Introduction:

Logistics study aims at reducing the outbound logistics costs by making it more efficient.

Coverage/ Methodology:

Logistics optimization aims at making outbound logistics system efficient as it covers Process Improvement and Cost Reduction.

Process Improvement addresses following issues:

• In-Plant processes: order processing time at plant, product mix planning as per order, packing and loading schedule, truck availability and schedule, etc.
• Plant - Depot Chain: dispatch time from plant to depot, bottlenecks in transportation, transit delays and loss, etc.
• Depot - Dealer -Customer Chain:  lead time in order processing, lead time in supply to customer, billing and collection delays, etc.
• Information Processing: Performance monitoring of dealers, competitor and market information analysis, etc.

Cost Reduction where costs are reduced by:

• Reducing primary and secondary freight by using competitive rates in tune with the market, using the right routes and supply points, using the right mode of transport, etc.
• Reducing movement and handling costs by having right number of depots, optimal location and right size.
• Reducing hidden costs by increasing direct supplies, using competitive C&F charges, etc.

Broad methodology involves:

• Situation Analysis.
• Process effectiveness: analysis of logistics system.
• Process Optimization: identification of possibilities of optimization.
• Recommendations.

Benefits:

It helps in:

• Reducing response time and therefore increasing work efficiency.
• Reducing cost of delivery, and therefore maximizing profits.
• Achieving high supply reliability, therefore higher customer satisfaction.