Logistics and Supply Chain Management

Prof. Suman Saurabh

Marks Distribution

External: 50 marks Internal: 50 marks

Presentation: 20 marks Case Study Presentation: 10 marks Class Test: 10 marks Attendance: 10 marks

Syllabus Introduction, function and strategies of Logistics.

Understanding about C&F, wholesaler and retailer.

Transportation management

Customer service

Order taking, raising invoice, goods return and expiry product

Cont….

Introduction, philosophy of Just in time method and kanban system.

Introduction, strategies, challenges and opportunity of Supply Chain Management.

Introduction

Logistics acquired from Greek word “LOGO”. Means “science of computing and calculating”

It was first used by military to procurement, maintenance and transportation of military materials.

Cont…

Science the beginning of the last decade of the 20th century, there has been a fast changes in the business world due to environmental transformation. That is result into tremendous growth opportunity In business world.

This is the outcome of heavy industrialization as a government’s liberalisation policy and globlisation of world market.

Cont… Due to stiff competition, consumer are

becoming very conscious about his purchase decision and value for money.

Retailer are also worried about his ROI.

Firm need to generate higher level of customer satisfaction and provide highest value to share holder.

Cont…

All these are possible by Improving his productivity as well as profitability.

In short :“Right Product at a right time”

Logistics Management

Definition:

“Logistics management is the art of managing and controlling the flow of row material, work in progress and finish goods from point of origin to point of consumption towards customer satisfaction.”

Function of Logistics

The generic function of logistics management is making available the required quantity of required quality products at the point of use at right time at the least cost.

Cont…

There are mainly three types of function of logistics.

Inbound logistics function Production related logistics function Outbound logistics function

Inbound logistics function Inbound (Procurement) function of logistics

management ensures a smooth flow of raw material, part and component of specified quality and quantity from vendor to the production center.

It consist entire activity of logistics from procurement of material to Production center which is mention billow:

Activity involve on inbound logistics

Input need

Source Study

Negotiation with vendor

Order placementSelection of

Vendor

Delivery of Product

Storage

Production Related Function This function deals with efficient management

of work in progress management and its flow between the different stages of manufacturing. For example – quality control, bottling, packaging.

Primary function is to establish and maintain an maintain an orderly, smooth and economic flow of material facilitating total production system, avoiding ideal time for any manufacturing facility due to non availability of any input items.

Production Related Function

Production Schedule

Inventory management

Input

StoragePackaging

Material handling

Outbound logistics unction Outbound logistics function deals with

physical distribution of product from point of production to point of consumption.

Physical distribution function of logistics ensure zero-defect service and prohibits stock – out by making the final product available regularly with minimum inventory level.

Outbound Logistics Function

Distribution warehousing

Transportation

Order processing

Customer satisfaction

Output inventorymanagement

Strategic Logistics Management While looking at logistics management

strategically, it is essential to examine the classic approach to formulating a logistics strategy that begins with the firm’s overall strategy and then defining the logistics strategy that will enable the firm to reach its overall objectives.

It is a subset of the overall corporate strategy that deals with the management of the flow of materials/product in downward approach.

Step of Strategic Logistics

1) Corporate Visioning2) Strategic Logistics Analysis3) Logistics planning and evolution

Corporate Visioning

It start with definition of the corporate vision about objectives behind the potential use of logistics for gaining differential advantage and long term performance of the firm.

It reflect corporate mindset about logistics in term of planning process, identification of potential, alternative logistics approach.

Continue….

Key element of corporate vision towards strategic logistics management.

1. Recognition of service requirement for different market segment.

2. Understanding of key external environmental forces along with their impact.

Strategic logistics analysis There are three key function of the step

are as follow.

1. Development of various strategic alternatives2. Evaluation and review of each developed

alternatives for their capabilities for attainment of corporate vision, risk involved and additional resources required.

3. Final selection of the best alternatives and formulation of detailed logistics plan.

Logistics planning and evaluation

Logistics Planning is blueprint of total logistics systems in term of:

Functional goals to achieve. Programme and procedures for implementation

of new logistics system. Time for framework. Authorities and responsibility Continuous evaluation and measurement of

performance for further improvement.

Second Chapter

Distribution System

Channel partner for Pharmaceutical company.

Manufacturer

C & F OR

Super stockiest

Stickiest OR

Distributor

ChemistOR

RetailersConsumer

Carry n Forward Agent (C & F) C & F agent is distribution agency which

manage all distribution function of company. Its work virtually like a company distribution

office. It is appointed by the company on mutually

acceptable agreement.

Function of C & F agent To store company goods safely as specified in

various schedule of drugs.

To execute order to company.

To follow up documentation procedure.

To provide all detail about sales to company.

Cont…. To dispatch the company’s promotional

material to company’s field force.

To submit sales tax and other returns to respective authority.

To provide all feedback regarding all matters concerning the business.

Why C & F agent

1) To manage distribution system2) To provide better service to all channel

member.3) To reduce cost of distribution and company

cost because No sales transaction taking place To avoid trade margin Wages are very less of staff Warehouse rent

Stockist

Stickist is main channel partner of company which is appointed for a specific area to resell company product to chemist or retailer.

Function of stockist

Maintenance of adequate stocks of the company product, at all time, to prevent stock out.

To provide proper storage facilities in term of maintaining the specific temperature.

To resell company product among retailers, nursing homes and hospital.

Cont…. To provide details regarding sales and stocks

held by them at the end of every month

To collect the returned goods from retailers and other parties.

To provide feedback regarding consumer reactions to company.

Retailer Retailers in the Indian pharmaceutical

industry is known as chemists and druggists.

Retailer who dispenses the prescription of a medical practitioner and sell medicines to a patient.

Retailers is very important source of information regarding the prescribing behaviors of doctors and competitor activities.

Function of retailer

To hold ready stocks of various important and essential medicines needed to cater to the prescription of doctors.

To provides supplementary information required by patient regarding the dosage and side effect.

Thank You