Logistics department

The logistics department is entrusted with the responsibilities of ensuring that the entire process of logistics is maintained and developed in accordance with the goals of the business at an economical cost.

Entire process of logistics - a complete process of planning, managing, controlling and coordinating to make sure that the goods reach the right place, at the right time, and in a right condition.

Importance of Logistics
Logistics is important to strategy Supply and distribution lines are lengthening with greater complexity Logistics adds significant customer value Customer Service Expectations are increasing. Logistics costs are significant

Logistics is important to strategy

Firms spend a great deal of time finding ways to differentiate their product offerings from those of their competitors. Wal-mart wins with logistics. The 2010 Supply Chain Strategy Unilever.

Supply and distribution lines are lengthening with greater complexity

Globalization and internationalization of industries everywhere depend heavily on logistics performance and costs, as companies take more of a world view of their operations. if a firm seeks foreign suppliers for the raw materials that make up its final product or selects a foreign locations to build its product, the motivation is to increase profit.

Logistics adds significant customer value.

The customer value concept recognizes that the market place success in new competitive environment will require not only continued investment in the brand but also investment in customers. What is customer value Customer value is created when the perception of benefits from a transaction exceed the total cost of ownership. The same idea can be expressed as a ratio: Customer Value =
Perceptions of benefits Total cost of ownership

Logistics adds significant customer value. of ownership In most transaction there will Total cost
be cost other than price involved for example maintenance cost, running cost, inventory carrying cost, disposal cost. The marketing task is to find ways to enhance customer value by improving the perceived benefit and/or reducing the total cost of ownership.

Customer Service Expectations are increasing

Customer are expecting - rapid processing of their request - quick delivery - high degree of product availability

The internet ,just in time, VMI, logistics software, RFID, GPS, CPRF, have all contributed to the meeting customer expectations.

 Logistics costs arelogistics cost varies between For any country, the annual significant 9% and 20% of the GDP, the figure for the US being about 9%. US-based Armstrong & Associates, Inc. The annual logistics cost in India is estimated to be 14% of the GDP, which translates into USD 140 billion assuming the GDP of India to be slightly over USD 1 trillion.

Logistics costs are significant

if India can bring down its logistics cost from 14% to 9% of the GDP (level in the US), savings to the tune of USD 50 billion will be realized at the current GDP level, making Indian goods more competitive in the global market. The government plans to create a council for the development of logistics sector to enhance efficiency and reduce cost for movement of goods across the country.