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Logistics Strategy &
Planning
Why the Increasing Interest?
Deregulation
Globalization
Technological breakthroughs
Environmental concerns
Performance imp...
Logistics Decision Areas
Transportation
◦ Modes
◦ Formats
◦ Pricing
Warehousing
◦ Consolidation
◦ Cross-Docking and Break-...
Major Transportation Modes
Road
Water
Rail
Air
Pipeline
Consolidation
Air Road Pipeline Rail Water
• Cost components
• Fixed infrastructure
and equipment
• Labor and fuel
• Varia...
Warehousing
Any operation that stores, repackages, stages, sorts, or centralizes goods or
materials
Consolidation
Warehouse
Small shipments in ...
Large economical shipments out ...
Logistics Strategy Choices
Pricing Logistics
Economic factors
◦Pricing versus distance
◦Price exchange rate
◦Storability, handling, and liability
◦Ma...
Customer Service
From a logistics perspective, customer service is the outcome of all logistics
activities or supply chain processes.
Cus...
Elements of Customer Service
Dimensions of Customer Service
oTime
oDependability
oFlexibility
oCommunication
Logistics Products
1.Nature of the logistics product
2.Product characteristics
3.Product packaging
4.Product pricing
5.Incentive pricing arra...
Nature of logistics Products
oCustomer Products
oIndustrial Products
oConvenience Products
oShopping Products
oSpecialty P...
Product Life Cycle
Product Characteristics
oWeight
oVolume
oValue
oPerishability
oFlammability
oSubstitutability
Product Packaging
oTo facilitate storage and handling.
oTo promote better utilization of transport equipment.
oTo provide ...
Product Pricing
oGeographical Pricing
oIncentive Pricing
oTax Effects
oProduct Standard
oEconomies of Scale
oDiscounted Pr...
Risk In Products
oPerishability (fresh fruits and whole blood)
oFlammability tendency to explore (gas, oil)
oValue, ease b...
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Logistics strategy & planning, Customer Service & Products

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logistics in a Brief

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Logistics strategy & planning, Customer Service & Products

  1. 1. Logistics Strategy & Planning
  2. 2. Why the Increasing Interest? Deregulation Globalization Technological breakthroughs Environmental concerns Performance impact
  3. 3. Logistics Decision Areas Transportation ◦ Modes ◦ Formats ◦ Pricing Warehousing ◦ Consolidation ◦ Cross-Docking and Break-Bulk ◦ Hub-and-Spoke ◦ Inventory
  4. 4. Major Transportation Modes Road Water Rail Air Pipeline
  5. 5. Consolidation Air Road Pipeline Rail Water • Cost components • Fixed infrastructure and equipment • Labor and fuel • Variable – passenger/cargo • Key issues • Location/number of hubs • Fleet assignment • Maintenance schedules • Crew scheduling • Prices and availability • Use of more than one mode of transportation to move a shipment • Grown considerably with increased use of containers • May be the only option for global trade • More convenient for shippers – one entity • High fixed cost • Primarily for crude petroleum, refined petroleum products, natural gas • Best for large and stable flows • Pricing structure encourages use for predicable component of demand • Move commodities over large distances • High fixed costs in equipment and facilities • Scheduled to maximize utilization • Transportation time can be long • Limited to certain geographic areas • Ocean, inland waterway system, coastal waters • Very large loads at very low cost • Slowest • Dominant in global trade • Containers
  6. 6. Warehousing Any operation that stores, repackages, stages, sorts, or centralizes goods or materials
  7. 7. Consolidation Warehouse Small shipments in ... Large economical shipments out ...
  8. 8. Logistics Strategy Choices
  9. 9. Pricing Logistics Economic factors ◦Pricing versus distance ◦Price exchange rate ◦Storability, handling, and liability ◦Market factors Ratings ◦Goods classification ◦Class index
  10. 10. Customer Service
  11. 11. From a logistics perspective, customer service is the outcome of all logistics activities or supply chain processes. Customer service, when utilized effectively, is a prime variable that can have a significant impact on creating demand and retaining customer loyalty. Order entry and ends with delivery of product to customers. Equipment service maintenance other technical support. The speed and dependability with which items ordered can be made available.
  12. 12. Elements of Customer Service
  13. 13. Dimensions of Customer Service oTime oDependability oFlexibility oCommunication
  14. 14. Logistics Products
  15. 15. 1.Nature of the logistics product 2.Product characteristics 3.Product packaging 4.Product pricing 5.Incentive pricing arrangement 6.Risk
  16. 16. Nature of logistics Products oCustomer Products oIndustrial Products oConvenience Products oShopping Products oSpecialty Products
  17. 17. Product Life Cycle
  18. 18. Product Characteristics oWeight oVolume oValue oPerishability oFlammability oSubstitutability
  19. 19. Product Packaging oTo facilitate storage and handling. oTo promote better utilization of transport equipment. oTo provide product protection. oTo promote the sale of the product. oTo change the product density. oTo facilitate the use of the product. oTo provide reuse value for the customer.
  20. 20. Product Pricing oGeographical Pricing oIncentive Pricing oTax Effects oProduct Standard oEconomies of Scale oDiscounted Pricing oInternational Level
  21. 21. Risk In Products oPerishability (fresh fruits and whole blood) oFlammability tendency to explore (gas, oil) oValue, ease be stolen (pens. watches. cigarettes) oSpecial treatment, whether transportation, storage or packaging, adds to the cost of distribution.

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