Logistics Management and Emerging Trends

1. By Kritika – 47 Madhujith T.H - 49 Logistics Management and Emerging Trends

2. Logistics is that part of the supply chain process that plans, implements and controls the effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet the customer’s requirements.

3. Elements • Transportation – air, water, land • Warehousing • Inventory Management • Packing and Utilization • Information and communication

4. Importance of Logistics Management • Transportation costs • Large retailers, low distribution costs – eg. Metro Cash and Carry • Deregulation – e.g. Fiat – Tata • Changing strategies – eg Toyota Way • Technology – eg. Wal-Mart, DELL • Globalization

5. 0% fuel • 0% technology • 0% investment • 0% dispute • 99.9999 % performance • 100% customer satisfaction

6. ‘The Show must go on’ The wonder of Mumbai dabbawalas

7. What is NMTBSA?? • Nutan Mumbai tiffin box supply Association. • It started in 1880 – british raj • Total area coverage is 60 kms. • 5000 employees • Each person working is a share holder • 4,00,000 transactions per day • Time taken – 3hrs.

8. Six sigma performance • ISO 2000 certified • Error rate 1 in 16 million transactions. • Technological backup: Nil • Cost of service: Rs. 200/month

9. How do they do it?? • Organisational structure • Logistic management

10. Executive committee (5 members) Team of 20 to 25 people headed by a group leader Individual dabawalas=30 tiffins/day

11. Logistic Management • 9.30 am The “pick up” people pick up the tiffin boxes from house wives • 10.34 – 11.20 am This period is actually the journey time. Dabbawalas load the wooden crates filled with tiffin box in the luggage and goods compartment.

12. 11.20 to 12.30 pm The unloading takes place at the destination station. The “delivery” people unload the boxes from the train And re-arrangement of tiffin boxes are done as per the coding. 12.30 to 1.00 – lunch time

13. Coding • The coding indicates the originating rail station the destination station the building name the floor number of delivery • POKA-YOKE techbique- color indicates the group responsible for collecting dabba at particular point.

16. 1.15 to 2.00 pm Here begins the collection process. The dabawalas collect the tiffin from the offices where they have delivered almost an hour back.

17. 2.00 to 2.30 pm the return journey The group members meet at the segregation as per the destination.

18. 2.48 to 3.30 pm The return journey by train Group finally meets up after the day’s routine of dispatching and collecting from various destination offices.

19. 3.30 to 4.20pm Here the final sorting and dispatching takes place. The group finally meets up at the origin station The tiffins are finally sorted out as per their original areas. This is again done through the coding process.

20. Latest Trend • The Web site (www.mydabbawala.com) – online booking on line poll • Booking through SMS

21. The royal visit • Prince of Wales • Sir Richard Branson, chairman of Virgin Atlantic Airlines.

22. Every day Amul collects 447,000 litres of milk from 2.12 million farmers, converts the milk into branded, packaged products, and delivers goods worth Rs 6 crore (Rs 60 million) to over 500,000 retail outlets across the country Case study

23. GCMMF • Gujarat Cooperative Milk Marketing Federation (GCMMF) is the largest food product marketing organization of India. • aims to provide good returns to the farmers and also to fulfil the requirements of consumers by giving them quality products • has 42 regional distribution centers in India, serves over 500,000 retail outlets and exports to more than 15 countries

24. Problems to be addressed: • Logistics in collection of: 6 lts of milk everyday from 10600 separate villages • Logistics in co ordination of : storing ,processing and delivering the milk.

25. Suppliers Logistics: Weighing the milk Determining the fat content Calculation of purchase price

26. The Need • formulate an IT plan • Integrate its existing applications with ICT tools • Connect its regional and field offices through e-media

27. Implementation • Amul started implementing ERP in phases. • Automatic milk collection system units (AMCSU) at village societies were installed to automate milk producers logistics.

28. At milk collection counter - farmer drops the card - milk is weighed - calculates amount due to farmer - value of milk is printed

29. Amul connected its zonal and regional offices through VSATs. • Amul is also using GIS (geographic information system) for business planning and collection process. • IIM-A provided Amul with a software-Dairy information system kiosk(DISK) to facilitate data analysis and decision support in improving milk collection.

30. Indian Railways • Largest network under management • Revenues: 12 billion $ • Passengers: 14 million/day (approx) • Freight: 2 million tons/day (approx) • Manpower: 1.4 million

32. Indian RailwaysContd…. • Track – 63000 km • Around 7000 – 8000 stations • Freight: 2 million tons/day (approx)

34. Long Range Decision Support Systems • Used to manage and plan strategies for IR • Implemented in 1998 • Public – private partnership • World bank + IR personnel + overseas consultants • Powerful tool for pre-feasibility investment analysis for networks

35. Long Range Decision Support Systems Contd…. • Based on traffic projections over the next two decades • Uses- • Simulation Models • Optimization tools • GIS based interface • Develop ‘what if scenarios’ • Demand and supply side

36. LRDSS MODEL TRAFFIC FORECASTING PROJECT IDENTIFICATION MARKET ANALYSIS SUPPLY ANALYSIS DEMAND ANALYSIS TRAFFIC ASSIGNMENT FACILITY PERFORMANCE COST BENEFIT ANALYSIS FINANCIAL FORECASTING

37. Solutions Providers

38. New Needs, New Players • Solutions Providers – with the increased importance of logistics management, a new market opened and there are companies that solve the logistics management problems. • Oracle • Infosys • FedEx – case study • DHL etc

39. Solutions Providers • Oracle – Transportation Management Systems • It integrates and streamlines - • transportation planning, execution, freight payment, and business process automation • Single application

40. Oracle – Transportation Management Systems • Oracle Transportation Management - • Lowers transportation costs • Improves customer service and asset utilization

42. Solutions Providers • Infosys – Master Data Management • Enables Logistics Service Providers (LSPs) to efficiently manage revenues, expenditure, shipment, and large ERP implementations. • IBM – RFID later case study

43. Emerging Trends

44. 1.Case Study: • FedEX started Virtual Order – Online B2B site. • Shippers can setup an online catalog of goods • that consumers can order from. • FedEx setup Express Distribution Centres like Dubai, • Philipines. • FedEX systems are fully integrated with that of the shippers

45. Case Study: • Customer places the order. • Shippers notified • Order Enters into FedEx network. • Order collected from a variety of shippers. • Within 48 hours delivery to customer • Mainly for High Value, low weight goods like electronic and medical goods

46. Emerging Trends 2. Two Dimensional Bar Codes 1D BarCode 2D BarCode

47. 2. Two Dimensional Bar Codes • 1D barcode contains only vertical lines • 2d barcodes contain both horizontal and vertical lines • Can store information of an entire freight • Uses laser scanners to read. Currently not available.

48. 3. Going Green • Use software that minimizes carbon emissions and cost savings • Eg – by incorporating algorithms that include data about location and date to consolidate shipments by size, product compatibility and trailer types

49. 3. Going Green • Case Study:

50. DHL’s green initiative by implementing multi site ISO 14001 • Bought 1.3 billion Euros worth of new fleet • Planes quieter, more fuel efficient • Reduced carbon dioxide emissions by 6.864 tons • Improved waste management Over 53% general solid waste recycled