Logistics

Logistics is refer to a physical flow of materials and finished goods from points of origin to points of use to meet the customer requirements to gain profit by adopting proper planning, implementing and controlling.

Importance

A company choosing the markets in which it wants to operate

Inventory management including costs and service levels

Customer service policies

Extent of distribution network

Location and management of storage facilities

Choice of mode of transport, selection and management of carriers.

Any packaging decisions that directly impact storage and transportation.

Functions

Procurement

Procurement refers to the steps that are used in the acquisition of goods and services. The recognition that there is a need or wants for a particular goods and services.

Transportation

Transportation means physical movement of goods from the place of origin to the place where they needed.

Warehousing

Warehousing means providing storage space serves as a buffer between production and use, warehousing may be used to enhance service and to lower transportation.

Material handling

Material handling is a system or combination of methods, facilities, labour and equipment for moving, packing and storing the materials to meet specific objectives.

Order picking

Order picking is the process of wrapping the products ordered in convenient containers to facilitate easy dispatch and unloading.

Recycling and return

Recycling involves the collection of used and discarded materials processing these materials and making them into new products. Return goods means a problem with the product or the customer the goods might may be returned when out dated of stock

Waste disposal

Waste disposal refers to realization of commercial value by selling off surplus items, scrap, and obsolete items.

Customer service 

Logistics is only required to provide the time and place utility. It has to ensure that the product or service being offered by the company is available to the final consumer or end user.

Inventory control

The trade of between the level of inventory to be maintained and the expected service levels to be provided to the customers.

Packaging

Primary purpose is that it is a form of advertising and marketing support logistics is concerned with providing protection for the product in transit and storage logistics. 

Channel Conflict

Channel conflict is a situation of discord or disagreement between channel members from the same marketing channel system. Conflict always has negative connotations and is driven more by feelings than facts.

Conflict is considered as part of social system, which brings together disparate entities to form a working relationship.

Conflict could be the result of,

1)   Each channel member wanting to pursue his own goals.

2)   Each wants to retain their independence.

3)  There are limited resources, which all of them want to utilize in the pursuit of their goals.

Four stages of channel conflict

1)   Latent

2)   Perceived

3)   Felt

4)   Manifest

Latent

Some amount of discord exits but does not seem to be effecting the working of the channel partners.

Perceived

The discord becomes noticeable and the channel partners become aware of the opposition, there is no cause for worry, but the opposition has to be recognized.

Felt

It is the stage of worry, concern & alarm. Here the parties are trying to out smart each other. The channel get affected by the discord and the channel members upsets that other parties do not value their “feelings” of discontent.

Manifest

This is last step the conflict has escalated to a level which reflects adversary behavior of the channel partners who have a disputes. 

Reasons

1)   Roles not defined properly

2)   Resource scarcity

3)   Differences in perception on the business environment

4)   Expectation of the channel members for their future growth

5)   Decision domain disagreements

6)   Goal in compatibility

7)   Communication difficulties

Selecting Channel Partners

The company should select the right kind of partners to identifying & fulfill the needs of the customers.

The process of recruitment could include placing advertisement in the press or getting the sales people to visit market and also references by existing partners.

Criteria for selection of channel partner

1)   Location of the party

2)   Location of the ware house

3)   Past experience

4)   Financial strength

5)   Transportation facility

6)   Size of the channel partner

7)   Reputation

8)   Market coverage

9)   Inventory management

10)  Sales performance

11)   Infrastructure

Training for channel members

1)   On the job field training for sales people to achieve the sales & collects the payments.

2)  Class room training to distributor about company products, ways of tackling competition.

3)   Special meeting for launch new products

4)   Training on submitting reports & records.

Power of Motivation to members

1)   Referent power– image, position& recognition

2)   Expert power- special knowledge about the co

3)   Legitimate power- agreement or contract

4)   Support power-  by co to increase sales

5)   Competition power- main competitors

6)   Reward power- awards, incentives, prices

7)   Coercive power- credit to customers

Inventory

It is a stock of raw material finished goods.

Need

1)   To improve customer service 

2)   To smoother the operations of logistic system

3)   Reduces costs

Objective of inventory Management

1)  It aims to achieve perfect balance b/w customer service target and reducing inventory costs.

2)   Cost associated with inventory.

3)   Inventory procurement costs

4)   Inventory carrying cost.

5)   Stock out cost