BUSINESS STUDIES (CLASS 11) WORKSHEET 16-LOGISTICS

EMERGING MODES OF BUSINESS IN INDIA

LOGISTICS
What Are Logistics?
Logistics can be viewed as a logical extension of transportation and related areas to achieve an efficient and effective goods distribution system.

Logistics refers to the overall process of managing how resources are acquired, stored, and transported to their final destination. Logistics management involves identifying prospective distributors and suppliers and determining their effectiveness and accessibility. Logistics managers are referred to as logisticians.

"Logistics" was initially a military-based term used in reference to how military personnel obtained, stored, and moved equipment and supplies. The term is now used widely in the business sector, particularly by companies in the manufacturing sectors, to refer to how resources are handled and moved along the supply chain.

Philip Kotler defines logistics as "Planning, implementing, and controlling the physical flows of materials and finished goods from point of origin to point of use to meet the customers need at a profit."

Let us take the example of our Indian Postal Service

Indian Postal Service is one of the largest logistics networks in the world today that delivers the letters in the most cost-effective way. The Indian Postal Service operates through a network of 1,52,781 post offices covering 6, 09,030 villages, towns, and cities across the country, delivering 43 million letters every day. They use all transportation modes available in India for movement of postal cargo. The collection of letters from 542,781 letter boxes, followed by sorting, packing, moving, unpacking and again sorting for final delivery is mammoth logistical task that they have performed cost effectively for the past one and a half centuries.

Let us take the example of Pizza Hut
Ideally, the time taken for registering the order should be one minute. After that the pizza goes to the guy in the "make line". He takes two minutes, and then oven time is five minutes. When the pizza comes out of the oven it is inspected. One minute goes into quality check and packing. Another minute goes in checking the route and confirming the order one last time.

The moment he is leaving, the delivery boy shouts the out-of-the-door time, which is normally between 10 and 12 minutes. Then everybody yells out "drive safe". When he returns he punches the time in. At the end of the day the average delivery time for all his orders is checked. This helps the manager figure out which orders were not delivered in time. The next day, the store manager calls each one of those whose orders got delayed and apologizes.

The essence is process sequencing, just-in-time inventory availability, and time management for the success in this service operation logistics.