1. Logistics in the
Information Age
Presented By:
Jatin Kathuria
Ankit Narula

2. Logistics Sector
• Logistic is defined as business function that deals in transfer and its supporting activities
of goods and services
Global Logistic Sector
Indian Logistic Sector
Global logistic cost is lower in countries like
U.S. and Europe
The average logistics cost in India is around
13% of GDP
China got the 26th rank in the World Bank
International Logistics Performance Index
Ranked as low as 46th among 155 countries
in the World Bank International Logistics
Performance Index
Turnaround time from ports 7-10 hrs. (Hong
Kong)
Indians Port 4.67 days (major ports in 201011)

3. Manufacturing Firm
• A Manufacturing firm without taking help from a service provider.
Custom Clearance
Incoming
product
Customer
Warehouse
Importing Raw Materials
Manufacturing
Plant

4. THIRD PARTY LOGISTICS
• A Logistic Service provider will work provide customized services
to a client including Warehousing, product delivery, fleet
management etc.
Single Site Warehouse
Foreign
Supplier
Activities
1. Labor and Supervision
2. Receiving Storage
3. Value added Services
4. Inspection sorting
Bulk
Warehouse
OUTSOURCED
Indian
Customer
Facility
Final
Product
Benefits
1. Lower Cost (Variable and fixed)
2. Focus

5. COMPLEX TPL SERVICE
Supplier Hub
Supplier1
Supplier
2
Custom
Clearance
Bonded
Warehouse
Supplier
2
Incoming Materials
Activities
1. Same as single site warehouse
2. Custom clearance
3. Fleet management
4. Freight consolidation
Outsourced
Point of
Use /
Customer
Different Location
Benefits
1. Delayed Payment duties and
taxes
2. Pay on production sale
3. Data on Product availability
4. Faster custom clearance

6. INTERNATIONAL DIRECT SHIPMENT
• Many semiconductors suppliers have hired express delivery companies to perform
international direct shipment of Integrated circuits from their factories to customers in US
& Europe.
• Activities performed by LSP
 LSP will pick outbound product from the factory
 Transportation to destined market
 Custom Clearance
 Deconsolidate the consignment & deliver it to customer
•




Benefits
Shorter cycle time
Elimination of inventory stocking points
Postponement of final packaging
Smoother new product introduction, discontinuance

7. PARTS BANK
• Many manufacturing companies are using small express delivery companies for both warehousing and delivery of spare parts
known as “partsbank”.
• Activities performed by LSP
 Warehousing
 Transportation
 Cross-docking
 Tracking & tracing
 VAS-returns, sorting
•





Benefits
Reduced cycle time
Decreased inventory levels
Lower transportation cost
Improved visibility of inventory
Smoother new product ramp, discontinuance

8. TRANSPORTATION VS INFORMATION
TECHNOLOGY
• IT is not only a substitute for, but also a complement to,
transportation. Lets understand this through an example.
CASE:• Mr. Park living in San Francisco wants to send a bouquet to his
daughter Sandra in Boston on her Birthday.
• Three possible options are:1st option- To purchase a bouquet in San Francisco, pack it, and
mail it to Boston.

9. TRANSPORTATION vs INFORMATION
TECHNOLOGY
• 2nd option:Order at a local Florists shop in
SF
SF Florist will forward the order
to Florist in Boston
Boston Florist will deliver the
bouquet to Sandra
• 3rd option:- DROP SHIP
MODEL
Mr Park will place order with C &
C for bouquet
C & C will bypass the order to
the flower farm
Flower Farm will mail flower
directly to the Boston

10. MERGE IN TRANSIT
Monitors
LSP
Merge
Centre
Point of Sale
CPU
coordinate multiple products when the components are
sourced from different manufacturing and/or
warehousing locations.

11. CROSS DOCKING
Cross-Dock operations
were first pioneered
in the US trucking
industry in the 1930s,
and have been in
continuous use in LTL
(less than truckload)
operations ever
since.
Wal-Mart began
utilizing crossdocking in the retail
sector in the late
1980s

12. Sales Agent Model
Dealer
Customer
Plant
RDC
Customer
Dealer

13. Route Optimization By Consolidation
 Routing Before Consolidation
 Routing After Consolidation
Benefits:
 Scale Economy in Volume
 Scale Economy in Miles

14. Economics of Logistics
Transportation economics and pricing are driven by multiple
factors that influence rates. The primary factors are distance,
weight, and density.
Distance
Weight
Density

15. Efficient Transportation Infrastructure Investment
Increased transportation
capacity, efficiency, reliability and level of
service
Transportation cost
saving
Transit time savings
Increased Productivity
Increased Competitiveness
Increased Economic Growth
Business Expansion

16. Freight mode share
120
100
1
30
80
1
14
1
6
36
48
60
47
40
20
37
22
0
57
CHINA
U.S.A
ROAD
RAIL
WATER
INDIA
AIR
Source: Wef
Renders the economy less efficient and competitive

17. The Indian logistics sector
• The logistics sector in India has evolved over the past two decades
from being a pure transportation / warehousing functional service
to provision of more value added offerings like customs
clearance, domestic / international freight forwarding, crossdocking, reverse logistics, freight consolidation, warehousing of
modern standards etc.
• India estimated to spend 13 per cent of its GDP on logistics
creating an industry size of around Rs. 4,068 billion
• The sector has been witnessing double digit y-o-y growth rate
since 2002 and is expected to be more than USD 120 billion
(approx Rs.5,400 billion) by 2015

18. Emergence of
a global
manufacturing
hub
Development
of SEZs
Big retail boom
Growth of the
Economy
projected at 9-10%
Growth
Drivers
Logistics
management
as a strategic
tool

19. FUTURE OF LOGISTICS
4PL
Order to deliver supply chain services
Transition & support services
Provider managed services
3 PL Services
Distribution
Operations and
Carrier services
Transportation
routing and
scheduling
Freight pay and
audit
Forwarder
services
Transportation
execution Trade
management
Brokerage
services
Warehouse
management
Others
The 4PL will serve as the single point of contact for customers, managing a comprehensive set of
supply chain and logistics services that are executed by other providers