Reverse Logistics Process Formalization

Reverse logistics is the process of planning, implementing and controlling the efficient, cost-effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing or creating value or for proper disposal. Despite the growing recognition of the importance of reverse logistics, many companies are not ready to meet the challenges involved in handling returns. The rapid growth in the volume of returns far outpaces the abilities of firms to successfully manage the returns. Because of all the uncertainties involved, reverse logistics program development and implementation becomes very complex.… Read the rest

How Logistics Productivity Improvement Affects the Economy as a Whole as well as the Position of Individual Consumer?

Generally logistics refers to the inbound and outbound flow and storage of goods , services, and information within and between organisations. The Council of Supply Chain Management Professionals (CSCMP), which is the pre-eminent professional organisation for academics and practitioners in the logistics field, formed in 1963, defined logistics management as ” that part of supply chain management that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods ,services, and related information between the point of origin and the the point of consumption in order to meet customers requirements “.

Logistics Productivity Improvement and the Economy

Logistics has become an enormously important component of the gross domestic product (GDP) of industrialized nations and thus affects the rate of inflation, interest rates, productivity, energy costs and its availability and other aspects of the economy as well.… Read the rest

Concept of Shipping Conferences in Logistics

The conferences are association of companies, resembling an ordinary cartel or  trust, formed to control supply and prices and to limit entry into the trade. The Royal  Commission  of 1909 defined  Shipping  ring or conference  as ‘a combination, more or less close of shipping companies  formed for the purpose of regulating or restricting competition in the carrying trade on a given trade route or routes’. Shipping  Conferences are formed only in a line trade  and not in the tramp service, because the former is a more stable and regular  organisation. Since the conferences are made for particular routes only, a shipping  company may join many conferences on different routes.… Read the rest

Competition in Shipping Industry

Shipping is a competitive industry. The demand for shipping services is a derived  one. Shipping services do not have alternative applications. So amongst ship owners  competition arises to corner the existing traffic. The causes for the competition are  as follows:

  • Freedom of use of a certain highways:  The permanent way of ocean being a gift of  nature, which is free. It is open to all persons and countries of the world without  acquiring any rights to float the ships and steamers. Except for some restrictions  in coastal waters of the countries, the ship are free to move anywhere on the sea  and it invites international competitors.
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Warehousing Function of Logistics

A warehouse is a location with adequate facilities where volume shipments are  received from a production  center, broken down, resembled into combinations  representing a particular order or orders and shipped to the customer’s location or  locations. The rationale for establishing a warehouse in a distribution network is the  creation of a differential advantage for the firm. This advantage accrues from  achieving a lower overall distribution cost and/or obtaining service advantage in a  market area.

The concept of a distribution warehouse or a distribution  center  is vastly different  from the earlier concept of a godown for storage. The need of that system is sue to

  • Ensuring protection against delays and uncertainties in transportation arising  from a variety of factors.
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Total Cost Approach to Logistics

Total cost approach to logistics  is the key to managing the logistics function. Management  should strive to reduce the total cost of logistics rather than the cost of each activity.  So logistics must be viewed as an integrated system rather than the individual  system, because reduction in one cost invariably lead to increase the cost of other  components. Effective management and real cost savings can be accomplished only  by viewing logistics as an integrated system and minimizing its total cost given the  firms customer service objectives. So the main costs which are involved in  logistics  function are:

  1. Customer service level costs
  2. Transportation costs
  3. Warehousing costs
  4. Order processing and information costs
  5. Lot quantity costs
  6. Inventory carrying costs
Customer Service Level Costs

Most business people find it difficult, if not impossible to measure this cost.… Read the rest