Logistics management consists of eight elements called wings of logistics. These are
Customer Order Processing
Flow of Actions
- Filling up the order form
- Deciding the specifications of the product
- Deciding the quality check list of the product
- Deciding the delivery schedule
- Deciding the location of delivery
Important Factors
- Cost of order processing
- whether the company is capable of producing a component
- Detailed list of specifications
Techniques
- Electronic data Interchange (EDI)
- E-ERP or CPFR
- Web portal
Location Analysis
Flow of Actions
- Cost of transportation of raw materials and finished goods
- Proximity to suppliers
- Proximity to customers
- Availability and type of land
- Availability of secondary resources
- Availability of desired manpower at affordable cost
- Communal harmony
- Governmental regulation and taxation
Important Factors
- Cost of operations as a percentage of sales
- Shelf life of product
Inventory Control
Flow of Actions
- On hand inventory analysis
- Communicating the quantity, quality and timing of material with the supply points.
- Getting the material of right quality, quantity and at right time
Important Factors
- Inventory control at planning stage
- Lead time
- Cost vs. importance of raw material
Techniques
- DRP and replenishment order control
- Fixed order interval system
- Economic order quantity with ROP system
- Selective inventory control (ABC, VED, FSN analysis etc.)
- Order forecasting using statistical tools
Material Handling
Flow of Actions
- Type of material (Business significance like raw material, finished goods etc.)
- Material handling requirements of the material (Fragile, inflammable)
- Cost ratio of material handling to material cost.
- Material default location, identification and traceability
Important Factors
- Material breakage
- Pilferage
- Cost of material handling
- Number of handlings
Techniques
- Operational research
- Material flow analysis
- Computerized material retrieval system
- ASRS (Advanced Storage & Retrieval System)
Packaging
Flow of Actions
- Packaging requirement for the material (Refrigeration, Fragile etc.)
- Primary packaging
- Secondary packaging
- Cost of packaging
- Transportation requirement for packaging (Vibration proof, water or moisture tight)
Important Factors
- Protection to product
- Holding the product
- Communicating the message to customers
- Customer requirement for packaging
- Reverse logistics for packaging
- Recycling of packaging material
- Cost of packaging
Techniques
- Standardized box packaging
- Containerization of packaging
- Direct part marking
- ISO 14001
- Recycling of packaging materials
- Reusable packaging materials
- Eco-friendly packaging materials
- Bar coding
- Bumpy bar coding
- GPS tracking system
- RFID
Transportation
Flow of Actions
- Mode of transportation
- Cost of product
- Speed of transportation
- Ambience requirement of material (Refrigeration, Vacuum)
- Cost of transportation
- Urgency of the product to customers
Important Factors
- Urgency of the product
- Cost of product
- Cost of transportation
Techniques
- Containerized transportation
- Cool Chain Transport (Refrigerated Vans/Containers)
- Multi-modal Logistics
- Milk Run Distribution systems
- Cross Docking
- Direct Shipment
Warehousing
Flow of Actions
- Location of the warehouse
- Inventory level at the warehouse
- Storage requirement of the product
- Packaging and repackaging requirement of the product
- Shelf life of the product
Important Factors
- Availability of space
- Availability of proper material handling systems
- Strategic location
- Packing and Re-packing facilities
- Information and allied services
Techniques
- Third Party Logistics
- Third party Warehousing
Customer Service
Flow of Actions
- Contractual services offered to client
- Type of customer service required for the product
- Location of the service centre
- Service level at the service centre
- Cost of service vs. replacement
Important Factors
- Contractual requirement of customer service
- Service quality
- Reverse logistics
Techniques
- AMC (Annual Maintenance Contracts) and free replacements
- Limited (free) trial period
- Guarantee & warranty
- User clubs
- Help lines, toll free number, call centers
- CRM