Compiled by Dr. Sarang Shankar Bhola Associate

Transcript:Compiled by Dr. Sarang Shankar Bhola Associate:
Compiled by Dr. Sarang Shankar Bhola Associate Professor, Karmaveer Bhaurao Patil Institute of Management Studies and Research, Varye, Satara Define: SCM & Logistics "Logistics typically refers to activities that occur within the boundaries of a single organization and Supply Chain refers to networks of companies that work together and coordinate their actions 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 (SCM) acknowledges all of traditional logistics and also includes activities such as marketing, new product development, finance, and customer service" - from Essential of Supply Chain Management - Michael Hugos SCM & Logistics….. concept Physical distribution starts at the factory. Managers choose asset of warehouses (stocking points) and transportation carries that will deliver the goods to final destinations in the desired time or at the lowest total cost. Physical distribution has now been expanded into the broader concept of supply chain management (SCM). Supply chain management starts before physical distribution it involves: Procuring the right inputs (raw materials, components and capital equipment) Converting them efficiently into finished products. Dispatching them to the final destinations. Market logistics involves planning the infrastructure to meet demand, then implementing and controlling the physical flows of materials and final goods from points of origin to points of use, to meet customer requirements at a profit. Marketing logistics planning has four steps Deciding on the company’s value proposition to its customers. (What on time delivery standards should be offered? What levels should be attained in ordering and billing accuracy?) Deciding on the best channel design and network strategy for reaching the customers. (should the company serve customers directly or through intermediaries? What products should it source from which manufacturing facilities? How many warehouses should it maintain and where should they be located?). Developing operational excellence in sales forecasting, warehouse management, transportation management and materials management. Implementing the solution with the best information system, equipment, policies and procedures. Market Logistics Decisions Order Processing: shorten the order to payment cycle. Steps - including order transmission by the salesperson - order entry and customer credit check - inventory and production scheduling, order and invoice shipment, and receipt of payment. The longer this cycle takes, the lower the customers satisfaction and the lower the company’s profits. Companies need to prepare criteria for the perfect order. Warehousing: every company has to store finished goods