This ppt shows the role of logistics in the service industry

1. LOGISTICS IN SERVICE INDUSTRY
By,
AIYESHA AYYUB KHAN
MBA/IBTLG/002/IITTM

2. Contents
1. INTRODUCTION
2. LOGISTIC -DEFINITION
3. TYPES OF SERVICES PROVIDED BY LOGISTICS
4. REASONS THAT LEAD TO DEPENDENCE UPON LOGISTICAL
SERVICES
5. SERVICE INDUSTRY – DEFINITION
6. TYPES AND CHARACTERISTICS OF SERVICE INDUSTRY
7. KEY DISTINGUISHING CHARACTERSITICS OF SERVICE INDUSTRY
8. CURRENT SCENARIO IN SERVICE INDUSTRY
9. CURRENT SCENARIO IN LOGISTIC INDUSTRY
10. CHALLENGES FACED BY LOGISTICS INDUSTRY
11. POSSIBLE SOLUTIONS
12. CASE STUDY
13. CONCLUSION
14. REFERENCE

3. Introduction
• Logistics has a pivotal role in the service
industry.
• The service industry sector contributes to 52% to
the Gross Domestic Product (GDP) in 2014-15.
• It has emerged as the largest and one of the
fastest-growing sectors of the economy.
• The service sector consists of trade , hotel and
restaurants , transport , storage and
communication , financing , business services
and service associated with construction.

4. • This presentation is all about how the logistic
services helps in smooth running and rendering
of the service industry by attaining maximum
customer satisfaction.

5. Logistic -Definition
LOGISTIC :
Planning , execution and control of the
procurement , movement and stationing of
personnel , material and other resources to
achieve the objectives of a campaign , plan ,
project or strategy. It may be defined as the
‘management of inventory in motion and at rest’.

6. Types of Services provided by logistics
• Express Mail :
It is primarily used for shipment by air or sea to
deliver receipts , documents , and packages.
• Cargo and Storage :
It provides large scale shipping services for
materials that normally weigh more than 50 kg. It
uses every means of transportation including air ,
sea , land and rail.
• Continuous Support Services Management
(Supply Train Services Management):
Provides a number of integrated services such as

7. Continuation
extending support in material shipment which
includes :
 Warehouse management
 Internal and External Support services
 Application and Requests management
 Other valuable services such as product
assembly , packaging and labeling.

10. 5PL: Fifth Party Logistics
• Much the same as 4PL, 5PL is a new term circulating
within the supply chain industry. A 5PL will plan,
organize and implement logistics solutions on behalf of
the contracting company with a focus on utilizing the
most appropriate technologies. Essentially, a 5PL
manages networks of supply chains with an extensive e-
business focus across all logistic operations, other than
3PLs and the parent company.
• The central ethos of 5PL is its commitment to
collaboration and to obtaining a higher degree of
resource utilisation in order to achieve savings and open
up opportunities to secure the best possible solution at
minimum cost/carbon etc.
• E.g., BCR

11. Reasons that lead to dependence upon
logistical services
• The inability to provide human resources and
necessary capital to provide services at the
desired level internationally.
• Corporations entered into new markets and
areas of activity with radically different logistical
needs than they were accustomed to.
• Obtaining logistical services from an outsourced
third party is more economical than integrated
logistical techniques.

12. Service Industry - Definition
An industry made up of companies that primarily
earn revenue through providing intangible
products and services .
Service industry companies are involved in retail ,
transport , distribution , food services , as well as
other service-dominated businesses.

13. Types and characteristics of Service
Industry
• Consumer Services :
Consumer services principal purpose is to provide
services to individual consumers who desire them
and can afford to pay for them. Two main types of
consumer services are retail services and personal
services.
 Retail and whole sale services
 Education Services
 Health Services
 Leisure and Hospitality Services

14. • Business Services :
Business services principle purpose is to facilitate
other businesses. Producer services and
transportation services are two main types of
business services.
 Professional Services
 Financial Services
 Transportation and Similar Services
• Public Services

15. Six key distinguishing characteristics of
services are as follows :
Intangibility
Inseparability
Variability
Perishability
Heterogeneity
Lack of
ownership
Services cannot generally be seen, tasted , felt , heard or
smelt before being bought. Eg., Car Repair
Marked distinction between physical goods and services
in terms of sequence of production and consumption
Quality of service depends on who provides it and how
its provided.
Services cannot be stored for later sale or use. As
services are performances they cannot be stored.
Each ‘unit’ of a service may differ from other ‘units’
It is the basic difference between a service industry and
a product industry.

16. Current Scenario of Service Industry
• The service sector is expected to perform well in FY16.
• Improvements in global growth and recovery in
industrial growth will drive service sector to grow 7.4
per cent in FY16.
• The Indian facilities management market is expected
to grow at 17 % CAGR between 2015 and 2020 and
surpass the $19 billion mark supported by booming
real estate , retail and hospitality sectors.
• The Central Govt. is considering a two-rate structure
for the goods and service tax (GST) under which key
services will be taxed at a lower rate compared to the
standard rate , which will help to minimize the impact
on consumers due to increase in service tax.

17. Current scenario in logistics
• Due to rapid growth in economy , increase in
outsourcing of logistics , steady supply side changes ,
significant government investment in core
infrastructure projects and land mark changes in tax
and regulatory policies.
• The growing emphasis on alternative transport modes
, thrust on outsourcing driven by growing business
complexity , significant drop in fuel prices and the
imminent roll-out of GST are expected to be positive
enablers for the sector.
• The Government’s ‘Make in India’ campaign and the
launch of mega-infrastructure initiatives in the sector
are expected to lay a foundation for growth of the
sector.

18. Key challenges faced by logistics
industry
• Poor infrastructure – Insufficient integration of
transport networks , information technology (IT) ,
warehousing and distribution facilities.
• Trade Regulations – Regulations exist at a
number of different tiers , imposed by national ,
regional and local authorities. Regulations often
differ from city to city , hindering the creation of
national networks.
• Trained manpower – Both in Third party logistics
sector and the manufacturing and retailing sectors
is very weak at a practical level.

19. • Lack of Training Institutions –
The disorganized nature of the logistics sector in
India , its perception as a manpower –heavy
industry and lack of adequate training institutions
has led to a shortfall in skilled management and
client service personnel.
• Poor Warehousing and Storage –
Poor facilities and management are to blame for
higher levels of loss , damage and deterioration of
stock , especially in the perishables sector. Part of
the problem is due to insufficient equipment .i.e.,
proper refrigerated storage and containers.
• Lack of research and development (R&D) of the
industry – The field of logistics is still under
penetrated as far as research is concerned.

20. Possible solutions to some of the
challenges :
• Infrastructural Improvements –
Focus needs to be given on building world-class road networks ,
integrated rail corridors , modern cargo facilities at airports and
creation of logistics park which need to be given a status equivalent
to Special Economic Zones.
• Creating Awareness and Establishing Training Institutions – Gaps
in training have to be filled not only at the entry level but also in
the management cadre which could be made possible through
specialized graduation and post graduation courses focused on
operations and Supply chain management.
• Improving Warehousing facilities – Good storage and warehousing
facilities are essential to the growth of the logistics industry. And
the changing dynamics of JIT manufacturing , global procurement
and new models of sales and distribution.
• Encouraging Research and Development (R&D) – More focus
needs to be given on research in process excellence which can help
eliminate inefficiencies and bring Indian logistics on par with
global practices.

21. Case study on Adidas with UPS Supply
chain solutions

22. Case study on Adidas
Adidas :
Adidas – Salomon AG, based on Herzogenaurach,
Germany , is a global leader in the sporting goods
industry , delivering high performance footwear ,
apparel and accessories to virtually every country
in the world.
Geographic Area Served – United States
Client Challenge :
Improve the supply chain performance of a leading
athletic apparel company to accommodate rapid
growth and efficiently meet the requirements of
major retailers and team distributors throughout
the United States.

23. Solution and Results
 Consolidate the distribution system into a single ,
streamlined network, outfitted with automated
inventory and order fulfillment systems to allow
the company to rapidly scale its services and add
enhancements to the supply chain as needed.
Increased order accuracy rate
Boosted on-time delivery
Enhanced visibility throughout supply chain
Improved customer satisfaction
Added flexibility to operations

24. Conclusion
• Therefore , from the above case it is quite
evident that logistics forms the backbone for the
service industry.
• With the appropriate type of logistics for the
respective service industry fields will provide not
only smooth operation but also customer
satisfaction.

25. References
• http://www.ibef.org/industry/services.aspx
• http://logisticsdegree.net/2012/logistics-what-it-is-
and-why-its-important-to-your-company/
• http://cerasis.com/2013/08/08/3pl-vs-4pl/
• https://www.kpmg.com/IN/en/services/Tax/unionbu
dget2015/Documents/KPMG-Union-Budget-TL-PoV-
2015.pdf
• http://projectvendor.com/indian-logistics-industry-
current-scenario-future-outlook/
• http://www.yourarticlelibrary.com/services/services-
characteristics-6-key-distinguishing-characteristics-of-
services/34008/
• http://lewishistoricalsociety.com/wiki2011/tiki-
read_article.php?articleId=80