Logistics Overview
Logistics Overview Macro & Micro Perspective
Macro & Micro Perspective Logistics Overview Macro & Micro Perspective
Logistics Overview Macro Perspective Logistics costs increase with growth in economy Total Logistic Costs measured with GDP USA – 9% Europe – 11% India – 13%
Logistics Overview Macro Perspective 70% of total domestic product is transported through road network and 15% through rail Organized Logistics Market – 6% CAGR – 25% [Projected] USD 15 Billion [FY 11]
Logistics Overview Macro Perspective Logistic Costs Warehousing & Inventory Costs Transportation Costs Other Logistics Costs
Logistics Overview Macro Perspective Logistic Costs Warehousing Costs Assets used to hold Inventory Inventory Costs Interest Opportunity Risk [Obsolescence, Depreciation] Service Related [Insurance, taxes]
Logistics Overview Macro Perspective Logistic Costs Transportation Costs Total national expenditure for movement of freight in India Other Logistics Costs Administrative Costs Managing Personnel
Logistics Overview Micro Perspective Marketing Logistics Interface with Functional Areas Marketing Manufacturing / Operations Finance & Accounting
Logistics Overview Micro Perspective Logistics Interface with Manufacturing/Operations Long vs Short Production Runs Pulled vs Pushed Systems Lowers Inventory & Logistics Costs Seasonal Variation in Demand Inbound Movement & storage of Raw Materials
Logistics Overview Micro Perspective Logistics Interface with Marketing-Price Full Truck Loads vs Smaller Shipments Products-Volume Discounts Transportation Costs related to Product Weight
Logistics Overview Micro Perspective Logistics Interface with Marketing-Product New Products – Movement & Storage Size Shape Weight Physical Attributes Re-furbishing Old Products Package design Package sizes
Logistics Overview Micro Perspective Logistics Interface with Finance ROA=Revenue-Expenses/Assets ROA=Gross Profit/Assets Inventory Asset-Balance sheet, Expense-Income Statement Lower inventory reduces Asset Base & Variable Expenses- Increases ROA Owning Warehouses & Transport Equipment reduces ROA Focus on Customer service increases ROA [Incremental Increase in revenue vs Cost of Cust Svc]