INTRODUCTION

MEANING OF LOGISTICS

Logistics is concerned with getting the product and services where they are needed and when
they are desired. It is difficult to accomplish any marketing or manufacturing without logistical
support. It involves the integration of information, transportation, inventory, warehousing,
material handling, and packaging.

The operating responsibility of logistics is the geographical repositioning of raw materials, work
in process and finished inventories where required at the lowest cost possible support no activity
can be performed to meet defined goal. The current challenge is to perform logistics
scientifically in order to optimize benefits to the organization. Logistics is planning function of
management. Logistics function is concerned with taking products and services where they are
needed and when they are needed.

LOGISTICS MANAGEMENTS:

Logistics management is that part of the supply chain which plans, implements and controls the
efficient, effective, forward and backward (reverse) flow and storage of goods, services and
information between the point of origin and the point of consumption in order to meet
customer’s requirements rather to the customers delight. A professional working in field of
logistics management is called a logistician

Logistics, as a business concept evolved only in the 1950s. This was mainly due to the increasing
complexity of supplying one’s business with materials, and shipping out products in an
increasingly globalize supply chain, calling for experts in the field who are called supply chain
logisticians. This can be defined as having the right item in the right quantity at the right time at
the right place for the right price and to the right target customers and it is the science of process
having its presence in all sectors of the industry. The goal of logistics work is to manage the
fruition of project life cycle, supply chains and resultant efficiencies. Logistics is concerned with
getting the products and services where they are needed or when they are desired. It is difficult to
accomplish any marketing or manufacturing without logistical support. It involves the integration
of information, transportation, inventory, warehousi9ng, material handling, and packing. The
operating responsibility of logistics it the geographical repositioning of raw materials, work in
progress and finished inventories where required at the lowest cost possible.

ORIGIN AND DEFINITION OF LOGISTICS

The term ‘logistics’ originates from the ancient Greek Logos (ratio, word, calculation, reason,
speech, oration). Logistics is considered to have originated in the military’s need to supply
themselves with arms, ammonization and rations as they moved from their base to a forward
position. In ancient Greek, roman and byzantine empires, there were military officers with the
little “logistickas” who were responsible for financial and distribution of supplies.

The oxford English dictionary defines logistics as “ the branch of military science having to do
with procuring maintaining and transporting material, personnel and facilities.”

The American council of logistics management defines logistics as” the process of planning,
implementing and controlling the efficient and effective flow, and storage of goods, services and
related information from the point of origin to the point of consumption for the purpose of
conforming to customer requirement.”

IMPORTANCE OF LOGISTICS MANAGEMENTS

1. LOGISTICS IS THE BED ROCK OF TRADE AND BUSINESS

Without selling and or buying there can be no trade and business. Buying and or selling takes
place only when goods are physically moved into and or away from the market.

Take away logistical support trade and business will collapse

2. INTEGRATES LOGISTICAL ACTIVITES

In conventional management environment, various activities of logistics work in isolation under

different management function. Each pocket trying to sub optimizes its objectives at the cost of
overall organizational objectives. Purchasing trying to purchase at minimum price at the cost of
what is needed by operation. Operation produce large quantities at minimum production cost
ignoring demand leading to doom inventory. Logistics function of management brings all such
functions under one umbrella pulling down inter departmental barriers.

3. COMPETITIVE EDGE

In the fiercely competitive environment logistics provides the edge. Due to technological
revolution most of the products are moving into commodity markets. In a commodity market
where price is controlled by competition, where there is no product differentiation in terms of
quality parameters like performance and reliability, where brands are almost irrelevant,
competitive edge is that of availability of product and service in terms of time, place and
quantity.
4. LEADS TO CUSTOMER SATISFACTION

Through superior customer service organizational objectives of P (productivity), Q (quality), C

(cost), D (delivery), E (employee morale), F (flexibility), S (safety), H (health), E (environment)
are set to meet customer expectation.

5. SUPPORTS CRITICAL FUNCTIONS LIKE OPERATIONS AND MARKETING

Strong logistics support enables a company to move towards JUST IN TIME production system
for survival in high competitive market

6. LOGISTICS WINS OR LOSES WARS

British lost American war of independence due to poor logistics. Rommel was beaten in the
desert by superior logistics of allies

Logistics helps a lot in maintaining 4 P’s

The 4 P’s of marketing mix

Product mix
A product has both tangible and intangible components. Customers view product as “ boundless
of satisfaction” rather than just physical things.

 Quality, technology
 Packaging
 Labeling
 Branding
 Trademark
 Merchandising
 Size, design, color, feature
 Service
 Warranty
 Product line and range

Price mix
Price is an important consideration in buying decisions. Price also denotes quality in the
costumers mind a psychological factor for some products

 Pricing policies
 Credit terms
 Cost and profit
 Allowances and discounts
 Computation
 Terms of delivery

Place mix
The marketer has the responsibility of making his product available near the places of
consumption so that consumer can easily buy it. If the brand proffered by consumer is not easily
available at the convenient location

 Distribution channels
 Transportation warehousing and storage
 Inventory level
 Positioning
 Promotion mix
 Advertising
 Sales promotion
 Personal relations
 Publicity
 Direct responses

Promotion mix
Marketing promotion is a management process trough, which an organization develops, presents
and evaluates a series of messages to an identified audience. So, effective promotion depends on

 The nature of communication

 The target audience
 The environment in which it is received
  The receiver’s perception of the source as. E.g. Friends, reference group etc.

LOGISTICS MANAGEMENT AND SUPPLY CHAIN

SCM and logistics management, the definitions made by the Council of Supply Chain
Management Professionals, CSCMP. SCM is defined as “ supply chain management
encompasses the planning and management of all activates involved in sourcing and
procurement, conversion, and all Logistics Management activities. Importantly, it also included
coordination and collaboration with channel partners, which can be suppliers, intermediaries,
third-party service provider, and customer. In essence, supply chain management integrates
supply and demand management within and across companies “supply chain encompass the
companies and the business activities needed to design RFDn, make, deliver, and use a product
or service. Business depends on their supply chains to provide them with what they need to
survive and thrive. Every business fits into one or more supply chains and has a role to play in
each of them. The pace of change and the uncertainty about how markets will evolve has made it
increasingly important for the companies to be aware of the supply chains they participate in and
to understand the roles that they play. Those companies that learn how to build and participate in
strong supply chains will have substantial competitive advantages in their markets. Supply chain
management is the coordination of production, inventory, location, and transportation among the
participants in supply chain to achieve the best mix of responsiveness and efficiency for the
market being served. There is a difference between the concept of supply chain management and
the traditional concept of logistics. Logistics typically refers to activities that occur within the
boundaries of single organization and supply shins refer to networks of companies that work
together and coordinate their action to deliver a product to market. Also traditional logistics
focuses its attention on activities such as procurement, distribution, maintenance, and inventory
management. Supply chain management acknowledges all of traditional logistics and also
includes activates such as marketing, new product development, finance, and customer service.
In the wider view of supply chain thinking, these additional activities are now seen as part of
work needed to fulfill customer requests. Effective supply chain management requires
simultaneous improvement in both customer service level and the internal operating efficiencies
of the companies in the supply chain. Customer service at its most basic level means consistency
high order fill rates, high on-time delivery rates, and a very low rate of product returned by
customer for whatever reason. Internal efficiency for organizations in a supply chain means that
these organizations get an attractive rate of returns on their investments in inventory and other
assets and those they find ways to lower their operating and sales expenses.