Participant Handbook - Logistics (3)

PHB Logistics Logistics (Global Logistics Industry includes all activities of the supply chain such as transportation, customer service, inventory management, flow of information and order processing. Other activities of the supply chain are warehousing, material handling, purchasing, packaging, information dissemination and maintenance among others.) Participant Handbook Course offered by: Under:- 3

PHB Logistics Table of Contents 1) Introduction to Logistics Essentials 2) Prepare for Inventory Counting 3) Verify Physically Counted Numbers and System Numbers 4) Post Counting Activities 5) Classify the Components of Supply Chain and Logistics Sector 6) Detail the various Sub-sectors and the Opportunities in them 7) Documentation Requirements in Warehousing Operations 8) Picking, Packing, Kitting, Labelling and Binning 9) PPE to be used for Loading/ Unloading of various types of Goods 10)Handling Procedure for Breakage/ Spillage of Package/ Consignment 11) Identify various Activities in Land Transportation, Warehouse, Port Yard, Land, Ship and Air Transportation 12) Consignment Booking and Processing 13)Verify Compliance to Customs and Legal Clearance for all Containers before approving Exit Pass 14)Route Planning and Vendor Coordination 15)Record location of Consignment in ERP periodically to track movement and Compliance to schedule 16)Gate Operations 17) Consignment Pickup and Tracking 18)Guidelines on Integrity and Ethics 19)Compliance to Health, Safety and Security Norms 4

PHB Logistics General Instructions for Trainees Dear Trainee, You would gain demand-driven theory skills in the chosen trade aligned with industry requirements and knowledge of basic workplace skills. This would indirectly enhance prospects for optimistic career. For gaining highest advantage of the trainings for growth, the following is compulsory: In Case of Online Training: i. Login 10 minutes prior to start of web-based seminar. ii. Do not login with your cell phone names or token names or as Guest. Please login with your official names and location only. For example: Neeraj Parmar, Mumbai. iii. During the webinar, it is mandatory to mute your microphones. Microphones should be unmuted only when you have to ask questions. iv. If you are logged in from mobile devices, adjust the mobile devices on a proper stand. Do not move with mobile device when the webinar is on. v. Ensure the area where you are sitting is properly lighted. Light should fall on your face and should not be coming from your back. vi. The camera of laptop or mobile device should be pointed towards your face and upper Ensure you attend the webinar from enclosed space. vii. People attending webinar from public places will not be allowed to attend the webinar. viii. Ensure you are in a silent zone and there is no external disturbance or movement during webinar. (Vehicular or People) ix. Avoid speaking to external people when webinar is on. Only in emergency you can speak after ensuring microphone is muted and video is turned off. x. People surrounding you should not peep in the camera when webinar is on. xi. Sit in good posture. You should not sit in a casual manner. xii. Be properly dressed to suit the occasion. In Case of Physical Training: i. Regular attendance to the classes and practical ii. Energetic participation in classes and tasks/projects iii. Following the rules and regulations and maintaining the discipline iv. Always wear the I-card v. Please follow healthy practices vi. Kindly switch off fans and lights when you leave the class room or lab vii. Please handle the lab equipment carefully, if any viii. Phones are not permitted in the premises. ix. Preparations need to be made for the sessions as suggested by Trainer and as mentioned in the handbook. x. Kindly submit the assignments, reports and records on time. Kindly contact to the Trainer / Center Head for any query / feedback related to the training program or center related matter. 5

PHB Logistics Duration in Hours - Topic wise S. No. Name of the Topic Hours 4 1 Introduction to Logistics Essentials 8 10 2 Prepare for Inventory Counting 12 12 3 Verify Physically Counted Numbers and System Numbers 8 12 4 Post Counting Activities 10 12 5 Classify the Components of Supply Chain and Logistics Sector 12 12 6 Detail the various Sub-sectors and the Opportunities in them 8 16 7 Documentation Requirements in Warehousing Operations 8 12 8 Picking, Packing, Kitting, Labelling and Binning 12 16 9 PPE to be used for Loading/ Unloading of various types of Goods 8 8 10 Handling Procedure for Breakage/ Spillage of Package/ Consignment 200 11 Identify various Activities in Land Transportation, Warehouse, Port Yard, Land, Ship and Air Transportation 12 Consignment Booking and Processing 13 Verify Compliance to Customs and Legal Clearance for all Containers before approving Exit Pass 14 Route Planning and Vendor Coordination 15 Record location of Consignment in ERP periodically to track movement and Compliance to schedule 16 Gate Operations 17 Consignment Pickup and Tracking 18 Guidelines on Integrity and Ethics 19 Compliance to Health, Safety and Security Norms Total 6

PHB Logistics Chapter 1: Introduction to Logistics Essentials Unit Objectives At the end of this unit, you will be able to: 1. Understand the meaning of Logistic 2. Know the difference between Logistic and Supply Chain Management 3. Why Logistic matters 4. National Logistics Policy (Proposed/Draft) 2.1 What is Logistics? More generally, logistics is used to refer to the process of organizing and transferring resources – people, goods, inventories, and equipment – from one place to the intended destination. The word logistics originated in the army, referring to the delivery of equipment and supplies to field troops. The goal of logistics is to meet customer requirements in a timely, cost-effective manner. 2.2 Logistics vs. Supply Chain Management Logistics and supply chain management are concepts that are often used interchangeably, but in reality they refer to two process aspects. Logistics refers to what happens within a business, including, for example, the procurement and distribution of raw materials, packaging, shipment and transportation of products to distributors. Although supply chain management refers to a broader network of external companies working together to distribute goods to clients, including suppliers, logistics providers, call centers, warehouse providers and others. According to Phillip Kotler, “Market logistics involve planning, implementing and controlling physical flow of material and final (finished) goods from the point of origin to the point of use to meet customer requirements, at a profit.” Logistics management is crucial to supply chain management planning, as it helps to determine the efficiency and productivity of a company's top and bottom line. 7

PHB Logistics There are three different types of flow in supply chain management − i. Material flow ii. Information/Data flow iii. Money flow 2.3 Why Logistics Matters While many small businesses concentrate on developing and manufacturing their goods and services to better serve consumer needs, the company will fail if those goods cannot meet consumers. This is the biggest role logistics plays. Yet logistics also affects other market aspects too. The more efficiently it is possible to buy, transport and store raw materials until they are used, the more profitable the business can be. Coordinating resources to facilitate timely distribution and use of materials may make or break an enterprise. And on the customer side, if products cannot be produced and delivered in a timely manner, customer satisfaction can decline, thus having a negative impact on the profitability and long-term viability of a company. 8

PHB Logistics 2.4 National Logistics Policy (Proposed/Draft) On February 1, the Government, in the Budget, had announced that it will soon release the National Logistics Policy. National Logistics Policy: The vision of the proposed policy is to drive economic growth and business competitiveness of the country through an integrated, seamless, efficient, reliable, green, sustainable and cost effective logistics network leveraging best in class technology, processes and skilled manpower. Key objectives of the national logistics policy: Given the pivotal role of the logistics sector in the development of the economy and the need to incorporate learnings from global best practices, the policy outlines an ambitious set of objectives. The following are some of the key objectives for logistics in India, to be achieved in the next five years: 1) Creating a single point of reference for all logistics and trade facilitation matters in the country which will also function as a knowledge and information sharing platform 2) Driving logistics cost as a % of GDP down from estimated current levels of 13-14% to 10% in line with best-in-class global standards1 and incentivize the sector to become more efficient by promoting integrated development of logistics a. Optimizing the current modal mix(road-60%,rail-31%,water-9%) in line with international benchmarks(25-30% share of road, 50-55% share of railways, 20-25% share of waterways) 2 and promote development of multi modal infrastructure b. Improving first mile and last mile connectivity to expand market access of farmers, MSMEs and small businesses c. Enhancing efficiency across the logistics value chain through increased digitization and technology adoption d. Ensuring standardization in logistics (warehousing, packaging, 3PL players, freight forwarders) 3) Creating a National Logistics e-marketplace as a one stop marketplace. It will involve simplification of documentation for exports/imports and drive transparency through digitization of processes involving Customs, PGAs etc in regulatory, certification and compliance services 4) Creating a data and analytics center to drive transparency and continuous monitoring of key logistics metrics 5) Encouraging industry, academia and government to come together to create a logistics Center of Excellence, and drive innovation in the logistic sector 6) Creating and managing on an ongoing basis, an Integrated National Logistics Action Plan which will serve as a master plan for all logistics related development. Also, there will be support for states for development of respective state logistics plans aligned with the national and state priorities. An annual execution plan to continuously monitor progress against the set objectives will also be created 7) Providing an impetus to trade and hence economic growth by driving competitiveness in exports 8) Doubling employment in the logistics sector by generating additional 10-15 million3 jobs and focus on enhancing skills in the sector and encouraging gender diversity 9

PHB Logistics 9) Improve India’s ranking in the Logistics Performance Index to between 25 to 30 10) Strengthening the warehousing sector in India by improving the quality of storage infrastructure including specialized warehouses across the country 11) Reducing losses due to agri-wastage to less than 5%4 through effective agri-logistics involving access to cold chain, packaging and other post-harvest management techniques and thereby enhance agriculture price realization and farmer income 12) Providing impetus to MSME sector in the country through a cost-effective logistics network 13) Promoting cross regional trade on e-commerce platforms by enabling a seamless flow of goods 14) Encouraging adoption of green logistics in the country Here are a few of the perceived challenges faced by Indian logistics companies in India:  High Order Intensity Ratio: Every Indian Logistics Company has faced the issue of receiving a bulk load of orders that would break their back while trying to keep up with the supply-chain timeline. Considering the high volume of orders received, it gets difficult to prioritize orders and deliveries while juggling too much on too little time. The challenge also pops up when the company has limited resources, thanks to the difficult payment cycles. Depending on the season to season, festival time is the best example of mass delays in delivery schedules and an overall failure to the ETA mechanism.  Transportation Roadblocks: Even when the packaging and drops are conducted on schedule, the transportation industry is often unreliable. India is a huge country that covers a lot of different terrains subject to different conditions. The roads are terrible at internal parts of the country while the Ghats are prone to accidents and landslides. Traffic congestions, multiple checkpoints, and toll stations are also issues where Logistics companies lose out on a lot of time and money. All in all, even after taking extra delays into account, there is scope for even further delay.  Rail Tariffs: The high costs of rail transportations and the hike in goods transportation tariff don’t make a positive impact on time-bound delivery since the Indian railways, too, suffer from a congested network. Seasonal problems such as floods during the monsoons lead to several services being canceled every hour and cause a huge loss to Logistics companies in India.  Port and Shipping Problems: Shipping goods from point A to B takes the longest time among all of the possible modes of transport. If the seas are kind, the ship may dock on time at the port. Unfortunately, understaffed ports, overstuffed berths and delayed evacuation of cargo cause the logistics companies to suffer without a fault. Costal ports have an infrastructural problem where large vessels fail to dock due to lack of depth. Hence, even with a costal port at a shorter distance, these companies have to choose a port or route farther away due to their cargo being shipped on larger vessels.  Lack of Skilled and Specialist Personnel: There is a serious lack of skilled personnel and specialists in the Logistics sector in India. The laborers are under-skilled, over-worked and lack the desired skill-set to make the process more efficient. To save on capital, companies also compromise on the training of their logistics staff and also their payments. Eventually, these companies face problems like high labor turnover, increased training costs and under- performing human resources. 10

PHB Logistics  Slow Transition into Newer Technologies: When we compare the logistics and supply-chains of more efficient countries like Japan, their work models, and strategies revolve around adapting to the latest technologies to achieve maximum productivity. The logistics companies in India fail to reach that potential when they don’t upgrade their technology with changing times. It might appear as if they’re saving on costs, but this approach causes more damage in the long run. Transitioning into new technology takes up unavoidable costs such as : o Set-up and installation costs o Bringing foreign trainers to train the workforce o Time is taken to learn and integrate the process to actual productivity. A company needs to keep in sight the big picture when incurring such expenditures. Sometimes the returns may not recover the full value of a big investment like technological upgrades, which may deter many logistic companies in India to push for this transition.  Competition with Global Giants: Being an Indian logistics company means little to the clients and end customers today, as global giants play in the same field with better services. By providing short supply cycles at competitive prices, the Indian logistics companies face a major challenge to keep up. With schemes such as free one day deliveries, these international organizations monopolize the attention and loyalty of customers while the companies in India can’t keep up with the costs of providing such services.  Customer’s Mindset: With the passage of time and globalisation, the customer experience has changed manifold. The industry competition which is meant to benefit them creates more demands from the customers. Such demands increase because the global logistics companies can deliver on their promises. Customers’ unwillingness to pay an extra fee for anything less than 2 days delivery time causes a lack of funds and source for the Indian logistics companies to be able to formulate better cycles. Also, the overall expectations of customers increases when e-commerce organizations like Amazon have internalized and streamlined their entire logistics process.  Ever Increasing Fuel Costs: With the change in the prices of fuel, the biggest problem in transportation costs. Increasing fuel costs cause an increase in the surcharge to the freight tariffs. This, in turn, decreases the profit to be earned by the company, maybe even resulting in a loss in extreme cases.  Government Policies And Bottlenecks: With compliance mandates being tightened even more, the logistics companies in India face the consequence of bottlenecks with increased regulations.  Shortage Of Drivers And Delivery Staff: Every Logistics organization in India faces the problem of employing and retaining their deliver staff. The industry is subject to a shortage of delivery personnel, hence the workloads of multiple time-bound deliveries are placed on the current workers, leaving them burnt out and discouraged with the pressure. 11

PHB Logistics Notes __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ Summary Management of logistics consists of the process of preparing, executing and managing the efficient movement of raw materials, work-in - progress and finished goods and related information-from point of origin to point of consumption; with a view to ensuring customer service. The actual logistics work is in its nature supportive. For manufacturing and marketing operations logistical support is a must. The logistics concept is based on a total system view of the multitude of functions involved in the movement of materials and goods from supply sources to users. It also requires management to think in terms of handling the whole system; rather than just a part of it. Exercise 1. The fastest and most costly mode of transport. a. Air transport b. Water transport c. Rail transport 2. Supply chain management is followed by:- a. Dell b. Dabbawalas of Mumbai c. Both of these 12

PHB Logistics Chapter 2: Prepare for Inventory Counting Unit Objectives At the end of this unit, you will be able to: 1. Key Decision to Perform an Inventory Count 2. Phases in Inventory Counting 3. Inventory Related Information 4. Deciding the Frequency and Number of Counting 2.1 Key Decision to Perform an Inventory Count Inventory control assumes significance on account of many factors. First of all inventory of raw materials as well as finished goods can run in thousands of SKU varieties. Secondly inventory can be in one location or spread over many locations. Thirdly inventory may be with the company or may be under the custody of a third party logistics provider. These factors necessitate inventory maintenance mechanisms to be devised to ensure inventory control. Inventory has two different dimensions to it. On one level it is physical and involves physical transactions and movement of inventory. While on the other hand, inventory is recognizable by the book stock and the system stocks maintained. This necessitates inventory control mechanism to be implemented to ensure the book stocks and the physical stocks match at all times. Inventory control is exercised through inventory audits and cycle counts. An inventory audit essentially comprises of auditing the books stocks and transactions and matching physical stocks with the book stock.  Cycle count: refers to the process of counting inventory items available in physical locations. Depending upon the nature of inventory, number of transactions and the value of items, cycle count can be carried on periodically or perpetually.  Daily Cycle Count: Normally where the number of SKUs is very high coupled with high number of transactions and through put, daily cycle count is initiated, where in a certain percentage of locations or SKUs are counted on daily basis and physical stock is compared 13

PHB Logistics with system stock. By the end of the month all of the stocks would have been covered once in cycle count.  Quarterly & Half Yearly Cycle Counts: End of the sales quarter or end of half yearly sales, finished goods and spare parts are normally covered under inventory audit and a 100% cycle count is carried out. Key decision to be taken on performing an inventory count are;  Why are you counting your inventory?  What are you going to count?  Where are you going to count?  When are you going to count?  Who all will be doing the counting? SKU versus UPC: A UPC, or universal product code, is a 12-digit numeric code that is attached to products wherever they are sold, for external use. A stock-keeping unit (SKU) is a scannable bar code, most often seen printed on product labels in a retail store. The label allows vendors to automatically track the movement of inventory. The SKU is composed of an alphanumeric combination of eight-or- so characters. 2.2 Phases in Inventory Counting Physical inventory is a process where a business physically counts its entire inventory. In the planning and preparation period, a list of stocks which is supposed to be counted are set up. Different teams are then assigned to count the stock. 14

PHB Logistics Each team counts a specific inventory. The results are recorded on the inventory listing sheet. The physical count is compared to the computer count. The company must note any discrepancies between the actual number and the computer system, recount these inventory items to determine the correct quantity, and adjust the computer inventory quantity if needed. Any discrepancies between the actual number and the computer system must be fixed. Perpetual inventory or continuous inventory updates information on inventory quantity and availability on a continuous basis as a function of doing business. Generally this is accomplished by connecting the inventory system with order entry and in retail the point of sale system every day. A cycle count is an inventory auditing procedure, which falls under inventory management, where a small subset of inventory, in a specific location, is counted on a specified day. Cycle counts contrast with traditional physical inventory in that a full physical inventory may stop operation at a facility while all items are counted at one me. Cycle counts are less disruptive to daily operations, provide an ongoing measure of inventory accuracy and procedure execution, and can be tailored to focus on items with higher value, higher movement volume, or that are critical to business processes. 15

PHB Logistics 2.3 Inventory Related Information Storage location ID Storage location address in the inventory record sheet will help anyone to identify where the product is stored and where to store the products.  Location names should be unique. No two locations should ever have the same name.  Every physical space in your facility should have a location name, even if you don’t currently store anything in that space.  The location labels should contain the full name of the location and, if possible, have arrows that point to the location.  Zone/room names should be abbreviated (usually to a single leer) and contained in the full location names.  Within a zone or room, location names should ascend from top to boom and from le to right. UOM in inventory: A unit of measure (UoM) is defined as the standard units of measurements used when accounting for stock, and expressing them in quantities. It stands for Unit of Measure. UOM are used to quantify the inventory items and enables to track them. It's a physical unit (like kg, dozen, meter etc.) in which we measure and manage different items. The UOM codes reproduced below are used in the Advanced Shipment Notice, Invoice, Item, and Purchase Order documents. 16

PHB Logistics 2.4 Deciding the Frequency and Number of Counting Several techniques of inventory control are in use and it depends on the convenience of the firm to adopt any of the techniques. What should be stressed, however, is the need to cover all items of inventory and all stages, i.e. from the stage of receipt from suppliers to the stage of their use.  ABC ‐ Classification based on the Annual Consumption. ABC analysis is a business term used to define an inventory categorization technique often used in materials management. It is also known as ‘Selective Inventory Control’. ABC analysis is otherwise called as Pareto principle where significant items in a given group normally constitute a small portion of the total items in a group and the majority of the items in the total will, in aggregate, be of minor significance. This way of classification is known as ABC classification. o CLASS A: 10% of total spares contributing towards 70% of total consumption value. o CLASS B: 20% of total spares which account for about 20% of total consumption value. o CLASS C: 70% of total spares which account for only 10% of total consumption value.  XYZ ‐ Classification is based on the Inventory investments of the items  HML ‐ Classification based on unit price which is abbreviated as ‘High’, ‘Medium’ and ‘Low’  FSN abbreviated as ‘Fast’, ‘Slow’ and ‘Non‐moving’ ‐ Classification based on frequency of issues and uses. FSN classification identifies the items frequently issued, less frequently issued for use and the items which are not issued for longer period, say, 2 years. For instance, the items can be classified as follows: o Fast Moving (F) = Items that are frequently issued say more than once a month. o Slow Moving (S) = Items that are issued less than once a month. o Non‐Moving (N) = Items that are not issued\\used for more than 2 years. This classification helps spare parts management in establishing most suitable stores layout by locating all the fast moving items near the dispensing window to reduce the handling efforts.  VED abbreviated as ‘Vital’, ‘Essential’ and ‘Desirable’‐ The classification of items based on their criticality. 17

PHB Logistics The VED analysis helps in focusing the attention of the management on vital items and ensuring their availability by frequent review and reporting. Thus, the downtime losses could be minimized to a considerable extent.  SDE abbreviated as ‘Scarce’, ‘Difficult’ and ‘Easily available’‐ Classification is based on the sourcing problems of the material. SED classification helps in reducing the lead me required at least in case of vital items. Ultimately, this will reduce stock‐out costs in case of stock‐outs. A comprehensive analysis may ultimately bring down lead me for more & more number of items. This will also result in streamlining the purchase and receiving systems and procedures.  RRS abbreviated as ‘Runners’, ‘Repeaters’ and ‘Strangers’‐ This type of classification is done on the units shipped annually. 18

PHB Logistics Notes __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ Summary Inventory is a necessary evil in any organization engaged in production, sale or trading of products. Inventory is held in various forms including Raw Materials, Semi Finished Goods, Finished Goods and Spares. Every unit of inventory has an economic value and is considered an asset of the organization irrespective of where the inventory is located or in which form it is available. Even scrap has residual economic value attached to it. In most of the organizations inventory is categorized according to ABC Classification Method, which is based on pareto principle. Here the inventory is classified based on the value of the units. The principle applied here is based on 80/20 principles. Exercise 1. Any product that is ready to be sold to your customers falls under this category. a. Finished Goods b. Work-In-Progress c. Raw Materials 2. V.E.D analysis useful for: a. Raw material b. Finished goods c. Spare parts 19

PHB Logistics Chapter 3: Verify Physically Counted and System Numbers Unit Objectives At the end of this unit, you will be able to: 1. Understand the importance of recording and reporting after counting 2. Know different types of documents used in an inventory counting operations 3. Understand the importance of packaging standards and symbols 4. Distinguish the roles and responsibilities of different colleague on the shop floor 5. Get knowledge on the importance of Labeling system in warehouse 6. Get more insight on various technical specifications of goods stores in the warehouse 3.1 Inventory Count Procedure In a business that does not have accurate inventory records, it is necessary to periodically conduct a complete count of the inventory (known as a physical count). This is usually done at the end of a month, quarter, or year, to coincide with the end of a reporting period. As the following procedure will show, it takes a great deal of effort to complete an accurate physical inventory count, so companies tend to limit the number of counts completed per year. The steps in the process are as follows:  Order count tags. Order a sufficient number of two-part count tags for the amount of inventory expected to be counted. These tags should be sequentially numbered, so that they can be individually tracked as part of the counting process.  Preview inventory. Review the inventory several days in advance of the scheduled inventory count. If there are missing part numbers, or if items appear to be in a condition that would be difficult to count (such as not being bagged or boxed), notify the warehouse staff to make the necessary corrections. 20

PHB Logistics  Pre-count inventory. Go through the inventory several days in advance and count any items that can be placed in sealed containers. Seal them in the containers and mark the quantity on the sealing tape. This makes the counting task much easier during the actual count. If a seal is broken, then a counting team will know that they need to re-count the contents of a container.  Complete data entry. If there are any remaining data entry transactions to be completed, do so before the physical inventory count begins. This includes transactions for issuances from the warehouse, returns to the warehouse, and transfers between bin locations within the warehouse.  Notify outside storage locations. If the company has any outside storage facilities or third- party locations that hold company inventory on consignment, notify them that they should count their inventory on hand as of the official count date and forward this information to the warehouse manager.  Freeze warehouse activities. Stop all deliveries from the warehouse, and also segregate all newly-received goods where they will not be counted. Otherwise, the inventory records will be in a state of flux during the inventory count, and so will not be entirely reliable.  Instruct count teams. Assemble two-person teams to count the inventory, and instruct them in their counting duties. These duties involve having one person count inventory while the other person marks down the information on a count tag. One copy of the tag is affixed to the inventory, while the team retains the other copy.  Issue tags. An inventory clerk issues blocks of count tags to the count teams. Each team is responsible for returning a specific numeric range of count tags, whether or not the tags are used. Maintaining control over all count tags ensures that lost tags will be investigated promptly.  Assign count areas. Assign a specific range of bins to each count team. Note these locations with a highlighter on a map of the warehouse. The inventory clerk should maintain a master list of which areas of the warehouse have been counted, and which teams have been assigned to each area.  Count inventory. One person on each team counts a specific item within a bin location, and then the other person marks the bin location, item description, part number, quantity, and unit of measure on a count tag. The team affixes the original copy of the tag to the inventory item and retains the copy.  Verify tags. Upon completion of a count area, each count team returns to the inventory clerk, who verifies that all tags were returned. If there are more warehouse areas to be counted, assign a new area to the count teams and issue them new blocks of count tags as necessary.  Enter tag information. Enter the information on the count tags into an online data entry form. Once data entry is completed, print a report showing all tag numbers entered, sorted by tag number, and look for any gaps in the numbers. Investigate any numbering gaps found. This will ensure that all count tags issued were included in the file.  Investigate unusual results. Re-sort the inventory report several ways to look for unusual information, and investigate the tag entry associated with each one. 21

PHB Logistics 3.2 Duties of Different Colleagues on the Shop Floor Warehouse workers work in warehouses where they receive, unpack, arrange and store goods, and gather, pack, prepare and load goods for dispatching. Warehouse workers check stock for damage and wear, report faults and discrepancies to relevant parties, and mark and label stock. Warehouse Worker Responsibilities:  Ensuring cleanliness, tidiness and safety of work environment.  Loading and unloading delivery vehicles.  Accepting delivery of inventory.  Counting and confirming inventory.  Inspecting inventory for damage and faults.  Communicating errors to relevant parties.  Marking and labeling stock.  Storing inventory in accessible manner.  Loading and wrapping stock on pallets.  Building loads with forklift and electronic pallet jack. Duties of Different Colleagues:  The Warehouse Packer reports to a packing supervisor or to a warehouse manager in case of any challenges and on other day to day activities.  A Warehouse Picker is responsible for filling customer orders and delivering them to the delivery platform in a manner that meets company standards for safety, security, and productivity.  A Put Away Assistant is a person who is responsible to accurately place materials on shelves, in racks or other designated storage areas in an orderly manner.  A Packer is a person who perform jobs like packing goods with protective materials, such as bubble wrap and polystyrene chips sealing containers using glue, staples or shrink‐wrap weighing and labelling packaged goods ready for dispatch.  The Forklift Operator is responsible for operating a forklift to move, locate, relocate, stack, and count products. 22

PHB Logistics  An Inventory Clerk works with stored goods in a warehouse environment, facilitating the movement of goods going out to customers and coming in for use. They also help track and keep accurate counts of items on hand and utilize these numbers. Most of the times a Warehouse supervisor might need Inventory clerk’s assistance for locating the product inside the warehouse. 3.3 Significance of Labels in Warehouse Operations Warehouse is a place where manufactured goods are stored in bulk and in large quantities and broken into smaller pieces as per the customer requirements. Warehouse labels helps the professionals working inside the warehouse to quickly identify the products during tracking and tracing. Packaging Labels helps the logistics channel partners to identify how the packed product needs additional care related to handling and moving. A label provides complete information regarding the product. It mainly includes ingredients of the product, its usage, and caution in use, cares to be taken while using it, date of manufacturing, batch number, etc. The universal recycling symbol, which is three folded arrows that form a triangle, was created by Gary Anderson, a student at the University of Southern California in 1970. He created it as part of a contest associated to the very first Earth Day. Bar code systems can track material through each step of the work and keep detailed records on each piece or batch. Using barcodes you can track your inventory, where items are located and how many items are in stock. 23

PHB Logistics The purpose of a packaging label is to facilitate the movement of goods and the exchange of data among all members within a channel of distribution (suppliers, carriers, customers and others). The amount of data (bar code as well as human readable text) needed on a label is a function of the needs of the trading partners involved. The technologies used in warehouse labels:  A Pick to light method consists of light displays installed per each fixed location on racking or picking lanes. Tasks are uploaded to a system that lights up units as operators pick each order line. The light marks where the product location is and the task that is to be carried out at the pick area.  Voice picking method is the most advanced picking method where an operator is delegated with a picking task via a headset and voice control. The labels required for voice picking ranged from simple digits, to barcodes. Voice picking cuts more me by simplifying the picking process. Labels and Coding Systems:  The Warehouse labels are essential in inventory management and the picking process throughout the warehouses. The use of warehouse labels and implementing the correct labeling structure will reduce the time spent in tracking and tracing and increases the inventory location accuracy.  It is not mandatory to standardize the work but the expected inputs, procedures and outputs must also be documented in detail.  A warehouse inventory clerk marks the stock using a variety of means, including radio frequency identification tags, paper tags, labeling equipment or stencils, or other marking equipment.  Shipping labels and packing slips are two of the most important documents used by a warehouse. They provide crucial information to the shipper, transporter, and receiver. The information on these documents can and are not limited to include: the shipping address, 24

PHB Logistics weight and dimensions, package contents, shipping dates, order and PO numbers, and special information/instructions. Labels inform how many pallets per shipment which can prevent pallets from being le behind or taken in error. They can also include special instructions example: tail gate required or maximum weight/height restrictions. This information ensures all pares handling the goods have all the information necessary to get the shipment from point A to point B. An Inventory clerk needs to be familiarized with these labels and coding systems in order to work efficiently. 3.4 Types of Product and Packaging labels All containers and packaging must be designed with consideration given to ergonomics and ease of part removal. Appropriate consideration must be given to unit load height restrictions, weight restrictions, carton disassembly and other requirements which may affect ergonomics and worker safety. 25

PHB Logistics The purpose of a packaging label is to facilitate the movement of goods and the exchange of data among all members within a channel of distribution (suppliers, carriers, customers and others). The amount of data (bar code as well as human readable text) needed on a label is a function of the needs of the trading partners involved. Different Packaging Symbols: Understanding packaging symbols is important to a consumer. These coded signs have a lot to say about the product, its contents and disposal. ... Understanding packaging symbols is important to a consumer. These coded signs have a lot to say about the product, its contents and disposal. Ex: The umbrella with rain drops symbol on packaging indicates that the box (and contents) should be kept dry. A variation showing just the umbrella can also be used. 26

PHB Logistics Notes __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ Summary Warehouse labeling is one of the most undermined aspects of supply chains across the globe. Unlike other parts of running a business, managing a warehouse is a purely analytical job devoid of any working experience. Labeling here refers to identifying items within the storage facility with reference to the areas assigned for stacking it. However, it is not limited to the products as the storage areas, aisles, shelves, material handling equipment, and packing/shipping stations. Warehouse labeling depends on the nature of your businesses, the volume, and a variety of SKUs. Exercise 1. The activities carry by the company to design and produce a differentiated container for particular product is classified as: a. Guarantees b. Labeling c. Packaging 2. The formal statement by the manufacturer of the product regarding its performance is classified as: a. Warranties b. Labeling c. Packaging 27

PHB Logistics Chapter 4: Post Counting Activities Unit Objectives At the end of this unit, you will be able to: 1. Understand importance of housekeeping after completing warehouse operations 2. Realize how to deal with errors and damages 3. Brief about the importance of work instructions 4. Perform regular inspections inside the warehouse operation areas 5. Explain the escalation matrix for reporting the damages and losses! 4.1 Dealing with Damages and Losses The common problem that will be faced during inbound / outbound logistics that will lead loss and damages. The loss may happen because of poor packing, poor material handling during loading and unloading, theft or misplacing. Damages will also be by improper handling of materials during transit. Follow below mandates:  Understand the organization policy by which you have to proceed in handling the issues.  During loading, count the quantity and visually inspect the damages and make a note of it.  Communicate to the immediate reporting supervisor about the damages and loss.  Report reasons and investigate the reason for damage. Follow organizational procedures in sorting out the issues. 28

PHB Logistics 4.2 Risk/Impact of Deviating Procedure/ Work Instructions Standards are essential for understanding the current status of a process, for supporting continuous improvements and measuring improvements.  It is not mandatory to standardize the work but the expected inputs, procedures and outputs must also be documented in detail.  The documentation should be so clear than an outsider should be able to step into the process, understand the process and soon operate as fully functioning team member, making appropriate contributions to the process.  The most important processes in a warehouse operations are documented with the help of Standard Operating Procedure and it is reviewed continuously for further improvements. “Plan‐Do‐Check‐Act”  It is important to establish (plan) the instructions that your people must execute.  The references must then be effectively implemented (do) so they are accessible to personnel.  Documentation must be verified (check) so the instructions assist your problem‐solving methodology.  Finally, it is important to use (act) what has been defined in order to continuously improve. 4.3 Reconciliation of Missing Goods You reconcile inventory when you compare the inventory counts in your records to the actual amounts on the warehouse shelves, figure out why there are differences between the two amounts, and make adjustments to your records to reflect this analysis. Inventory reconciliation is an extremely important part of cycle counting, since the warehouse staff uses it to continually update the accuracy of its inventory records. Inventory record accuracy is needed to ensure that replacement items are ordered in a timely manner, that inventory is properly valued, and that parts are available for sale or production when needed. An inventory reconciliation is also needed to ensure that the actual and recorded inventory amounts are the same at the end of the year, so that there will be no issues when the inventory is audited. 29

PHB Logistics Inventory reconciliation is not as simple as adjusting the book balance to match the physical count. There may be other reasons why there is a difference between the two numbers that cannot be corrected with such an adjustment. In particular, you should consider following any or all of these steps:  Recount the inventory. It is entirely possible that someone incorrectly counted the inventory. If so, have a different person count it again (since the first counter could make the same counting mistake a second time). Further, if the physical count appears to be significantly lower than the book balance, it is quite possible that there is more inventory in a second location - so look around for a second cache of inventory. Recounting is the most likely reason for a variance, so consider this step first.  Match the units of measure. Are the units of measure used for the count and the book balance the same? One might be in individual units (known as \\\"eaches\\\"), while the other might be in dozens, or boxes, or pounds, or kilograms. If you have already conducted a recount and there is still a difference that is orders of magnitude apart, it is quite likely that the units of measure are the problem.  Verify the part number. It is possible that you are misreading the part number of the item on the shelf, or guessing at its identification because there is no part number at all. If so, get a second opinion from an experienced warehouse staff person, or compare the item to the descriptions in the item master records. Another option is to look for some other item for which there is a unit count variance in the opposite direction - that could be the part number that you are looking for.  Look for missing paperwork. This is an unfortunately large source of inventory reconciliation issues. The unit count in the inventory records may be incorrect because a transaction has occurred, but no one has yet logged it. This is a massive issue for cycle counters, who may have to root around for unentered paperwork of this sort before they feel comfortable in making an adjusting entry to the inventory records. Other examples of this problem are receipts that have not yet been entered (so the inventory record is too low) or issuances from the warehouse to the production area that have not been entered (so the inventory record is too high).  Examine scrap. Scrap can arise anywhere in a company (especially production), and the staff may easily overlook its proper recordation in the accounting records. If you see a modest variance where the inventory records are always just a small amount higher than the physical count, this is a likely cause.  Investigate possible customer ownership. If you have no record of an inventory item at all in the accounting records, there may be a very good reason for it, which is that the company does not own it - a customer does. This is especially common when the company remodels or enhances products for its customers.  Investigate possible supplier ownership. To follow up on the last item, it is also possible that you have items in stock that are on consignment from a supplier, and which are therefore owned by the supplier. This is most common in a retail environment, and highly unlikely anywhere else.  Investigate back flushing records. If your company uses backflushing to alter inventory records (where you relieve inventory based on the number of finished goods produced), then the bill of materials and the finished goods production numbers had better both be in 30

PHB Logistics excellent condition, or the reconciliation process will be painful. Backflushing is not recommended unless your manufacturing record keeping is superb.  Accept the variance. If all forms of investigation fail, then you really have no choice but to alter the inventory record to match the physical count. It is possible that some other error will eventually be found that explains the discrepancy, but for now you cannot leave a variance; when in doubt, the physical count is correct. The inventory control process consists of the following accounting events: Event Description Stock Requisition (SR) A request for inventory stock represents the intent to incur an (Pre-Encumbrance) obligation. Requests for inventory stock can provide useful accounting information for internal management purposes and are recorded in the Stock Issue accounting system as pre-encumbrances. Though they do not represent Confirmation (CI) legal obligations, they are reductions to the available budget balance (Buyer Expenditure, when budgetary controls are being used. Seller Revenue) Once requested stock items are released and issued by the seller, the net accounting effect recognizes revenue for the seller (if the Over the Counter warehouse is able to recognize revenue) at the unit price multiplied by (OC) (Buyer the quantity of the stock items, and the expense of inventory at cost. In Expenditure, Seller terms of the buyer, an expenditure/expense is recognized for the same Revenue) amount, and the pre- encumbrance created by the Stock Requisition (SR) document is reversed. Stock Return (SN) A direct issue of requested stock items from inventory recognizes the (Revised Accounting same net accounting events involved with an Issue Confirmation (CI): at Issue) expenditure/expense to the buyer, revenue to the seller (if the warehouse is able to recognize revenue), and expense of inventory at Inventory cost. Adjustment (IA) The return of stock items to inventory by the buyer results in reversing (Seller Expense) the accounting events that took place at the issuance of these items. A decrease in revenue for the seller (if the warehouse is able to recognize Physical Inventory revenue) and a decrease in expenditure/expense for the buyer are the Purchase Input (IP) net accounting effects. (Seller Expense) The managing warehouse may need to adjust the on-hand quantities or the unit costs of stock items in inventory. If quantity and/or unit cost Stock Transfer are increased, the net accounting effect of this event is an increase in Receipt (TR) (Transfer inventory balances with a decrease in expense to the seller. If there is a of expenditure) decrease in quantity and/or unit cost, the net accounting effect is a decrease in inventory balances and an increase in expense to the seller. The managing warehouse may need to adjust the on-hand quantities of stock items in inventory at a specified unit price. If quantity is increased, the net accounting effect of this event is an increase in inventory balances with a decrease in expense to the seller. If there is a decrease in quantity, the net accounting effect is a decrease in inventory balances and an increase in expense to the seller. As the transfer of stock items is recognized and received by the receiving warehouse, the previously incurred by the issuing warehouse is transferred to the receiving warehouse. The net accounting effect results in an increase in the available budget balances for the issuing warehouse and reduction in the available budget balance of the 31

PHB Logistics receiving warehouse. This transaction recognizes inventory and expenditure balances at cost. Documents Inventory Control includes the following documents: Document Description Stock Requisition (SR) Reserves quantities of stock items from an on-hand supply for later delivery. This reduces the available quantity. If items are not Pick and Issue (PI) immediately available, they may be backordered and later filled by having the Backorder Servicing program run. Stock Issue Schedules previously reserved items to be picked up for delivery and Confirmation (CI) releases them from a reserved status. This function is performed by creating a Pick Ticket Report (IN80). From this report, the warehouse Over the Counter can determine the stock item, the quantity, and the bin number of the (OC) items that are to be picked up. It also creates the corresponding Issue Confirmation (CI) document. Stock Return (SN) Confirms to the system that previously reserved and released items Inventory have been issued from the warehouse to the buyer. The on-hand Adjustment (IA) quantity of the warehouse for this item is reduced by the amount Physical Inventory issued. Purchase Input (IP) Issues requested items directly from the on-hand quantity. As the items Stock Transfer Issue are issued immediately upon request, in effect, \\\"over-the-counter,\\\" (TI) backordering is not allowed. Once an \\\"Over the Counter\\\" transaction Stock Transfer is successfully completed, an Over the Counter Issued Report will be Receipt (TR) produced, identifying the requestor and the stock items issued. Any request for items unavailable for immediate issuance must be reserved through a Stock Requisition (SR). On-hand quantity is reduced by the amount issued. Allows the original buyer to return previously issued items. At the option of the issuing warehouse, a return charge may be imposed. Allows warehouse management to adjust quantities or unit values of on-hand items due to a change in on-hand quantities or unit costs. These adjustments alter inventory and cost of goods expense balances. Allows warehouse management to adjust quantities of on-hand items due to a change in on-hand quantities at a specified unit costs. These adjustments alter inventory and cost of goods expense balances. Initiates the transfer of items from one warehouse to another. Recognizes the receipt of transfer items by the receiving warehouse. On-hand quantities of receiving/issuing warehouses are adjusted. 4.4 Report to Management There are certain reports that the management expects from the inventory clerk. They are listed below: THE INVENTORY: An inventory is a report which is produced following a property inspection, listing and describing each and every component and content of a property in the context of “as seen” at 32

PHB Logistics the time of the inspection. As seen meaning a written and photographed “snapshot”, to be used as the basis of how the property's condition and its contents were seen by the Inventory Clerk. The inventory may have additional notes or observations added by relevant parties to confirm or enhance its accuracy. IMPORTANT: unless stated otherwise - either in brackets or in a separate column next to the item referred to - the listed item is assumed to be in good order, although not necessarily new or perfect. Fair wear and tear is not considered at the time of inventory take, although the Inventory Clerk may offer an opinion as to an item's age or condition if it helps in future identification, e.g. appears old or new. THE CHECK-IN: As the name implies, this report is used to qualify the accuracy – with any additional notes or information – of the inventory at move-in by the Inventory Clerk and tenant or tenant's representative. IMPORTANT: a check-in is not a duplication or substitute for an inventory, although it may accompany or support an inventory in distinguishing anything which needs adding to or altering within the inventory. The check-in report may vary in style according to Landlord or Letting agent's needs, but typically will include a record of meter readings and keys recorded at time of tenant move-in. The report may accompany, be included, or be supplied separately from the inventory, and may be used as support material in deciding apportionment with the check-out report following tenant move-out. THE MID-TERM: This report, sometimes known as a management or interim inspection, is produced normally – but not always – mid-term or 3monthly during a tenancy period. The inspection and report – although varying in style – is normally used to report on how a property is being cared for within a context of reporting problems within a property, either caused or not, by the tenant. IMPORTANT: this report is used to verify that a property is being respectfully looked after and may, although unlikely, be part of a dispute process at tenancy end. THE CHECK-OUT: As this name implies, the inspection and its subsequent report is intended to identify differences – whether better or worse –following tenants vacating a property at tenancy end. IMPORTANT: a check-out is not a duplicate inventory, and in the context of inventoryclerk.com methods, will list differences for the purpose of identifying whether a landlord - or their representative - is able to claim for damages, loss or cleanliness issues. Depending on client needs, an Inventory Clerk may add opinions as to whether changes are tenant or landlord responsibility, or are due to fair wear and tear. Clerks will not offer opinions as to apportionment or value; this is the remit of the landlord or their agent, sometimes requiring support material such as quotes or receipts. METER READINGS: As an organization we endeavor to obtain utility meter serial numbers and readings as a service, providing meters are found and safe to access. 33

PHB Logistics Notes __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ Summary  The best way to count inventory is with inventory management software that helps keep inventory audits short and sweet. Using an inventory app is faster than physically counting items and maintaining spreadsheets, and it's also more accurate.  Cycle counting is a popular inventory counting solution that allows businesses to count a number of items in a number of areas within the warehouse without having to count the entire inventory. Cycle counting is a sampling technique where the count of a certain number of items infers the count for the whole warehouse.  There are two types of inventory count: o Full - this processes all the items defined. o Cyclic - this uses the last counted date, count frequency, number of counts on a warehouse and random item selection mechanism to define what appears in a count. Exercise 1. The activities carry by the company to design and produce a differentiated container for particular product is classified as: a. Guarantees b. Labeling c. Packaging 2. The formal statement by the manufacturer of the product regarding its performance is classified as: a. Warranties b. Labeling c. Packaging 34

PHB Logistics Chapter 5: Classify Components of Supply Chain and Logistics Sector Unit Objectives At the end of this unit, you will be able to: 1. Components of Supply Chain Management 2. About Inbound & Outbound Logistics 5.1 Components of Supply Chain Management Supply Chain Management: It is the process of managing the movement of the raw materials and parts from the beginning of production through delivery to the consumer. In many organizations, operational supply chain decisions are made hundreds of times each day affecting how products are developed, manufactured, moved, and sold. The complexity of the supply chain varies with the size of the business and the intricacy and quantity of items manufactured, but most supply chains have elements in common, such as the following:  Customers: Customers start the chain of events when they decide to purchase a product that has been offered for sale by a company. If the product has to be manufactured, the sales order will include a requirement that needs to be fulfilled by the production facility.  Planning: The planning department will create a production plan to produce the products to fulfill the customer’s orders. To manufacture the products, the company will then have to purchase the raw materials needed.  Purchasing: The purchasing department receives a list of raw materials and services required by the production department to complete the customers’ orders.  Inventory: The raw materials are received from the suppliers, checked for quality and accuracy, and moved into the warehouse.  Production: Based on a production plan, the raw materials are moved to the production area. These raw materials are used to manufacture the finished products ordered by the customer and then sent to the warehouse where they await shipping. 35

PHB Logistics  Transportation: When the finished product arrives in the warehouse, the shipping department determines the most efficient method to ship the products so they are delivered on or before the date specified by the customer. Supply chain management can be defined as a systematic flow of materials, goods, and related information among suppliers, companies, retailers, and consumers. There are three different types of flow in supply chain management − 1. Material flow 2. Information/Data flow 3. Money flow Let us consider each of these flows in detail and also see how effectively they are applicable to Indian companies. 1. Material Flow: Material flow includes a smooth flow of an item from the producer to the consumer. This is possible through various warehouses among distributors, dealers and retailers. The main challenge we face is in ensuring that the material flows as inventory quickly without any stoppage through different points in the chain. The quicker it moves, the better it is for the enterprise, as it minimizes the cash cycle. The item can also flow from the consumer to the producer for any kind of repairs, or exchange for an end of life material. Finally, completed goods flow from customers to their consumers through different agencies. A process known as 3PL is in place in this scenario. There is also an internal flow within the customer company. 36

PHB Logistics 2. Information Flow: Information/data flow comprises the request for quotation, purchase order, monthly schedules, engineering change requests, quality complaints and reports on supplier performance from customer side to the supplier. From the producer’s side to the consumer’s side, the information flow consists of the presentation of the company, offer, confirmation of purchase order, reports on action taken on deviation, dispatch details, report on inventory, invoices, etc. For a successful supply chain, regular interaction is necessary between the producer and the consumer. In many instances, we can see that other partners like distributors, dealers, retailers, logistic service providers participate in the information network. In addition to this, several departments at the producer and consumer side are also a part of the information loop. Here we need to note that the internal information flow with the customer for in-house manufacture is different. 3. Money Flow: On the basis of the invoice raised by the producer, the clients examine the order for correctness. If the claims are correct, money flows from the clients to the respective producer. Flow of money is also observed from the producer side to the clients in the form of debit notes. In short, to achieve an efficient and effective supply chain, it is essential to manage all three flows properly with minimal efforts. It is a difficult task for a supply chain manager to identify which information is critical for decision-making. Therefore, he or she would prefer to have the visibility of all flows on the click of a button. Example: Amazon Amazon is a US electronic commerce and cloud computing company. Their headquarters are based in Seattle, Washington and they are the largest internet-based retailer in the United States. Amazon was one of the first companies that started selling book online. Currently their range of products doesn’t stop there; they also sell music, videogames, shoes, clothing, luggage and many other accessories. Amazon offers about everything you can think of and their variety in offers and products along with their customer driven shopping and recommendations is a hit with customers. One of the reasons why Amazon can have such a wide spectrum of products is the fact that they are not limited by physical spaces, since they don’t have actual stores. Their supply chain goes from the lowest levels of inventory, through the logistics of the order itself all the way up to an outstanding distribution chain of their products in an international scale. Amazon can currently ship close to 10 million different products. This diversity gives it an edge against competitors and makes it a perfect example of what efficient supply chain management can accomplish. 37

PHB Logistics 5.2 Value Chain Value Chain refers to the range of activities that adds value at every single step in designing, producing, and delivering a quality product to the customer. Value Chain Analysis is used to evaluate the activities within and around the organization and relating to its ability to provide value for money, goods, and services. The concept of Value Chain Analysis was first evolved by Michael Porter in 1985 in his renowned book “Competitive Advantage”. In his opinion, two major steps involved in the value chain analysis are:  Identification of individual activities  Analyzing the value added in each activity and relating it to firm’s competitive strength. Porter split business activities into two main categories, for the purpose of Value Chain Analysis:  Primary Activities:  Inbound Logistics: It deals with receiving, storing and distributing of inputs.  Manufacturing operations: Conversion of inputs into finished products.  Outbound Logistics: It is concerned with the collection, storage, and distribution of product or service to customers.  Marketing and Sales: Involve activities that create awareness among the general public regarding the product.  Services: All those activities that increase the value of product or services.  Support Activities: These activities help the primary activities and include procurement, technology development, human resource management and infrastructure. 38

PHB Logistics 5.3 Components of Logistics Management Logistics: When used in a business sense, logistics is the management of the flow of things between the point of origin and the point of consumption in order to meet requirements of customers or corporations. The resources managed in logistics can include physical items such as food, materials, animals, equipment, and liquids, as well as abstract items, such as time and information. The logistics of physical items usually involves the integration of information flow, material handling, production, packaging, inventory, transportation, and warehousing. There is often confusion over the difference between logistics and supply chains. It is now generally accepted that logistics refers to activities within one company/organization related to the distribution of a product, whereas supply chain also encompasses manufacturing and procurement and therefore has a much broader focus, as it involves multiple enterprises, including suppliers, manufacturers, and retailers, working together to meet a customer’s need for a product or service. BASIS FOR LOGISTICS MANAGEMENT SUPPLY CHAIN MANAGEMENT COMPARISON Meaning The process of integrating the The coordination and movement and maintenance of management of the supply Objective goods in and out the chain activities are known as Evolution organization is Logistics. Supply Chain Management. Customer Satisfaction Competitive Advantage How many The concept of Logistics has Supply Chain Management is a organizations are been evolved earlier. modern concept. involved? Single Multiple One in another Logistics Management is a Supply Chain Management is fraction of Supply Chain the new version of Logistics Management. Management. One way to look at business logistics is “having the right item in the right quantity at the right time at the right place for the right price in the right condition to the right customer.” An operations manager who focuses on logistics will be concerned with issues such as inventory management, purchasing, transportation, warehousing, and the planning and organization of these activities. Logistics may have either an internal focus (inbound logistics) or an external focus (outbound logistics). 39

PHB Logistics  Inbound Logistics: A manager in charge of inbound logistics manages everything related to the incoming flow of resources that the company needs to produce its goods or services. These activities will include managing supplier relationships, accessing raw materials, negotiating materials pricing, and arranging quicker delivery.  Outbound Logistics: A manager working in outbound logistics will be focused on two issues: storage and transportation. He or she will use warehousing techniques to keep the finished goods safe and accessible. Since the products may need to be moved out to a customer at any moment, proper organization is crucial. Having as little product stored as possible can be advantageous since stored products are not making money, so the outbound logistics manager often has to balance company cost savings with consumer demand. The transportation function is by far the most complex part of outbound logistics. Without transport, there simply is no logistics. For that reason it’s critical to be able to move the product from one location to another in the fastest, most cost-effective, and efficient way possible. Since transportation involves fluctuations, factors such as delays and changes in fuel costs need to be taken into account in order to cover all possible scenarios that might jeopardize the efficient movement of goods. BASIS FOR INBOUND LOGISTICS OUTBOUND LOGISTICS COMPARISON Meaning The influx of raw material and The outward movement of Related to parts, from suppliers to the final goods, from the manufacturing plant, is known company to the end user, is as inbound logistics. known as outbound logistics. Material management and Customer service and procurement channel of distribution Focuses on Deployment of resources and Movement of finished Interaction raw materials, within the goods or product from the manufacturing plant. business to final customer. Between supplier and the firm Between firm and customers 40

PHB Logistics Notes __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ Summary  Supply Chain is described as a tool of business transformation, which minimizes costs and maximizes customer satisfaction by providing the right product at the right time at the right place and the right price. Conversely, Value Chain is a way of getting a competitive advantage, through which a company can beat its competitors along with fulfilling customer requirements.  Logistics is an integral part of the supply chain management, which results in the timely delivery of the goods and materials to the final destination. It aims at providing right goods, at given time, in desired quantity and condition, at proper place and price.  Inbound logistics includes all the activities that are concerned with order placement to the suppliers. On the other hand, outbound logistics covers all those activities that involve dealing or trading in products produced by the company. Exercise 1. The initial stage of the supply chain process is the _____________. a. Sourcing Stage b. Organizing Stage c. Planning stage 2. The purpose of supply chain management is to_______. a. increase the production level b. manage and integrate supply and demand management c. enhance the quality of a product and services 41

PHB Logistics Chapter 6: Detail the various Sub-sectors and the Opportunities in them Unit Objectives At the end of this unit, you will be able to: 1. About 12 verticals of Logistics 6.1 About 12 verticals of Logistics The deciding aspect has been in identifying the sub-sectors A. Subsector employment potential B. Validated skill gap in industry and C. Projected sub-sector growth Global Logistics Industry includes all activities of the supply chain such as transportation, customer service, inventory management, flow of information and order processing. Other activities of the supply chain are warehousing, material handling, purchasing, packaging, information dissemination and maintenance among others. 1) WAREHOUSING – STORAGE AND PACKAGING The Warehousing sub-sector addresses the needs of inbound material management, inventory keeping, and outbound material distribution and dispatch. Tertiary transport packaging is an important part of the sub-sector. Around 60% of the modern warehousing capacity in India is concentrated in the top six cities of Ahmedabad, Kolkata, Bangalore, Chennai, Mumbai, and National Capital Region (NCR). Warehousing spaces of organized players across eight major cities in India experienced a year- on-year growth rate of ~77% in 2017 to reach 46.2 million square feet in 2018. 3PL, e-Commerce, Fast Moving Consumer Durable (FMCD), Fast Moving Consumer Good (FMCG), Manufacturing and Retail industries are the major adopters of organized warehousing spaces in the country. Among these the 3PL and e-Commerce players continued to be the biggest adopters of organized warehousing spaces in 2018. 42

PHB Logistics The warehousing and logistics sector in India is projected to attract an investment amount of nearly INR 691 billion over the next 4-5 years, after the implementation of the Goods & Services Act and the attainment of its infrastructure status. The warehousing sector in the country has witnessed extensive participation from developers, as well as institutional investors, who have invested more than INR 470 billion since 2014 till May 2019, with an average investment of INR 19 billion per deal. Major players operating in the warehousing market in India are Container Corporation of India Ltd., Gati Ltd., Mahindra Logistics Ltd., Transport Corporation of India Ltd., DHL Express (India) Pvt. Ltd., Spear Logistics Pvt. Ltd. and Jayem Warehousing Pvt. Ltd., among others. Warehouse Job Titles:  Kitting Labelling  Forklift Operator  Warehouse Picker  Warehouse Packer  Warehouse - Kitting / Labeller  Warehouse Binner  Data Feeder – Warehouse  Warehouse Associate  Warehouse Supervisor  Inventory Clerk  Inventory & Materials Manager  Warehouse Manager  Reach Truck Operator  Receiving Assistant  Warehouse Quality Checker  Loading Supervisor  MHE Maintenance Technician  Goods Packaging Machine Operator  Warehouse Claims Coordinator  Warehouse, Inventory and Transport Manager  Material Handling Operator and Technician  Warehouse Executive 2) LAND TRANSPORTATION Land transport carriage accounts for 60 percent of the modal mix in India compared to rail and water freight. The transport subsector deals with consolidating the freight, transport and transport network coordination. This will be a focus area for LSC due to the shortage of Commercial Vehicle Drivers especially in the Heavy Vehicle segment. 43

PHB Logistics Transportation is the foundation stone of economic infrastructure. It helps in the development of trade, commerce and industry. Transportation removes the hindrance of place and facilitates the movement of goods from producers to consumers. It also helps in removing regional inequalities. Land Transportation related Job Titles:  Commercial Vehicle Driver  Loader/Unloader  Transport Coordinator  Transport Consolidator  Transport Manager  Land Transportation Supervisor  Land Transportation Executive  Land Transportation Associate  Consignment Booking Assistant  Consignment Tracking Executive  Documentation Assistant 3) COURIER AND EXPRESS SERVICES Courier and Express Industry handles time-critical consignments and many high-value consignments and a significant percentage of the segment in India's documents. It is also a sub-sector with high employability, as several businesses still provide E Commerce services. Courier & Mail Services related Job Titles:  Courier Delivery Executive  Courier Pick-up Executive  Mail Handler  Courier Sorter  Shipment Bagging Agent  Lead Courier  Shipment Classification Agent  Clearance Support Agent  Shipment Query Handler  Delivery Management Cell Agent  Courier Branch Sales Executive  Courier Institutional Sales Executive  Key Consignor Executive  Courier Claims Processor  Courier Associate  Courier Executive  Courier Supervisor  Courier Manager 44

PHB Logistics 4) PORT TERMINALS, ICDs' AND CFS OPERATIONS With the Sagarmala project's focus on port infrastructure, both the velocity and the quantity of cargo movement will be significantly enhanced. More restructuring of the Port user group is bound to take place and multi-skill qualified manpower will be the requirement as the new projects take off. Port terminals, ICDs' and CFS operations related Job Titles:  Cargo Surveyor  Grab Ship Unloader Crane Operator  Rail Mounted Quay Crane operator  Signalman  Stevedoring Labour  Ship and yard planning supervisor  CFS and ICD supervisor  Cargo handler- manual  Cargo equipment handler  Cargo Surveyor 5) EXIM LOGISTICS - FREIGHT FORWARDING & CUSTOMS CLEARANCE The implementation of trade agreements and custom regulations would be strictly adhered to in a protectionist environment, and logistics professionals will need to be well versed in the regulations of the export country because they will be in accordance with domestic rules and regulations. Freight forwarders work in a very competitive environment influenced by global currency fluctuations and need to know carriage laws, foreign trade documents, etc., and use their domain knowledge to arrange cost-effective freight. In addition to training in technical skills, broad-based vocational training would be necessary to ensure that applicants are able to manage this complex task. EXIM logistics - freight forwarding & customs clearance related Job Titles:  Customs Clearance - Documentation Executive – Export  Customs Clearance - Documentation Executive – Import  Customs Clearance – Field Operation Executive – Export  Customs Clearance – Field Operation Executive – Import  Freight Forwarding - Documentation Executive – Export  Freight Forwarding - Documentation Executive – Import  EXIM – Executive  EXIM – Manager  EXIM – Supervisor 45

PHB Logistics 6) AIR CARGO OPERATIONS Time sensitive and high value cargo movement will be experiencing an increase with increased regional connectivity. To ensure faster and more reliable delivery schedules, most Courier and Express companies would leverage this regional connectivity. This will create the need for more dispersed workplaces and hence more need for skilled local candidates to take on the job roles. Air Cargo related Job Titles:  Ground Operations Associate  Pallet Maker  Ramp Operation Associate 7) COLD CHAIN LOGISTICS SOLUTIONS Agricultural Product and post-harvest fruit must be kept in a regulated environment to avoid its degradation. Likewise fish catch and meat must be properly processed and transported in refrigerated environment where control of humidity is very important. Many plants are old and need modernization and operators need to be trained both in the technical details of the plant and its maintenance as well as in the product. Cold Chain Solutions related Job Titles:  Cold Chain Manager  Cold Chain Engineering Specialist  Perishable Product Handling Specialist  Cold Chain Process Management Specialist  Refrigeration Equipment Maintenance Specialist  Reefer Vehicle Operator  Cold Chain Lead 8) E-COMMERCE Ecommerce logistics refers to the processes involved in storing and shipping inventory for an online store or marketplace, including inventory management and the picking, packing, and shipping of online orders. Ecommerce logistics starts with moving inventory from the manufacturer and lasts until it ends up at the end 46

PHB Logistics customer’s destination. Fulfillment is one of the most critical pieces of ecommerce logistics, which includes: Inventory management, Warehousing and storage, Order fulfillment, or the picking, packing, and shipping orders. Cold Chain Solutions related Job Titles:  E-commerce Team Lead  E-commerce Manager 9) INLAND WATERWAYS AND MARINE SERVICES Inland waterways exists in the form of rivers, canals, backwaters and lakes while sea routes exists in form of seas and oceans. Inland waterways is used to transport goods from one place to another inside a mass of land while sea routes the goods are usually transferred from one land mass to another via the oceans and the seas.  Inland water ways o It exists in the form of river, canals, back waters and lakes o It is mainly used to transport goods from \"one place to another\" inside a mass of land. o \"Generation\" of \"hydroelectric power\" and navigation is possible in these waterway areas. o Inland waterways are most widely used in Internal trading within the country.  Sea routes o It exists in the form of sea, oceans. o Here, the goods are transported from \"one land mass to another\" through oceans and sea. o Readymade carriage ways for ships o Sea routes are widely used all over the world for international import and export and it is one of the important way of transport compared to air route. Inland Waterways and Marine Services related Job Titles:  Vessel Operator Grade 1 / 2/ 3 10) SUPPLY CHAIN In commerce, a supply chain is a system of organizations, people, activities, information, and resources involved in supplying a product or service to a consumer. A supply chain involves a series of steps involved to get a product or service to the customer. The steps include moving and transforming raw materials into finished 47

PHB Logistics products, transporting those products, and distributing them to the end-user. Supply Chain related Job Titles:  Dispatcher  Distribution Manager  Distribution Supervisor 11) LIQUID LOGISTICS Liquid logistics is a special category of logistics that relates to liquid products, and is used extensively in the \"supply chain for liquids\" discipline. Standard logistics techniques are generally used for discrete or unit products. Liquid products have logistics characteristics that distinguish them from discrete products. Some of the major characteristics of liquid products that impact their logistics handling are:  Liquids flowing from a higher level to a lower level provide the ability to move the liquids without mechanical propulsion or manual intervention.  Liquids' adaptation to the shape of the container they are in provides a great deal of flexibility in the design of storage systems and the use of “dead” space for storage.  The level of a liquid as it has settled in a tank may be used to automatically and continuously know the quantity of liquid in the tank.  Liquids provide indications through changes in their characteristics that may be sensed and translated into measures of the quality of the liquid.  Many security and safety risks are significantly reduced or eliminated using liquid logistics techniques. Tools such as liquid level sensors and flow meters can be useful in reducing security risk by providing directly, near real-time and accurate measurements of product's movement and balance along the supply-chain flow. The safety risk is reducing as product movement through the process of supply stream is independent and controlled.  Liquids may in some cases be \"processed\" well downstream from the original production facility and thus offer the opportunity for improved efficiencies throughout the supply stream together with more flexibility as to the nature of the product at the point of final usage. Each of these points represents a differentiation of liquid logistics from logistics techniques used for discrete items. When properly planned for and handled these points of differentiation may lead to business advantages for companies that produce, process, move, or use liquid products. 48

PHB Logistics Liquid Logistics related Job Titles:  Tank Farm Associate  Tank Farm Supervisor  Tank Farm Manager  Liquid Transport Operator 12) RAIL LOGISTICS Rail freight transport is the use of railroads and trains to transport cargo as opposed to human passengers. A freight train, cargo train, or goods train is a group of freight cars (US) or goods wagons (International Union of Railways) hauled by one or more locomotives on a railway, transporting cargo all or some of the way between the shipper and the intended destination as part of the logistics chain. Trains may haul bulk material, intermodal containers, general freight or specialized freight in purpose-designed cars. Rail freight practices and economics vary by country and region. Railway transportation is not only particularly sustainable, but is also faster than shipping and cheaper than air operations. But it is not always possible to use rail transport for the complete journey. Rail Logistics related Job Titles:  Executive-logistics Railway  Forklift Operator  Store Incharge 49

PHB Logistics Notes __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ Summary The Global Logistics Industry in 2017 is equally subject to global geo political machinations but that apart countless disruptions threaten to tip the balance of global trade as we knew it. These could be stated as follows: -  Robotics, automation, 3 D /4 D printing will offset low cost manufacturing advantages.  Rampant protectionism favours localisation and also sustainability.  Digitisation and demand driven logistics are pushing supply chains closer to demand.  Middle class growth in developing markets is altering supply demand dynamics.  Global E Commerce will challenge traditional borders and boundaries. Demand-Supply Gap of Skilled Manpower In Logistics Sector:  Current Concentration: Tamil Nadu, Telangana, Andhra Pradesh, Karnataka, Maharashtra, Delhi NCR  Growth Corridors: Uttar Pradesh, Gujarat, Bihar, Orissa, West Bengal, North-Eastern States, Punjab, Haryana  Potential Geographies: Himachal Pradesh, Goa, Rajasthan Exercise 1. The initial stage of the supply chain process is the _____________. a. Sourcing Stage b. Organizing Stage c. Planning stage 2. The purpose of supply chain management is to_______. a. increase the production level b. manage and integrate supply and demand management c. enhance the quality of a product and services 50

PHB Logistics Chapter 7: Documentation Requirements in Warehousing Operations Unit Objectives At the end of this unit, you will be able to: 1. Understand the Warehouse Basic Operations 2. Receiving to Dispatching Activities in Warehouse 3. Know about various Formats of Warehousing 7.1 Warehouse Basic Operations Warehouse operations are an integral part of a company's business strategy. Efficient warehouse operations can ensure that a company ships and receives vital stock in time for replenishment on store shelves or in manufacturing facilities. Warehouse Activities:-  Receive goods  Identify the goods  Dispatch goods to storage 51

PHB Logistics  Hold goods  Pick goods  Marshal shipment  Dispatch shipment  Operate an information system Receive goods: ‒ Accepts goods from  Outside transportation or attached factory & accepts responsibility ‒ Check the goods against an order & the bill of loading ‒ Check the quantities ‒ Check for damage & fill out damage reports if necessary ‒ Inspect goods if required Identify the goods: ‒ items are identified with the appropriate stock-keeping unit (SKU) number (part number) & the quantity received recorded Dispatch goods to storage: ‒ goods are sorted & put away Hold goods: 52