UNIT - III [Compatibility Mode]

8/7/2019 UNIT - III [Compatibility Mode]

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Logistics Technology and Management

Master of Business Administration

(Global Logistics & Supply Chain Management)

UNIT - III


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GITAM SCHOOL OF INTERNATIONAL BUSINESS

Why study Business Logistics?

Wide career prospect

Manufacturing & trading firms

Service firms e.g. 3PL, freight forwards

Learning institutions

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LogisticsSystemsEngineering

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Government agencies

Other service institutions e.g. restaurants, hospitals, etc


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Logistics Management

The process of planning, implementing and controlling the

efficient, effective flow and storage of goods, services, and

related information from point of origin to point of

consum tion for the ur ose of conformin to customer

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-LogisticsSystemsEngineering

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requirements.

Council of Logistics Management

a leading organization for logistics professionals


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Logistics Management

many names including:

Business logistics

Channel management

Distribution

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Logistical management

Materials management

Physical distribution

Quick-response systems

Supply chain management Supply management


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Systems Approach/Integration

Logistics is, in itself, a system

It is a Network of activities with the purpose of managing

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the orderly flow of materials and personnel within the

logistics channel.


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The system approach

All functions or activities need to be understood in terms of how they

affect, and are affected by, other activities.

The sum, or outcome of a series of activities, is greater than its individual

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. Eg. High inventory level good or bad?

-Bad: warehouse cost, obsolete, cash flow, insurance, currency fluctuation

-Good: support demand


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Logistics role in the Economy

Logistics is an important component of GDP

Adds value by creating TIME and Place Utility(value)

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4 Ps of the Marketing Mix

Products- the set of utilities or characteristics a customer

receives as a result of a purchase

(quality, features, customer service, warranty)

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Price- the amount of money a customer pay for a product or

service

(discount, rebates, customers)

Promotion- a product or service encompasses both personal

selling and advertising

Place- component of the marketing mix support the levels of

customer service provided by the organization


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Types of Utility

Logistics Types of Utility

Time utility

value created by making product or service availability when it is needed

Place utility

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value created or added to product or service availability where it is needed


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Logistics allows efficient movementto the customers

7 Rights of Logistics

Move the Right Materials/Products

In the Right Quantity

In the Right Service

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At the Right Time

To the Right Place

At the Right Cost

To the Right Customers, Associates, Suppliers and Stockholders.


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The Logistics Evolution

Fragmentation1960

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Evolving Integration 1980

Total Integration2000


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Factors Impacting theDevelopment of Logistics

Advances in Computer Technology

Quantitative techniques

Development of the systems approach

Total cost analysis concept

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Recognition of logistics role

Erosion offirms profits

Profit leverage

Economic condition


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Key Logistics Activities

Customer Service

Demand forecasting

planning

Parts & Service Support

Plant & warehouse site

selection

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Inventory management

Logistics

Communications

Material handling

Order processing Packaging

Procurement

Return goods handling

Reverse logistics

Traffic & transportation

Warehousing & storage


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CONTENTS

Introduction

Problem Statement

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Results

Conclusion

References


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Traffic Telematics ?

Structure of Telecommunications and

Informatics

Also known as ICT (Information and

Communications Technology)

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s e sc ence o sen ng, rece v ngand storing information thru devices

(telecommunication).

It have been applied specifically GPS

technology integrated with

Information processing system and

mobile communications technology in

Automotives Systems.

The primary standard that addresses

and enhances as (ITS).

Source: http://www.whnet.com/4x4/radio/contitel01.jpg


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Some practical applications of Traffictelematics

Vehicle tracking

Trailer

Tracking

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Fleet management

Satellite navigation Mobile data & Television

Emergency warning system
http://www.whnet.com/4x4/radio/contitel01.jpg


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Some practical applications of Traffictelematics

Intelligent vehicle technologies

Car clubs

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Problem Statement

Major urban transport problems in India

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Traffic injuries and fatalities

Roadway congestionInadequate public transport

To reduce congestion, pollution, fuel use

fuel use

Environmental pollution


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Problem Statement

Traffic Congestion is probably the most Visible,

Pervasive and Immediate transport problem in Indias

cities on a daily basis

It affects all modes of transportation and all

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For Example

Speeds for motor vehicles in Mumbai fell by half from

1962 to 1993, from 38 km/h to only 1520 km/h

(Gakenheimer, 2002)

In Delhi, speed fell from 2027 km/h in 1997 to only

15 km/h in 2002 (Times of India, 2002)

Moreover, the periods of peak congestion in Delhi

now last 5 h: from 8:30 to 10:30 in the morning andfrom 4:30 to 7:30 in the evening.

In Chennai, average speed is 13 km/h

Kolkata it ranges from 10 to 15 km/h overall but falls

to only 7 km/h in the center (Times of India, 2003)

In Hyderabad, average speed is 14 km/h (The Hindu,

2006)


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Problem Statement

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Source: http://www.seas.harvard.edu/TransportAsia/workshop_papers/Padam-Singh.pdf


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Problem Statement

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India's proved oil reserves are currently estimated (as of January 2005) at about 5

billion barrels, or about 4.5% of the world total

Source: http://www.cslforum.org/india.htm
http://www.seas.harvard.edu/TransportAsia/workshop_papers/Padam-Singh.pdf


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Vehicle Sales

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Automotive Investments in India

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http://www-03.ibm.com/industries/automotive/doc/content/bin/auto_inside_india.pdfhttp://www-03.ibm.com/industries/automotive/doc/content/bin/auto_inside_india.pdf


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Percent distribution of urban trips

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Source: http://policy.rutgers.edu/faculty/pucher/FINALarticleTransportPolicy.pdf (Pendakur

2002 and World Bank 2002.)
http://policy.rutgers.edu/faculty/pucher/FINALarticleTransportPolicy.pdfhttp://www-03.ibm.com/industries/automotive/doc/content/bin/auto_inside_india.pdfhttp://policy.rutgers.edu/faculty/pucher/FINALarticleTransportPolicy.pdfhttp://www-03.ibm.com/industries/automotive/doc/content/bin/auto_inside_india.pdf


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Solution

Transportation systems worldwide are undergoing a shift from

supply side techniques to demand management

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Road Pricing in Urban Region


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Road Pricing in Urban Region

What is it ?

Road pricing: used to cover the various charges

includes fuel taxes, license fee, tolls and congestion

charges, where applied for the use of roads

Road pricing has two distinct objectives Charge for

use of road or area

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Fixed or time-of-day fees

Paid in a variety of ways:

Electronic payment

Cash payment

Prepayment

Revenue

generation such

as Tolls Roads

Congestion pricing

like (HOT) lanes or

restricted area of a

city


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Why ?

Curb traffic demand to reduce

congestion, pollution, fuel use

Manage road space for highest

productive capacity to reduce

con estion, ollution, GHG emissions,

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and fuel use

Generate revenue for roads, public

transportation, impact mitigation, other

things


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Aim

Discouraging Driving: Making journeys less polluting and more efficient

Management: Congestion pricing/value pricing. Controlling when and

where people drive, e.g. London congestion charge, peak/off-peak charges

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Financing: raising money to pay back the construction of the road, or to

build new facilities for the public

SOME DISADVANTAGES

Perceptions of fairness: is charging for a once free good unfair

Burden falls more heavily on the poor drivers than the rich regressive taxation

New toll roads in a largely free system may be seen as unjust

Revenue use can consumers be sure that their money is being well

spent


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Why Implement Congestion Pricing?

To boost the environmental performance

To reduce the illness rate.

If we consider the Stockholm, as an example their implemented the same

telematic solution to reduce the congestion and pollution level. The

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outcome result is as follows: Traffic reduced overall by

Queue times down 30-50%

Emissions down 14%


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Why & Where Road Pricing andCongestion Charging

Traveler response to changes in price of travel changes:

When travel is done

How travel is done

Where goods and people travel

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nc ence o tota trave Urban centers facing serious traffic congestion

Motorways where current or future congestion threatens loss of peak period

capacity

Corridors or regions where added revenue is needed from vehicle users

Corridors where road user fees may achieve other objectives e.g., emission

based fees to manage pollution hot spots, truck tolls to divert goodsmovement to rail or other corridors


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Road Pricing and Congestion Charging:How Much?

Coin machine & attended toll collection: 300 vehicles/hour capacity

Automated toll collection: 1600+ vehicles/hour per lane capacity

using Direct Short Range Communication (DSRC) transponders

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RESULTS Some Recent Developments

1970s: Singapore cordon charge, full electronic road pricing (ERP) in 1996

1986: Bergen, Norway, toll ring

1990-2003: Oslo, Trondheim & other Norwegian cities adopt toll rings

1995-96: Southern California high occupancy toll lanes (I-15, SR-91)

2000: Congestion pricing of NY bridges

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2002-2004: Swiss, Austrian truck tolls

2004: London cordon charge

2005: Germany tolls autobahn trucks

2006: Stockholm congestion charge

2005: Minnesota, Colorado HOT lanes



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Approaches for congestion charging

Cordon entry permit

Payment at toll plaza e.g. Norway cordon systems

Area License

Paper license or Transit Pass for visual inspection, database option e.g.,

Singapore 1970s

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Virtual license with digital camera enforcement e.g., London CongestionCharge

Electronic Road Pricing e.g., truck pricing systems Swiss, Austrian, German

Corridor or spot tolls approach - e.g., most toll lanes

Workplace parking levy, parking excise tax, and cash-in-lieu-of-parking incentives

How much they charge



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Some Cost-Effectiveness Matters

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For Implementing Road Pricing steps

Articulate system objectives

Affirm legal authority: who can implement? Under what conditions? On

which facilities?

Determine implementation framework: Area license fee? Cordon

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charge? Corridor time-of-day tolls? Use of toll revenues? Design & evaluate road pricing plan

Adopt system plan, financing scheme

Procure management & technology services: system development,

integration, operation, enforcement, evaluation, marketing



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CONCLUSION

The development of cooperative telematics services increases the value of

telematics services and can speed up the above mentioned expansion of

the market.

The key challenge is to overcome the network effect and it requires a

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comp ex partners p etween t e var ous sta e o ers nc u ng pu cauthorities to create conditions for the establishment of a mass market.



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E Lo istics and Su l

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Chain Management

Coordination



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Supply Chain: a network of activities that deliver a finished

product or service to the customer.

The connected links of external suppliers, internal

E-Commerce, Logistics and Supply ChainManagement

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ExternalSuppliers

InternalFunctions

ExternalDistributors

INFORMATION

, .



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Logistics

The process of planning, implementing, and controlling the

efficient, cost-effective flow and storage of goods,

services, and related information, from point of origin to

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po n o consump on, or e purpose o con orm ng ocustomer requirements.

Components of an Integrated Logistics System

External Supply: links suppliers to operations process

Internal Operations: manages in-process material

flow

Physical Distribution: links operations process to

customers



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External Suppliers

External suppliers provide the necessary raw materials,services, and component parts.

Purchased materials & services frequently represent 50% (ormore of the costs of oods sold.

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Suppliers are frequently members of several supply chains often in different roles.

Tier one suppliers: Directly supplies materials or servicesto the firm that does business with the final customer

Tier two suppliers: Provides materials or services to tier

one suppliers Tier three suppliers: Providers materials or services to tier

two suppliers



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Developing a Supply Base

Criteria for Choosing Suppliers

Cost: Cost per unit & transaction costs

Quality: Conformance to specifications

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On-time delivery: Speed & predictability

Size of Supplier Pool: 1 or many per item

Partnering with Suppliers



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One Supplier per Item

May only be one practical source for the item

Patent issues, geography, or quality considerations

The supply chain is integrated to support JIT or EDI

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Making multiple suppliers impractical Availability of quantity discounts

Supplier may be more responsive ifits guaranteed all your

business for the item

Contract might bind you to using only one supplier

Deliveries may be scheduled more easily



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Multiple Suppliers per Item

No single supplier may have sufficient capacity

Competition may result in better pricing or service

Multiple suppliers spreads the risk of supply chain

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n errup on Eliminates purchasers dependence on a single source of

supply

Provides greater volume flexibility

Government regulation may require multiple suppliers

Antitrust issues Allows testing new suppliers without risking a complete

disruption of material flow



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Partnering with Suppliers

Involves developing a long-term, mutually-beneficial

relationship:

Requires trust to share information, risk, opportunities,

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& investing in compatible technology Work together to reduce waste and inefficiency &

develop new products

Agree to share the gains



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Internal Functions

Vary by industry & firm, but might include:

Processing

Purchasing

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Production Planning & Control Quality Assurance

Shipping



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Distribution

Getting the right material to the right place at the right time in the

right quantity:

Traffic Management:

The selection, scheduling & control of carriers (e.g.:

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materials & products Distribution Management:

The packaging, storing & handling of products in

transit to the end-user.



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Trends in Logistics Management

Increased awareness of strategic benefits of integrated logistics

management

Third-party logistics services

- -

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Environmental sensitivity

NOW: Supply chains create tremendous amounts of waste material toprotect goods in shipment and storage.

FUTURE: Distribution will use reverse logistics, the recycling orproper disposal of cardboard, packing material, strapping, shrink wrap,pallets, etc...



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upp yChain for

MilkProducts



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Supply Chain Management

A philosophy that describes how organizations should managetheir supply chains to achieve strategic advantage

The objective is to synchronize requirements of the finalcustomer with the flow of materials and information along the

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supply chain to reach a balance between high customer serviceand low cost

Supply Chain Management entails:

Coordinating the movement of goods and delivery ofservices.

Sharing information between members of the supply chain.

For example: sales, forecasts, promotional campaigns,and inventory levels.



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SCM: the need to reduce variability or the impact ofvariability on the supply chain

Supply network variability

late deliveries: weather, equipment breakdown

quality problems

Manufacturin rocess variabilit

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machine reliability and equipment failure

changeovers / setups / part expediting

design and quality problems

Customer network variability

cancellations and irregular orders

equipment failure scheduling

Carrying safetyinventories are the mostcommon approach to

dealing with variability



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Mobilit Services in Urban Re ion

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Objective

Required progress in human transit to achieve a more efficiency and to

meet the minimum service level of different stakeholders have different

objectives

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e serv ce s ou cover t e w o e r an rea

Reduction ofnon - full driving vehicles

Safe journey with minimal price

Provide service till End User

Optimize the transit services by considering thecosts and benefits of schemes, within both

urban and intercity area by using well informed

quality services Source: http://w ww.camden.gov.uk/ccm/cms-service/stream/image/?image_id=338326

http://www.camden.gov.uk/ccm/cms-


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Introduction

Transport, or Transportation, is the movement of people and goods

from one place to another

Two kinds of transportation

Freight transportation

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Load with goods As a ship, or vehicle of any kind, for transporting

Provide reliable delivery and pick up of goods

Traveler transportation

Urban Transit

Intercity Transit International Transit

Source: http://ocw.mit.edu/NR/rdonlyres/9576C84F-B3CB-

4926-BC7D-10050C2F4BB2/0/chp_transport.jpg



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Introduction (2)

Transit commonly refers to Public transport, the passengers use transportationsystems to travel

Alternative calls: Public Transit or Mass Transit

Transit can usefully be classified in a variety of ways (wikipedia.org):-

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uses Metro/underground, bus, taxi, tram and ferry Smaller urban areas

uses buses and taxis

Rural areas

rely on buses, taxis and share taxis

Inter-urban and regional transport

based on the train, coach and the plane Long haul destinations

uses the plane

Alternative infrastructure (Road, rail, water and air)



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Introduction (3)

Confusion about Urban Terms

The City as a Municipality or Local Authority Area

The City as a Metropolitan Area

The City as an Urban Area

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r an rea means

Never be the same as a municipality

It include many municipalities, though in the case of many geographically

large municipalities

The urban area will be smaller than the core city

Traveler

One who travels or has traveled, as to distant places



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Stakeholders in Transportation

Stakeholders are groups, who have an interest in the business activities

In Transport, stakeholders objectives include:

Passengers or freight users:

desire low prices/costs and reliable safe predictable journeys

Employees:

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w o see g wages an goo wor ng con ons

Operators: who want minimum costs, maximum profits and also to meet government targets

Managers:

who seek bonuses and promotion

Shareholders or Owners:

who want maximum profits, dividends and growth

Local communities:

who want excellent transport infrastructure and services with minimal negative externalities

Government: who want satisfied voters, investment in new infrastructure (from the private sector) low expenditure and high

tax receipts Source: http://tutor2u.net/default.asp



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Stakeholders in Transportation (2)

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http://tutor2u.net/default.asp


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Stakeholders in Transportation (4)

Travel/Trip time

Flexibility

Comfort

Availability

Cost Customer

Represented in simplified form

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Unmotorized

Motorized

CO2

Noise

Providing space

Society

Reliability

Business gains

Service

Operators



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Problem Identified

Consider the existing and future urban traffic

Problems identified:

Traffic Congestion and environmental effects

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Inflexibility for traveler Imbalance for customer demand and available service

In urban mobility service, stakeholders causing conflicts because of having

different service objectives

Fixed tariff even in having less demand



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An example...

Consider an issue which shows necessity of

logistics in urban areas for human mobility:

Mr.X wish to travel from University to sdpark.

To reach his destination having different mobility

sources

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IfX takes cab, it costs around 50 & 30 minsjourney time

IfX walks to bus stop and takes bus, it costs

around 30 & 50 mins journey time

IfX travel by train, it costs around 40 & 35 mins

journey time

IfX rent a car then it costs around 100 & 20

mins journey time.

Finally, Mr.X has to reach his destination with lessmonetary value, comfortable journey with

minimum travel time.



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Motivation

If customer make out his objectives

Less pay even in urgency

Comfort

Any time service accessibility

Quality based service

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The other stake holders were unable to meet their objective Traffic congestion

Air pollution

Parking problem with more custom vehicles

More usage of natural resources like petrol, diesel

Environmental effects like pollutants, noise level

Increasing accidents

Stakeholder conflicts

Different stakeholders have different objectives

Optimize stakeholder objectives



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Various Modes

The action of human mobility in urban area

Why to move

Continuous change required in the position of a body relative to a

reference point.

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Where to move home, workplace, stadium, production facility, warehouse,

department store, with that destination always being the place of

activity, e.g. staying at home, working, running, producing, storing,

distributing.

Mobility is not a static concept it always unstable and change position

from one place to another.

Various modes of mobilityPedestrian Motor cycle Taxi Bus

Bicycle Personal car Rent a car Car pool



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Present urban area structure

Population (billions)

Year 1950 1975 2000 2005 2030

Total 2.52 4.07 6.09 6.46 8.20

Urban 0.73 1.52 2.84 3.15 4.91

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In the last 50 years, 30% of the worlds population is increased

Closely 750 million people were city-dwellers

People run their own vehicles to meet their objectives

Due to this society gets effect with increase traffic and environment effects

Getting business loss for transport service providers

Rural 1.79 2.56 3.24 3.31 3.29

Urban %

29.0 37.2 46.7 48.7 59.9



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An Overview

Let us evaluate the level of services

Travel/Trip time

Flexibility

Comfort

Unmotorized

Motorized

Travel/Trip time

Flexibility

Comfort

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va a y

Cost

Customer

va a y

Cost

Customer



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An Overview


Conceived stakeholders with Human mobility modes

Travel/Trip time

Flexibility

Comfort

Availability

Unmotorized

Motorized

Travel/Trip time

Flexibility

Comfort

Availability

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CostCustomer

CO2

Noise

Providing space

Society

Cost Customer

CO2

Noise

Providing space

Society



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An Overview


Conceived stakeholders with Human mobility modes

Travel/Trip time

Flexibility

Comfort

Availability

Unmotorized

Motorized

Service

Operators

Travel/Trip time

Flexibility

Comfort

Availability

Service

Operators

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CostCustomer

CO2

Noise

Providing space

Society

Reliability

Business gains

Cost Customer

CO2

Noise

Providing space

Society

Reliability

Business gains


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A R t f C fli t


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A Root for over Conflicts

Since research began by conceiving the issues like car emissions, traffic congestion,time delay and cost criteria for urban people etc., from which developed a conceptcalled car pooling

Car Pooling

It is ridesharing of individuals who are going to the same destination

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It saves economy (fuel, parking, road investment) Social benefits (car accidents reduction, socialization benefits)

Some of the most identified benefits points are:

Economize money on the costs of running personal car and buying fuel

Economize on parking cost Riding can be quite stressful, both mentally and physically, but this service can give an

interruption from stress

Be like a passenger and can go other things like paper reading, have a relax or do somework etc

Reduction in pollution and congestion.

Travel Time Less Comfort Better CO2 Minimum Space required

Flexibility Possible Availbility Some time Noise Minimum Business gain to provider and customer


A R t f C fli t (2)


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A Root for over Conflicts (2)

Here typical variable costs for a 3.7-miles (6 km) round trip for

different modes:

From the previous example

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2 10 3 4 1.5

Noise, safety and security issues are same as personalcar, but concept is to reduce the personal cars and tocontrol the congestion from their

The additional benefits like

Provides cost savings

Reduces parking problems

Reduces congestion and pollution

Provides a more sociable commute

Reduces the number of single occupancy cars



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A model

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A transport model is a simplified representation of a complex transport system

Trip Generation

Trip Distribution

Modal choice

Traffic Assignment



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Four-Step Transportation Model

Divide study area into study zones

4 steps

Trip Generation

Decision to travel for a specific purpose (eat lunch)

Trip Distribution

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o ce o est nat on a part cu ar restaurant e nearest restaurant

Mode Choice Choice of travel mode (by bike)

Network Assignment

Choice of route or path (Elwood to Lincoln to US 69)

Trip Generation

Trip Distribution

Modal spilt

Traffic Assignment



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Trip generation

Trip Generation to predict the number of trips beginning from

and destined for each zone based on population

Model estimation

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Perform statistical tests to measure significance of differencesbetween existing and new rates

Model structure options

New variables like travelers, distance, trip purpose etc.,

Model implementation

Identify weaknesses and improve functionality

Determine desired interface and program features

Recode existing program with new input data



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Trip generation Model

Calculate number of trips generated in each zone 500 Households each making 2 morning trips to work (avg. trip ends ~ 10/day!)

Worker leaving job for lunch

Calculate number of trips attracted to each zone Industrial center attracting 500 workers

McDonalds attracting 200 lunch trips

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um er o r ps a eg n rom or en n eac zone

Trips for a typical day

Trips are produced or attracted

3 variables related to the factors that influence trip production and attraction (measurablevariables)

Density of land use affects production & attraction Number of dwellings, employees, etc. per unit of land

Higher density usually = more trips

Social and socioeconomic characters of users influence production Average family income

Education Car ownership

Location Traffic congestion

Environmental conditions


i i d l (2)


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Trip generation Model (2)

Trip purpose

Zonal trip making estimated separately by trip purpose

School trips

Work trips

Shopping trips

Recreational trips

Travel behavior depends on trip purpose

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School & work regular (time of day)

Recreational & shopping - highly irregular

Forecast # of trips that produced or attracted by each zone for a typical day

Usually focus on Monday Friday

Forecast function of other variables

Attraction

Number and types of retail facilities

Number of employees

Land use

Production

Car ownership

Income

Population (employment characteristics)


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E l t i bl i t i ti d l


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Explanatory variables in trip generation model

Socio-economic variables

Car ownership

Number of persons

Age of head of household

Distance

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Land use variables

Offices

Industry

Commerce

Shops

Education and health

Public buildings

Open space Transport and utilities

Vacant land


Other Models


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Other Models

Trip Distribution

Predicts where trips go from each TAZ

Determines trips between pairs of zones

Tij: trips from TAZ i going to TAZ j

Different methods but gravity model is most popular

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Mode Choice/Split

In most situations, a traveler has a choice of modes

Transit, walk, bike, carpool, motorcycle, drive alone

Mode choice determines # of trips between zones made by auto or other mode, usually

transit

Trip Assignment

Trip makers choice of path between origin and destination

Path: streets selected Transit: usually set by route

Results in estimate of traffic volumes on each roadway in the network


T h i l i f t t


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Technical infrastructure

The following structure defines the service flow between demander and Offerer

Demander - 1 Demander - 2 Demander - 3

Desktop, PC, Laptop, Mobile Pagers,

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Integrate with other

providers

Other issues (weather forecasting,Routing, Entertainment)

Terminal softphoneDemande

rInterface

Database

ServiceProvider

Offerer - 1 Offerer - 2 Offerer - 3

Desktop, PC, Laptop, MobilePagers, Terminal softphone

OffererInterfac

e

BanksPaymentService

UsingWeb

Services

AGENTS


Conclusion


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Conclusion

Increasing mobility generates economic development,welfare and social

freedom

It remove negative effects in terms of congestion, environmental, noise,

energy use, space use, accessiblity and other problems

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Developing this type of service is not only for human mobility and even

for goods to improve the heavy vehicle congenstion in city areas and canimprove the financial growth


Future Work


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Future Work

Continuous data updation such as demander

information, offeror information, other

clients

Make connectivity for different

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commun cat on sources suc as mo e,

internet etc.) Generating different reports such as daily

profit, daily credits earned by each service

provider and all other transactions

Affiliate with reputed banks to make better

customer payment transaction



86/86

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Documents

UNIT - III [Compatibility Mode]