Operating Objectives of Logistics

1. Operating Objectives of Logistics

2. Berlin Airlift • Timeline: • 24 June 1948 to 12 May 1949, Post World-War II • Location: • Germany • Existing state: • Post-war division of Germany into four zones by countries like Soviet Russia, Britain, USA and France • East Germany was occupied by the Soviets, while the West by the other three countries • Berlin was also divided into four zones like it’s country • Issue: • Stalin wanted other 3 countries out of Germany who wanted to rebuild Germany • Soviets halted US military supply trains and refused passage to Berlin • All land and water access to West Berlin was cut off by the Soviets • Result: • Operation Vittles • Duration: • 18 months

3. Berlin Airlift - Problem • There were 2 million residents in West Germany needing food and basic necessities • Residents’ daily food ration would be 646 tons of flour and wheat; 125 tons of cereal; 64 tons of fat; 109 tons of meat and fish; 180 tons of dehydrated potatoes; 180 tons of sugar; 11 tons of coffee; 19 tons of powdered milk; 5 tons of whole milk for children; 3 tons of fresh yeast for baking; 144 tons of dehydrated vegetables; 38 tons of salt; and 10 tons of cheese.  • Power stations were on the east-side which was cut off by Soviets. Coal and fuel was required to provide heat in homes and for running industries. • In total, 3,475 tons of supplies were needed daily • No land access, no water access but air access and capability existed

4. Berlin Airlift - Solution What wasn’t feasible? • A C-47 (Willie) can haul 3.5 tons.  In order to supply the people of Berliners, C-47's would have to make 1000 flights each day What were Alternatives? • There were C-54 Skymaster (Big Willie or Big Easy or Spirit of Freedom), which was capable of hauling 10 tons What happened with including Alternatives? • Aircraft, and parts were standardized for ease in unloading (Willie took more time to unload than Big Willie) • Procedures were changed. For example, if an aircraft missed an approach due to lack of visibility etc, they were told to return to their stations to avoid stacking and a fresh crew will be sent as a regular flight to avoid stacking in and out of Berlin • Pilots were told to NOT stay away from their aircraft. Weather and up to date information was sent to the sircraft while they were unloaded, so crew didn’t have to go inside the terminal • Several trucks were outfitted as mobile snack bars for the crews to get snacks, coffee or other goods without having to leave the airplane • The average turnaround time from landing to departing reduced to about 25 minutes • A plane was landing every 30 seconds and directly taking off for another load – 24X7 • Planes supplied 4,500 tons of food and 15,000 tons of coal during winter season

5. Berlin Airlift – Problems with Solutions • Processing paperwork in different language and red tape – Manifest system was created • Lack of human resources for unloading – German volunteers were sought who received extra food rations or cigarette packs • Lack of mechanists to maintain supplies via Big Willies which required them to perform inspections, repairs, engine replacements, cleaning and servicing these aircraft – Luftwaffe mechanics were available right in Berlin along with American maintenance supervisor and an interpreter • Weather was strenuous and the Soviets harassed pilots by buzzing, close flying, shooting near, etc. – No Solution! Pilots went flying on with the cause

6. Berlin Airlift – The End • The Soviets were humiliated with the success of the airlift and the Easter Parade • The Soviet Blockade was lifted one minute after midnight on 12 May 1949 • Airlifts continued for sometime till 30 September 1949, to build up comfortable surplus though night flying and weekend flying were eliminated •  The C-47s and C-54s together flew over 92 million miles in the process, almost the distance from Earth to the Sun • Pilots came from the United States, United Kingdom, Australia, Canada, New Zealand, and South Africa • A total of 101 fatalities were recorded as a result of the operation, including 40 Britons and 31 Americans, mostly due to non-flying accidents. Seventeen American and eight British aircraft crashed during the operation • The cost of the Airlift was shared between the USA, UK, and Germany. Estimated costs range from approximately US$224 million[to over US$500 million (equivalent to approximately $2.22 billion to $4.96 billion now)

7. Berlin Airlift – New Beginnings • Basis for Dwight Eisenhower’s Interstate Highway System in US • IBM, HP and many companies learned, relearned, improved and applied to existing logistics system

8. Operating Principles of Logistics – Berlin Airlift • Rapid Response – Ability to satisfy customer service requirements in a timely manner. Emphasis is on shipment-to-shipment basis rather than anticipation based on forecasting • Minimum Variance – Either keep a safety stock o use cost premium transportation. Key support from IT & Communications • Minimum Inventory – Improved ROI and commitment for the entire firm not just each business location • Movement Consolidation – Concerned with transportation cost: Type f Product, size of product and distance to be covered • Quality – Aim at achieving zero defect logistical performance. When quality fails, the logistical performance must be reversed and then repeated • Life Cycle Support – Required when normal value-added inventory flow towards customer is reversed or recalled due to rigid quality standards; expiry dates, responsibility for hazardous responsibility, laws prohibiting disposal and encouraging recycling. It means cradle-to-cradle logistical support

9. Types of Logistics • Inbound logistics – The movement of materials from suppliers and vendors into production processes or storage facilities • Outbound logistics – The movement of materialsassociated with storing, transporting, and distributing goods to its customers. • Reverse Logistics – Flow of surplus or unwanted material, goods, or equipment back to the firm, through its logistics chain, for reuse, recycling, or disposal. • Third-party Logistics (3PLs) – Afirm that outsourcesthe logistics part of its supply chain to a third party which is known as third-party logistics provider. 3PLs provide are transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding, which are integrated or bundled together by the provider • Fourth-Party Logistics (4PL) – Is an integrator that assembles the resources, planning capabilities, and technology of its own organization and other organizations to design, build, and run comprehensive supply chain solutions. • Integrated Logistics – System-wide management of entire logistics chain as a single entity, instead of separate management of individual logistical functions.

10. Inbound Logistics – Steel Production (Contd…) Truck Truck Coal Mine Warehouse Steel Plant …activities of receiving, storing and disseminating incoming goods or material for use

11. Inbound Logistics – Steel Production Truck Coal Mine Truck Warehouse Steel Plant Workers Workers Workers Workers Is this as simple as it is seen?

12. 3PL Versus 4PL Third-Party Logistics Fourth-Party Logistics Manage and direct the activities of multiple 3PLs Serve as a integrator of interface between client and multiple logistics service providers Not asset-based like 3PLs • Providers of transportation-based, warehouse/distribution-based and financial-based services • Examples include freight forwarders, courier companies, sub-contracting warehousing and transportation service providers • Independent of buyers and sellers Are these PLs (3 and 4) really beneficial?

13. Questioning Supply by Logistics Lead Time (LLT) Measurement of LLT • Procurement • Production • Distribution

14. Logistics Functions • Information Management • Inventory Control • Transportation • Warehousing • Network Design

15. sources • http://www.logisticsquarterly.com/issues/13-3/article2.html