What is logistics? :A.N.Charlu Retail Management 02 1 What is logistics? Procurement Movement Storage Materials Parts Finished goods Logistics is the total process of planning, implementing, and coordinating the physical movement of merchandise from manufacturer (wholesaler) to retailer to customer in the most timely, effective, and cost-efficient manner possible


Goals of Logistics :A.N.Charlu Retail Management 02 2 Goals of Logistics Economy in movement of goods (external internal movement) Accuracy in order management Time management of shipments and deliveries Shelf-life and replenishment of perishable goods (Eg.Egatematrix) Coordination with suppliers and third-party service providers (Eg.Verisign, Gati) Backup plans and return shipments


Logistics spans across the functions of… :A.N.Charlu Retail Management 02 3 Logistics spans across the functions of… Supply Chain Management CPFR 3 PL Order Processing & Fulfillment QR (Quick Response) ECR (Effecient Customer Response) Transportation & Warehousing Customer Transactions & Customer Satisfaction Inventory Management Logistics


The Sophisticated Logistics System of Reitmans :A.N.Charlu Retail Management 02 4 The Sophisticated Logistics System of Reitmans


Performance Goals :A.N.Charlu Retail Management 02 5 Performance Goals Relate costs incurred to specific logistics activities Place and receive orders as easily, accurately, and satisfactorily as possible Minimize the time between ordering and receiving merchandise Coordinate shipments from various suppliers Have enough merchandise on hand to satisfy customer demand, without having so much inventory that heavy markdowns will be necessary


Performance Goals_2 :A.N.Charlu Retail Management 02 6 Performance Goals_2 Place merchandise on the sales floor efficiently Process customer orders efficiently and in a manner satisfactory to customers Work collaboratively and communicate regularly with other supply chain members Handle returns effectively and minimize damaged products Monitor logistics’ performance Have backup plans in case of breakdowns in the system


Supply Chain Management :A.N.Charlu Retail Management 02 7 Supply Chain Management The supply chain is the logistics aspect of a value delivery chain Parties involved Manufacturers Wholesalers Third-party specialists Retailer


Supply Chain Management :A.N.Charlu Retail Management 02 8 Supply Chain Management Facilitating system for movement of goods or services from supplier to customer Coordinates suppliers, intermediaries, third-party service providers and customers Ropes in CPFR and 3PL systems


CPFR(Collaborative Planning, Forecasting and Replenishment) :A.N.Charlu Retail Management 02 9 CPFR(Collaborative Planning, Forecasting and Replenishment) Inventory replenishment Information sharing Satisfying customer demands Economy in inventory, logistics and transportation expenditure


3PL :A.N.Charlu Retail Management 02 10 3PL Procurement (Sourcing) Order Management Production Distribution After Sales Service Reverse Logistics Warehousing Transport


Order Processing &Fulfillment :A.N.Charlu Retail Management 02 11 Order Processing &Fulfillment Starts with product enquiry Ends with delivery or return Uses – CPFR QR ECR 3 Way Match (Qty, Price, Receipts)


Order Processing & Fullfillment :A.N.Charlu Retail Management 02 12 Order Processing & Fullfillment


Transportation & Warehousing :A.N.Charlu Retail Management 02 13 Transportation & Warehousing No. of shipments Minimum / Economic Order Quantity Shipment Ownership Infrastructure quality Non-store retailing


Customer Transactions & Customer Service :A.N.Charlu Retail Management 02 14 Customer Transactions & Customer Service Outbound logistics Retail stores Non-store retailers Webtailers Direct Sellers Customer Service vis-à-vis logistical efficiency


Warehousing :A.N.Charlu Retail Management 02 15 Warehousing Centralized Warehousing Direct Store Distribution


Claire’s Aggressive Use of Central Warehousing :A.N.Charlu Retail Management 02 16 Claire’s Aggressive Use of Central Warehousing


Logistics support in India :A.N.Charlu Retail Management 02 17 Logistics support in India


Inventory Management :A.N.Charlu Retail Management 02 18 Inventory Management Cost effectiveness Vendor managed inventory Loss in inventory Employee theft Customer shoplifting Vendor fraud and errors Electronic surveillance Reverse Logistics


Problems Balancing Inventory Levels :A.N.Charlu Retail Management 02 19 Problems Balancing Inventory Levels The retailer wants to be appealing and never lose a sale by being out of stock; it does not want to be “stuck” with excess merchandise What fad merchandise and how much should be carried? Customer demand is never completely predictable Shelf space allocation should be linked to current revenues


Logistics – Indian Experience(Case Study: Bombay Dubbawalla) :A.N.Charlu Retail Management 02 20 Logistics – Indian Experience(Case Study: Bombay Dubbawalla) Four thousand five hundred semi-literate dabbawalas collect and deliver 175,000 packages within hours ! Six-sigma quality with zero documentation! 120-year-old logistics system! Mumbai's dabbawalas developed their home-grown version of logistics long before the term was coined by the modern business! One mistake for every eight million deliveries!


Elegant Logistics :A.N.Charlu Retail Management 02 21 Elegant Logistics Uses 25 Kms of public transport, 10 Kms of footwork Multiple transfer points Routing and Sorting limited to few central points Simple colour code determines the packets route and priority Lunch packets transfer from train to bicycle to foot Business model worth replicating in the digital age