Sales Mod 5

DEFINITION, COMPONENTS & SCOPE OF LOGISTICS
● Logistics is the management of supply and transportation to deliver the

goods on time and in good shape. handling of operations is a part of
the logistics industry, and the need to perform efficient and cheap
operations is of utmost importance in the modern competitive world.
● scope:
INVENTORY MANAGEMENT DECISIONS
CONCEPT OF EOQ
ROP,
A reorder point (ROP) is a specific level at which your
stock needs to be replenished. In other words, it tells
you when to place an order so you won’t run out of stock
JIT
JIT, is an inventory management method in which goods are

received from suppliers only as they are needed. The main
objective of this method is to reduce inventory holding costs and
increase inventory turnover.
ONLINE INVENTORY MANAGEMENT
● Online inventory management is exactly that – inventory management,
online. A cloud-based software system, online inventory management
provides organisations with a digitised, logical, and systematic
process to control the inward and outward flow of inventory stock.
Crucial to the success of strong growth, and business
sustainability.
● The automation inherent in online inventory management removes

time-consuming and costly manual processes associated with
traditional inventory control. It helps companies efficiently manage
and maintain inventory stock levels, to ensure that they have the
right amount of inventory available, in the right place, and at the
right time.
OUT BOUND LOGISTICS:
What Is Outbound Logistics?
Outbound logistics focuses on the demand side of the supply-demand equation.

The process involves storing and moving goods to the customer or end user. The
steps include order fulfillment, packing, shipping, delivery and customer
service related to delivery.
Outbound Logistics Activities
● Warehouse and Storage Management: A company keeps a certain quantity of

goods on hand to meet demand. Outbound logistics processes store these goods
securely in the right conditions and organize them. Inbound and outbound
logistics overlap in warehouse management. But outbound logistics deals with
outgoing finished products. For companies that sell finished products they
receive from suppliers, inbound logistics concentrates on product acquisition
and outbound logistics fulfills orders sent straight to customers and
distributes the products to retail outlets.
● Inventory Management: Software often plays a central role in inventory
management, a process that determines the best place to store goods in the
warehouse for fast order fulfillment and the order picking and packing
operation. Inventory management goals include inventory and order accuracy as
well as maintaining product quality by preventing damage, theft, obsolescence
or spoilage.
● Transportation: The modes and methods of shipping products vary depending

on the type of goods. For example, huge items like heavy machinery may ship in
small order quantities by truck. Perishable items like fresh flowers may need
to be transported by plane in refrigerated containers.
● Delivery: On-time delivery is critical to success. Moreover, the

customer’s order must have the correct items and quantities, and the package
can’t get lost or damaged in transit. Outbound logistics takes responsibility
for this step.
○ Distribution Channels: The ways your product reaches the customer, called
distribution channels, affect how you organize outbound logistics.
Distribution channels can be broadly categorized into direct (when you sell
directly to your customers) and indirect (when you sell through an
intermediary such as a wholesaler or retailer). There are many distribution
methods, including direct to consumer, value-added resellers, dealer networks,
dual-distribution, omnichannel and drop shipping. When choosing distribution
channels, consider logistics complexity, cost, speed, quality, customer
satisfaction and control.
○
○ Last-mile Delivery: The final step in an order’s journey covers the last
shipping leg and delivery. The last mile is usually the most costly and
inefficient part of delivery. The term comes from the early days of telephone
service, when wiring homes to the mainline was slow and expensive. Last-mile
logistics includes services such as home grocery delivery from a local store
and package delivery by a common carrier. Before the last mile, shippers can
handle lots of orders at the same time in the same way (for example, they can
load dozens of orders going to the same city in one truck). But in the last
mile, each delivery requires individual handling because it goes to a single
address. Deliveries to addresses get spread over a suburban region or packed
within a gridlocked city center where parking is difficult—last-mile services
account for 41% of overall supply chain costs.
● Delivery Optimization: Optimizing delivery involves not only reducing
costs but meeting ever-increasing customer expectations for speed and
visibility. Often, these two things go hand-in-hand. Route planning software
groups orders more efficiently for delivery, sorts packages by route, plots
the best course with an eye to traffic, fuel consumption and other variables,
and assigns routes to drivers.
1.
CONCEPT AND SCOPE OF SUPPLY CHAIN MANAGEMENT.
● Supply chain management (SCM) is the centralized management of the

flow of goods and services and includes all processes that transform
raw materials into final products.
● By managing the supply chain, companies can cut excess costs and
deliver products to the consumer faster and more efficiently.
● Good supply chain management keeps companies out of the headlines
and away from expensive recalls and lawsuits.
● The five most critical elements of SCM are developing a strategy,
sourcing raw materials, production, distribution, and returns.
● A supply chain manager is tasked with controlling and reducing costs
and avoiding supply shortages.
Minimises Operating Cost
Supply chain management focuses on reducing the overall operating cost of the
organisation. It aims at bringing efficiency and raising the profitability of organisations.
By developing a proper chain it brings down the purchasing cost, production cost and
delivery cost. It enables smooth flow of raw materials from the supplier to an
organisation which reduces the holding period of materials with the supplier and avoids
any losses due to delay in production. Similarly, companies are not required to hold on
expensive inventories for a longer time and distribute quickly through the supply chain.
Boosts Customer Service
Supply chain management helps in providing better service to customers. All production
strategies are framed in accordance with requirements of customers to manufacture
right product. It properly anticipates the demands of customers before initiating the
production. Supply managers monitor all operations of business and ensure that quality
products are produced using best combination of resources. Right product available to
right cost provide better satisfaction to customers. This will boost their confidence level
in company’s products.
Enhance Financial Position
Management of supply chain has an effective role on the financial position of business.
It improves the efficiency of the organisation, cut down the excessive cost and avoids
any shortage. Supply chain manager bring down the cost by reducing the use of fixed
assets like plants, transportation vehicles, warehouses etc. Proper supply chain results
in speedy flow of products which minimises the blockage of funds in inventories. It
ensures that optimum funds are always available which helps in improving financial
position.
Manages Distribution
Distribution of products at the right time and the right location is a complex task for
every organisation. Supply chain management accelerated the overall distribution
system of an organisation. It coordinates with various transportation channels and
warehouses for attaining faster movement of goods. Supply chain managers ensure
that all products get delivered at the right location within the time limit. By developing a
proper network for movement of goods it has to ease the whole distribution system.
Bring Coordination Among Partners
Proper coordination among all partners of business increase productivity and

profitability. It develops a proper channel through which employees, supplier and
customers can easily interact with business. Managers can easily control the activities
of their subordinates by communicating them all the required information.
Employees in case of any problem or error can contact their supervisors. Customers
can also access their brands for any information through self-portals which are
developed as a part of the customer support system. This enables a better exchange of
information and brings coordination among partners.
Inventory Management
Maintaining an optimum inventory is a must for uninterrupted operation of every

business. It keeps record of all inventories that is raw materials, spare parts and
finished goods. Supply chain managers ensure that the proper amount of inventory is
always maintained within the organisation. They work towards avoiding situations like
understocking or overstocking. Supply chain managers frame proper strategies for
procuring, producing and maintaining all inventories as per requirements.
Supplier Management
Supply chain management works on strengthening the relationships between business

and suppliers. It tracks and records every interactions or transaction with the suppliers.
Proper supply chain enables timely procurement of all required raw materials from
suppliers. It develops a proper network through which suppliers and business can easily
interact. Supply chain management solutions provide a self-service portal through
which suppliers can contact the company in case of any issues or problems.

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DEFINITION, COMPONENTS & SCOPE OF LOGISTICS

● Logistics is the management of supply and transportation to deliver the

JIT, is an inventory management method in which goods are

● The automation inherent in online inventory management removes

OUT BOUND LOGISTICS:

What Is Outbound Logistics?

Outbound logistics focuses on the demand side of the supply-demand equation.

Outbound Logistics Activities

● Warehouse and Storage Management: A company keeps a certain quantity of

● Transportation: The modes and methods of shipping products vary depending

● Delivery: On-time delivery is critical to success. Moreover, the

CONCEPT AND SCOPE OF SUPPLY CHAIN MANAGEMENT.

● Supply chain management (SCM) is the centralized management of the

Boosts Customer Service

Enhance Financial Position

Bring Coordination Among Partners

Proper coordination among all partners of business increase productivity and

Maintaining an optimum inventory is a must for uninterrupted operation of every

Supply chain management works on strengthening the relationships between business

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