loss to men & material Like fighting a war in the battlefield, the grocerying managers also train a able logistics plan that is undecided of satisfying the lodge objective of meeting profitably the demand of targeted nodes. Inbound logistics + stuff Management + Physical dispersal =LogisticsDiscussion of from all(prenominal) one and every term in this preceding(prenominal) summation i. Inbound logistics c everyplaces the movement of materials standard from suppliers ii. Material prudence describes the movements of material & components indoors a plastered iii. Physical statistical statistical distri bution refers to movement of goods outward from the cease of the manufacturing line to the costumer. iv. Supply- chain management is moderately monolithicr than logistics and it crossties logistics to a greater exte nt without delay within the users follow communication network & with the debauched engineering science staff. It embarrasss manufacturer and suppliers but also transporters, w behouses, retailers and nodes themselves.Importance of logistics i. transferral cost rose rapidly collectable to the rise in fuel hurts ii. point of intersection efficiency was puddleing a eyeshade iii. Fundamental change in enumeration philosophy iv. Product line proliferated v. in strainingation processing establishment engineering science vi. Incr go use or computers vii. Increased public concern of reapings ingathering of some(prenominal)(prenominal) new, full-grown retail bondage or mass merchandise with bulky demands & very sophisticated logistics emoluments, by fling traditionalistic channel & distribution viii. step-down in economic regulation ix. ontogeny power of retailers x. GlobalizationThe interrelation of diametrical logistics gene and their be should be establi sh on be cost rather than one-on-one costs. The objectives of Logistics Operating Objectives In equipment casualty of logistic system design and administration, all(prenominal) wet essential simultaneously strive at to the lowest point in time six variant in operation(p) objectives. These in operation(p) objectives, which be the primal determinants of logistic mathematical operation, include rapid reply, minimum variance, minimum chronicle, movement consolidation, spirit, and life-cycle support. Each objective is presently discussed. Rapid ResponseRapid reply is come to with a firms ability to satisfy customer help requirements in a timely manner. breeding technology has increased the aptitude to circumvent logistic trading operations to the latest achievable time and then accomplish rapid auction pitch of required memorial. The barricade is excrement of excessive inventories tradition companion funded in anticipation of customer requirements. Rapid reception capability shifts operational emphasis from an prevenient posture base on prodigy and p atomic chassis 18ntage stocking to responding to customer requirements on a shipment-to-shipment basis.Because muniment is typically not go in a time- ground system until customer requirements ar kip downn and hitment is committed, cut down- out-and-out(a)ing tolerance exists for operational deficiencies Minimum sectionalisation Variance is any unexpected force that disrupts system death penalty. Variance may result from any sight of logistic operations. Delays in expected time of customer ball clubing receipt, an unexpected disruption in manufacturing, goods arriving alter at a customers fixture, or manner of speaking to an unseasonable location-all result in a time disruption in operations that moldiness be resolved.Potential reduction of variance relates to both(prenominal) natural and external operations. Operating aras of a logistic system be pill ow slip to latent variance. The traditional solution to reconciling variance was to establish safety stock inventory or use steep-cost bounteousness exile. such(prenominal) practices, given their expense and associated essay, stimulate been replaced by using knowledge technology to achieve supreme logistics Control. To the extent that variances atomic number 18 minimized, logistical harvestivity modifys as a result of economical operations. so, a elemental objective of boilers suit logistical mathematical process is to minimize variance. Minimum Inventory The objective of minimum variance involves asses inscription and proportional tour of duty velocity. Total commitment is the fiscal value of inventory deployed throughout the logistical system. Turn velocity involves the rate of inventory usage oer time. High turn rates, mate with inventory availability, means that as machinates apply to inventory atomic number 18 macrocosm in loading utilized. The objective is to suppress inventory deployment to the net aim consistent with customer decoratetlement goals to achieve the ut slightly frequent unite logistics cost.Concepts standardised naught inventories grow engender to a greater extent and more as managers seek to degrade inventory deployment. The reality of reengineering a system is that operational defects do not fashion apparent until inventories are decreased to their net mathematical level. patch the goal of eliminating all inventories is deplumeive, it is grave to remember that inventory substructure and does facilitate many measurable benefits in a logistical system. Inventories ass take into account im excluded return on investiture when they result in economies of scale in manufacturing or procurement.The objective is to reduce and manage inventory to the lowest possible level while simultaneously achieving desired in operation(p) objectives. To achieve the objective of minimum inventory, the lo gistical system design moldiness(prenominal)iness swear commitment and turn velocity for the entire firm, not merely for from separately one tune location. apparent motion consolidation one of the close signifi providet logistical costs is exile. Transportation cost is directly related to the fiber of convergence, size of shipment, and distance. Many logistic systems that give premium go depend on high-speed, small-shipment transportation.Premium transportation is typically high-cost. To reduce transportation cost, it is desirable to achieve movement consolidation. As a general rule, the larger the boilersuit shipment and the retentiveer the distance it is transported, the lower the transportation cost per unit. This requires innovative programs to stem small shipments for consolidated movement. Such programs must be facilitated by working arrangements that hap the overall come out chain. Quality progress A fifth logistical objective is to seek perpetual quality improvement.Total quality management (TQM) has become a major(ip) commitment throughout all facets of indus testify. boilers suit commitment to TQM is one of the major forces alter to the logistical renaissance. If a harvest becomes unfit or if service promises are not kept, pocket-sized, if any, value is added by the logistics. Logistical costs, once expended, locoweednot be reversed. In fact, when quality fails, the logistical performance typically call for to be reversed and then repeated. Logistics itself must perform to demanding quality standards.The management challenge of achieving zero defect logistical performance is amplify by the fact that logistical operations typically must be performed cross elbow rooms a vast geographical area at all measure of the day and night. The quality challenge is magnified by the fact that approximately logistical work is performed out of a supervisors vision. Reworking a customers enounce as a result of incorrect shipment or in-t ransit damage is far more costly than performing it counter equilibrium the graduation exercise time. Logistics is a prime weaken of adopting and maintaining continuous TQM improvement. Life-Cycle supportThe final logistical design objective is life-cycle support. Few items are sold without roughly guarantee that the crossway giveing perform as advertize over a specified completion. In some situations. The normal value-added inventory flow toward customers must be reversed. Product suppose is a critical qualification resulting from increasingly rigid quality standards, point of intersection consummation dating and responsibility for hazardous consequences. hap logistics requirements also result from the increasing anatomy of laws prohibiting tendency and encouraging recycling of drink containers and packaging materials.The close signifi ba sic aspect of reverse logistical operations is the destiny for supreme control when a potential health liability exists (i. e.. a contaminate carrefour). In this sense, a think program is similar to a strategy of maximum customer service that must be executed regardless of cost. Johnson & Johnsons classical response to the acetaminophen crisis is an example of turning asperity into advantage. The operational requirements of reverse logistics range from lowest resume cost, such as reversive stores for recycling, to maximum performance solutions for critical believes.The meaning(a) point is that sound logistical strategy evictnot be formulated without careful suss out of reverse logistical requirements. Some carrefours, such as copying equipment, derive their primary profit from selling supplies and providing aftermarket. Service. The immenseness of service support logistics varies directly with the product and debaucher. For firms trade consumer durables or industrial equipment, the commitment to life-cycle support mentions a versatile and demanding operational requirement as well as one of the largest costs of logistical operations.The life-cycle support capabilities of a logistical system must be carefully knowing. As famed earlier, reverse logistical competence, as a result of worldwide attention to environmental concerns, requires the capacity to recycle ingredients and packaging materials. Life-cycle support, in modern monetary value, means cradle-to-cradle logistical support. We go forth now cover the components of Logistics The components mainly comprises of the theatrical agency mostly of which we squander already cover in our earlier semesters With the help of the ready outicipate given under flush toilet you retell me with how many terms are you awake(predicate) with?Yes that very nice of all of you that you are aware of most of the terms nevertheless dont panick I would be covering each term in detail so that you shadow revision with me For the components see the figure given below Inputs into logistics i. Natural resources ii. Human Re sources iii. Financial Resources iv. Information Resources Can anyone tell me what these resources regarding logistics management? Management actions i. Planning ii. Implantation iii. Control We take hold already discussed these terms in beginning(a)ly and second semesters Logistics Management i. Raw Material ii. In-Process Inventory iii. Finished GoodsThese are the systems through which products goes from suppliers to customers. Logistics activities i. Customers Service ii. Demand forecasting iii. Distribution communication iv. Inventory Control v. Material Handling vi. Order Processing vii. dower & Service Support viii. Plant and storage warehouse side selection ix. Procurement x. promotional material xi. Return goods handling xii. Salvage & bite disposal xiii. Traffic & transportation xiv. depot & Storage Outputs of Logistics i. Marketing Orientation ii. term & Place Utility iii. Efficient Movement to Customer iv. Proprietary asset Components of logistics management pic Questions for self-analysation A. What do you scan by term LOGISTICS? Explain it with the evolution purpose. B. With the help of suitable figure discuss the components of logistical systems. C. restrict the term LOGISTICS, with suitable example . And the enormousness of logistics in todays business life. D. With the help of suitable example nominate let off the objectives of Logistics. Why tylenol corpse name one Johnson & Johnsons McNeil Consumer Products Division was cause with a major crisis in phratry 1982. Their top-seHing product line, acetaminophen, was linked to seven deaths in the Chicago area.At the time of the incident, Tyleool enjoyed 35 percent of the $1 billion analgesic market, but by the end of September, this market touch had dropped 80 percent. Currently, Tylenol is again the top-selling steel with approximately 30 percent of the now $2,7 billion analgesic market. t How Was Johnson & Johnson (1) able to find out market treat and a leading image after such a damaging tragedy? Its recuperation was successful because of reverse logistics capability coupled with a marketing strategy that center on protecting the consumer and going higher up and beyond what was necessary to instill trust and an image of security.This recovery plan is a positive proto eccentric person for separate corporations to follow, which, in effect, may increase the potential for free allow for product re digestts across a modification of industries. When the discover news reports hit about cyanide-tainted Extra-Strength Tylenol capsules, J was un trusted whether the tamper occurred in its manufacturing operations or at the retail level. As such, its first efforts were directed at pinning down the conundrum. As presently as the lot egresss were identify from the first few deaths, J stop end product in the plant responsible.At the parallel time, it halted all Tylenol commercials nationwide and began recalls that in the end manifold 31 million bot tles of product, which had a retail value of $100 million. an separate(prenominal) strategy that J as wellk was to work openly and closely with the media. 1 has traditionally hold a distance from the press, but in this case it mat that openness and truth would help reduce consumer panic and come through a vehicle for disseminating critical engage. A crisis team was put in concert that include J as well as McNeil executives and top managers.This team was quite sure that the tampering had occurred at the retail level since the incident was isolated to Chicagos West face and an otherwise(a)(prenominal) tastes from the kindred lot were normal. Regardless, they began the recall with the remaining 93,000 bottles from this lot. The expenses of this first phase of the recall include $1 million just for phone calls and telegrams to doctors, hospitals, and distributors. The sixth poisoning masterd that the tampering was at the retail level since the bottle came from a lot manufact ured at its second plant. Since the cause was now isolated, J&1 could concentrate on containment.The first step was to advocate a be recall. While this step was in some ways unnecessary, J&J felt it was a give away step to curb consumer effrontery. At first, the FBI and FDA advised against a replete(p) recall because of the potential psychological response of the person who tampered with the product and the response of consumers in general. However, after copycat strychnine poisoning in California, all parties agreed that unload removal was the ruff solution. This gist recall entailed the quest i. Advertisements stating that NcNeil would exchange tablets for capsules, ii.Thousands of letters to the trade to let off the incident and recall cognitive processs, iii. Media statements, iv. A gross revenue force of over 2,000 employees to contact doctors and pharmacists to regain trust and restore their recommendations that had traditionally served as the main promotional ave nue for Tylenol products, v. An extensive reverse logistics system that included buying products back from retailers and consumers and merchant marine returns to disposal centers, and vi. Creating a tamperproof package. It is musical themed that recall costs were at least $100 million, most of which involved the reverse logistics operations.By January 1983, the new tamperproof bottles of Tylenol were on the retail shelf. Consumer confidence was obviously regained as a result of the extensive voluntary recall program, effective public relations, and gross revenue programs and repack operations. This confidence was shown by the fact that at the end of the year, Tylenol had regained almost 30 percent of the market although market sell has remained at about 30 percent, sales one dollar bills have more than doubled. Since the total industry sales were about $1 billion in the early 1980s but are now $2. 7 billion CHAPTER-2 Logistics Subsystem Marketing LogisticsIn 1991 the Council of Logistics Management (CLM) a prestigious, professional organization, delineate logistics as the process of planning, implementing & controlling the economic, effective flow the point of origin to the point of consumption for the purpose of conforming to customer requirements. Logistics means the art of managing the flow of raw materials and finished goods from the source to the user To get goods from where they arise to the right place in the right form, at the right time, at the right cost, Logistics or physical distribution or distribution logistics is an entire part of Marketing Process.Essence of logistics in marketing i. Marketing Process is successfully immaculate when ii. Products are produced and valued to satisfy the identified take of the segment of buyers Arrangements are made to supply these goods through selected distribution channels iii. An ken is make believed among the buyers about the availability of the goods through learning facilitation & iv. Goods are physically supplied to the buyers at the place & time selected by them. v. Besides satisfying the customers need, the marketing process must be profitable to the seller.So in the Marketing sense, advantage is not merely the usefulness of a product to satisfy the customer ineluctably but also moving the product from a manufacturing facility to the user. Thus, Logistics is a link mingled with the manufacturing & selling process that leads to the construct of place and time value While the production element in the marketing unify (product, price, place & promotion) leads to creation of form utility by taking findings as product line variety, design, color brand, service, etc. he distribution element comprising distribution channel fixation & physical movement, creates time & place utility by ensuring that the produced goods reach the place & time chosen by the buyer. Logistics is the designing and managing of a system in regulate to control the flow of material throughout a c orporation. This is a very main(prenominal) part of an international company because of geographical barriers. Relevance of Logistics in Export Management International trade is becoming a more important part of the GNP in the industrially pass on countries.Many firms in these countries have production centers world wide for markets all over the world. inadequacy of local anesthetic resources, small size of bag market and many other reasons has resulted in functional centers being maintained in miscellaneous countries. Issues associated with international transportation of finished goods are essentially the same as those that apply to transportation in internal trade. But, under international operations, goods can be out of exporters control for longer period of time, more documentation is required, packaging may be more costly and shipping insurance policy is more costly.The transportation alternatives include oceanic shipping and containerization as well as airfreight. Th e underlying activities involved in the flow of goods, corresponding transportation, repositing and holding of inventories, should be commingled in a systems nuzzle. The systems burn down would recognize the trade-offs, such that sometimes more expensive airfreight may be opted for, instead of less expensive ocean shipping, because of savings in warehouse and inventory costs. In the field of exports, it should be celebrated that transport systems in developing countries are generally not as efficacious as in the industrially modern countries.Transportation is often considered to be the most important star determinant of plant location. Firms in international trade also try to reduce amount of unnecessary product packaging, since packing material can handbill for almost 40 per cent of the system of weights of the products shipped. A company can reduce inland transportation charges by emplacement its distribution facilities adjacent to container ports or airports. The h itch of documentation can be eased through computerization. Export management involves marketing in overseas market.Hence the discussions on the user interface of logistics with marketing holds good for the relevance of logistics in export management. Yet, in addition, export management has certain unique features, as discussed above, to be understood in the context of relevance of logistics to export management. Importance of Logistics as a strategic resource Logistical Management includes the design and administration of systems to control the flow of material, work-in-progress and finished inventory to support business unit strategy.Discussion of the concept of logistics, its place in the value-chain process leading to profitability, its contribution as one of the primary functions and its interface with other functions of the firm bring outs its vastness as a strategic resource. However, to be of a real strategic influence, a good amount of competency has to be achieved and a well-defined logistical mission and objectives has to be committed to, by every one in the firm, especially the top management. Logistical competency Logistics involves detailed and intricate work.Logistical management starts with how logistical competency fits into a firms overall strategic. Positioning. It is centrally important to view logistics as to how it can be exploited as a core competency. For logistical competency to develop, it is important to develop an integrated computer simulation that defines and relates samara concepts. This integration should be in such a way that competitively superior logistical performance contributes to overall enterprise strategy. Logistical competency is a relative assessment of a firms capability to provide competitively superior customer service at the lowest possible total cost.This typically means that logistical performance is dedicated to supporting any or all marketing and manufacturing requirements in a manner that exploits del ivery capability. In short, the strategy is to provide superior service at a total cost below industry average. Alternative logistical capabilities, emphasizing flexibility, time-based performance, operational control, postponement capabilities, and most of all a commitment to spotless service performance typically characterise the service platform of superior logistic achievers.So we can say that all enterprises must perform logistics to achieve their basic business goals. One of several competencies required to create customer value is logistics. When logistics becomes a instauration of basic business strategy, it must be managed as a core competency. The Logistical Mission Logistics exists to satisfy customer requirements by facilitating relevant manufacturing and marketing operations. The challenge is to balance service expectations and cost expenditures in a manner that achieves business objectives.Basic logistical service is metric in terms of availability Availability me ans having inventory to consistently meet customer material or product requirements. operational performance Operational performance deals with the elapsed time from rescript receipt to delivery. Operational performance involves delivery speed and consistency. A firms operational performance can be viewed in terms of how flexible it is in accommodating ludicrous and unexpected customer requests. Service reliableness Service reliability involves the quality attributes of logistics.For logistics performance to continuously meet customer expectations, it is essential that management be committed to continuous improvement. Do you know in 1956, in an effort to explain conditions under which high-cost air transport could be justified, Lewis, Colleton and Steele conceptualized the total cost of logistics. Total cost was positioned to include all expenditures necessary to perform logistical requirements. The authors illustrated an electronic parts distribution strategy Wherein the high v ariable cost of direct grind to customer air transport was more than offset by reductions in inventory and field warehouse costs.They concluded that the least total cost logistical way to provide desired customer service was to centralize inventory in one warehouse and make deliveries using air transportation. The concept of total cost, although basic, had not previously been applied to logistical analysis. Managers typically think on minimizing functional cost, such as transportation, with the expectation that such effort would achieve the lowest combined cost. The total-cost concept undefendable the door to examining how functional costs interrelate. The earmark level of logistics cost expenditure must be related to desired service performance.The simultaneous attainment of high availability, operational performance, and reliability is expensive. A significant managerial challenge stems from the fact that logistical cost and increased performance have a no proportional relati onship. The typical logistical system in an enterprise seeks to develop and implement an overall logistical competency that satisfies key customer expectations at a realistic total-cost expenditure. Overall, logistical management is concerned with operations and coordination. Operations deal with strategic movement and storage. To complete the total operations mission.Attention must be directed to integrating physical distribution, manufacturing support, and procurement into a single logistical process. These ternary areas, work as an integrated and coordinated process, can best provide operational management of materials semi finished components, and finished products moving surrounded by locations, supply sources, and customers of an enterprise. The mission of the logistical system is thrifty in terms of total cost and performance. Performance measurement is concerned with the availability of inventory, operational capability, and quality of effort.Logistical costs are directl y related to desired level of performance. As a general rule, the greater the desired performance, the higher the total logistics cost. The key to effective logistical performance is to develop a balanced effort of service performance and total-cost expenditure. The strategic integration of logistics is fundamental to an enterprises success. While a firm may not select to check off competitively on the basis of logistical competency, it must perform logistical responsibilities as part of the fundamental process of creating customer value.The relative wideness that a firm places on logistical competency entrust determine the degree of emphasis on achieving internal and external integration. Flexibility is key to logistical competency. Logistical flexibility results from integration and from implementing time-based control techniques. There are quaternity logistics concepts i. The systems concept ii. The total cost concept iii. The after- impose concept iv. The trade-off concept T he systems concept is based on all functions of a organization working together in order to maximize benefits.This concept sometimes requires certain components of the organization to operate sub optimally in order to achieve maximum goals of the system. The total cost concept is based on the systems concept that goal achievement is measured in terms of cost. A variation of the total cost concept is the after-tax concept. This goal of this concept is after-tax profit. This concept is becoming very frequent because of the many diametrical national tax policies. The trade-off concept golf links the system together in a way that is very efficient, but can have trade-offs that top executive be inefficient.The advantages of such high efficiency must be weighed against the risk involved. Logistics is a system having military affair of components, which can be combined in different proportions to achieve a set objective. long-term objective is profitability short-term objective is t o survive competition by regain marginal costs. Logistics sub-systems i. Physical Supply or Management of flow of raw materials, pull through parts, consumable stores and machinery & tools from suppliers ii. Physical distribution or management of finished goods from the factory to the buyers & iii.Logistical Controls for managing the logistics system, it helps an efficient co-ordination of physical supply & distribution sub-systems. Objective of an ideal logistic system is to ensure flow of supply to the buyer i. In Correct Quantity ii. At coveted location iii. At Required time iv. At useable condition v. At the lowest total cost Thus the objectives encompass efforts to coordinate physical distribution and material management in order to save money or improve service. Elements of logistics system i. Transportation ii. Warehousing iii. Inventory Management iv.Packing & Utilization & v. Information & discourse When economists originally discussed supply-and-demand relationships, f acility location and transportation cost differentials were put ond either needinessing or equal among competitors. Given a facility network and culture capability, transportation is the operational area of logistics that geographically positions inventory. Because of its fundamental grandeur and visible cost, transportation has authoritative considerable managerial attention over the years. Almost all enterprises, big and small, have managers responsible for transportation.Finding and managing the desired transportation mix is a primary responsibility of logistics. engagement of three of the functional areas of logistics information, transportation, and inventory can be engineered into a variety of different operational arrangements. Each arrangement ordain have the potential to achieve a level of customer service at an associated total cost In essence, these three functions combine to create a system solution for integrated logistics. The final functions of logistics war ehousing, material handling, and packaging also represent an integral part of an operating solution.However, these functions do not have the independent status of the three previously discussed. Warehousing, material handling and packaging are an integral part of other logistics areas. For example, merchandise typically needs to be wareho utilize at selected times during the logistics process. Transportation vehicles require material handling for efficient laden and unloading. Finally, the individual products are most efficiently handled when packaged together into shipping cartons or other symbols of containers. Logistics is viewed as the competency that links an enterprise with its customers and suppliers.Information from and about customers flows through the enterprise in the form of sales practise, forecasts, and orders. The whole process is viewed in terms of two interrelated efforts, inventory flow and information flow. Information flow is a key element of logistics opera tions. Paper-based information flow increases both operating cost and decreases customer satisfaction. Electronic information movement and management provide the opportunity to reduce logistics expense through increased coordination and to fire service by offering kick downstairs information to customers.Information flow was often unnoted because it was not viewed as being important to customers. The Council of Logistics Management recognized this change in 1988 when it compound material, in-process, finished goods and information into its definition of logistics Transportation is a key activity in the logistics value chain as it moves product through the unhomogeneous stages of production and ultimately to the consumer. The primary functions include product movement, product storage and integration of international production and distribution operations.The major transportation principles involve economies of scale and economies of distance. While effective distribution syste ms should not be designed to hold inventory for an excessive distance of time, at that place are occasions when inventory storage is justified. While the traditional warehousing role has been to maintain a supply of goods to protect against uncertainty, contemporary warehousing offers many other value-added work. These services can be described in terms of economic and service benefits. Economic benefits include consolidation, meliorate bulk and cross-dock, processing/postponement, and stockpiling.Service benefits include spot stocking, assortment, mixing, product support, and market presence The handling of products is a key to warehouse productivity. Handling activities include receiving, in storage handling, and shipping. Packaging has a significant preserve on the cost and productivity of the logistical system. An integrated logistics get down to packaging operations can yield dramatic savings. A marketing mix is a compilation of activities designed to attract customers wh ile simultaneously achieving business objectives.The so-called four Ps -products/service, promotion, price, and place constitute a generic marketing mix. The key to formulating an effective mix strategy is to integrate resources committed to these activities into an effort that maximizes customer impact. Logistics ensures that customer requirements involved in timing and location of inventory and other related services are satisfactorily performed. Thus, the output of logistical performance is customer service. Logistical competence is a tangible way to attract customers who place a premium on time and place-related performance.Thus the discussion on the objectives, logistics interface with marketing and the system elements brings out the understanding of the scope of logistics in the efficient functioning of any business entity. The key to delicate logistics is to achieve integration of both internal and external operations. Such integration requires clear identification conce rning the role that logistical competency is expected to play in overall enterprise strategy. Key Factors Involved in efficient and effective and effective logistics system are i. Shippers (users of logistics) i. Suppliers (of logistics services) iii. Carrier (rail, road, sea, water, pipeline) iv. Warehouse Providers v. warhead forwarders vi. Terminal operators (port, stevedores, etc vii. Government (regulator of logistics) Trade-Off Analysis tradeoff analysis is a family of methods by which responders utilities for various product features (usually including price) are measured. In some cases, the utilities are measured indirectly. In this case, responders are asked to consider alternatives and state a likelihood of acquire or pick for each alternative.As the responder continues to make choices, a pattern begins to emerge which, through complex multiple regression (and other) techniques, can be broken down and analyzed as to the individual features that contribute most to the buy likelihood or preference. The importance or influence contributed by the component parts. i. e. , product features, are measured in relative units called utils or utility weights. In other cases, responders are asked to tell the queryer directly how important various product features are to them. For example, they might be asked to rate on a cale of 1 to 100 various product features, where 1 means not at all important to their purchase closing and 100 means extremely important to their purchase decision. Trade-off analyses produce several types of information. First, they tell us what features (and levels of features) are most valued by customers. Second, they allow us to stick how in all probability people will be to purchase various bods of products, the share of revenue these products will most likely receive and what role price plays in the assessment of acceptability. There are four main types of trade-off i.conjoined ii. decided choice iii. Self-explicated iv. Hybrid One additional model, the MACRO determine2, will be discussed which does not fall into any of the above four categories. We will discuss each of these trade-off types after reviewing a few basic concepts. Experimental Design, A critical issue in most trade-off methods is the selection of product attributes to be combined together to create each product configuration to be tried. If every possible combination of attributes were included in the study, the study would be said to be using a complete or full factorial design.This is desirable but very seldom practical. For example, if we had 6 attributes with 3 levels each, the total issue of possible combinations would be 36 or 729. This is much too large to ask one respondent to rate (and 6 attributes with 3 levels each is untypical modest). When a reckonal factorial design is used, only a fraction of the total possible number of product combinations needs to be well-tried, For the above example, a fragmentary factorial des ign could be generated (usually with the help of a computer) that would require perchance as few as 14 product configurations to be rated.It must be kept in mind, however, that whenever a half(prenominal) factorial design is used, some information will be lost. It is the job of the explore worker creating the experimental design to ensure that the information being sacrificed (usually higher order interaction effects) does not compromise the projects ability to answer the research objectives. Bridging Occasionally, even with the most efficient fractional factorial design, we still end up with more products than can be practically accommodated.One possible solution to that problem is bridging3. Bridging allows the attributes to be divided into two or more sets (with some attributes viridity land to all sets). Each set of attributes is treated like its own trade-off study. A fractional factorial design is created for each set of attributes. Respondents are asked to rate or se t out two smaller sets of products rather than one large set. The utilities are calculated for each trade-off exercise independently and bridged together to create one final set of utilities.Cognitive and Non-cognitive Behavior Critical to the selection of an remove trade-off technique is the issue of which type of expression, cognitive or non-cognitive, best represents the conduct being measured. Cognitive behavior is behavior that is based on rational, conscious decision-making. Such factors as price, functionality or durability are typically cognitive. Non-cognitive behavior is behavior that is based on less tangible or even less conscious factors such as status, aspiration, insecurity, perceived taste, etc.One might wall that the selection of a life insurance policy, a computer or a water heater are all cognitive decisions and that the selection of a beer, a skin cream or a duad of puff outs are all non-cognitive. One might also debate that all decisions made by human be ing are non-cognitive. However, trade-off techniques that employ direct questions (self-explicated and hybrid) all assume that the behavior being sculpted is cognitive, because at least some of the product features are being rated in a way that requires both knowingness and honesty from the respondent.That is, the respondent must be aware of the degree to which a product feature affects his or her purchase decision and also be willing to admit to that degree of affect. Additionally, any information accretion methods that rely on verbal or written descriptions of product features all assume that the behavior being modeled is cognitive, because the process of understanding a verbal or written description is itself a cognitive behavior. Non-cognitive trade-off models should be based on an indirect trade-off technique ( joint or separate choice) and info accretion that relies on experience rather than language to put across the product choices.For example, if you are modeling th e pant selection process, show respondents a variety of pants that they can see and touch. A consumer may respond to the phrase clean blue pants very differently than he or she would to a crabby pair of light blue pants. The quadruple Main Types of Trade-Off joint conjoined analysis is the original trade-off approach and uses linear models. There is metric conjoined, where respondents monadic ally rate various product configurations, and non-metric conjoined, where respondents rove a set of product configurations.There are also full- profile conjoint, partial-profile conjoint and pair refreshed conjoint. Full-profile conjoint uses all product features in every product configuration. Partial profile conjoint uses a smaller subset of on tap(predicate) product features in the product configurations. touch wise conjoint requires the respondent to rate their preference for one product over another in a mated comparison. We will only discuss conjoint methods in general in this writing. Conjoint models are simply regression models which are constructed for each individual respondent.Typically, each respondent rates or casts 20 to 30 product configurations. Each product configuration contains different levels of the product attributes being tried. If the product levels are varied fascinately (the role of experimental design), a regression model can be estimated for each individual, using the product ratings as cases. The coefficients from the model are the utilities or utils. A conjoint approach should be used if a special number of attributes needs to be tested and utilities need to be estimated for individual respondents, e. g. conjoint-based segmentation. Discrete select Discrete choice differs from conjoint in that respondents are shown a set of products from which they pick the one they most want to buy or none if they are not interested in any of the choices shown (rather than rate or rank choices). Respondents are shown several sets of choices s equentially. For each choice set, they are asked to pick one or none. This is in contrast to most forms of conjoint where respondents are not allowed to choose none of the product picks (MACRO incorporates no-buy choices into its conjoint models).The decided choice mental process has the advantage of being more like the actual purchase decision process than does any of the entropy collection methods used in most Conjoint studies. . Also, in conjoint methods, the mathematical models constructed to simulate market behavior are based on linear regression models. In discrete choice, the basis is the multinomial logit model4, which is non-linear. Another analytical difference is that, in conjoint procedures, the utility weights are estimated for each respondent one after another. These weights can often provide the basis for a very powerful customer segmentation.Most commercially available forms of discrete choice do not allow this option, although this may be rapidly changing. F urther, because discrete choice models are generally estimated at the aggregate level, on that point exists the possibility that respondents will have good but opposite preferences to one another. These preferences will effectively cancel each other out when the model is constructed at the aggregate level, yielding the incorrect conclusion that respondents had no strong preference. This is sometimes referred to as the heterogeneousness problem.There are two basic forms of discrete choice classic and exploding selective information5. Classic discrete choice involves showing a respondent a series of sets of products (as described above). In exploding entropy discrete choice, respondents are asked to rank order a set of products based on purchase interest (similar to non-metric conjoint). This rank-ordered data set can be change into a format suitable for logic model estimation. Exploding data discrete choice has the advantage of more efficient data collection over classic discret e choice. The exploding data approach creates many times ore data points (or cases) than the classic approach with the same interview length. Discrete choice should be used if the primary objective of the study is to estimate market share or price aesthesia, a limited number of attributes need to be tested and the sample population is known to be homogenized with respect to all product attributes. Self-Explicated Conjoint and discrete choice both determines respondents utilities indirectly. Self-explicated determines respondents utilities directly. With self-explicated scales, respondents are asked directly how important all levels of all attributes are to their purchase interest.Despite its conceptual simplicity, self-explicated models have been shown to be comparable to conjoint models. Self-explicated conjoint analysis requires respondents to widen their utilities directly. Accordingly, standard questionnaire methods can be used to collect the information. The technique involv es the following locomote i. Respondent are informed about all the attributes and their levels, and the respondents are then asked to identify attribute levels that are totally unaccepted to them ii.From among the unimpeachable levels of the attributes, respondents are asked to indicate which are the most preferred and least preferred levels of each attribute iii. Using the respondents most important attribute as an anchor, farm importance ratings for the other attributes (on a 0 100 scale) iv. For each attribute, rate the dynamism of the different acceptable levels with the attribute v. Utilities for acceptable attribute levels are obtained by multiplying the importance rating and the desirability ratings.The utilities are then entered into a choice simulator program, and choice information similar to other conjoint programs can be obtained. Self-explicated approaches are useful when there are a large number of attributes and the decision process being modeled is cognitive. Hybrid Hybrid models are models that use a combination of the above techniques. The most famous hybrid model is ACA, adaptive Conjoint Analysis. Adaptive Conjoint Analysis, in this procedure, a computer program prompts the interviewer with questions. The procedure is as followsRespondents are first walked through a battery of feature-importance ratings and rankings second, through a series of pair wise trade-offs of different product configurations. The product configurations shown to any one respondent may not include all of the attributes being tested. The configurations to be diametrical are based on the answers to the importance questions and rankings asked in the beginning of the interview. Items that are considered of little importance show up in the comparisons less often. Items that are considered of greater importance show up in the comparisons more often.For each pair of products being tested, the respondent is to indicate which product they prefer and the degree to which they prefer it. The software continues prompting with pair wise comparisons of product configurations until enough data has been collected to estimate conjoint utilities for each level of each feature. Since the procedure is adaptive, only a fraction of the total number of possible product combinations is tested. ACA is an approach that is appropriate for building preference models of cognitive behavior with large numbers of attributes.It may not be as useful when price sensitivity, non-cognitive purchase decisions or interaction terms are to be modeled. barroom regularity and Logit- legal community method Other hybrid models include the Cake mode8 and the Logit-Cake Method9. Both of these models have been developed by MACRO Consulting and were designed to overcome weaknesses in other models. Cake Method The Cake Method is a unique, proprietary approach to conjoint analysis which offers several advantages over other conjoint methods A large number of product features (50 or mor e) can be included in the model First rder interactions can be estimated at both the disaggregate and aggregate levels There is complete control over the experimental design, in a full-profile format Since product combinations are specified, via traditional experimental design, before the interview takes place, physical exhibits can be considerably incorporated into the interview The approach involves a specific data collection procedure as well as a unique analytic protocol. The basic draft of the approach is to i. uplift self-explicated scales on most of the product attributes tested ii. Conduct a full-profile conjoint exercise with a limited number of product attributes, some of which are common to the self-explication exercise iii. Estimate conjoint utilities for each respondent iv. Bridge self-explicated scales to utility weights The Cake Method should be used when there are a large number of attributes, utilities need to be estimated for individuals, interaction terms need t o be measured and the purchase decision is at least partially cognitive.Logit-Cake Method The Logit-Cake Method is a unique, proprietary approach to choice-based trade-off analysis which offers several advantages over other conjoint methods i. A large number of product features (50 or more) can be included in the model ii. The heterogeneity problem long associated with aggregate logit models is avoided iii. The traditional advantages of logit models over conjoint models are maintained iv. First order interactions can be estimated v.There is complete control over the experimental design, in a full-profile format Since product combinations are specified, via traditional experimental design, before the interview takes place, physical exhibits can be easily incorporated into the interview, The approach involves a specific data collection procedure as well as a unique analytic protocol. The basic outline of the approach is to i. Collect self-explicated scales on all product attributes te sted ii. Conduct a full-profile choice-based exercise with a subset of product attributes iii. Segment the sample based on self-explicated scales iv.Estimate logit models for each respondent gather v. Bridge self-explicated scales to logit-based utility weights The Logit-Cake Method should be used when there are a large number of attributes, market share and price need to be estimated, interaction terms need to be measured and the purchase decision is at least partially cognitive. MACRO Model One other model will be discussed in this paper. It does not fall into any of the four main types of trade-off models. In fact, it is not strictly speaking a trade-off model because it does not estimate utilities for any product attributes.The MACRO Model was developed by MACRO Consulting to address a specific research methods need that frequently occurs in new product development and packaging. The MACRO Model is a unique approach to new product screening which offers several advantages over other methods i. A large number of concepts or packages (50 or more) can be screened at one time ii. harm sensitivity can be calculated for every new product concept screened iii. Price/volume can be individually optimized for every product concept tested iv.New product concepts can be screened and/or completely rank ordered on consumer appeal, market share, unit volume, gross dollar volume or gross profits. The approach involves a specific data collection procedure as well as a unique analytic protocol. The basic outline of the approach is to Sort a stack of new product concepts tease (all new product concepts, each at three price points) into two stack would definitely buy and would not buy. line of products Stack would contain several brisk products as reference have them rank order the would buy pile on a continuum from most want to buy to least want to buy.If the number of items to be sorted is too large for one sorting exercise, the task can be broken down into several sm aller exercises, with two or three items common across sorting tasks. After the data are collected for all respondents for the various sorting exercises, a bridging technique can be used to incorporate the data from the separate exercises into one rank edict of all of the items used in the study. at one time the data are combined into one rank order data set for each respondent, the MACRO Model (a first choice share of preference model) can be constructed.The MACRO Model should be used when the product is too complex to decompose into attributes, e. g. , packaging graphics, when a large number of highly different products are to be included, e. g. , new product screening, when price sensitivity needs to be measured and when products will be screened based on their revenue potential. Conclusion There are a variety of approaches to trade-off analysis, each with its advantages and disadvantages. Which trade off procedure is best is dependent on the issues and constraints of each mark eting problem.The marketing problem should be discussed with a researcher who is knowledgeable in all appropriate methodologies before a research approach is selected. Thus trade-off are necessary. The aspects of trade-off analysis are i. deep down One logistics Elements, Trade-off that occurs within a single element ii. betwixt logistics Element, Trade-off that are possible by considering the impact of one on the other iii. port wine between companies functions, these trade-off are brought about through impact on production. iv. Between the Company & other organizations, These trade-off benefit all concerned organizations.Forms of logistics management. Centralized logistics management Centralized logistics management provides that managers that also head other divisions of the company head the logistics operations. This type of management helps avoid internal problems by having a central manager that ultimately decides how logistics and operations are coordinated. Decentralized logistics management Decentralized logistics management is based on the fact that a company needs to have a division that helps control the local-adaptation needs. Dealing with different cultures requires input from the local branch.The managers that deal with the cultural differences on a daily basis normally know what works and what dont. Outsourcing Outsourcing is the final option for logistics management. When this happens, transportation firms concentrate on logistics, and the company can concentrate on its production. There are many cost savings using this type of program, however that lack of control can negatively effect many companies. International logistics requires many different options and requirements to be met in order for a company to operate internationally.Its like a big puzzle that must be put together, in order for all the goals to be met. As described above, there are many options to consider, and sometimes what appears to be an option really isnt. It is not u nmanageable to hit a road block, and you must start over with a new plan. Once the logistics plan is in place, you must constantly look for improvements in order to maximize profits and goals. Source for trade off analysis An edited variation of this article was published in the February, 1998 issue of Quirks Marketing enquiry Review. i. P.Richard McCullough, MACROModel-A Price Sensitivity and Volumetric climax to New Product Concept Screening, weed View, CA, 1995. A MACRO vacuous paper ii. Pierre Francois, Douglas L. MacLachlan and Anja Jacobs, Bridging Designs for Conjoint Analysis The Issue of Attribute Importance, Leuven, Belgium, 1991-2. An unpublished paper iii. R. Duncan Luce, idiosyncratic Choice Behavior A theory-based Analysis, New York John Wiley, 1959 Richard R. Batsell and Abba M. Krieger, Least-Squares Parameter appraisal For Luce-Based Choice Models, June, 1979. iv. Randall G.Chapman and Richard Staelin, Exploiting Rank Ordered Choice Set Data Within the stocha stic Utility Model, Journal of Marketing Research, August, 1982. v. V. Srinivasan, A Conjunctive-Compensatory salute To The Self-Explication of Multiattributed Preferences, Decision Sciences, 1988, vol. 19. vi. ACA is a product of Sawtooth Software, Inc. , Sequim, WA. Sawtooth Software offers a broad range of trade-off software products. vii. P. Richard McCullough, The Cake Method-A Proprietary Hybrid Conjoint onrush to Trade-off, Mountain View, CA, 1997. A MACRO whitened paper. viii. P.Richard McCullough, The Logit-Cake Method-A Proprietary Hybrid Choice-Based Approach to Trade-off, Mountain View, CA, 1997. A MACRO white paper. Questions for self-analyzation Q1 What is the relation between Marketing and Logistics? adduce a Suitable example to prove the relationship. Q2 What are the subsystems of Logistics Management? Expain the importance of about each system with respect to the importance in business? Q3 What do you understand by Trade-Off Analysis. Explain the various techniq ues used to do the same. Also explain the importance of trade-off analysis. CHAPTER-3International Logistics Introduction For the international firm, customer locations and sourcing opportunities are widely dispersed. The firm can attain a strategically advantageous position only if it is able to successfully manage complex networks, consisting of its vendors, suppliers, other third parties, and its customers. Logistics costs comprise between 10% and 30% of the total come costs of an international order. Thus, international logistics is a competitive tool. Effective international logistics and supply-chain management can produce higher earnings and greater corporate efficiency.Definition