inventory & transportation management

8/2/2019 Inventory & Transportation Management

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It provides information to efficiently manage the flow ofmaterials, effectively utilize people and equipment ,coordinate internal activities and communicate with

customers.

It has to do with keeping accurate records of finishedgoods that are ready for shipment.

Process of efficiently overseeing the constant flow ofunits into and out of existing inventory.




Inventories are held in following general categories:- Raw materials and components- Work In Progress

- Finished Goods- Maintenance repairs & operating supplies- Pipelines or in-transit inventory

Raw

Materials

Works

in

Process

Finished

Goods

Finished

Goods

in Field




Meeting production requirements

Supporting operations requirements

Customer service consideration

Hedging against future expectations




Inventory Cost

Carrying cost

Ordering cost

Warehousing cost

Damaged, Pilferage and obsolescence cost

Exchange rate differentials




ABC Analysis

VED Analysis

SAP Analysis



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Plays important role in SC process since products arerarely produced and consumed in same location.

Main purpose of transportation is to make right quantity

of right quality goods at right time and place in leastcost.

Logistical costs and customer service capabilities canbe reduced by:- reduction in transit time- less damages- curtailment of productive packaging cost

Example: Blue Darts




Ensures speedier and timely physical movement ofgoods from point of inspection to point of consumptionIt creates core competencies by preventing stocks – out

of customers annoyanceIt provides protective storage during transitEnsures cost efficient, better customer serviceFulfills specific service requirements of the corporateenterprise for improvement of logistical capabilities andharmonious supply chain relationship




Tariff of transportation mode

Transit time cost

Obsolescence and detoriation costs

Protective packaging costs

Transit insurance cost

Miscellaneous cost




AirwaysSeawaysRoadways

RailwaysPipelines




Strength and weakness of the company in terms ofmarketingFinancial and production resources

Prevailing market characteristics including thecompetitive scenarioGeographical and territorial structureQuantity to be transported each time, distance to becoveredProduct feature and suitability to various modes oftransportation such as weight, size, shape etc




For a comprehensive discussion on transportationdecision following 4 factors needs to be highlighted

- Economic factor

- Shipper’s factor

- Carrier factors

- Alternative pricing strategies




Current transport infrastructure of India is majorbottleneck in the achievement of logistical objectives,mainly due to following factors-

Poor Government policiesNetworksRoad/Rail track conditionsVehicle qualityCoordination between various agencies and transportorganizations




Logistics Management –Vinod SopleLogistics & SCM – D K Agrawal

Materials Management–

K. Shridhara Bhat




Thank You

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inventory & transportation management

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