Logistics 2 PDF

# Forecasting * **Ft= a (D+-1) + (1-a) x (ft-1)** ## Advantages of Forecasting 1. Effective handling 2. Better labor relations 3. Balanced workload 4. Minimizing fluctuations 5. Better use for production facilities 6. Better material management 7. Good customer service 8. Optimal utilization...

# Forecasting * **Ft= a (D+-1) + (1-a) x (ft-1)** ## Advantages of Forecasting 1. Effective handling 2. Better labor relations 3. Balanced workload 4. Minimizing fluctuations 5. Better use for production facilities 6. Better material management 7. Good customer service 8. Optimal utilization of resources ## Disadvantages of Forecasting 1. Forecasting information is not accurate. 2. Forecasting information is not reliable. ## Forecasting for the year 2020-21 is 10,000 and actual sales worth 500,000. Calculate forecast for 2021-22 using exponential smoothing @a= 0.50. * Dt-1 = 400,000 * Ft-1 = 1,000,000 * Ft = 0.50 (400,000) + (1-0.50) × (1,000,000) * Ft = 200,000 + 0.5 (1,000,000) * **Ft = 700,000** # Question Bank 1. Explain logistics. Explain logistical performance cycle. 2. Explain the importance of logistics 3. What is backward & green logistics? 4. What is green logistics? Explain advantages and disadvantages of green logistics. 5. What are the SCs in logistics? 6. What is supply chain management? Explain any 6 functions of supply chain. 7. Who are all the participants of the supply chain management? 8. Explain the bull-whip with an example, explain the causes of the bull-whip effect. 9. Differentiate between logistics and supply chain management. 10. Explain customer service. What are the objectives of customer service? 11. Explain forecasting and reasons for forecasting. 12. What are the components of forecasting? 13. What is qualitative method of forecasting. Explain naive approach and Delphi method. 14. What are the approaches to forecasting? 15. Explain the forecasting techniques in detail. # Transportation ## Functionality of Transportation * Product movement * Product storage * Time resource * Financial resources (driver cost and administrative cost) ## Principles of Transportation * Economies of scale * Economies of distance ## Participants in Transportation * Consignor - originating porting * Shipper * Receiver / destination party / consigning signee. ## Modes of Transportation ### Railway #### Advantages * High speed * Low cost * Larger carrying capacity * Suitable for long distance * Protection to goods #### Disadvantages * Huge capital expenditure * Huge overhead cost * No competition * No door to door service * Lack of flexibility ## Roadway #### Advantages * Minimium operating cost * Limited capital expenditure * Door to door service * Flexibility * Suitable for short distance * Feeder to other modes of transport (everything is dependent - all modes are dependent on each other) #### Disadvantages * Irregular and unreliable (not sure of period) * Not suitable for long distance * Bad and unsafe road condition * Lack of uniformity in rest rates (different rates) * Low speed ## Airways #### Advantages * Bringing world closer * High speed * Quick service * Easy access * No physical barriers * Natural highways #### Disadvantages * Costly * Huge investment * Not suitable for heavy and bulky products * Carrying capacity is limited * Affected by weather * Restricted products * Narrow Coverage ## Waterways #### Advantages * Largest carrying capacity * Long distance * Protection to goods * Cheapest mode of transport * Flexible mode of transport * Natural highways #### Disadvantages * Huge capital expenditure * Huge overhead cost (maintaining cost of port) * Alliance needed (help of others for roadways transport mode) * Specialise packaging ## Ropeways & Pipelines * For highly placed * Only use for vegetables #### Advantages * Bulk material is sent over short distance * Lower capital cost * Ideal for hilly areas * Least damage to the environment #### Disadvantages * Limited scope of operation * Slow mode of transport ## Pipeline #### Advantages * Continuous (24x7 till end) * Unaffected by weather * Cheap (low maintenance) * Eco-friendly * No empty containers / wagons - gases * Suitability #### Disadvantages * Cannot carry salt (only for liquid and gases) * Inflexibility * Continuous cautions ## Factors Influencing Transportation Decisions * Nature of goods * Availability * Distance (more cost more) (distance less cost less) * Cost * Delivery time * Frequency * Capabilities of goods mode * Speed (more higher level of transportation) * Reliability (less risky) * Safety & Security # Packaging Customer is also called as consumer. "Retain" means to keep something for future. ## Packaging Packaging is an important logistical management function. Packaging influences both the efficiency of effectiveness of logistic operations. ## Functions of Packaging * Physical protection - (e.g., box for the bottle, ) * Environmental protection (e.g., eco-friendly) * Helps to improve material handling efficiency * Cube minimization (e.g., using the space properly) * Weight minimization * Facilitation storage and reuse * Goods put into convenient unit for distributions ## Objectives of Packaging * Right condition (proper packaging) * Communication (clear and transparent) * Appealing of a product * Protection * Marketing * Convenience * Security (insurance) ## Types of Packaging * **Consumer packaging** - of a finished product * **Industrial packaging** - of a raw material ## Design Considerations in Packaging * **Material handling** - physical distribution of a product involves a number of activities such as warehousing, transportation, and distribution (to the final product reach) * **Transportation** - weight and space, size and shape * **Warehousing** * **Communication** - clear and transparent (has to contend identification, tracking, and handling instructions) ## Types of Packaging Material (for final product) * **Cardboard** - e.g. for packaging, anything that is light in weight * **Plastic** - e.g., Tupperware, non-perishable goods * **Steel** - e.g., food items, and juice * **Wood** - e.g., non-perishable goods, are kept in it * **Glass** * **Metal** - e.g., perishable goods ## Packaging Cost * Cost of packing material * Cost of storing *empty packages * Cost of handling empty packages * Package and damaged ## Types of Packaging * **Primary packaging** - the material that first and envelops the product and hold it. It is usually for the smallest unit. * **Secondary packaging** - It is used to group together primary packages. They are usually used for storage and transport shipping. * **Tertiary packaging** - It is used for bulk (transport) handling warehouses. ## Concept of Unitiization Making a larger goods into smaller ones. ### Definition Basically means grouping of different small packages into a single large package for transportation, warehousing, and material handling. # Transportation Infrastructure ## Elements of Transportation Infrastructure * **Terminal & vessels facility** - (path for loading and unloading) * **To vehicles** * **Write off way** (cement part, near the shipment where the goods are loaded) * **Prime movers** - are the power house moving a vehicle for transportation * **Carrier organization*** ## Intermodal of Transportation Also known as **multimodal transportation**. * Involves using more than one mode of transportation at the same time. ## Different types of Intermodal Transportation * **Piggy-back** (rail & road) * COFC - Container on Flat Car (for more distance) * TOFC - Trailer on Flat car (for less distance) * **Fishy-back** (rail & water) * **Birdy-bag** (air & road) * **Land bridge** (combination of multiple land and bridges) ## Comparison between Rail & Road * **Rail** - low cost (fixed) * **Road** - high cost (fluctuating) ### Rail * Suitable for heavy and bulky products * Less pollution * High Speed * Cost effective * Safeway * Customization noplace in railway ### Road * Not so heavy productst * More pollution * Less speed * Comparing with rail * Door to door service. * No alliance ## Other Transportation ### Waterways * Heavy bulk goods * Cost effective * It's on alliance ### Roadway * Broken into units * No alliance ## Factors Influencing Transportation Cost * **Product related** * Density (weight and space) * Stowability (size and shape) * Handling * Liability * **Market related** * Location of market * Nature and extend of government legislation * Seasonality of product unit movement * Domestic / international transportation * Degree of competition # Importance of Transportation * Wider market * Place utility * International division of labor * Price stability (price being at par) * Employment opportunity * Higher standard of living * Distribution of perishable goods # Warehousing ## Definition A warehouse is the place where a company's goods are stored. It is a commercial building for storage of goods. ## Warehouse & Distribution Center ### Warehouse 1. Store all products. 2. Four cycles * Received * Stored * Pick * Shift 3. Minimum value added. 4. Information breadth oriented. 5. Cost minimization focus ### Distribution Center * Limited inventory * Two cycles * Received * Shift ## Types of Warehouse * **Private warehouse** - company made their own warehouse for their goods * **Public warehouse** - owned by godown owners * **Contract warehouse** - customizing warehouse (grinding, packing, all things should be combining in this) ## Unit 2 - Question bank 1. Principles of transportation. 2. Participants in transportation. 3. Warehouse operating principles. 4. Principles of material handling 5. Types of packaging. 6. Inter-modal transportation/combinations of inter-modal transportation. 7. Warehousing strategies # Benefits of Warehousing * Regular production * Time utility (on time) * Store of surplus goods (extra goods) * Price stabilization * Minimization of risk * Packaging # Warehousing operating principles * **Design criteria** - Number of storeys (levels), height (maximum height) * **Handling technology** - product flow, movement continue, movement scale (continuity, economic (means movement in large quantity), storage plan. # Warehousing stategies * **Presence synergies** - refers to marketing. Benefits of having stocks located near markets. * **Industry synergies** - refers to operating benefit, of company locating with other firms in the same industry * **Operating flexibility** - refers to the ability to adjust internal policy and procedures to meet product & customer needs * **Location flexibility** * **Economy of scale** # Number of Warehouse * Transportation cost * Inventory cost * Warehousing cost * Customer dissatisfaction cost # Warehouse Location * Cost of distribution from warehouse to market area * Cost of transportation * Presence of competition * Availability and cost of labor * Cost of land # Factors Affecting Warehousing Cost * Size of warehouse * type of product * Transportation * Inventory * Customer service level (another factor that affects the cost) * degree of automation (if there is intense automation, to give superior customer service then it will increase the warehouse cost) * Types of equipment used in warehouse (cost) ## Material Handling * **Material handling** - means providing the right material in the right condition in the right place and at the right time. Only increases the cost. It does not add value to the product. ## Objectives of Material Handling * Increase the storage capacity of warehouse * Reduction of the number of times the product is handled. * Development of effective working conditions * Reduction of movement involving manual labor * Improve logistic service * Reduction of cost overall cost ## Principles of Material Handling * Planning * Standardization * Work principle * Ergonomic principle (reduce cost) * User-friendly * Unit load principle (proper documentation of goods) * Space utilization principle (which is high) * system principle (automatic machine for handling product) * Automation principle (automatic machine for handling product) * Environmental principle (suitable for long time) * Life cycle & cost of materials, handling or product. ## System of material handling * **Manual material handling system** * **Recognized material handling system** * **Semi-automated material handling system** * **Automated material handling system**