1. SHAN SENTHIL
Marketing Manager
INTEGRATED LOGISTICS COMPANY

2. Introduction
“Supply-chains are about people, processes, and technology people
are probably the most important element,”
-Ray McDonald of Canadian Tire
The market situation, logistics service providers face today, differs a lot from the
situation years ago. The trend towards globalization has steadily increased with the
effect that supply chains have become longer and more complex. The term global
logistics management pertains to the overall management system of a corporation's
undertaking of worldwide market distribution, product design, customer
satisfaction, production, procurement, logistics, suppliers and inventory.
Two concepts are critical to have a global logistics management equipped with
complete strategy brain and in meeting with the current environment:
•firstly, supply chain management is no longer directed at the relations with local
suppliers, but of global supply chain management. The focus stresses how to
systematically consider commanding the information within the entire supply chain.
• This then leads to the second concept of [Just-in-Time] from orders, material
purchase, and manufacture to delivery.

3. THE LOGISTICS PROCESS

4. LOGISTICS PROCESS – ITS ACTIVITIES

5. An International Look at Logistics
Trends
 Total supply-chain performance, rather than individual plants’ and
warehouses’, is the key to economic benefits. VIZ., Toyota, SONY, MERCEDES
 These and other factors have led many European businesses towards integrated
logistics. For example, Energizer’s pan-European logistics strategy required a
number of reengineering measures including rationalisation of its
distribution centres, changes to the organisational structure, and selective
outsourcing of warehouse operations. To support the strategy, an
integrated communications infrastructure was installed.
“This (installation) allows logistics planning support using centralised sales
forecasting and distribution planning tools,” Laurence of Energizer—Ralston
Energy Systems.
The logistics trends in North America are:
 Increased use of third party logistics providers;
 Formation of new collaborative supply-chain relationships between vendors
and retailers;
 Changes in logistics’ reporting relationships; and
 Increased use of information technology.

6. Global logistics trends and
opportunities
 The world is shrinking. Across all sectors of business, there is a
trend for companies to become larger and fewer in numbers
through global mergers and acquisitions.
 One driver of business globalisation is the development of major
trading blocs around the world, such as the European
Community or the North American Free Trade Association,
which provide opportunities for expansion beyond home
markets into regional trading environments
 Twenty years ago supply-chain structures had to be designed to
match the available information technology (IT). Now the
physical infrastructures plants, warehouses, distribution centres,
and inbound supplies, for example can be designed independent
of system constraints. IT for communicating and sharing data
between sites, countries, and supply chain players is now readily
available.

7. A global culture, which is leading to the development of
global brands, is emerging .
 This is challenging companies to consider how to provide consistent
product offerings from manufacturing, distribution, and logistics
perspectives.
 few global brands currently exist. Even if products have the same name,
their content may vary according to local regulations and so might their
packaging.
 Economic growth historically seen in Europe and North America is
now being translated into other parts of the world, particularly in Asia-
Pacific. Economic movement is also now being seen in Central and
Eastern Europe.
 Greater political stability exists throughout the world, and workforce
and management skills are developing everywhere. This means that
manufacturing plants can be built in areas never even considered just a
few years ago. But none of these opportunities can be exploited unless
the supply chain (or logistics) works efficiently. And effective
management is the key to this.

8. OPPORTUNITIES TO BE REALISED
 Many manufacturing companies still see their key mission as minimizing
manufacturing costs and maximising the use of their assets. When their
products leave the factory, they are someone else’s responsibility.
 This view is rapidly disappearing. In the consumer goods businesses in Western
Europe and North America, for example, the concept of customer-driven
logistics has become increasingly important, and flexible
manufacturing response is an essential part of this. This trend is rapidly
spreading to other sectors and other continents. Integrated systems are needed
to support the extended supply-chain activities.
 Customer-service requirements are increasingly demanding. Customers now
have more products from which to choose and they expect those
products to be in stock. In the retail sector, this again results in pressure
throughout the supply chain in terms of order lead times. Then there is the
question of how to harmonise these products, and services for a regional or
global market, while at the same time meeting local tastes and regulations
 Product life cycles are also shorter, which means faster response from
manufacturing and reduced lead times throughout the supply chain. Total
delivered cost (i.e., cost to serve) needs to be a prime consideration. It makes
little business sense to choose a manufacturing location that has cost-effective
labour, low investment costs, and high subsidies, if the cost and time involved
in delivering the product to the marketplace more than eliminate these
advantages.
ALMARAI FOODS – A FINE EXAMPLE FOR FMCG LOGISTICS

9. GLOBAL LOGISTICS – CHALLENGES AHEAD
 Manufacturers and retailers face a number of major challenges in the Asian
logistics environment. Some companies are building plants to meet the
anticipated rapid market growth but have limited management resources available
to overcome the biggest challenge effective distribution and logistics. Regulatory
constraints prevent flexible provision of customized logistics services by
restraining geographic expansion within a country or by preventing the
integration of warehousing and transport operations into a single entity.
 TNT’s experience setting up as a logistics-service provider in China illustrates
some of the regulatory problems. First was the difficulty of obtaining a business
license that required the company to summarise its business activities in 25
words when no word exists in Mandarin for logistics. Then China’s regional
structure requires business licenses to be obtained for each province in
which the company wishes to operate, which can take between 3 and 12
months per license. Deciding on appropriate technology is another challenge.
 Some Asian economies will leap frog technological development; they cannot
be seen as a dumping ground for yesterday’s technology. For example, TNT
and many of its customers are using satellite technology for communications
in some Asian countries where a fixed infrastructure does not exist. Joint venture
partners are a requirement in many Asian countries and while they are invaluable
for their local knowledge, they are unlikely to have the capabilities to manage
logistics.
 As a result, Western companies must retain tight control of their logistics
operations in most Asian countries. The final major challenge is human resource
management. Finding a balance between local, low-cost resources and
highly-skilled expatriate resources is very delicate and critical to success in
Asia.

10. Logistics Trends
The key trends in logistics are:
 Increasing assortments and assortment dynamics;
 Individualisation of consumers;
 Increasing numbers of distribution channels;
 Manufacturing rationalisation and reallocation;
 Globalisation and increase of competition;
 Internationalisation of partners within the supply chain;
 Demand for increased service levels; and
 Demand to drive inventories out of the supply chain.

11. Sara Lee/Douwe Egberts
 Sara Lee/Douwe Egberts accepts the consequences of these trends. As a
result, our companies are focusing increasingly on logistics processes,
 intensifying communications between partners within the
supply chain and realigning the business organisation from a
functional to a process and supply-chain orientation. This is inline
with Sara Lee/Douwe Egberts’ international commitment to be “team
players with individual responsibilities,” an important condition
for ECR.
 Supply chains are no longer country-based; increasingly, they are
spreading across and among regions.
 To design and manage these extended supply chains requires
involvement from all supply-chain partners. Material suppliers,
manufacturers, distributors, retailers, and service companies need to
work together to ensure the creation of an efficient and effective global
supply chain, which meets customers’ demands. Logistics is the key to
successful supply chain management.

12. Future Vision
Becton Dickinson’s vision is of a supply chain in which
 business planning and execution is shared.
 Information will be globally accessible.
 Demand plans will be generated by region, country, and customer.
 Replenishment will be automated.
 The status of all orders, shipments, and inventories will be known and accountability will be
shared. For the company, supply-chain management is a key company-wide initiative.
 It is part of a cultural transformation that started in 1994.
 Between 1995 and 1997, the company concentrated on improving the performance of each
business unit.
 Another three-year programme, which started in 1996, concentrates on improving integration
across the business units.
Becton Dickinson’s growth is linked to five key challenges:
 Maintaining focus on core businesses;
 Effectively managing technological change;
 Continuing expansion of its worldwide presence;
 Working together as one company, while maintaining the strength of individual product lines;
and
 Becoming a better self-managed organisation by becoming more responsive to change, more
adaptive to the environment, and more dynamic. As Professor Michael Porter of Harvard
Business School says: “Coordination of complex global networks of company activities is
becoming a primary competitive advantage.” This is also Becton Dickinson’s belief.

13. MAJOR PLAYERS IN GLOBAL
LOGISTICS
 RS COMPONENTS
 FARNELL
 DHL
 FEDEX
 IKEA
 CARREFOUR

14. CONCLUSION
 The logistics community is increasingly being pushed to
the forefront of business activity as competition increases.
Logistics has a solid learning culture on which to build.
New entrants into the field will need to acquire a huge
array of skills, knowledge, and aptitudes, many of which
cannot be taught, but require experience. The most critical
transition enablers to help people in their logistics career
path include information management and an employer
management development cooperative that is, a
cooperative of employers in the supply chain who are
willing to provide the cross-functional experience needed
by logistics professionals in the chain.