Overview

Section B: Group-02 Amitabh Gautam 13P123 Disha Aggarwal 13P140 Nikhil Jain 13P152 Shashank Shukla13P166 Dhaval Thakkar13P242 Arun Ahlawat 13P199 Niket Gupta 13P217Logistics

Operations Strategy Term VI MDI Gurgaon1Agenda2Overview3Definitions4Components of Logistics System

5Interrelation Between Transportation and Logistics6Transport Costs and Goods Characters in Logistics7Role of Transportation in Service Quality 8Forms of Logistics Operations9Supply Chain Management10Reverse Logistics11Maritime LogisticsIt plays an important role in international freightIt is cheap and has high carrying capacity, vital for transportation of particular goods such as crude oil and grainsIt takes longer time and strongly affected by weatherMaritime Industry has mainly 3 types of operations:

Liner Shipping: The business is based on the same ships, routes, price and regular voyages

Tramp Shipping: It has irregular transport prices, unsteady transport routes and schedules. Usually delivers goods like dry bulk cargo and crude oil

Industry Shipping: Sometimes needs specialized containers, such as high-pressure containers for natural gas since its main purpose is to ensure supply of raw materials

12Land LogisticsIt extends the delivery services for air and maritime from airports and seasMain transport modes are railway transport, road freight transport and pipeline transportTo improve the land transport in efficiency and reliability, a revolution of transport policies and management is required, e.g. pricing13Air Freight LogisticsIt provides the delivery with lower risk of damage, security, higher speed, flexibility, accessibility and good frequency for regular destinationsIts disadvantage is high delivery feeFuture pattern of air freight logistics is cooperative with other transport modes, to provide a service base on Just-In-Time, and door-to-doorExpress DeliveryInvolves more frequent delivery of materials, at the right time and at the right place in the production processThe characteristics of express delivery are: door-to-door serviceEfficiencyTraceabilityJust-In-Time (JIT)Growing various delivery demands14E-Commerce15Outsourcing of Logistics Activities16Efficiency in logistics activities indispensable to effective business operations

Globalization driving higher level of complexity in logistics network

Importance of distribution and transportation in maintaining sustainable competitive advantage

Companies seeking to concentrate on core activitiesNeed for Outsourcing17Advantages of 3PL operatorsGreater expertiseFlexibility for wide geographyLower operating costsBetter quality of service

Outsourcing to 3PL has followed two trendsIncreasing range of services outsourcedIncreasing volume of traffic outsourced

Key challenge for 3PL operators Overcoming clients concerns about relinquishing control

Outsourcing of logistics is expected to increase3PL Third Party Logistics18Assembles and manages resources, capabilities and technologies of own organization with those of complementary service providers

Best of breed approach

Creates unique and comprehensive logistics solutions that cannot be achieved by any single provider

Complete solution; Centralized point of contact4PL Third Party Logistics19Logistics in India20Growth Drivers

21Logistics infrastructure lags behind global peers

Planned investment cannot support 2.5 fold expected increase in traffic by 2020Current freight infrastructure Networks built before independenceRailwaysOver 80% of current network built before independence1951-2007: 10 fold growth in traffic; 1.4 fold growth in track length

Roadways200 fold traffic growth; 8 fold increase in track lengthHighways Only 15%; Two/Four lanes 0.5%Paved road density 940km/1000sq.km; Japan 21000 km, UK 7050 kmHighways are structurally inadequate

WaterwaysLimited investments after independenceLoss of key routes following partition

Challenges in Indian Logistics22Logistics flows are highly concentrated

7 corridors connect 15 high growth clustersThese 7 corridors account for 50% of freight trafficThese clusters are expected to account for 60% of GDP growth in next 10 years

Challenges in Indian Logistics23Indias freight traffic relies excessively on roads

This is despite the fact that 2/3rds of freight travel being more suitable for rail and waterways65% is bulk; 75% transported over distances more than 400kmRoads are cheapest only for non-bulk and