The series of slides are an Introduction to Logistics Functions. Logistics can be defined as the science of organizing the Distribution Function. The presentation also defines distribution management. It also talks about Porter’s value chain. This presentation is a Welingkar’s Distance Learning Division initiative. For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/DistMang Join us on Facebook: http://www.facebook.com/welearnindia Follow us on Twitter: https://twitter.com/WeLearnIndia Read our latest blog at: http://welearnindia.wordpress.com Subscribe to our Slideshare Channel: http://www.slideshare.net/welingkarDLP

1. Welingkar’s Distance Learning Division
CHAPTER-1
Introduction to Logistics Functions
We Learn – A Continuous Learning Forum

2. Distribution Definition
• Distribution Management can be defined as
that arm or wind of management which
serves as a link between procurement,
manufacturing, marketing/sales, and finance,
proper functioning of which synergizes the
effects of all the activities, and absence of
which cannot only reduce efficiencies but can
lead to chaos in the organization

3. Logistics
• Logistics can be defined as the science of
organizing the Distribution Function.
• Any marketing organization, makes its profits
through a combination of activities which
includes sales , cost of sales, gross margins,
and distribution.

4. Marketing Organization Activities
•
•
•
•
•
Sales
Less Cost Of Sales
Gross Margins
Less marketing Cost
Net Margins
Rs. XXXXXX
Rs. YYYYYY
Rs. ZZZZZZ
Rs. SSSSSS
Rs. PPPPPP

5. Analysis of Marketing Activities
• Sales is a function of Volume X Net
Realization
• Volume is dependent on Marketing Inputs Viz.
Advertising, promotions, and sales efforts.
• Net Realization is dependent on price, taxes
and levies
• Cost of Sales is an aggregate of Cost of
Production

6. Analysis of Marketing Activities
• Advertising spends have to keep on increasing,
consumers have to be constantly indulged
with promotions, cost of inputs keep on
increasing

7. Scope for Reducing Costs
A.
B.
C.
D.
E.
F.
G.
Process Optimization
Optimization of Transportation
Locating Distribution Centers
Reducing the overall Inventory
Improving the turn around of Inventory
Effective Distribution
Increasing Customer service levels

8. Overview of Logistics Management
Porter’s Value Chain

9. Value Chain
• Inbound Logistics
– Receiving, storing, and forwarding inputs to the
manufacturing process
• Operations
– Activities associated with transforming inputs into the
finished goods
• Out bound Logistics
– Collecting, storing, physically distributing products to the
subsequent links in the supply chain

10. Value Chain
• Marketing & Sales
– Providing the condition in which the customers
can buy or pick up the products, inducing and
encouraging them to buy the products.
• Service
– Providing service to enhance, maintain the value
of the product, involving activities such as
installation, repair, parts supply, training etc.

11. Role of Logistics Manager
•
•
•
•
•
•
•
Improve profits
Increase market share
Improve cash flows
Introduce new products
Rapid coverage,
Better customer service
Materials Management, transportation,
warehousing, distribution, inbound logistics etc.

12. Logistics Interface
Functional Interests
Sales
Logistics Interface
Business Impact
More
Customer
Service
Less
Production
More
Production
Constraints
Fewer
Finance
High
Low
Asset
Investments

13. Distribution Planning
Audit
distribution
performance
Where are
we
now?
How do
we know
arrived?
Design
distribution
controls
Define
Distribution
Mission
Where do
We
Want
To be?
How do we
get
There?
Develop
Distri.
Strategy
Introduction to L

14. Distribution Mission
• The distribution mission can be described as a set of
goals to be achieved by the system within a specific
product/market context will get shaped by
–
–
–
–
–
–
The product
Production method
Nature of the product
The channel
Outlets
Customer service levels

15. Distribution Strategy
Corporate
objectives
What biz. are
we in?
Marketing
strategies
Product/market
decisions
Customer
service
strategies
Inventory
strategies
Warehousing
strategies
Cost
effectiveness
appraisals
Transport
strategies
Customer
Communication
strategy

16. Distribution Planning Cycle
Strategic
Planning
Products
Markets
channels
Performance
measurement
Actual Vs. Plan
Midcourse
corrections
Operational
planning
Manufacturing
Customer service
Budgets
Distribution
management
Inventory
control
Transport

17. Summary
• Distribution Management serves as a link between
different organizational department
• Logistics can be defined as the science of organizing
the Distribution Function.
• Porter’s Value chain discusses inbound logistics,
operations, out bound logistics, marketing and
service and support as well as primary activities

18. Summary
• The distribution mission can be described as a
set of goals to be achieved by the system
within a specific product/market context
• In case of distribution strategies one has to
examine the options in terms of cost
effectiveness