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Role of Logistic in SCM

Presented by: Aarti Mishra Fashee Sendhu Sweta Kawdey Manprit Kaur

Supply Chain
A Supply Chain(SC) is a sequence of organization their facilities, functions and activities that are involved in producing and delivering a product or service. Eg. Supply Chain of Manufacturing Organization

Supplier A

Supplier B
Supplier C







History of Logistics

In the 1950s and 60s, the military was the only organization using the term logistics. There was no true concept of logistics in private industry at that time.

Evolution of Logistics in SCM

S c o p e

Global Logistics Supply Chain Logistics Corporate Logistics Facility Logistics Workplace Logistics

I n f l u e n c e






Logistics involves the movement of material and information in a SC.

Type of Logistics

Business Logistics Military Logistics Event Logistics Service Logistics

3PL Reverse Logistics

Role of Logistics
Ensuring all the requirements of the customers are met on time in an

efficient and safe manner.

To coordinate with third party logistics (3PLs). To ensure that there is a safe and timely dispatch of goods. To draft plans, policies and procedures for successful implementation of logistics system. To ensure that the business goals of the organization are in synchronization with logistics system.

Role of Logistics cont

To create and maintain customer support.

To maintain coordination with vendors, service providers and transport carriers. To ensure that no fraud is committed. To ensure timely supply and payment of goods and reduce inventories.

Key Logistics Activities

Customer service Demand Forecasting Order Processing Transportation Warehousing Material Handling Packaging Inventory Management Supply(procurement) Management Reverse Logistics Parts & Service Support Logistics Information/ Communication

Performance Measurement in SCM

Three types of performance measurement criteria Supplier performance Purchasing/ material management performance Supply chain performance

Strategic Logistics Plan

Strategic logistic plan depends on various functional area Marketing Manufacturing Finance/accounting Logistics

Strategic Logistics Plan

Marketing: Sales volume by month Type of customer Regional area Product introduction and deletions Customer Geographical

Strategic Logistics Plan

Customer service policy: Order placement method Order entry Target cycle Order cycle variability Desired fill-rate or in-stock level

Strategic Logistics Plan

Manufacture: Location of current and planned production facilities Plan volume and product mix for each location

Strategic Logistics Plan

Finance/accounting: Forecast of cost based on inflation rate and growth rate Perform cost trade off analysis

Inventory Planning & Management

Inventory planning and management in the logistics framework consist Forecasting Order Quantity Engineering Fill Rate Planning Control Policy Deployment

Inventory Planning & Management

How to reduce inventory & increase service at the same time?


Minimize Inventory Carrying Rate

Eliminate Supply Chain Blind Spots Minimize/ Eliminate Purchase Order Cost

Reduce Lead Times in Each Supply Chain Link

Measure & Improve Forecast Accuracy Return on Inventory

Lead Time Demand Management

Supply in Logistics
Supply in logistic framework consist of Supplier service policy (SSP) Sourcing Supplier integration Purchase order processing Buying and payment

Transportation in Logistics
Transportation in logistics framework consist of Network design Shipment management Fleet /container management Carrier management Freight management

Warehouse in Logistics
Warehouse in logistics framework consist of Receiving Putaway Storage Order picking Shipping

7 Disciplines of Logistic Organization

The seven disciplines tie together enterprises across the supply chain, logistics activities within the enterprise,& personal community development objectives within the logistics organization. Supply chain organization managemententerprise to enterprise Corporate logistics organization alignmentlogistics to enterprise Logistics strategic planning and project managementlogistics to enterprise Logistics process and activity managementlogistics to enterprise Logistics professional developmentprofessional to logistics Human-friendly logisticsprofessional to logistics Community-friendly logisticscommunity to logistics

Future Direction for SCM

Effective planning, operations and control in the logistics & SC area will be: Shift for virtual integration Collaboration Knowledge of core competencies Technology & connectivity Managing the people skill Comprehensive SCM