LSCM SECOND CIA 24-25 PDF

M A N A G E M...

M A N A G E M E N T Dr. P.MATHAN KUMAR Assistant Professor of Commerce LOYOLA COLLEGE (AUTONOMOUS), CHENNAI. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 1 kumar-369468243/  UNIT - III Customer Service Audit Customer Service Strategy Inventory management Essence of Logistics in Marketing Marketing Trends. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 2 kumar-369468243/  Customer Service Audit Customer service audits are periodic, comprehensive, systematic, and independent reviews of a customer service function's environmental influences and internal operations. This activity should be undertaken regularly, preferably annually. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 3 kumar-369468243/  What is a customer service audit? Customer service audits uncover what your company and employees are doing well and help identify areas of opportunity to improve the customer service experience. A third-party audit provides an unbiased experience that may not be the same as what happen “when the bosses are watching.” https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 4 kumar-369468243/ A customer service audit is a focused evaluation of a company’s customer service practices to identify strengths and weaknesses. It typically includes: 1. Customer Feedback Analysis: Gather feedback via surveys or reviews to understand customer satisfaction. 2. Performance Metrics Review: Assess key metrics like response time, resolution rate, and customer satisfaction scores. 3. Employee Performance: Evaluate staff’s ability to handle queries effectively through mystery shopping or call reviews. 4. Process Efficiency: Review internal workflows to eliminate bottlenecks and improve service delivery. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 5 kumar-369468243/  Customer Service Strategy A customer service strategy is a thorough plan to handle customer interactions. It provide a consistent customer experience throughout the customer journey. Improved customer experience results in a more loyal customer base. Loyal customers buy more often, spend more, and refer their friends and family to you. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 6 kumar-369468243/  What is a customer service strategy example? One of the most effective customer service strategy examples is to provide customers with interaction that speaks to them as individuals. Using their name is the most obvious of the most common customer service tactics, but it's equally important to remember specifics about their individual needs and preferences. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 7 kumar-369468243/  CS – Strategies Encourage feedback Personalize customer experience Be responsive on social media Provide appropriate training to frontline staff Research competitors Hire the right people Empower employees Craft a customer service mission statement Go above and beyond for your valued customers Share knowledge with your customers https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 8 kumar-369468243/  Inventory management What is Inventory Management? Inventory management is the tracking of inventory from manufacturers to warehouses and from these facilities to point of sale. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 9 kumar-369468243/  https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 10 kumar-369468243/  Types of Inventory 1. Raw Materials 2. Components 3. Work In Progress (WIP 4. Finished Goods 5. Maintenance, Repair and Operations (MRO) Goods 6. Packing and Packaging Materials 7. Safety Stock and Anticipation Stock 8. Decoupling Inventory 9. Cycle Inventory 10. Service Inventory 11. Transit Inventory 12. Theoretical Inventory 13. Excess Inventory https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 11 kumar-369468243/  https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 12 kumar-369468243/  Methods of Recording of Inventory The two methods of recording inventory are periodic and perpetual. In periodic inventory, you count stock at specific times and add the totals to the general ledger. In the perpetual method, you record changes in stock as they occur. Although any type of business can use periodic inventory, small organizations frequently use it, especially when there are no plans to scale the business. The periodic method requires no special software or equipment. Organizations that use perpetual inventory recording methods and require real-time counting often use scanners and point-of-sale (POS). https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 13 kumar-369468243/ How does inventory management work? Inventory is the goods or materials a business intends to sell to customers for profit. Inventory management, a critical element of the supply chain, is the tracking of inventory from manufacturers to warehouses and from these facilities to a point of sale. The goal of inventory management is to have the right products in the right place at the right time. This requires inventory visibility — knowing when to order, how much to order and where to store stock. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 14 kumar-369468243/ The basic steps of inventory management include: 1. Purchasing inventory: Ready-to-sell goods are purchased and delivered to the warehouse or directly to the point of sale. 2. Storing inventory: Inventory is stored until needed. Goods or materials are transferred across your fulfillment network until ready for shipment. 3. Profiting from inventory: The amount of product for sale is controlled. Finished goods are pulled to fulfill orders. Products are shipped to customers. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 15 kumar-369468243/  INVENTORY MANAGEMENT TECHNIQUES Stock Review Just-in-Time ABC Analysis https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 16 kumar-369468243/  1. Stock Review It is the most effective technique that involves reviewing stock availability. Small businesses with limited production can manually track available stocks. But large companies utilize advanced inventory management software like SaaS and ERP to monitor supply and consumption regularly. This strategy also ensures the placement of reorders before existing stockpiles get exhausted. It helps identify the following order processing stages and arrange stocks accordingly: https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 17 kumar-369468243/  Economic Order Quantity or EOQ Economic order quantity helps to minimises the inventory costs such as holding and carrying cost. It helps to determine the correct units of product to be ordered at the different levels. This method is one of the beneficial methods that helps to determine the reorder level of the inventory at different interval of times. The major limitation EOQ method it thinks everything remains constant. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 18 kumar-369468243/  Economic Order Quantity or EOQ It refers to the minimum volume of stocks to reorder to meet the market demand before the existing supply depletes. Knowing this reduces costs of inventory holding and ordering due to excess production. The formula used to estimate EOQ is as follows: Economic order quantity (EOQ) = √[(2 x D x K)/H] Where, D = Demand per year K = Ordering cost per purchase H = Holding costs per year, per unit https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 19 kumar-369468243/  Minimum Order Quantity or MOQ It is the minimum volume of stocks that a supplier wishes to sell to a producer. The only aim of the supplier here is to earn more profits while getting rid of the inventory more quickly. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 20 kumar-369468243/  Safety Stock Safety Stock is the stockpile of inventory that a manufacturer retains in excess to ensure they are available to customers when demand spikes unexpectedly. Besides, it protects businesses against the unforeseen shortage in supply. Also known as a buffer or emergency stock, it lets manufacturers cover up for the lead time until the new inventory reaches points of sale. However, it never crosses the level that increases holding costs. Safety stock = (Max Daily Sales x Max Lead Time in Days) – (Average Daily Sales x Average Lead Time in Days) https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 21 kumar-369468243/  Reorder Point Reorder Point is the level at which businesses realize to reorder new inventory from the supplier to avoid stockouts. The replenishment of stocks considers factors like existing and potential demand and lead time before new inventory arrives. The formula used by businesses to determine a minimum level of inventories is as follows: Reorder point = (Average Daily Sales x Average Lead Time in Days) + Safety Stock https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 22 kumar-369468243/  2. Just-in-Time This method originated in japan (1960s- 1970s). Toyota motors contributed the most to its development. This helps to save amount and reduce wastage by keeping only the inventory needed for production and sales. The main advantage is it helps reducing the storage and insurance costs as well as cost of liquidation or discarding excess inventory. The disadvantage is if demand rises unexpectedly then the company will suffer the lot and may also losses his competitive advantage. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 23 kumar-369468243/  3. ABC Analysis This technique helps businesses categorize inventories into three distinct groups based on their value, costs, and consumption: Category A comprises higher value products kept in a small amount. Hence, it cuts the warehouse space and cost requirements. Category B consists of items of moderate value and moderate quantity with regular sale records. Category C includes products that acquire smaller value but have high market demand. It makes the inventory occupy more warehouse space and requires businesses to pay more for the same. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 24 kumar-369468243/ 4. MATERIALS REQUIREMENT PLANNING (MRP) This inventory management is mainly based on sales- forecasted method. The company must have the sales records to enable accurate planning of inventory needs and communicate to those needs with the suppliers. Inability to accurately forecast sales and plan inventory acquisitions results in a manufacturers inability to fulfil orders. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 25 kumar-369468243/  DAYS SALES OF INVENTORY (DSI) It is a financial ratio helps to indicate about the average days the company takes to make the inventory into turnover. DSI is also known as average age of inventory, days inventory outstanding and days in inventory. Generally, lower DSI is preferred as it indicates shorter duration to clear off the inventory. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 26 kumar-369468243/  ESSENCE OF MARKETING IN LOGISTICS https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 27 kumar-369468243/  Marketing logistics is a key component for any business which ensures that the products are reached to the right set of customers along with all the product-related information. A good product is useless unless it reaches the right set of customers at the right place at the right time. Marketing logistics management is an important study where a company has to analyze where a finished product is needed, how should the products be taken, when are they required, what product information must be shared etc. Without a proper marketing logistics plan, even the best of products might not have a positive impact on business. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 28 kumar-369468243/  CURRENT TRENDS IN LOGISTICS Automation and Robotics: Warehouses and fulfillment centers are increasingly using automated systems, such as robotics and automated guided vehicles (AGVs), to improve efficiency and reduce labor costs. Sustainability Initiatives: Companies are adopting eco-friendly practices like electric vehicles, energy-efficient warehouses, and optimizing routes to reduce carbon footprints. Blockchain Technology: Blockchain ensures transparency, security, and traceability in the supply chain, improving trust among suppliers, manufacturers, and consumers. Last-Mile Delivery Innovations: The demand for faster delivery is driving solutions like drones, autonomous vehicles, and local delivery partnerships to enhance last-mile efficiency. Data Analytics and AI: Advanced analytics and artificial intelligence (AI) help optimize inventory management, demand forecasting, and real-time tracking to reduce costs and improve decision-making. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 29 kumar-369468243/  MARKETING TRENDS Marketing logistics in a business process to ensure an efficient is flow of finished goods, services and product information to the distributor, retailer and end customer. Marketing logistics is an important business parameter which entails finished goods' inventory management, packaging, transportation, distribution, waste management and reverse logistics. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 30 kumar-369468243/  Importance of Marketing Logistics Management Marketing logistics is a key component for any business which ensures that the products are reached to the right set of customers along with all the product-related information. A good product is useless unless it reaches the right set of customers at the right place at the right time. Marketing logistics management is an important study where a company has to analyze where a finished product is needed, how should the products be taken, when are they required, what product information must be shared etc. Without a proper marketing logistics plan, even the best of products might not have a positive impact on business. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 31 kumar-369468243/  Components of Marketing Logistics 1. Customer profiling 2. Goods distribution 3. Transportation 4. Packaging & Information 5. Customer Service 6. Reverse Logistics https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 32 kumar-369468243/ LOGISTICS INDUSTRY TRENDS 1. Internet of Things 2. Artificial Intelligence 3. Robotics 4. Last Mile Delivery 5. Warehouse Automation 6. Block chain 7. Big Data & Analytics 8. Cloud Computing 9. Autonomous Vehicles 10. Elastic Logistics https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 33 kumar-369468243/  UNIT – IV Warehouse Management Evolution of Concept of Warehousing Importance of Warehousing Benefits of Warehousing Warehouse Operating Principles Developing the Warehouse Resource. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 34 kumar-369468243/  https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 35 kumar-369468243/  https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 36 kumar-369468243/  WAREHOUSE A warehouse is a facility that, along with storage racks, handling equipment and personnel and management resources, allows us to control the differences between the incoming flow of goods (received from suppliers, production centers, etc.) and the outgoing flow of goods (goods being sent to production, sales, etc.). https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 37 kumar-369468243/  What is meant by warehouse management? Warehouse management encompasses the principles and processes involved in running the day-to-day operations of a warehouse. At a high level, this includes receiving and organizing warehouse space, scheduling labor, managing inventory and fulfilling orders. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 38 kumar-369468243/  Evolution of Concept of Warehousing Warehouses are derived from the concept of storage, which as far as we can tell, dates back to the early stone age, when pits were used to store seeds and surplus food. Warehouses have been around for a long time. Some say it goes back to the Egyptian era when they used warehouses to store their yields and crops. While some say, it goes back to the 1300s in Great Britain, where the word - “Warehouse” was first used. Either way, in today’s day and age, the meaning of a warehouse is a lot more complex than it used to be. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 39 kumar-369468243/  IMPORTANCE OF WAREHOUSING Better Inventory Management More Efficient Packing and Processing Superior Customer Service / Improves Customer Service Ensure Price Stabilization / Stabilizes Product Prices Keeping Goods Safe / Provides Safety of Products Streamlining Purchase Decisions Develop Optimal Processes Provides Storage Space Facilitates Regular Production https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 40 kumar-369468243/  Benefits of Warehousing Easy distribution Accessibility Managing inventory better Storage space for excess inventory and seasonal products Consolidation Efficiency/Productivity Faster inventory turnover Higher customer satisfaction Lower labor costs Better record-keeping Greater security https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 41 kumar-369468243/ WAREHOUSE OPERATIONAL FUNCTIONS Receiving of goods. Up-to-date recording of goods showing stock position (inventory accounting system). Storing of goods at an appropriate place and in the minimum area. Protecting and preserving the physical attributes of the products. Proper handling of goods, especially loading and unloading. Order receiving, processing and filing. Marshalling of goods in terms of assortment of various goods to be dispatched to a customer. Dispatching of goods. Preparation of documents pertaining to transactions, records and advices. Marketing intelligence and act as an intermediary between company and customer. Other legal functions related to trade. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 42 kumar-369468243/  WAREHOUSE DESIGN Purpose of the Layout of the facility facility and Warehouse space requirement and aisle layout https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 43 kumar-369468243/  https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 44 kumar-369468243/  https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 45 kumar-369468243/  https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 46 kumar-369468243/  OPERATIONAL MECHANISM OF WAREHOUSE (i) Receiving and Stocking System (ii) Hiring and Training Personnel (iii) Developing a Working Procedure System (iv) Developing Security System (v) Billing and Inventory Management System (vi) Local Delivery System and (vii) Safety and Maintenance System https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 47 kumar-369468243/  https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 48 kumar-369468243/  UNIT-V Transportation and Multimodal Transport: Transport Functionality and Principles Product Movement Product Storage Relationship between the Shipper, the Consignee, and the Public Multimode transport concepts and features Advantages of Multimodal Transport Suppliers of Transportation Services Typical Carrier Ancillary Services https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 49 kumar-369468243/  https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 50 kumar-369468243/  https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 51 kumar-369468243/  Transportation Transportation is the operation involved in the actual physical delivery or movement of products from one place to another. It’s part of the larger system of logistics and considers factors such as secured item packaging, best delivery route, and the most appropriate mode of transport. Its functions are further divided into three areas that businesses must observe to ensure effective logistics operations: Operations management – or the organization of processes involved in making goods and delivering services Vehicle and fleet management – or the coordination of delivery vehicles to ensure optimum and efficient use of resources Infrastructure administration – or securing all infrastructures involved in the logistics process such as roads, ports, airports, canals, rails, and pipeline networks, among others https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 52 kumar-369468243/ Transportation Transportation networks are essential to society for a multitude of purposes, from facilitating daily commutes to distributing commodities across production sites. The easiness, quickness, and security of transportation has supported human development throughout history. Creating transportation infrastructure is a constant issue for meeting demand for mobility, promoting economic growth, and engaging in international trade. 07-10-2024 https://www.linkedin.com/in/dr-p-mathan-kumar- 53 369468243/ Basic Modes of Transportation Rail: – Best for: Bulk goods over long distances (coal, minerals, heavy machinery). – Example: Coal is transported by rail from mines to power plants. – Advantages: Cost-effective, large capacity, eco-friendly. – Disadvantages: Limited by track networks, less flexible. Road: – Best for: Short to medium distances, flexible routing (consumer goods, groceries). – Example: FMCG companies use trucks to distribute products to retail stores. – Advantages: Flexible, door-to-door service, fast for short distances. – Disadvantages: Prone to delays (traffic, weather), smaller capacity. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 kumar-369468243/ 54  Basic Modes of Water: Transportation – Best for: International trade, large quantities of goods (crude oil, automobiles). – Example: Automakers like Hyundai ship cars via sea from Korea to global markets. – Advantages: Economical for large, heavy loads, ideal for global trade. – Disadvantages: Slow, weather-dependent, requires port access. Air: – Best for: High-value, urgent, or perishable goods (electronics, pharmaceuticals). – Example: Apple uses air transport for shipping iPhones worldwide to meet demand quickly. – Advantages: Fast, secure, reliable. – Disadvantages: Expensive, limited capacity for large volumes. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 kumar-369468243/ 55  Basic Modes of Pipeline: Transportation – Best for: Transporting liquids and gases (oil, natural gas). – Example: Natural gas pipelines from Russia to Europe provide a steady supply of energy. – Advantages: Safe, efficient for continuous flow, low operational cost. – Disadvantages: High initial investment, limited to specific goods. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 56 kumar-369468243/ Characteristics of Different – A variety of options is available for Modes of Transportation individuals, firms, or countries that want to move their products from one point to another. – Various options for moving products from one place to another are called transportation modes. – Road, rail, air, water, and pipelines are considered the five basic modes of transportation by most sources. – In addition, digital or electronic transport is referred to as the sixth mode of transportation in some texts. https://www.linkedin.com/in/dr-p-mathan-kumar- 07-10-2024 369468243/ 57  1. Road – Road transport—also known as highway, truck, and motor carriage— steadily increased its share of transportation. – Throughout the 1960s, road transport became the dominant form of freight transport in the United States, replacing rail carriage, and it now accounts for 39.8% of total cargo ton-miles, which is more than 68% of actual tonnage. 07-10-2024 https://www.linkedin.com/in/dr-p-mathan-kumar-369468243/ 58  1. Road The key advantages of road transport over transportation modes are its flexibility and versatility. Trucks are flexible because they offer door-to-door services without any loading or unloading between origin and destination. Truck’s versatility is made possible by having the widest range of vehicle types, enabling them to transport products of almost any size and weight over any distance. https://www.linkedin.com/in/dr-p-mathan-kumar- 07-10-2024 369468243/ 59  1. Road Road transport also offers reliable and fast service to the customers. The loss and damage ratios for road transport are slightly higher than for the air shipment, but are too far lower than for the rail carriage. Road transport generally offers faster service than railroads, especially for small shipments (less than truckload, or LTL). For large shipments (truckload, TL), they compete directly with each other on journeys longer than 500 miles. However, for shipments larger than 100,000 pounds, rail is the dominant mode. Also, as motor carriers are more efficient in terminal, pickup, and delivery operations, they compete with air carriers, for both TL and LTL shipments that are transported 500 miles or less. https://www.linkedin.com/in/dr-p-mathan-kumar- 07-10-2024 369468243/ 60  1. Road In regard to economic aspects, road transport has relatively small fixed cost, because it operates on publicly maintained networks of high-speed and often toll-free roads. However, the variable cost per kilometer is high because of fuel, tires, maintenance, and, especially, labor costs (a separate driver and cleaner are required for each vehicle). Road transport is best suited for small shipments and high value products, moving short distances. Legislative control and driver fatigue are some problems of motor carriers’ long journeys. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 61 kumar-369468243/  Flexibility: Easily accessible to most areas, providing door-to- door delivery. Speed: Suitable for short to medium distances with quicker delivery times. Cost: Can be cost-effective for small-scale deliveries. Examples: Delivery of perishable goods, e-commerce deliveries within cities or states. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 62 kumar-369468243/  2. Rail Rail carriage accounts for 37.1% of total freight ton-miles (more than 14% of actual tonnage) in the United States, which places railroads after motor carrier as the second dominant mode of transportation. However, in some countries such as the People’s Republic of China, the countries of the former Yugoslavia, and Austria, rail remains the dominant transportation mode. Although rail service is available in almost every major city around the world, the railroad network is not as extensive as the road networks in most countries. Thus, rail system lacks the flexibility and versatility of the road transport. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 63 kumar-369468243/  2. Rail Indeed, rail carriers offer terminal-to-terminal service rather than the door-to-door service provided by motor carriers. Therefore, railroads, like water, pipelines, and air transport, need to be integrated with trucks to provide door-to-door services. Also, rail-roads offer less-frequent services compared to motor carriers. Rail transportation is relatively slow and quite unreliable, as the loss and damage ratios of rail transport for many shipments are higher than other modes. As a result, the railroad is a slow mover of both raw materials (e.g., coal, lumber, and chemicals) and low-value finished goods (e.g., tinned food, paper, and wood products). https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 64 kumar-369468243/  2. Rail Railroads have high fixed costs and relatively low variable costs. Expensive equipment, multishipment trains, multiproduct switching yards and terminals, and right-of-way maintenance result in high fixed costs. However, the variable costs are low, especially for long hauls, so rail carriage generally costs less than motor and air transport on a weight basis. Less than truckload is any quantity of freight weighing less than the amount required for the application of a truckload rate. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 65 kumar-369468243/  2. Rail Efficiency: Rail transport is efficient for long-distance freight, especially for bulky goods like coal or minerals. Capacity: Can handle large volumes of cargo in a single journey. Speed: Generally slower than air but faster than road transport for long distances. Examples: Shipping coal from mines to power plants, transporting goods across continents like Europe and Asia via the Trans-Siberian Railway. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 66 kumar-369468243/  3. Air Air carriers transport only around 0.1% of ton- mile traffic in the United States. Although airfreight offers the shortest time in transit (especially over long distances) of any transport mode, most shippers consider air transport as a premium emergency service because of its higher costs. However, the high cost of air transport may be traded off with inventory Opens in new window and warehousing Opens in new window reductions or justified in some situations: for high-value products, for perishables, in limited marketing periods, and in an emergency. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 67 kumar-369468243/  3. Air Speed: Fastest mode of transport, ideal for perishable or urgent goods. Global Reach: Covers virtually all locations worldwide with airports. Cost: Expensive per unit weight compared to other modes. Examples: Transporting flowers from Kenya to Europe, delivering electronics from Asia to North America 07-10-2024 https://www.linkedin.com/in/dr-p-mathan-kumar-369468243/ 68  4. Water (Maritime) Cost-Effectiveness: Extremely cost- effective for bulk goods and large distances. Capacity: Can carry enormous volumes of cargo, including containers. Speed: Generally slower compared to air and road but cost-efficient for international trade. Examples: Shipping containers from China to the United States, transporting oil across oceans. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 69 kumar-369468243/  5. Pipeline Specialization: Used primarily for liquids and gases like oil, natural gas, and water. Efficiency: Constant flow with minimal handling required. Environmental Impact: Considered more environmentally friendly for certain liquids compared to other modes. Examples: Transporting oil from extraction sites to refineries, distributing natural gas across regions. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 kumar-369468243/ 70 6. Digital or Electronic Transport Digital or electronic transport refers to the use of technology-driven solutions to enhance transportation systems. It’s like giving your regular commute a turbo boost with a dash of ones and zeros. Speed Demon: Picture this: digital transport zooms along the information superhighway at breakneck speeds. It’s the Flash of transportation modes— minus the red suit. Cost Efficiency: It’s not just fast; it’s also cost- effective. Think of it as the budget-friendly option that doesn’t skimp on performance. Accessibility & Flexibility: Digital transport is like that friend who’s always available. It’s accessible anytime, anywhere, and adapts to your needs. Whether you’re sending data packets or teleporting 07-10-2024 your cat https://www.linkedin.com/in/dr-p-mathan-kumar- memes, it’s got your back. 71 369468243/  https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 72 kumar-369468243/  Transport Economics https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 kumar-369468243/ 73  Transport economics involves the study of economic factors affecting transportation systems and decisions. Cost Analysis: Evaluating costs associated with different transport modes, including infrastructure, maintenance, and operational costs. Demand Analysis: Understanding how price, accessibility, and service levels influence transportation demand. Externalities: Assessing environmental and social costs and benefits associated with transport activities. Economic Efficiency: Maximizing economic benefits while minimizing costs through optimal transport planning and policy. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 kumar-369468243/ 74  https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 75 kumar-369468243/  What is Intermodal Operation? https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 76 kumar-369468243/  Intermodal operation refers to the transportation of goods using multiple modes of transport—such as rail, road, water, and air—within the same supply chain journey, without handling the goods themselves during the transitions between these modes. The goods are usually carried in standardized containers that can easily be transferred between different transportation modes (e.g., ship to rail, rail to truck). https://www.linkedin.com/in/dr-p-mathan-kumar- 07-10-2024 369468243/ 77  Key Features: 1. Standardization: Containers and cargo units are standardized to facilitate easy transfer between modes. 2. Flexibility: Different modes can be used depending on cost, speed, and efficiency, ensuring optimal use of resources. 3. Seamless Transfer: Goods remain in the same containers during transfer between modes, reducing damage, delays, and handling costs. Example: A container of electronics might be shipped from a factory in China by sea to a U.S. port, then transferred to a rail service to reach an inland city, and finally delivered by truck to the retail warehouse. Throughout this journey, the goods remain in the same container. https://www.linkedin.com/in/dr-p-mathan-kumar- 07-10-2024 369468243/ 78  https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 79 kumar-369468243/  Transport Functionality and Principles Transportation is one of the most visible elements of logistics operations. As consumers, we are accustomed to seeing trucks and trains moving products or parked at a distribution facility. While this experience provides a good visual understanding of transportation elements, it does not allow the necessary depth of knowledge to understand transportation’s role in logistics operations. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 80 kumar-369468243/  Transport Functionality and Principles Transportation functionality Product movement Product storage Principle of Transportations Economy of scale Economy of distance https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 81 kumar-369468243/  Product Movement Whether the product is in the form of materials, components, assemblies, work-in-process, or finished goods, transportation is necessary to move it to the next stage of the manufacturing process or physically closer to the ultimate customer. A primary transportation function is product movement up and down the value chain. Transportation utilizes temporal, financial, and environmental resources, it is important that items be moved only when it truly enhances product value. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 82 kumar-369468243/  Product Movement The major objective of transportation is to move product from an origin location to a prescribed destination while minimizing temporal, financial, and environmental resource costs. Loss and damage expenses must also be minimized. At the same time, the movement must take place in a manner that meets customer demands regarding delivery performance and shipment information availability. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 83 kumar-369468243/  Product Storage A less common transportation function is temporary storage. Vehicles make rather expensive storage facilities. However, if the in-transit product requires storage but will be moved again shortly (e.g., in a few days), the cost of unloading and reloading the product in a warehouse may exceed the profitability. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 84 kumar-369468243/  Product Storage A second method to achieve temporary product storage is diversion. This occurs when an original shipment destination is changed while the delivery is in transit. Traditionally, the telephone was used to direct diversion strategies. Today, satellite communication between enterprise headquarters and vehicles more efficiently handles the information. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 85 kumar-369468243/  Principle of Transportations Economy Economy of scale of distance https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 86 kumar-369468243/  Economy of scale It refers to the characteristic that transportation cost per unit of weight decreases when the size of the shipment increases. For example, truckload (TL) shipments (i.e., shipments that utilize the entire vehicle’s capacity) cost less per pound than less-than-truckload (LTL) shipments (i.e., shipments that utilize a portion of vehicle capacity). It is also generally true that larger capacity transportation vehicles such as rail or water are less expensive per unit of weight than smaller capacity vehicles such as motor or air. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 87 kumar-369468243/  Economy of scale Transportation economies of scale exist because fixed expenses associated with moving a load can be spread over the load’s weight. As such, a heavier load allows costs to be “spread out,” thereby decreasing costs per unit of weight. The fixed expenses include administrative costs of taking the transportation order, time to position the vehicle for loading or unloading, invoicing, and equipment cost. These costs are considered fixed because they do not vary with shipment volume. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 88 kumar-369468243/  Economy of distance It refers to the characteristic that transportation cost per unit of distance decreases as distance increases. For example, a shipment of 800 miles will cost less than two shipments (of the same combined weight) of 400 miles. Transportation economy of distance is also referred to as the tapering principle since rates or charges taper with distance. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 89 kumar-369468243/  Economy of distance The rationale for distance economies is similar to that for economies of scale. Specifically, the relatively fixed expense incurred to load and unload the vehicle must be spread over the variable expense per unit of distance. Longer distances allow the fixed expense to be spread over more miles, resulting in lower overall per mile charges. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 90 kumar-369468243/  Advantages of multimodal transport Multimodal transport brings with it a series of advantages that make this system one of the most used systems in the world, and these advantages are: Reduce congestion, sea ports are congested due to the chain of ships and small vessels. Reduces costs in monitoring goods and provides greater security in tax collection. Reducing customs costs and increasing smuggling control. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 91 kumar-369468243/  Reducing the prices of imported goods. Improving the competitiveness of national products in the international market. Allow scheduling of activities and control of compensation goods. Reducing cargo transportation time. Reducing transportation costs. Reducing the risk of loss due to theft or looting. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 92 kumar-369468243/  Multimode Transport Concepts Multimodal transportation or multimodal shipping refers to logistics and freight processes that require multiple modes of transportation. Multimodal transport is handled by a single carrier aka a multimodal transport operator or provider. The provider relies on a network of smaller carriers or contractors to do the job, but it's still a single-contract process for the shipper opting for multimodal transport. For example, one shipment may involve rail carriers, air cargo freight, as well as a truck carrier. These are three modes of transport used in combination to complete a shipment. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 93 kumar-369468243/  https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 94 kumar-369468243/  https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 95 kumar-369468243/  Multimode transport Concepts The twentieth century has seen tremendous developments in the evolution of transport systems at a global level. The innovations in the form of air-transport, increased safety norms for all modes of transport and the rapid strides in communications have had considerable effect on transport services. Nowhere is this more apparent than in the field of multimodal transport where the intermingling of various means of transport has contributed to the enormous complications that surround the conduct of reliable and efficient long range transport. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 96 kumar-369468243/  The term multimodal transport which is also sometimes referred to as "inter-modal", "combined" and "through" transport, is used to indicate the process when goods are carried from one place to another by different means of transport. In this sense, it is of considerably larger scope and hence complexity when placed in comparison to unimodal transport. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 97 kumar-369468243/  The field of multimodal transport has been principally affected by two intricacies, both of relatively recent origin. Firstly, there is the container revolution which has led to goods being perceived not in their individual form, but as a combination, which is in the form of a single container. It is said that the container revolution really started with a shipment of household goods in liftvans, and some non-vessel owning forwarders have already developed a specialised full moving service from residence to residence which includes liability for loss or damage under their freight forwarding contract. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 98 kumar-369468243/  Due to this, it becomes close to impossible to identify the precise point of time at which the damage has occurred. The second, and from the legal point of view, more important area was the precise status of a multimodal transport operator, a complication which owes its existence to the classic job of multi-modal transport operator. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 99 kumar-369468243/  He takes instruction from the consignor and the consignee as to the pick up point and the destination of the goods; he further goes on to make arrangements with the carriers for collection, cargo and delivery of the goods but those arrangements are made as an agent of the owner of the goods. He may accept responsibility for the entire transportation, but carry out none of it himself. An example of this kind of case would be that seen in Transcontainer v. Custodian Security. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 100 kumar-369468243/  As a result, one is unable to categorise the multimodal transport operator as either an agent of the carriers or an agent of the cargo interests. The consequence of this confusion is manifested if we turn to the nature of the contract, because before bringing a claim the goods owner has to identify the person who may be legally liable. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 101 kumar-369468243/  To solve these practical and detailed conundrums, the Indian Government has seen it fit to pass the Multimodal Transportation of Goods Act 1993. The Preamble to the Act states that this is, "an Act to provide for the regulation of the multimodal transportation of goods, from any place in India to any place outside India on the basis of a multimodal transport contract and for matters concerned therewith or incidental thereto." https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 102 kumar-369468243/  Multimode transport features The customer provides accurate information about the shipment to the company (type of goods, their weight, volume, and so on). The executing company may perform an independent inspection to verify the information provided by the customer. If it is found that the customer provided false information about the shipment, they will be fined. MTO is fully responsible for the goods' safety and integrity. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 103 kumar-369468243/  MTO also guarantees on-time delivery of the goods. MTO reserves the right to end the delivery with a force majeure situation. To do this, they deliver the cargo to the owner, and after they have delivered all of the goods, the delivery is complete. If it has been over 90 days since the customer was supposed to receive the cargo under the contract, the cargo is lost. The customer has the right to get information about all contractors involved in the transportation from the general contractor. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 104 kumar-369468243/  The contract's text must provide specific information on the cost of the work. If the cost of the work is not specified exactly, additional agreements must be made to determine the costs. Additionally, you should pay attention to the scheduling of these projects, since failing to fulfill deadlines allows the customer to claim just financial compensation. Generally, such modes of transport are used when there is no direct communication between the supplier and the recipient of the goods. Additionally, such transportation may be required if delivery via one mode of transport is too costly or takes an extended period of time. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 105 kumar-369468243/  The executing company performs several operations during the cargo transportation stage, such as the preparation of associated documents, the search for and conclusion of contracts with actual carriers, the leasing of terminals, and customs clearance of goods. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 106 kumar-369468243/  Intermodal vs. Multimodal: What is the Difference? https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 107 kumar-369468243/  - In multimodal transport, it involves only one company in the transportation process, but in intermodal transport, the customer engages with several companies separately. - Responsibility for intermodal transportation is distributed among all participants in the transportation of goods. Because of this, for example, in the event of damage to any goods, it is very difficult to find the culprit. - For multimodal transportation, usually, one general package of documents is drawn up for all goods; in the case of intermodal, the difference is that you need several packages of documents (for all participants in the carriage of goods). https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 108 kumar-369468243/  Vehicle Routing and Scheduling Vehicle routing and scheduling (VRP) is an extension of the basic vehicle routing problem. Realistic restrictions are now included such as Each stop may have volume to be picked up as well as delivered. Multiple vehicles may be used having different capacity limitations to both weight and volume. A maximum total driving time is allowed on a route before a rest period of at least ten hours. Stops may permit pickups and deliveries only at certain times of the day (called ‘time windows’. Pick-ups may be permitted on a route only after deliveries are made; and Drivers may be allowed to take short rests or lunch breaks at certain times of the day. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 109 kumar-369468243/  Suppliers of Transportation Services The Supplier” means any person, firm or a company who enters into a contract (Transport Order) with the Customer for the transportation and other related services stated by the Transport Order. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 110 kumar-369468243/  Typical Carrier Ancillary Services The service provided is a composite service which may include various ancillary services such as loading/ unloading, packing/unpacking, transhipment, temporary storage etc., which are provided in the course of transportation of goods by road. Shipping Ancillary transport services means stevedoring services (Loading / Unloading), lashing and securing services, cargo inspection services, preparation of customs documentation, container handling services and storage of transported goods or goods to be transported. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 111 kumar-369468243/  Loading and Unloading Packaging and Crating Warehousing and Storage Carrier Customs Clearance Track and Trace Ancillary Insurance Coverage Services Special Handling Freight Consolidation Delivery Appointment Scheduling Reverse Logistics https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 112 kumar-369468243/  Relationship between the Shipper, the Consignee, and the Public Whether you are moving overseas or shipping commercial merchandise with Full Container Load Services or Less Container Load (FCL or LCL) shipping, there are many parties involved in the entire ocean freight process with very different responsibilities. In order to ensure nothing goes wrong, it’s important to not only understand the process but the roles and responsibilities of each party. The terms ‘shipper’, ‘consignee’, and ‘notify party’ are often mistaken to be one and the same or confused with one another. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 113 kumar-369468243/  Shipper/Exporter The shipper, or exporter, is the party responsible for packing and preparing all the goods being sent, as well as handling all documents and paperwork needed. These include obtaining the proper licenses and checking for customs exceptions and restrictions to prevent problems during customs clearance both at origin and destination port. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 114 kumar-369468243/  Consignee The difference between a shipper and a consignee is that the consignee is the receiver of the shipment and is usually the owner of the goods. This may be an individual or a company. Unless otherwise instructed, the party listed as the ‘consignee’ on the Bill of Lading is legally required to be physically present to collect the shipment. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 115 kumar-369468243/  Notify Party The notify party is the contact person to be notified when the shipment arrives at destination. This field is usually only required if it’s different from the party listed in the consignee field. The notify party can be the buyer himself, the shipping agent, or any other entity. The notify party is usually also responsible for arranging customs clearance at destination. https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 116 kumar-369468243/  THANK YOU https://www.linkedin.com/in/dr-p-mathan- 07-10-2024 117 kumar-369468243/