Importance of Logistics Management and Emerging Trends

By
Kritika – 47
Madhujith T.H – 49
XIME, Bangalore
Batch 2008-10
LOGISTICS
MANAGEMENT AND
EMERGING TRENDS
 Logisticsis that part of the supply chain
process that plans, implements and
controls the effective forward and
reverse flow and storage of goods,
services and related information
between the point of origin and the
point of consumption in order to meet
the customer’s requirements.

Elements
 Transportation – air, water, land
 Warehousing
 Inventory Management
 Packing and Utilization
 Information and communication
Importance of Logistics
Management
 Transportation costs
 Large retailers, low distribution costs –
eg. Metro Cash and Carry
 Deregulation – e.g. Fiat – Tata
 Changing strategies – eg Toyota Way
 Technology – eg. Wal-Mart, DELL
 Globalization
 0% fuel
 0% technology
 0% investment
 0% dispute
 99.9999 % performance
 100% customer satisfaction
‘The Show must go on’
THE WONDER OF
MUMBAI
DABBAWALAS
What is NMTBSA??
 Nutan Mumbai tiffin box supply
Association.
 It started in 1880 – british raj
 Total area coverage is 60 kms.
 5000 employees
 Each person working is a share holder
 4,00,000 transactions per day
 Time taken – 3hrs.


 Six sigma performance
 ISO 2000 certified
 Error rate 1 in 16 million transactions.
 Technological backup: Nil
 Cost of service: Rs. 200/month


How do they do it??
 Organisational structure


 Logistic management
Executive committee
(5 members)
Team of 20 to 25 people headed by a group leader
Individual dabawalas=30 tiffins/day

Logistic Management
 9.30 am
 The “pick up” people pick up the tiffin boxes
from house wives

 10.34 – 11.20 am
 This period is actually the journey time.
 Dabbawalas load the wooden crates filled
with tiffin box in the luggage and goods
compartment.

11.20 to 12.30 pm
The unloading takes place at the
destination station.
The “delivery” people unload the boxes
from the train

And re-arrangement of tiffin boxes are
done as per the coding.


 12.30 to 1.00 – lunch time

Coding
 The coding indicates
 the originating rail station
 the destination station
 the building name
 the floor number of delivery
 POKA-YOKE techbique- color indicates
the group responsible for collecting
dabba at particular point.

 1.15 to 2.00 pm

 Here begins the collection process.

 The dabawalas collect the tiffin from the

offices where they have delivered almost
an hour back.

 2.00 to 2.30 pm

 the return journey

 The group members meet at the

segregation as per the destination.

 2.48 to 3.30 pm

 The return journey by train

 Group finally meets up after the day’s

routine of dispatching and collecting from
various destination offices.

 3.30 to 4.20pm
Here the final sorting and dispatching
takes place.
The group finally meets up at the origin
station
The tiffins are finally sorted out as per their
original areas. This is again done through

the coding process.
Latest Trend
 The Web site (www.mydabbawala.com) –
online booking
 on line poll


 Booking through SMS

The royal visit
 Prince of Wales


 SirRichard Branson, chairman of Virgin

Atlantic Airlines.
CASE STUDY
Every day Amul collects 447,000 litres of milk from
2.12 million farmers, converts the milk into branded,
packaged products, and delivers goods worth Rs 6
crore (Rs 60 million) to over 500,000 retail outlets
across the country
GCMMF
 Gujarat Cooperative Milk Marketing
Federation (GCMMF) is the largest
food product marketing organization of
India.
 aims to provide good returns to the
farmers and also to fulfil the
requirements of consumers by giving
them quality products
 has 42 regional distribution centers in
India, serves over 500,000 retail
outlets and exports to more than 15
countries

Problems to be
addressed:
 Logistics in collection of:
 6 lts of milk everyday
 from 10600 separate villages

 Logistics in co ordination of :
 storing ,processing and delivering the
milk.
 Suppliers Logistics:
 Weighing the milk
 Determining the fat content
 Calculation of purchase price
The Need
 formulate an IT plan

 Integrate its existing applications with ICT
tools

 Connect its regional and field offices
through e-media
Implementation
 Amul started implementing ERP in
phases.

 Automatic milk collection system units
(AMCSU) at village societies were
installed to automate milk producers
logistics.


 At milk collection counter
 - farmer drops the card

 - milk is weighed

 - calculates amount due to farmer


 - value of milk is printed

 Amul connected its zonal and regional offices
through VSATs.

 Amulis also using GIS (geographic
information system) for business planning
and collection process.
 IIM-A provided Amul with a software-Dairy
information system kiosk(DISK) to facilitate
data analysis and decision support in
improving milk collection.

Indian Railways

 Largest network under management
 Revenues: 12 billion $
 Passengers: 14 million/day (approx)
 Freight: 2 million tons/day (approx)
 Manpower: 1.4 million

Indian Railways
Contd….
 Track – 63000 km

 Around 7000 – 8000 stations

 Freight: 2 million tons/day (approx)


Long Range Decision
Support Systems
 Used to manage and plan strategies for
IR
 Implemented in 1998
 Public – private partnership
World bank + IR personnel + overseas
consultants
 Powerful tool for pre-feasibility
investment analysis for networks
Long Range Decision
Support Systems
Contd….
 Based on traffic projections over the next
two decades
 Uses-
Ø Simulation Models
Ø Optimization tools
Ø GIS based interface
Ø Develop ‘what if scenarios’
Ø Demand and supply side
LRDSS MODEL
PROJECT IDENTIFICATION TRAFFIC FORECASTING MARKET ANALYSIS
SUPPLY ANALYSIS DEMAND ANALYSIS
FACILITY TRAFFIC ASSIGNMENT

PERFORMANCE
COST BENEFIT ANALYSIS FINANCIAL FORECASTIN




Solutions Providers
New Needs, New
Players
 Solutions Providers – with the
increased importance of logistics
management, a new market opened
and there are companies that solve the
logistics management problems.
Oracle
Infosys
FedEx – case study
DHL etc
Solutions Providers

 Oracle – Transportation Management
Systems
 It integrates and streamlines -
Ø transportation planning, execution, freight
payment, and business process
automation
 Single application
Oracle – Transportation
Management Systems


 Oracle Transportation Management -
Ø Lowers transportation costs
Ø Improves customer service and asset
utilization
Solutions Providers
q Infosys – Master Data Management
Enables Logistics Service Providers
(LSPs) to efficiently manage revenues,
expenditure, shipment, and large ERP
implementations.

qIBM – RFID later case study



 Emerging Trends
1.Case Study:
q FedEX started Virtual Order – Online B2B site.
q
qShippers can setup an online catalog of goods
that consumers can order from.
qFedEx setup Express Distribution Centres like Dubai,

Philipines.
q
qFedEX systems are fully integrated with that of the
shippers
q
q
q
C a se S tu d y :
 Customer places the order.

 Shippers notified

 Order Enters into FedEx network.

 Order collected from a variety of shippers.

 Within 48 hours delivery to customer

 Mainly for High Value, low weight goods like
electronic and medical goods
Emerging Trends
 2. Two Dimensional Bar Codes

1D BarCode
2D BarCode
2. Two Dimensional Bar
Codes
 1D barcode contains only vertical lines
 2d barcodes contain both horizontal and
vertical lines
 Can store information of an entire
freight
 Uses laser scanners to read. Currently
not available.
3. Going Green

 Use software that minimizes carbon
emissions and cost savings

 Eg – by incorporating algorithms that
include data about location and date to
consolidate shipments by size, product
compatibility and trailer types
3. Going Green



 Case Study:


 DHL’s green initiative by implementing multi
site ISO 14001
q Bought 1.3 billion Euros worth of new fleet
―Planes quieter, more fuel efficient
q Reduced carbon dioxide emissions by 6.864
tons
q Improved waste management
 Over 53% general solid waste recycled
4. RFID
Two types:

 Active – contains battery and transmits

signals
 Passive – no battery, requires external
source
 Famous example :Wal – Mart
RFID Services

 Integrate real-time data capture with
business processes to reduce time to
market
 Track mobile assets to reduce loss and
theft
 Optimally manage work in process and
logistics networks
 Build a secure, responsive and flexible
supply chain—to ultimately deliver
value to your end customers


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By

Team of 20 to 25 people headed by a group leader

Individual dabawalas=30 tiffins/day

from the train

done as per the coding.

 12.30 to 1.00 – lunch time

 The dabawalas collect the tiffin from the

 The group members meet at the

 Group finally meets up after the day’s

original areas. This is again done through

 SirRichard Branson, chairman of Virgin

 - calculates amount due to farmer

 - value of milk is printed

PROJECT IDENTIFICATION TRAFFIC FORECASTING MARKET ANALYSIS

SUPPLY ANALYSIS DEMAND ANALYSIS

FACILITY TRAFFIC ASSIGNMENT

COST BENEFIT ANALYSIS FINANCIAL FORECASTIN

qFedEx setup Express Distribution Centres like Dubai,

 Active – contains battery and transmits

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