Logistics & Supply Chain Management

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Logistics Management

Logistics management is a supply chain management component that is used to meet customer demands through planning, control and implementation of effective movement and storage of goods and services from origin to destination


History of Logistics

The word 'logistics' has originated from the Greek word 'Logistikos' and the Latin word 'Logisticus' which means the science of computing and calculating.

In ancient times, It as used more in connection with moving armies, the supply of food and armaments to the war front. During world war II, logistics gained importance in army operations covering the movement of men and equipment across the border.

It has acquired the wider meaning and is used in businesses for the movement of materials from suppliers to the manufacturers and finally finished goods to customers.

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Supply Chain Management

10 April 2018 | Author name

Supply Chain (also called as value chain or demand chain), is the network of the involved companies, through upstream and downstream linkages, in different processes and activities that produce value in the form of products and services in the hands of the ultimate customer. For example, a shirt manufacturer is a part of a supply chain that goes upstream through the weavers of fabrics to the manufacturer of fibres, and downstream through distributors, retailers and then to final customer.

In the 1980s, the term supply chain management (SCM) was developed to express the need to integrate the key business processes, from end user through original suppliers. Original suppliers are those that provide products, services, and information that add value for customers and other stakeholders. The basic idea behind SCM is that companies and corporations involve themselves in a supply chain by exchanging information about market fluctuations and production capabilities. Keith Oliver, a consultant at Booz Allen Hamilton, is credited with the term's invention after using it in an interview for the Financial Times in 1982.The term was used earlier by Alizamir et al. in 1981.

The primary objective of SCM is to fulfill customer demands through the most efficient use of resources, including distribution capacity, inventory, and labor. In theory, a supply chain seeks to match demand with supply and do so with the minimal inventory. Various aspects of optimizing the supply chain include liaising with suppliers to eliminate bottlenecks; sourcing strategically to strike a balance between lowest material cost and transportation, implementing just-in-time techniques to optimize manufacturing flow; maintaining the right mix and location of factories and warehouses to serve customer markets; and using location allocation, vehicle routing analysis, dynamic programming, and traditional logistics optimization to maximize the efficiency of distribution.

Opportunities in India

According to a study conducted by National Skill Development Corporation (NSDC), Logistics sector currently employs over 16.74 million employees and is slated to employ more than 28.4 million employees by 2022. This implies additional creation of ~11.7 million jobs in the next nine-year period (2013-2022). A person who has completed the logistics correspondence courses, can find job opportunities in airports, sea ports, import-export companies, e-commerce companies (Flipkart, Amazon etc..), and 3rd party logistics companies (Bluedart, Fedex, DTDC etc..). The Indian transportation and logistics industry is poised at a crossroad along its growth trajectory even as the ongoing global economic uncertainty which has been impacting the Indian market to an extent. However, driven by strong fundamentals and consistent demand, the resilient Indian economy, in general and, the logistics sector in particular, are seemingly well-positioned to sail through turbulent global economic uncertainty.

Global Opportunities

The global annual logistics expenditure is approaching USD 3.5 trillion. The annual logistics cost of USA is about 9% of the GDP and internationally it varies between 9% and 20% of the GDP. The US logistics market is the largest in the world and accounts for one-third of the world logistics market.The global logistics industry has registered significant growth in the last decade with the emergence of Third Party Logistics (3PL) and Fourth Party Logistics (4PL) players in industry who are expected to play a much more important role in the years to come. 

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