The transportation industry is a complex of institution that includes not only the carriers themselves (the ocean shipping companies, airlines, and truckers), but also the supporting terminal operators, freight forwarders, customhouse brokers, ship brokers, financial houses, insurance firms, and engineering and manufacturing concerns, There is also an array of governmental agencies, that oversee the operations of the industry and control the rates charged and services provided. Changes in any of these institutions or their foreign counterparts have ramifications on the rest of the industry and affect the service provided to the shipper of goods in international trade. Physical distribution managers have an array of alternative methods or modes of transportation for the movement of goods across borders and within countries. Various forms of sea, air, and land transportation may be available for use singly or in combination. The manager’s choice is influenced by the specific product and market characteristics. Large, Continue reading
Logistics Management
Factors Affecting Transportation in Logistics
Whether the movement of material and equipment is by rail, sea, air or road, adequate facilities for their free flow to and from the factory must be ensured. The factors which affect progress at the construction stage, and production and dispatches after commission, have been discussed below: 1. Terminal Facilities Terminal facilities are usually grudgingly provided. One reason for this is that any delay or any in convenience caused to truck operators is not a loss to the project. It is treated as a loss to the carrier. In some cases, this may be true. However, this usual incidence of stoppage or regulation of the production process can be minimized, if not eliminated. Often extreme stinginess is expressed in planning for these facilities, which include storage space, and loading and unloading arrangements in a suitable area. If the storage space is not adequate or if the traffic is exceptionally heavy, Continue reading
Concept of Strategic Logistics Planning
Strategic logistics planning is defined as a unified, comprehensive, and integrated planning process to achieve competitive advantage through increased value and customer service, which results in superior customer satisfaction, by anticipating future demand for logistics services and managing the resources of the entire supply chain. Strategic logistics planning carried out within the framework of the overall corporate goals and plan. It therefore requires an in-depth understanding as to how the different elements and logistics activities relate in terms of trade-offs and the total cost to the organisation. Logistics can therefore best formulate its own strategy only by understanding the overall corporate strategy. Formulating the Strategic Logistics Plan The development of the strategic logistics plan is dependent on the marketing, manufacturing, finance/accounting and logistics functional areas. Marketing provides information about product or service offerings, pricing and promotion for each channel. This includes planned sales volume per month, type of customer, and Continue reading
Concept of Shipping Conferences in Logistics
The conferences are association of companies, resembling an ordinary cartel or trust, formed to control supply and prices and to limit entry into the trade. The Royal Commission of 1909 defined Shipping ring or conference as ‘a combination, more or less close of shipping companies formed for the purpose of regulating or restricting competition in the carrying trade on a given trade route or routes’. Shipping Conferences are formed only in a line trade and not in the tramp service, because the former is a more stable and regular organisation. Since the conferences are made for particular routes only, a shipping company may join many conferences on different routes. Likewise, the shipping companies may not join conference of a particular route and carry on independent business. The organisation of conferences varies. It may be completely formal or informal. A conference may have liners of various nationalities as its members and Continue reading
Introduction to Supply Chain Management (SCM)
Definitions of Supply Chain Management Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers (Harland, 1996). Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption (supply chain). Another definition is provided by the APICS (The Association for Operations Management) Dictionary when it defines Supply Chain Management as the “design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.” Supply Chain Management (SCM) as defined by the Council of Supply Chain Management Professionals (CSCMP): “Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Continue reading
Functions of Logistics
What is Logistics? The service of providing the right resources at the right time and right place for efficient and effective performance of a goal-oriented activity, including consumption is called as logistics. In simple words, “Logistics is the process of anticipating customer needs and wants; acquiring the capital, materials, people, technologies, and information necessary to meet those needs and wants; optimizing the goods- or service-producing network to fulfill customer requests; and utilizing the network to fulfill customer requests in timely way.” Logistics is the support element of the enterprise. It helps in managing the movement and storage of: Material into the enterprise. Goods in the enterprise. Finished goods from the enterprise. Its focus should be upon its inbound logistics system (movement of material within the organization) and its outbound logistics system (meeting the requirements of its customers). The definition above accurately defines the logistics process but is too restrictive under the Continue reading