Logistics Strategies Across PLC Product life cycle

Traditionally, logistics is conceived as a functional support system and used as one of the tools for extending differentiated customer service to gain the competitive edge. Logistics strategy is for­mulated in line with the overall business strategy of the firm to achieve the desired business objec­tives. Firms try to optimize the various elements of

1 Comments

Strategic Logistics Planning

The importance of logistics and the supply chain was realized by firms in the last decade because of the globalization of business activities, increasing competitive pressure and uncertainties in dynamic markets. This forced business firms to re-engineer or redefine their business process so as to bring efficiency and effectiveness into the operations. Hence, there

2 Comments

Logistics Strategies

The process of logistics strategies formulation can be viewed through the following three angles: Customer needs met through the implementation of strategies Target customers Resources required for implementation of strategies Logistics strategy formulation is not a process that can be initiated in isolation. In fact, logistics strategies should have a goal congruent with the

1 Comments

Logistics Strategy Implementation

Besides the formulation of strategy, its implementation is equally important. The firm should prop­erly evolve the framework for successful implementation of the logistics strategy. The elements of strategy implementation framework are controls, organization structure, organization culture and the human resource skills (see Figure 17.3). The financial dimensions of the controls focus on the monetary

1 Comments

L’Oreal – Improvising Supply Chain Performance

L’Oreal is the world’s leading cosmetics company, with consolidated sales of Rs. 14 billion euros, with 300 subsidiaries across the globe and having presence in over 150 countries. They develop more than 3000 formulas each year, and have a worldwide team of 50,500 employees, includ­ing 3000 employees in research spread over 42 factories across

1 Comments

Camy Pharmaceutical Co. – Seeking Solutions to Logistics Issues

India’s pharmaceutical industry is one of the fastest growing sectors in the Indian economy, with an average annual growth rate of 11 per cent in this decade. The growth of the industry is mostly driven by the surge in production, legislative reforms, the growth in contract manufacturing and outsourcing of clinical trials, R&D, foreign

Hindustan Motors – Shaving-off Procurement Cost Through Reverse Auction

Hindustan Motors is one of the leading manufacturers of automobiles (both passenger and com­mercial vehicles) in India. HM started its manufacturing activities way back in 1945 with one model in the passenger car segment, that is Ambassador. In the 1980s it introduced Contessa in the luxury car segment. However, the model got phased out

1 Comments

Why Logistics Performance Measurement?

When describing the performance measurement system, it can best be compared with the control panel on a machine or the dashboard of a vehicle. These examples provide the insights into the designs of control measures, which are required in logical performance measurement system. Con­trol of the logistical system is not possible through a single

1 Comments

Logistics Performance Measurement System Objectives

Any performance measurement system shall have the following objectives: Monitoring. Monitoring focuses on reporting on the current status of the operations. For exam­ple, a financial monitoring system will report to the management the total funds outgo and inflow on a particular day. Similarly, the monitoring system for marketing will report on the total orders

1 Comments

Logistics Performance Levels

Broadly there are two levels of performance measures—the internal and external measures. According to Vijay Govindarajan and Robert Anthony,1 the firm must strike the balance between the external measures, such as customer satisfaction, and the internal measure, such as productivity, cost, quality, and asset management, because the companies normally ignore the external results in

2 Comments

Logistics Audits

For enhancing the performance of the logistics system, it is necessary to take stock of the efficiency and effectiveness status of the various subsystems of the logistical chain. This process is known as logistics audit. The shortfalls, bottlenecks and gaps in the logistical supply chain can be identified with logistical auditing so as to

4 Comments

Logistics Performance Control

To align the objectives of logistics with those of the organization, or to direct the logistical activities for competitiveness, a powerful control mechanism needs to be evolved and implemented. Invari­ably, organizations are going in for the following control systems: Budgetary Control. Irrespective of the organizational reporting structure, the firm fixes up the budget for

2 Comments

Logistics Cost

In a competitive market, firms require more accurate and detailed logistics cost information from their cost accounting systems to work out the cost-benefits analysis of their logistics strategies in order to design a cost-effective supply chain. Logistics managers require detailed information to determine how different products, customers or supply channels affect the costs of

4 Comments

Traditional Logistics Costing Method

Logistics is a source of competitive advantage. According to Porter, with cost leadership the busi­ness firm can gain competitive edge over its business rivals. Logistics has much scope for cost reduction and enhance the customer service simultaneously. Hence, logistics management must understand how the behaviour of one cost differs from the other. The conventional

1 Comments

Logistics Activity-Based Costing

Activity-based costing is defined as: “[a] methodology that measures the cost and performance of activities, resources, and cost objects. Resources are assigned to activities, then activities are assigned to cost objects based on their use. Activity-based costing recognizes the causal relationships of cost drivers to activities.”2 ABC assumes that activities cause cost and that

Implementation of ABC in Logistics

Implementation of ABC can provide greater visibility of the profitability impacted by differ­ent products, customers or supply channels. The company can more accurately trace costs and determine areas generating the greatest profit or loss. The product and customer profitability analysis performed by firms using ABC has significantly altered management perceptions. Prof­itability analyses using ABC

2 Comments

Logistics Performance Measurement

Performance measures appear as a logical consequence of an ABC system. Activity descriptions include financial and non-financial information. The financial view indicates the costs or resources necessary for performing the activity. The non-financial view describes the activity in terms such as the time required, quality, number of transactions, or schedule attainment. The company can

1 Comments

Advantages of ABC to Logistics

ABC appears well suited for costing and measuring the performance of logistics processes. Many logistics costs remain buried in overheads; and logistics managers do not have adequate visibility or control over their costs. ABC would more clearly depict the critical linkage existing between corporate profitability and logistics costs and performance. Logistics confronts many of

1 Comments

Forecasting Models for Optimization in Logistics

A forecast is an estimate of the future level of some variable. The variable is most often demand, but can also be supply or price. Forecasting is often the very fi rst step organizations must go through when determining long-term capacity needs, yearly business plans, short-term operations and supply chain activities. It would be

2 Comments

Linear Programming for Optimization in Logistics

Linear programming (LP) is the central tool of mathematical programming. LP models are flexible enough to adequately describe many realistic problems arising in modern industrial settings, while at the same time take advantage of the considerable expertise in computational linear algebra that has been developed during the last 50 years. As a result, LP

1 Comments