IL6 Webinar on Logistics Network Design

Created by

@OptimisticLynx

Study Notes

India's logistics sector is one of the largest globally, estimated at $215 billion, growing at 10.5% CAGR.
The sector employs 22 million people, according to Ministry of Commerce and Industry data.
Logistics costs in India are estimated at 14% of GDP, comparable to other developing nations. Developed countries aim for 6-7% of GDP.
Logistics costs are broken down as follows in the Indian supply chain: Transportation (6% of GDP), Warehousing (4% of GDP), Inventory (3% of GDP), and Order processing/admin (1% of GDP).

The supply chain community includes raw material supply, manufacturers, distributors, wholesalers, retailers, and end-users.

Truck: Cost-effective for short distances, quick delivery for short to medium distances. Capacity is limited by size and weight. Wide reach. Relatively reliable but susceptible to traffic and weather. Less fuel-efficient.
Rail: Cost-effective for large volumes/long distances, high capacity. Slower than truck but comparable speed. Major market reach, but requires coordinating with trucks for first/last-mile delivery. Reliable, barring major delays. Fuel efficient.
Water: One of the least expensive modes for shipping; accessible to navigable waterways. Very slow transit times, difficult to predict and control.
Air: Fastest mode, especially for long distances; high carrying capacity. Accessible to most locations but requires airport infrastructure, and often requires truck pickup/delivery. Impacted by weather and possible delays. Most fuel-intensive mode.

Includes various terms, such as EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DPU, DAP, and DDP for various seller/buyer responsibilities for the goods delivery. Different locations (port of loading/destination) and responsibilities (risk transfer) are clearly defined for each term.

The supply chain network includes suppliers, manufacturers, warehouses/distribution centers, and customers.
Material costs, manufacturing costs, transportation costs, and inventory costs are part of the overall network.

The network is strategically positioned near mines and ports.
Service levels strive for 2-day delivery pan-India.
Warehouses and processing centers are located closer to demand to optimize delivery. Locations are detailed.

Diagrams show various locations and processes involved in the movement of finished goods.

Framework incorporates operational, tactical, and strategic layers.
Layers encompass real-time feedback, firm business planning, sustenance, cost-effectiveness and alignment of strategies.

Cost and service ability are inversely proportional, where higher service requires increased cost.
Multi-model and multi-node approaches are potential design strategies.

Details of stockyards (paved/unpaved/covered) across different geographical zones (North, West, East, and South).

Matrix categorizes customer demand and supply characteristics (predictable/unpredictable) and links these to different logistics strategies (Lean, Agile, etc.)

Classifies different service providers in a supply chain. 1PL to 5PL are stages of complexity and logistics service support/management.
A 5PL example is shown.