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Introduction

Logistics call for an understanding of the total supply chain, the elements of which include inventories,

packing, forwarding, freight, storage and handling. Logistics is responsible for all the movement that

takes place within the organization whether it is inbound logistics of incoming, raw materials or

movement within the company or the physical distribution of finished goods, logistics encompasses all of

these.

Typical logistics framework mainly consists of Physical Supply, Internal Operations and PhysicalDistribution of Goods and Services. To put it more simply, the material supply logistics starts from the

base level of generation of the demand, through the process of purchase and supply of material

from the vendor right through to final acceptance and payments to the supplier and issue to the

indenter and has to be considered as a one whole activity with each stage having an impact on

price/cost of material supply.

Logistics is, in itself, a system; it is a networ k of related activities with the purpose of managing the

orderly flow of material and personnel within the logistics channel.

DEFINITION :

The simplest way to.describe logistics is to say that it is all about ways and means of meeting the

demand for materials i.e. satisfying the customer with what he wants, when he wants, where he wants

etc.

Definition includes outbound, inbound, internal and external movements and returns of material for

environmental purposes. The logistics concentrate on dynamic processes, related to the flow of materials

and the relationship between the materials and their use at different facilities.

The most wide spread definition from council of Logistics Management says that Logistics is the part of

the supply chain process and plans, implements and controls the efficient, effective flow and storage of

goods, services and related information from the point of origin to the point of consumption in order to

meet customers requirements.

SCOPE:

Logistics is not confined to manufacturing operation alone. It is relevant to all enterprises, including

Govt. institutions such as Hospitals and schools and service organization such as retailers, banks and

financial service organizations. The study of logistics is especially important for bulk raw materials,

where substantial outflow of freight is involved. Management of Logistics is an art which is extremely

difficult to perfect in India, JIT ends up being SHIT - some how in time.

The study of logistics is important to establish a lean supply chain which would give an advantage of

quick product change over, capability, excellent short and long term forecast visibility and JIT capability.

MODES OF TRANSPORTATION IN LOGISTICS :

In order to transport material from one place to another Logistics Managers are using Rail, Road, Air,

Water & Pipe Line as the modes of Transportation. A logistics expert needs to understand these modes

based on priorities, product type. lead time etc. to decide the appropriate mode of Transportation.

Rail: Used for delivery of a wide range of goods including coal, iron ore, cement, food grains, fertilizers,

steel, petroleum products and other heavy goods.

Road : Used by suppliers to deliver goods in a cost effective manner and best suited for short distances.Many transport companies have expertise for fast delivery, packaging etc. for making scheduled

delivery.

Air: Used mostly for delivery of high value and tow volume goods from distant suppliers, usually not

connected by any other mode of Transportation. It is also suitable for emergent item to be imported for

some specific requirement.

Water : Used by firms for delivery of goods from distant suppliers, mostly conducted in containers of

varied size. This mode is ideal for transportation of heavy and bulky goods and suitable for products with

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long lead times.

Pipe Line : Used by oil sector companies for mass movement of Petroleum products including gases.

Due to quite low operating cost it is one of the preferred mode of transportation.

THIRD PARTY LOGISTICS :

Third Party Logistics (3PL) provider handles all or most of freight of the organizations including themanagement of information by the third party, freeing the company from day to day interaction with

carriers, and having to oversee hundreds or thousands of shipment. New and cheaper information flow

resulting from internet enabled solutions, will lead not only achieving immediate cost reductions in

operations but also to enormous productivity gains over the next few years.

The tracking and control of movement of goods drive freight optimization and asset utilization. The

options are : increased trailer utilisation, combining full truckload shipments, consolidation, aggregation

of smaller buyers. Purchase asset based transportation is becoming increasingly a commodity.

To put simply, 3PL refers to the outsourcing of a logistics function. It could be the use of a

transportation carrier, a warehouse, or a third party freight manager to perform all or part of a

companys production distribution functions.

The principle reasons of for this function are as under:

Globalization of sourcing, manufacturing and distribution leading to an increase in the complexity of

material movement.

Competition that has forced companies towards more responsiveness and a reduction in inventories.

An increased need for small but frequent shipments with 100 percent reliability, requiring core

competence in logistics management.

Resource constraints that require companies to concentrate only on their core manufacturing or new

product development activities.

FOURTH PARTY LOGISTICS :

Fourth Party Logistics (4PL) provider is a supply chain integrator that assembles and manages the

resources, capabilities and technology of its own organization with those of complementary service

provider to deliver a comprehensive supply chain solution.

4PL is emerging as a path to achieve more than the one time operating cost reductions and asset

transfers of a traditional outsourcing arrangement. Through alliances between best-of-breed third party

service providers, technology providers and management consultants.

4PL organizations can create unique and comprehensive supply chain solutions that cannot be achieved

by any single provider. According to John Gaftorna, White oufsourcing third party logistics is now a

accepted business practice, Fourth Party Logistics is emerging as a breakthrough solution to modern

supply chain challenges... to provide maximum overall benefits.

4PL can be described as the complete outsourcing of the logistics function including procurement of

service providers. 4 PL companies are suppliers which have the expertise to manage resources, value

delivery processes and technology for their clients in order to allow their clients to totally outsource theirlogistics management activity. The 4PLs do not compete with 3PLs as they have superior expertise in

their respective fields by virtue of their investment and specialization.

4PL providers do not own assets for transportation or warehousing, but rather leverage the solutions

created by 3PL.providers, in order to identify and provide best in class services to their clients. There

are many variations of the 4PL model that are practiced.

Three different models are summarized as under;

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A) Lead logistics provider: The 4PL provider acts as an in house freight management company, it might

or might not have a role in the selection of 3 PL partners. It takes care of transport invoicing and the

monitoring of the performance of the 3 PLs.

B) Solution Integrator: In this variant of the model, the 4PL acts as the integrator of various 3PLS and

as a single window for freight negotiations, 3PI selection and freight management on behalf of its client.

C) Industry Innovator: Under this model the 4PL uses its expertise and resources to create a solutionnot for any single client, but for offering 4PL services to a number of clients in an industry.

The services provided by a 4PL provider are:

Freight Negotiations with 3PLs

Freight Contract Management

Transport Billing

Continuous Improvement Programs

Management of Service Providers

IT Solutions

Risk Management and Insurance

Cash-flow Management.

RESERVE LOGISTICS:

Increasingly, as a strategy, to compete on services, companies offer repair and replacement services for

their products under the warranty periods. The defective products are often shipped across international

borders to common repair centers to be refurbished and returned to the originating station. Logistics

service providers who offer these services have to tackle issues pertaining to duty payment on

refurbished products, customs documentation and the establishment of collection points for repair for

the customers.

CONCLUSION:

Logistics is one of the area of the supply chain i.e. growing at a tremendous case as the Internet and E-

Commerce is drastically changing the range, delivery time and the speed of information as well as

ordering and payment process. Due to the big boon of information technology, greatly influencing and

enhancing the effectiveness of logistics, the time is not far when 5 PLs and 6 PLs may emerge which will

probably we doing part of the manufacturing and marketing for the organizations.

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