ignou MMPO-008 ©) ‘THE PEOPLE'S INTERNATIONAL LOGISTICS ae AND SUPPLY CHAIN MANAGEMENT Indira Gandhi National Open University ‘School of Management Studies sa natal iss a l| bi I mH HAN AMAL fi N rei a | bgt SY customer BRIE © = nyafar Ha aw a Y yat weal @ aie snot gr A dt ae chests A wren at are Ae) SH aH art SRO A Te oR ed art Rtemensit wt ey wa ER qe a Wa GR wort BI" Re “Education is a liberating force, and in our age it is also a democratising force, cutting across the barriers of caste and class, smoothing out inequalities imposed by birth and other circumstances.” Indira Gandhi6 ignou MMPO-008 THE PEOPLE'S. 7 Joti, UNIVERSITY International Logistics and Supply Chain Management BLOCK 1 OVERVIEW 5 BLOCK2 DEMAND MANAGEMENT AND CUSTOMER SERVICES 71 BLOCK3 GLOBAL TRANSPORTATION DECISION 123 BLOCK4 WAREHOUSING AND INVENTORY DECISIONS IN GLOBAL LOGISTICS 175 BLOCKS PERFORMANCE MEASUREMENT AND FUTURE TRENDS __233COURSE DESIGN AND PREPARATION TEAM Prof K, Ravi Sankar Prof G, Subbayamma Director, SOMS, IGNOU School of Management Suds New Deli IGNOU, New Des Prof. Sushil Prof. Srilatha Jndiaa Intute of Techeology School of Management Studies New Deli IGNOU, New Deis Prof RAK, Wada Prof, Anurag Saxena Red. Professor School of Management Stadies Indian laste of Foreign Trade, New Delhi IGNOU, New Delhi of: Sanjiv itil Fro. Newt Agrawal Guru Gobind Singh Indeapasbs University, School of Management Salis Deli JONOU, New Dei Prof, OF. Walt Prof. Anjali C. Ramteke Indias Insitute of Forcga Trade School of Management Stoica ‘New Delhi IGNOU, New Delhi Prof. Ashish Bajpat Prof. Kamal Vagrechs, Banaras Hind University Scboct of Management Stas Varanasi JGNQU, New Deli Prof. SP. Singh Prof. Rajeey Kumar Shokla Indias insitate of Technology Sebool of Management Stodies Delt IGNOU, New Delhi Prof PR S.Sarman SLY. Vijay Kumar Indian Insorte of Management School af Management Staies Visakhapatnam IGNOU, New Delhi Prof, A.P. Verma Dr, Venkataiah Chitika, ‘ational Insite of Tectnobory Schoot of Management States Pama IGNOU, New Delhi Prof. Sarmistbe Sarms Course Beiter Institue of Innovation in Technology and Prof. D:K. Agrawal Management Former Deas-Acadeimie & Founder Chairman. New Deli PGP, Indian Institute of Management, Shillong Dr. Abhinay Chaudhary Course Coordinator Delhi Technological Universiy Dr. Leena Singh Delhi Scboct of Mansgement Studies IGNOU. New Dei PRINT PRODUCTION ‘Me. Tak Bal [Assist Regist MEDD, IGNOU, New Det March 2023 © Indiv Gand National Open Universtiy (IGNOU), 2023 SBN: LAL righes reserved. No part af this work may be reproduced in any form, by mimeogoaph or any: other means, without permisiae in writing from the Ira Gandhi National Open University (IGNOU). Further information on the Pudira Ganaihi National Open University (IGNOU) courses may be obtained from the University office at Maidan Garti, New Dethi- 110088 Printed and published on behalf ofthe Indira Gandhi National Open University ((GNOU)New Delhi, bby the Registrar, MEDD, IGNOU. Laser Typescting: Tessa Media & Computers, C-206, Shaheen Bagh, Jamia Nayar, New Dethie?S Printed at : Saraswati Offset Pvt, Lid., Saraswati House, An, Naraina Industrial Area, Phase New Dethi—11023Contents Page No. AN OVERVIEW 5 Conceptual Framework 7 Global SCM and Influence of Agencies 2 Strategic Orientation to Global SCM 45 DEMAND MANAGEMENT AND CUSTOMER SERVICES 7 Demand Measurement and Management B Customer Services 90 Information Technology and SCM 107 GLOBAL TRANSPORTATION DECISIONS 123 Importance of Transportation in Global Logis 128 Modes of Intemational Transportation 139 Documentations in Global Logisties 160 WAREHOUSING AND INVENTORY DECI GLOBAL LOGISTICS 175, Warehousing iy Inventory Management 192 Outsourcing Decisions in Global Logistic 216 PERFORMANCE MEASUREMENT AND FUTURE TRENDS 233 Performance Measurement and Metrics of Global Logistics 235 Logistic Audit and Control 252 Future Trends in Intemational Logistics and Supply Chain 267 ManagementCOURSE INTRODUCTION A crucial part of supply chain management is logistics. From the point of origin to the point of consumption, it involves the planning, execution, and administration of commodities, services, and information. Logistics coordinates the intricate web of shipping, receiving, import and export operations, warehousing, inventory control, purchasing, production scheduling, and customer support. Businesses view logistics as a crucial component of the supply chain's design. It is used to manage, organize, and keep an eye on the resources required to move goods in a seamless, punctual, economical, and dependable way. Utilizing the best transportation system strengthens performance trade-offs to- lower shipping costs and guarantee on-time delivery of goods, since customer service satisfaction has evolved into a foundation on which businesses generate business growth and profitability. These methods and processes are: components of a strong logistics management system, highlighting the significance of warehousing and transportation for top-notch customer service and the delivery of end-user products. In this course, students have been introduced to the concept of supply chain. management in detail, Various principles, significance, approaches, challenges of logistics management have been discussed to give students a better understanding of the theory of international supply chain. The role of various parties such as government, intermediaries etc. which are involved in the intemational supply chain has been explained. Customers are the most important part of any business so demand forecasting methods and the role of logistics in servicing customers better has been elaborated upon in this coursework. Warehousing, transportation and documentation are very significant aspects of international logistics and therefore, various modes of transportation, types of warehousing, documentation process and their costing part etc. have been discussed to make students better decision makers in practical business life. Further, performance measurement methods, audit & control of logistics have been discussed. Lastly, latest trends and the role of IT (Information Technology) has been explained in detail to acquaint students with the ongoing world of international supply chain management.BLOCK 1 AN OVERVIEWBLOCK 1 AN OVERVIEW This block provides an overview of Logistics and Supply Chain Management (SCM). Meanings, objectives and principles of Logisties Management have been discussed to acquaint students with the basics of logistics and SCM. Several challenges and importance of international SCM have also been discussed to make students understand the problems of real world. After reading this block students will be able to understand the role of government, intermediaries and intemational agencies in controlling SCM so that they are better equipped to deal with several issues related to SCM. Unit 1 introduces students to the concept of Logistics and Supply Chain Management (SCM). It discusses 7R framework and Principles of International logistics management in detail, Key tasks of Logistics and SCM. have been explained to make students equipped for practical business world. Push and Pull approach are very important concepts of inventory management in SCM, this unit also elaborates upon these two concepts. Unit 2 explains the role of several parties involved in intemational SCM such as government, intermediaries, intemational agencies etc, It explains how government of a country controls international trade and how it impacts the SCM, Several Acts relating to intemational trade have been discussed in this unit. It also discusses the challenges faced by businesses in international SCM and explain why properly managing supply chain is very important for the success of any business. Unit 3 focuses on the strategic orientation to global SCM. It explains different type of SCM strategies. involved in intemational trade for smooth fanctioning, It elaborates on the importance of relating supply chain design to the overall strategy of'a business. Several strategies such as reverse logistics, customer service strategy, competitive advantage etc. have been discussed in detail. This unit also explains several determinants of supply chain in international logistics.UNIT 1 CONCEPTUAL FRAMEWORK Objectives After studying this unit, you should be able to understand: * Meaning and objectives of Logistics & Supply Chain Management * Characteristics of Logistics & Supply Chain Management © Principles of Logistics & Supply Chain Management * TR Framework and Key tasks of Logistics and Supply Chain Managers © Role of Logistics Manager and Supply Chain Manager * Push and Pull Approach to Supply Chain Manager Structure 1.1 Meaning and Concept of Logistics & Supply Chain Management 1.2 Objectives of Logistics & Supply Chain Management 1.3. Characteristics of Logistics & Supply Chain Management 1.4. Principles of Logistics & Supply Chain Management 1.5 7R Framework Logistics & Supply Chain Management 1.6 Key Tasks of Logistics & Supply Chain Managers 1.7 Push and Pull Approach to SCM 1.8 Summary 1.9 Keywords 1,10 Self-Assessment Questions 1.1L References! Further Readings 1.1 MEANING AND CONCEPT OF LOGISTICS & SUPPLY CHAIN MANAGEMENT ‘The term “logistics” stems from the Greek word ‘Logistieas’, which means ‘the sctence of computing and calculating’. Since ancient times, logistics hhas been in practice but the term. was first used within the facet of military science. In the military sense, Webster defines Logistics as ‘the procurement, maintenance and transportation of military materials, facilities and personnel” (Webster's Dictionary, 1963). Further, a US Air Force Technical Report (1981) defines this term ax ‘the science of planning and carrying out the movement and maintenance of forces. In this most comprehensive sense, logistics pertains to those aspects of military operations which deal with: © design and development, acquisition, storage, movement, distribution, maintenance, evacuation, and disposition of materials; © movement, evacuation and hospitalization of personnel; * acquisition of construction, maintenance, operation, disposition of facilities; andAn Overview * acquisition of furnishing of services. Thus in a military perspective, logistics refers to a supportive system which reflects the practical art of moving armies and materials engaged in combats enemy to achieve the desired results. However in the industrial and commercial world, logistics carries much wider spectrum that covers activities for the material flow from the source to the processing facilities, and subsequent distribution of finished goods from there to the ultimate users. Previously, the term physical distribution was commonly used, which refers to ‘manufacturing and commerce to describe the broad range of activities concemed with efficient movement of finished products from the end of production line to the consumers’. In 1991, the Council of Logisties Management, now Couneil of Supply Chain Professionals, a prestigious professional organization, modified its 1976 definition of Physical Distribution Management by first changing the term to Logistics and then changing the definition which is as follows: ‘Logistics is the process of planning, implementing and controlling of effi- cient, effective flow and storage of goods, services and related information from the point of origin to the point of consumption for the purpase of con- forming to customer requirements.” A more systematic definition of logisties management has been given by Bowersox and Closs (1996) as ‘logistics management includes the design and administration of system to control the flow of materials, work-in-process, and finished inventory to support business unit strategy.” Taking into consideration several new issues, challenges, and innovations in the field of management of logistics and supply chain, Council of Supply Chain Professionals has further redefined Logistics in 2003, in the following way: Logistics management is that part of the supply chain management that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers" requirements. While perusing abave definition of logistics management in the intemational perspectives, one can easily argue that in the International Logistics, at least two. countries are involved in the movement and management of these resources in an organization’s supply chain, across the border. In other words, there is a movement of goods, services and related information from one country for the fulfilment of requirements of customers of another country. For this purpose, most of the logistics activities are required like movement within a country such as information, material handling, production, packaging, inventory, transportation, distribution, storage, and security for the resoure International Logistics is the process of managing a system that controls the forward and reverse flow of raw-materials, services, and relevant information,into, through, and out of the international boundaries. International Logistics encompasses the total movement of raw materials, products and services by covering the entire framework of organizations operations concerned with movement, including both exports and imports. Most of the proactive firms started restructuring their organizations with @ focus on further enhancement of efficiency and effectiveness af logistics activities in the 1990s in the form of extemal integration, which has given impetus to the concept of supply chain management. It has been defined as systemic, strategic coordination of the traditional business functions within a particular company and across businesses within the supply chain, for the purpose of improving the long-term performance of the individual companies and the supply chain as a whole, The Council of Supply Chain Professionals (2004) defined supply chain management as something that: ‘Encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies.’ Accordingly, supply chain management can also be defined as: ‘an extemal integration of interrelated functions of the firm with its customers, vendors, and all third-party logistics service providers who contribute in the flow of goods (raw materials, semi-finished and finished products) and information from the point of inception to the point of consumption with the objective of ensuring superior value to all stakeholders’. In other words, supply chain management is an integrated management of various functions in the areas of materials, operations, distributions, marketing, and after sales services with a customer focus on extended enterprise perspective to synergize various processes with a view of maximizing value to all stakeholders. It refers to © managerial process of a joint approach of all supply chain participants to design, develop, and operate a system which responds to customer expectations by making available the right quantity of right quality products at the right time and right place in the right physical form at a right cost. 1.22 OBJECTIVES OF LOGISTICS & SUPPLY CHAIN MANAGEMENT es of Based on above discussions, one can draw following obje: international logistics and supply chain management: + Rapid Response: Rapid response is concerned with organizations ability to satisfy customer service requirements in a timely manner, Nowadays customers are paying more attention towards the response provided by the companies. Conceptual FrameworkAn Overview 10 Minimum Variance: Minimum Variance is best suitable for the ‘organization in providing better services to the customers, Delays in expected time of customer order receipt, an unexpected disruption in. ‘manufacturing, goods ariving damaged at a customer's location, or delivery to an incorrect location-all result in disruption in operations which must be resolved. + Minimum Inventory: Inventory is a necessary evil so organizations try to have minimum inventory in the business framework. So reduced inventory deployment to the lowest level consistent with customer service goals to achieve the lowest overall total logistics cost, needs to be implemented. * Quality Improvement: One important aspect in the business framework is that the quality improvement is 2 continuous process and if one defect ‘occurs in the International Logisties than it will multiply several times so each company is required to take care of the quality of the products, «Life-Cycle Support: Organizations should focus on providing Life- ‘Cycle Support to the customers so that the product provided to the ‘customers gets back to the company in the most efficient way and ‘manner, 1.3. CHARACTERISTICS OF LOGISTICS & SUPPLY CHAIN MANAGEMENT Some of the key characteristics of logistics management arc as under; * Flexibility: Flexibility is the most important aspect in the international logistics as the circumstances change at every location of the global world, So organizations should try to work effectively and efficiently while considering customers perception and other business framework scenarios. * Technology: Today technology has been imbibed in every aspect of business. With the support of technology organizations are reaching. more easily towards the customers. So updated technology plays a primary role in the suecess of the companies. + Experience: Customers are looking for better experience in the business ‘transaction process, International logistics is one of the important tool to serve customers in a better and new way so companies should provide good experience to customers with the help of Intemational Logistics. + Time Oriented: Organizations should try to deliver desired products, in ‘the time oriented manner, at the door step of the customers. Availability ‘of goods at the appropriate time enhances the image of companies brand in the eyes of the customers, * Human Resource: Human Resource is the basic platform on which ‘entire International Logistics framework is based. So companies should ‘try to keep their employees motivated in the delivery of products to the ‘customers.14 PRINCIPLES OF LOGISTICS & SUPPLY CHAIN MANAGEMENT On the basis of above discussions on the concept of logistics and supply chain management, some of the key principles on which it offers superior value to all stakeholders are as under; Superior Customer Value. ‘The ultimate objective of logistics and supply chain is to fulfil customers" requitements in cost efficient manner as well as in a better way than the rivals, It sccks to fulfil the goals of providing superior customer value with an appropriate use of resources, and to build and gain long-term competitive advantage; Far the achievement of above objectives, it ensures superior value to all stakeholders, Single Entity Logistics and supply chain is all about inter- and intra-firms. process integration that requires a variety of planning and control mechanism across the supply chain network. For this purpose, it is always viewed as a single entity. For example, @ group consisting of representatives from purchase, manufacturing, distribution, and sales could be the entity for finalizing the marketing plan, the dispatch plan, the production plan, and the procurement plan as a single supply chain plan, This has an impact on reducing administrative delays and improving empathy acrass the supply chain, Inventory Perspective ‘Traditionally, inventories have been viewed as a buffer to reduce coordination requirements across the network of activities as well as firms. Logistics and supply chain, in its current concept, views inventory in a perspective of speedy flow and a buffer to be used as a last (68 opposed to first) tesort after ensuring proper information sharing and coordination. For example, rather than quantifying the appropriate inventory to protect oneself against uncertain process yields, working with lower inventories will be the major problem area where efforts for improving process yields need to be focused. This results in a leaner and cleaner system, which is more responsive in the long run. Improving flexibility; reducing replenishment eyele time; reducing uncertainties without keeping safety stocks; enhancing, market responsiveness capability; and improving quality are some of the key perspectives of inventory in the era of supply chain management. Strategic Orientation The orientation of decisions in the supply chain is viewed strategically rather ‘than viewing it as operational one. For example, rather than being concerned with just sourcing trucks from the market, one could consider long-term contracts with transporters. Outsourcing vs. Insourcing Out of various activities undertaken in the logistics and supply chain, it is important to focus on doing what one can do best. This has implications on Secision regarding outsourcing or insourcing, In other word, out of total Conceptual FrameworkAn Overview 12 activities, which activities should be undertaken in-house and remaining should be given to outside firms who have better capability and expertise to do so in more efficient and effective ways. Supply chain further looks at managing and capitalizing on resource capability of these outside firms by building effective parterships, In the world of core competency, the gencral norm in today's business world is outsourcing {as is usually the case of consumer goods and durables) non-core processes and remained focused on. core competency. Supply Chain Relationships The supply chain concept emphasizes more of partnering relationships among. all the members, such as, vendors, channel participants, and all third-party logistics service providers (3PL). The contributions of supply chain members are significant for the successful long-term performance of corporate enterprises. The philosophy of supply chain management strongly advocates partnerships with limited number of external members (vendors, customers, and 3PL) along with their high level of motivation to take appropriate proactive actions for achieving the objectives of the buying firm. Flexible Approach Today's logistics and supply chains are designed for flexibility in all the processes of firm's system, starting from procurement to manufacturing to warehousing to delivery, which plays a very important part in improving the customer service. Since business conditions are certain to change, the supply chain configuration should be a flexible one. For instance, Flexible Manufacturing System (FMS) leads to more and more computerized cost fficicnt systems. Furthermore, a flexible approach towards demand-focused manufacturing can help firms in minimizing the inventory levels in the supply or demand flow channels, System Approach for Global Optimization All the elements of the logistics system are optimized in such a manner that the efficiency and effectiveness of the entire system is achieved in better way for providing better services to the organization and customers. Efforts are made to optimize the local system with the global linkages so that proper logistics framework should be designed in a better way. Activity 1 Choose any Intemational Logistics Company of your choice, and critically analyze the Objectives and Characteristics, if any, in that company.15 7RFRAMEWORK OF LOGISTICS & SUPPLY CHAIN MANAGEMENT One of the predominantly used postulation of the International Logistics/Supply Chain Management is the concept of 7 R Framework, In today's complex business scenarios where organizations are considering the whole global world as one market, 7 R Framework provides a handy tool in the framework of companies as how to attend to customers in a more effective and efficient manner. 1, Right Product: The ‘Right Product’ is the product that the consumer obliges at the moment or in the future, The consumer may be a peripheral to the majority of companies, in spite of whether or not it is a part of the production and companies always tries to increase their customer base by giving the right product to its customers, For Example, Mobile Phones, Tablets, HD TV, ete, 2. Right Place: Obviously, the right product ought to be shipped to the ‘Right Place’, The right place is where the customer wants its product to be delivered, Companies always ensure that the product reaches its right place to: the right customer which it achieves through its efficient supply network and good communication channel, For this, the company requires the data such as what type of orders are being ordered, where and when. This data is then scrutinized and an effective way is identified to reach out to the consumers easily and quickly. For Example, Dell follows this concept to- reach out to its customer at the right place, Data is collected from its website and Dell ensures that right product is ordered by the customer. 3. Right Quantity: It is vital for organizations to find out the accurate capacity of the product required to be produced or the demand of the product for less operating cost and better profits. The ‘Right Quantity” to be produced can be easily monitored in the retail sector by checking the quantity of product sold. Nevertheless, in operations, it is very important since the operations manager determines the quantity. It varies from company to company. The correct amount is limited by factors such as perishable items, product / storage cost, etc. For Example, Blinkit (formerly known as Grofers) needs to make sure that right quantity is available to the customers like fruits, vegetables and the commodities must not be washed out of the frame of perishables, 4. Right Condition: The item for consumption ought to be in ‘Right Condition’, in other words, it must be functional from the mimute it is Produced until the end of its intended constructive life, Whereas the correct conditions should be assured at the time of delivery of the product, attention should also be given to the time. For Example, Samsung should certify that the mobile phones should be delivered in the right condition nat anly te customer but to dealers also, Samsung also need to ensure that the warranty offered for the product match with the life of the component used in the production of the product. Conceptual FrameworkAn Overview 5. Right Time: ‘Right Time’ is about delivering the product to the people -at the right time, Many companies like Amazon, Flipkart have tied with different delivery partners to deliver the product to their customer at the right time, For Example, Amazon makes sure it delivers the product within the timeline given by the customer. 6. Right Customer: It is of utmost importance that the right product reaches the ‘Right Customer’. The companies produce the standard ‘product and add different characteristics to it according to the increase in. demand of the customers. Therefore, it is important that the companies deliver the right product to right customer according to customer's need. and demand. The need of rural areas is different from metro cities. For Example, a local ketchup producer may sell in big cans to bulk consumers whereas it can sell in small packets to local retailers. 7. Right Cost: ‘Right Cost’ refers to appropriate price for the product manufactured hy the company or the right value to achieve all of the above, The company must assure minimal costs, while guarantecing all. the 7R. Some factors lead to high cost of the product like customization, large inventory to ensure satisfactory delivery times, etc. Companies should balance all this to maintain appropriate cost of the product so that it can be sold in the market, For Example, generally to guarantee delivery at the right time for the consumer Hindustan Unilever (HUL) always tries to keep an inventory check and maintain a sufficient quantity. They shouldn't have high inventory levels to do this, as they also need to find the balance to get the right cost. Activity 2 Choose any two Mobile Phone Companies of your choice, and critically analyze the 7R Framework, if any, in these companies, 1.6 KEY TASKS OF LOGISTICS & SUPPLY CHAIN MANAGERS Logistics Manager A logistics manager is a professional, self-motivated individual in an organization who is generally responsible for the overall supply chain management of goods and services. Logistics manager manages the entire order cycle to enhance business development and ensure sustainability and customer satisfaction. Logistics managers need to have a continuous monitoring on flow of goods to ensure availability of various items ofinventory without stock-out situations as well as with minimum inventory level to satisfy the expectations of customers along with fulfillment of organizational objectives. They generally schedule all the inbound shipments and outbound shipments in an organization, provide leadership to the ‘warehouse team and keep transportation costs low. The successful logisties manager is responsible for prioritizing the key task of the organization so as to meet expected shipping dates and maintaining an accurate inventory. Logistics managers generally ensure that the right products are delivered at the right location at the right time, and maintain the quality required in the most cost effective way in an organization, Moreover, they oversee the distribution and transportation of goods from the manufacturer to the consumer. Key Task of a Logistics Manager: Followings arc the key tasks of logistics ‘managers: Supervision of Shipping: Logistics managers are responsible for the management of shipping of the various products and services in an organization. They are responsible for flects of tucks, forklifts and other shipping equipment. Logistics managers are also responsible for managing and completing the operations as per the given budgets. This is very difficult as the cost of operation changes on monthly or yearly basis. Some of the functions in the shipping department are as follows: - © They must work along with drivers, ® Focus on route optimization, + Review performance metrics, ‘+ Exceed customer service expectations. Supply Chain Activities: Supply chain activities consist of collaborating, ‘with teams for different inbound and outbound transportation projects that require high coordination with various service providers. Logistics managers also consult with managers about outbound and inbound transportation legalities, systems, networks and service levels ta make recommendations for ercative solutions and build long term business relationships with suppliers and pariners so as to improve supply chain flows and delivery schedules. Logistics managers have to ensure that the completion of projects should be done under the budget. Inventory Management: Logistics managers spend their valuable time in supervising the supply of raw materials required in manufacturing plants to support the production. These plants may be producing large output, Just-In- Time or may have Lean manufacturing environments, Logistics managers must ensure a safety culture by implementing safety policies and training programs for employees throughout the warehouse, They must manage the storage of raw materials in accordance with supplier guidelines, Distribution Center Supervision: Logistics managers in some organizations may perform as a head of distribution, shipping and receiving departments. ‘They may provide their supervision in picking, packing, and forklift operation employses. They may be assigned to big warehouses and large Conceptual FrameworkAn Overview 16 number of warehouse personnel. Warchouse duties include ereative ideas for improvements, coordinating product movements from raw material to finished product and adjusting product rotation process. They might have to manage the inventory control departments or personnel. Negotiating Rates with Logistics Providers: Logistics makes us a big part of company's expenses and has a direct effect on the finances of companies, Logistic Manager intends to reduce the cost at cach step. Logistics and negotiation plays an important role to get desired cost on carriage and distribution facilities. Logistic Manager also negotiates with 3PL (Third Party Logisties) providers so that the movement of products from Air, Railways, Ocean and Roadways should be cost effective for the organization, Recruitment and Training of Warehouse Personnel: Logistic Manager in some organizations also performs Reemitment and Training of Warehouse. Personnel as they ars liable for the work of the warehouse personnel, They are required to train them according to the specific need and develop required. skill sets for the tasks involved in warchousing process in an organization. Supply Chain Managers Supply chain manager is a person who is responsible for the management of equipment, hardware, and all other logistical details of « company, or a company’s vertical. It is their responsibility to manage all the steps neoded to. acquire raw materials, deliver it to various checkpoints throughout the company's business, ensure that the company makes enough of its products to meet the customer demand, and make the delivery to the right destinations on time, Supply chain managers should oversee the import or acquisition of raw materials to be used by the company in producing their final product They must also be able to track the materials as they are combined, shaped, and altered into a new form of products. They must be able to evaluate these items throughout the product development process so as to ensure that adequate supplies are in inventory. Lastly, they must develop a delivery system that will ensure maximum product development and optimum number of shipments to customers or other manufacturers for further usage. Moreover, the supply chain manager needs to be well-versed in process management and development in order to have an adequate understanding of how the company functions. Ideally, the manager must be able to provide fresh ideas that allow the company to deliver its products at much higher quantities than normal or at a faster rate compared to its competitors to the market. These ideas might involve simple reshufiling of employees within certain areas, to bring in advanced technology from around the globe so as to do a better tracking of hundreds or even thousands of raw materials and other goods. They are also responsible for oversecing and managing organization's overall supply chain activities and logistics strategy design and operations in. order to maximize the organization's process efficiency and productivity. Task of a Supply Chain Manager: Some of the key tasks are discussed below: Enhance Customer Service: Key task of a Supply Chain Manager is to manage the customer service. ‘Traditionally consumers had to spend lot oftime to place order, purchase and consume a product. But now customers require services with in fewer time frames, So, cusiomers should always get ‘what they are looking for and thus the Supply Chain Manager should try to assure that the customer service platform is accessible 24/7 so that the consumers remain. connected to the organization. Enhanced Product Value: Earlier the role of supply chain management was just to reduce the overall cost of the product or service. But with the passage of time now the important task of the Supply Chain Manager is to enhance the value of product and service at cach and every stage of the end-to-end supply chain management by covering upstream and downstream suppliers and partners so that better value-added product is provided to the customer. Reduce Product Cost: Nowadays the key task of the Supply Chain Manager is not only to reduce the cost of product but also to keep the overall cost of the produet at the organization’s part at the bare minimum level. This will facilitate the competitive positions in market to move in favor of the organization. One of the key tasks of the supply chain manager is to balance the cost of the product in the entire complex supply chain network. Enhance Financial Flow: One of the important flows in the supply chain management is the flow of fimds from customers towards the organization. It is one of the key tasks of Supply Chain Manager is to make sure that the smooth flow of funds is happening in the complex web of supply chain network. Moreover, equal fruits of profit are being shared among all the stakeholder of the supply chain management in the form of Supplier, Partners, Distributors, Retailers, ete, Support Marketing Strategies: Supply Chain Manager works in close coordination with all the functions of the organization so that efficiency and effectiveness should be maintained for the overall wealth maximization of the organization and other activities. So, Supply Chain Manager should also work in real close coordination with the marketing function so that the customer's needs can be better ascertained and the end customer is provided with the support of supply chain network in very less time, Activity 3 Choose any two Logistics Companies of your choice, and critically analyze the key task of Logisties Manager, if any, in these companies. Conceptual FrameworkAn Overview 7 PUSH AND PULL APPROACHES TO SUPPLY CHAIN MANAGEMENT From the supply chain management perspective, it is very important to understand the marketing stratcgy of the company especially with respect to- push or pull strategy, Adoption of « particular strategy determines the configuration and process integration of the supply chain system, Generally, supply chain systems of these two strategies are opposite to cach other with regard to production and distribution decisions as shown in Figure 1.1. Information Flow Product Flow Product Flow [mee tin Fie I Noon Information Flow Information Flow > Product Flow channel Negotiation Flow] Members| Negotiation Flow Bush Strategy Figure-I.1: Pull vis Push Strategies Source: Adopted from Agrawal, D. K. (2015) Distribution & Logistics Management, Trinity Press, Delhi In the push strategy, companies prefer to communicate its potential consumers through their network of buyers (customers) through selective, personal, and limited notworked media. They negotiate with their immediate customer about terms of trade, transaction, delivery, and payment to bring attention and special interest in such offerings to achieve commercial objectives. On the basis of such negotiation, there is physical flow of products and services. Under this kind of system, the firm make supply chain system supply driven where, production and distribution systems are coordinated truly on long-term forecasts and firm's objectives. As a result, each member in the supply chain network is required to hold excessive inventory in this system and supply chain management is solely based on make-to-stock philosophy, Some of the advantages of push strategy-based supply chain system are meeting the existing demand more quickly, prevention of stock-out, higher sales volume and market share, and mass production and distribution become cheaper. Contrary to push strategy, in the pull strategy, companies prefer to communicate its potential consumers through mass media by preaching attributes of their offerings to bring attention and special interest in such offerings for the achievement of commercial objectives. Based on such commercial messages, potential consumers negotiate with vendors about terms of trade, transaction, and delivery. On the basis of such negotiation,there is physical flow of products and services. This system of the firm makes supply chain demand driven, where production and distribution systems are based on coordinated consumer demand data. In ideal pull scenario, the firm is not required to hold any inventory, and supply chain system is solely based on make-to-order philosophy. The success of supply chain in this scenario needs enhancement of quick response capability that requires real time information flow about consumer demand (point-of-sales data). Some of the limitations of this system are frequent stock out, lost sales, high customer service costs, cte, However, pull strategy-based supply chain system is attractive, since it leads to decrease in inventory level and inventory carrying costs throughout supply chain network, better scope for customization of customer scrvices as last minute changes in demand can be accommodated, and less marketing and distribution costs as firms enjoy seller's market scenario, Activity 4 Choose any four FMCG Companies of your choice, and critically analyze the Push and Pull Approach, if any, in these companies. 1.8 SUMMARY Logistics and supply chain focusses on management of resources and information from place of origin to place of destination. The raw material is transformed in the form of a product and reaches the final customer. The flow of resources is both forward and backward, Forward flow is from supplier to producer, transporter and customer. The reverse or backward flow is in terms of reduce, repair, reuse, recycle, replacement and reaches the supplier. Understanding meaning, objectives, characteristics and principles is important to understand the process of managing the logistics and supply chain management. The 7 R Framework of logistics and supply chain management namely right product, right place, right quantity, right condition, right time, right customer, right cost, helps to understand the complex business scenario, The Logistics Manager and Supply Chain Manager play an important role in managing the logistics and supply chain management. They are self-motivated individuals responsible for overall logistics and supply chain management, They play an important role in managing the entire order eyele from business development to customer satisfaction. They ensure that right product is delivered in right quantity at the right time on right location in the most cost-effective way. The companies push their product to the customers with the support of intermediaries like retailers and distributors. ‘The customers also pull the product from the supply chain network. These explain the push and pull approach of supply chain management. Conceptual FrameworkAn Overview 20 19 KEYWORDS Logistics management: Logistics management combines distribution, manu- facturing and material management functions of an enterprise in order to have a synchronized system which would ensure a smooth flow of all kinds of goods, services, related information from point of inception to point of consumption. Supply chain management: Supply Chain Management is an extemal, integration of logistics systems of the firm with the logistics systems of its customers, vendors, and all third-party logistics service providers with the objective of ensuring superior value to all stakeholders. Push Approach: - Companies tends to push their products in the supply chain. network towards the customers with the support of distributors and retailers in the urban ot rural market. Organizations have a tendency to accumulate and store the products at the distributor's level or at the retailer's level, Pull Approach: - The supply chain network is generally influenced by the customers it such a way that the customer demands product from the retailer and in turn retailer again demands the product from the distributor, Basically, customer is pulling the product from the supply chain network. 1.10 SELF ASSESSMENT QUESTIONS 1. Discuss nature and concepts of logisties and supply chain management. 2, Explain the objectives and principles of Logisties Management, 3. What are the distinct characteristi¢s of Logisties Company? Diseuss with, the help of an example. 4, Discuss the concept of 7 R Framework, How it can be explained in today’s complex business scenatio? Differentiate between the task of a Logistics and Supply Chain Manager, 6. Explain the importance of Push and Pull in Supply Chain Management. 1.11 REFERENCES /FURTHER READINGS Agrawal, D. K., (2017). Supply Chain Management: Strategy, Cases & Best Practices, Cengage Leaming, Delhi. Bowersox, D.J. and Closs, DJ., (1996), Logistical Management: The Integrated Supply Chain Process, New York, McGraw-Hill International. Chopra, Sunil and Meindl, Pete, (2001). Supply Chain Management Strategy, Planning and Operation, New Jersey, Prentice-Hall Inc. D. Neiger, K. Rotara, and L. Churilov, (2008) "Supply Chain Risk Identification with Value- Focused Process Engineering,” Joumal of Operations Management, vol. In Press, Accepted Manuscript, D. Wang and Y. Zhao, (2007) "Decision-making for the optimal number of suppliers considering trade-off between supplier management cost and supplyfailure risk," in IEEE Intemational Conference on Industrial Engineering and Engineering Management, Singapore, pp.1664-1668, F. Fiedler, (1964) "A Contingency Model of Leadership Effectiveness," in Advances in Experimental Social Psychology. vol. | New York: Academic Press, pp. 149-190, Gunasekaran ond E, W. T. Ngai, (2005) "Build-to-order supply chain ‘management: # literature review and framework for development," Journal of Operations Management, vol. 23, pp. 423-451. Hi. E, Eriksson and M. Penker, (2000) Business Modeling with UML: Business Patterns at Work. New York: Wiley. J. H. Park, J. K. Lee, and J. $. Yoo, (2005) "A framework for designing the balanced supply chain scorecard," European Journal of Information Systems, vol. 14, pp. 335-346, J, Storey, C. Emberson, J. Godsell, and A-Harrison, (2006) "Supply chain ‘management: theory, practice and future challenges" International Journal of Operations & Production Management, vol. 26, pp. 754-774. M. Quayle, (2003) "A. study of supply chain management practice in UK. industrial SMEs," Supply Chain Management - An Intemational Journal, vol. 3, pp. 79-86, P. Kraljic, (1983) "Purchasing must become supply management,” Harvard Business Review, vol, 61, pp.109-117, 8. Varma, 8. Wadhwa, and S. G. Deshmukh, (2006) "Implementing supply chain management in a firm: issues and remedies," Asia Pacific Journal of Marketing and Logistics, vol, 18,pp. 223-243. Conceptual Framework 2UNIT 2 GLOBAL SCM AND INFLUENCE OF AGENCIES Objectives. After studying this unit, you should be able to understand: * the Importance of Supply Chain Management + themajor challenges of Global Supply Chain Management * the Supply Chain Management Model + thetole of Efficiency Oriented Supply Chains + therole of Responsiveness Oriented Supply Chains * — impact of Warehousing Corporation Acts on Logistics in India + role of Government Agencies through enactment of various Acts Influencing «Logistics and Supply Chain Management + role of Intermediaries in Logisties and Supply Chain Management Structure 2.1 Introduction 2.2. Challenges and Importance of Supply Chain Management 2.3 Supply Chain Management Model 23.1 Efficiency Oriented Supply Chains 2.3.2. Responsiveness Oriented Supply Chains 2.4. Impact of Warehousing Corporation Acts on Logistics in India 2.5 Acts Regulating the Logistics Industry in India 2.6 Role of Intermediaries in Logistics and Supply Chain Management 2.7 Key Recent Initiatives of Government of India 2.8 Summary 2.9 Keywords 2.10 Self-assessment Questions 2.11 Further Readings/References. 2.1 INTRODUCTION Customers are investing most of their valuable time in accessing the products. like Smart phones, Laptops, ete with the support of intemet and other upcoming technologies. This clearly signifies that the tastes and preference of customers are changing with the passage of time, Moreaver, customers are present across the globe and organizations and are trying their level best to satisfy their targeted customers in newer ways. Companies are moving from one location to another location to source bestquality of raw materials from their suppliers and are processing much of their organizations functions in the extended formats and lastly keep on deeply engaging with their outbound suppliers so as to reach their valuable customers at the right place and right time, Thus, the customer will be delighted and have better personalized experience. So, in Global Supply Chain Management, organizations on one hand take care of cost effectiveness and on the other hand customer's responsivencss plays its key role. When an organization focuses on the spectrum of Cost Effectiveness than it tries to move away from the customers, but when the same organization focuses more on the part of customer responsiveness spectrum than the per unit cost of product increases. Thus, it is very important for the organizations to balance the spectrum of Cost Effectiveness and Customer Responsiveness, Globalization is a two-edged sword in that it provides opportunities to enhance profits through cost reduction and maximizing comparative advantage, but it also intensifies competition. Therefore, it is critical that different stakeholders, especially the Governments recognize the changes as they impact on areas that include investment, economic growth and infrastructure development. In the wake of globalization and for the long- term sustainability of businesses both domestically and intemationally, India, too, has entered into a deregulation environment in transportation except for rail transportation. Due to internationalization and the cmerging socio- economic trends, customer expectations arc increasing rapidly. As a result, the jus time (JIT) transportation systems, still not very common in India will soon beeome the principal norm rather than the exception. The deregulation of transportation system in India began with road transportation in mid-1980s; air transportation in carly 1990s; ports and highways have already been taken up; 2.2 CHALLENGES AND IMPORTANCE OF SUPPLY CHAIN MANAGEMENT The major challenges of global supply chain management are as follow: - Supply Chain Visibility Supply Chain Visibility is one of the important challenges which Global organizations are facing nowadays. As the companies are relying more on extended supply chain partners and suppliers this is having a closer impact on their business operations. Organizations can easily keep a close eye on the day-to-day operations happening within their vicinity but it is really becoming a cumbersome task for the organization to have a clear visibility on what is happening in the other location, So, it is important to answer questions such as What happened? What is happening? Why is this happening? What is the likely impact? and How can we improve? Supply Chain Alignment Global Supply Chain Organizations generelly fail to realize that they themselves are also a part of the bigger supply chain network, Thus, (Global SCM and Influence of AgenciesAn Overview organizations have to pay duc supplicrs and partners. Sometimes proper alignment is missing in the global supply chain management and thus this result in great loss te the organization itself and to the other associated parmers and suppliers located at the far end of the globe. Most importantly customers also feel rejected in such a network. Cost of Product The important challenge which Global Supply Chain organizations are facing, is the gradual increase of raw material cost in the entire supply chain, The companies are continuously extending their suppliers and partners network for low-cost materials across the globe; thus, it is becoming very difficult for the organizations to maintain the low cost of the final product for the benefit of the end customer. Quality of Product Organizations are forming more partnerships and collaborations with the extended suppliers in the global supply chain network for taking the benefit, of the Globalization to the end customers. But now the quality of product has become & big problem for the same companies, the challenge is to maintain the highest quality parameter from the same sct of suppliers. As in case of automobile companies approximately more than 70% of their business activities are being taken care by the extended suppliers and partners. Thus, nowadays to maintain the quality of product in the Global Supply Chain has become a big challenge. Shorter Lead Time and Inventory Organizations are becoming more dependent on the extended suppliers in today’s global supply chain management, Customers are demanding products in shorter time span so it is becoming really difficult for the companies to fulfill the desired demands of the customers with the available time and resources. Moreover, keeping sufficient inventory at the desired level has now become a real devil in the supply chain. As the cost of losing customers in terms of inventory stock-out becomes really costly for the company in the Jong run. Activity 1 Choose four automobile companies of your choice, and critically analyse the supply chain challenges faced by them in today's complex business environment, if any, in these companies.Activity 2 Choose any two e-commerce companies of your choice, and critically analyse the Supply Chain Visibility problems faced by them, if any, in these companies. 2.3. SUPPLY CHAIN MANAGEMENT MODELS: A Global Supply Chain (GSC) is an inter connected institutions, materials, and activities that produce and supply products (both goods and services) to final consumers, In the instance of GSCs, it is spread throughout the globe. Any firm that utilizes components and facilities from another manufacturing unit located abroad comes actoss the challenges with global supply chain management. 2.3.1 Efficiency Oriented Supply Chains In ventures located for ease and have additionally high significance of advantage usage adds up to cost, Here start to finish effectiveness is an unquestionable requirement, Instances of such enterprises include concrete, steel, paper, items, having minimal effort design, among others. They are most appropriate to one of three production network types—"proficient," “quick,” and “persistent stream"— that are best ready to augment resource use: ~ 1. The "Efficient" Supply Chain Management Model The productive inventory network is suitable to companies which are described as extremely market competitive, with less players competing for a sitnilar combination of clients of those who have not seen having significant difference at worth proposition. In reality, competition is for each and every competitor who has invested money. Supervisors should concentrate on elevating most extreme start to finish productivity. There are two principle moves they can make to achieve this. To begin with, they ought to guarantee high paces of benefit combined with high overall equipment efficiency (OEE) so as to decrease cast, Secondly, they ought to guarantee significant levels of estimate exactness to ensure item accessibility and thus provide impeccable request satisfaction. This model is most applicable to industries such as steel and cement that survive in extremely competitive markets with various manufactures, and consumers who might not easily respect their distinet value propositions. 2. The "Fast" Supply Chain Management Model The quick store network is best for these companies producing popular comitnodities within a stialler span, Considering stakeholder's view, the (Global SCM and Influence of AgenciesAn Overview 26 ‘basic difference among competitors’ worth recommendations is that they should revitalize their portfolios on the basis of the recent identified patterns. This shows competitive nature of the stakeholders in the market ‘on the basis of manufacturing capacity to consistently establish new ‘tems sold at a minimum cost. In an industry, system is portrayed by sighting a shorter span. This may scem, it shows that all accounts are in a problem. However, by identifying a specific pattem mechanism in different market area, buyers’ propensities, it's conceivable te show ‘intervention cost at a particular level. Creation ought to be planned for a solitary bunch for each Stock Keeping Unit (SKU), with its size characterized by deals for the business season (or assortment, in the design business), Here the model utilization is dependent on "make to figure" decoupling point. As the product offering’s business season gets shorter, it gets progressively hard to deliver a second cluster of the smash hit items from the assortment and recharge it to stores before the item leaves design and shoppers never again need to get it. ‘The board should concentrate on advancing consistent portfolio. reestablishment, which is upheld by three primary capacities: brief timeframe from thought to showcase, most extreme degrees of figure precision so as to diminish advertise intervention cost, and start to finish. ceffectivencss to guarantee reasonable expenses for clients. For example, apparel industry as fishion trends change very fast, and smart phones as technology gets obsolete very fast. 3. The "Continuous-Flow" Supply Chain Management Model ‘The basic spotlight of the persistent stream store network model is the market interest strength. Forms are planned in such a way that path guarantees, consistent rhythm and constant progression of items take place. This model normally is for an execptionally adult inventory network with a client request profile that has little variety such as paper industry. So, the creation of outstanding burden creates interest through consistent model recharging dependent on a "make to stack" point, Here creation is planned for renewing the stock levels which are predefined and are dependent on the reorder point, before the cycle for that stock was created, In like manner, a serious nonstop framework should be ‘given to the clients, leading te enhancement of expenses related to stock. The executives should concentrate on advancing inventory network's joint effort, which is bolsicred by three principal abilitics. Initially, they incorporate electronic exchanges that are utilized to diminish the quantity of value-based procedures required during the request cycle, just as the sharing of deals and stock data to improve the capseity to anticipate request. In the most adult stage, cooperative arrangements are made with key clients who. are assisted with envisioning request designs, Activity 3 Choose any Stee! Producing Company of your choice, and critically analyse the Efficient Supply Chain Management situation in that company, if any, in this company.‘Activity 4 Choose any Oil Exploration Company of your choice, and critically analyse the Continuous -Flow of Supply Chain Management situation in that ‘company, if sny, in this company, 2.3.2 Responsiveness Oriented Supply Chains Businesses that face extensive interest vulnersbility, where showease intervention cost is exceptionally important, should utilize one of the three popular diverse store networks, These incorporate the “dexterous,” “specially designed," and "adaptable" models, 1, The "Agile" Supply Chain Management Model The spry sort of inventory system is valuable for companies that make similar products determined for customer. This is regularly found in the variable interest of a business. They use a "specially make" point, which creates and makes the stakeholders buy in order to refrain the items from having no deals in near future, Therefore, the fundamental driver of intensity is readiness—the capacity to satisfy eccentric need which the customer is surpassing the amount leading to a short duration than what it was before. The capacity to be nimble is corresponding to the proportion between abundance limit and the normal pace of benefit utilization, In severe terms, there can be no dexterity without abundance limit, ‘The management should focus on procuring dexterity, strengthened by two universal capabi overabundance limit, and items and procedures intended to create the smallest potential groups. 2. The "Custom-Configured” Supply Chain Management Model The specially designed store network model is described by high level importance of the expense for those resources which are all-out expense, and increase the (conceivably boundless) completed setups of the products from one stage to another. Serious situation is given for a novel (Global SCM and Influence of Agencies aAn Overview 28 design of the product completed by the final purchaser's needs. In an agile inventory network, product does not meet the expectations of any client necessity—restricted uniquely by specialized requirements—right now, configurable item is inside a restricted mix of product determinations. Typically, item setup is cultivated during get-together procedure, Mounted parts are gathered by an individual client's necessities. In any case, item arrangement might be done in different sorts of procedures, for example, blending, bundling, and printing, among others, When in doubt, the procedures before item setup are lengthier than the arrangement itself and the downstream procedures, ‘Due to the almost boundless number of conceivable completed items coming about because of numerous mixes of parts or materials, it is basically difficult to make a precise gauge. Other confounding variables incorporate the limited number of materials or pieces. The preceding, designs are booked by a gauge or # persistent renewal model, contingent ‘upon the changeability of the interest profile. Therefore, item setup and downstream procedures are booked in the wake of accepting the client's ‘organization, and to guarantee a short request eycle those procedures are structured with additional limit accessible. 3. The "Flexible" Supply Chain Management Model ‘The 6th inventory network type, the flexible model, is appropriate for sertain companies that satisfy unexpected need and in such a way are confronted with high and low appeal. This store network model. is described by flexibility, which is the capacity to reconstruct inward process required to mect the stakcholder’s requirement, This model ‘ordinarily is used by edminiswation companies that focus on care of startling situations, maybe in any event, including crises, The administrators should focus on ensuring flexibility, which is supported bby four central capacities: extra restriction of fundamental resources, quick response limit, particular characteristics in technique and product building, and a system stream that is proposed to be quickly reconfigurable, Activity 5 Choose Zara SA and critically analyses the Agile Supply Chain Management of the apparel clothing company, if any, in this eompany. Activity 6 Choose any FMCG company of your choice and critically analyse the Flexible Supply Chain Management, if any, in this company.(Global SCM and 2.4 IMPACT OF WAREHOUSING CORPORATION Influence of ACT ON LOGISTICS IN INDIA ‘Atencies To keep pace with the reforms initiated by the World economies, India too had taken various reform measures by enacting new laws and regulations so as to face fieree competition and sustain in the world economy. ‘The Warehousing Corporation Act, 1962 A warehouse plays vital role and supports various functions of other logistical functions to enhance the performance of supply chain to achieve overall objectives of the firm. With the passage of time, warchousing,— one of the significant functions of logistics management —has no more remained as a storage function, Over the years, there has been a paradigm shift and today it is used as a switching facility rather than a long-term storage house. The performance of a warchouse is judged by its productivity and value of performance, to achieve two polemic goals of customer satisfaction and lower cost of operation. This Act come up with incorporation and regulation of corporations with aims at providing support to warchousing of agricultural produce and other commodities, and for matters connected with it, The main objectives of this Act are: To issue @ warehouse receipt to the depositor that can be used as a negotiable document for transaction with producer, dealer, and bank. + To reduce wastage and storage losses by establishing, developing and running warchouses on seientific principles. * To help depositors in marketing the warehoused goods, * To train and develop manpower to manage warehouses built arid run-on scientific principles. The Act specifies the formulation of Central Warehousing Corporati (CWC) and State Warchousing Corporations (SWCs) for storage of agricultural produce, The CWC and $WCs are empowered to establish and run large-size warehouses at the production centres, marketing centres and ports involving a huge capital outlay. These Corporations can store agricultural produce, seeds, manures, fertilizers and other notified commodities offered by industries, cooperative societies and government agencies. The Act allows these corporations to function as agents on behalf of the government for the purpose of purchase, sale, storage and distribution of the above-mentioned goods. ‘Warehousing (Development & Regulation) Act 2007 ‘The Law of Contracts governs the business of warchousing, and it is left to the contracting parties to decide the terms and conditions of warehousing arrangements, Till the Government issues a notification, the existing law will remain in force. An important feature is that the business of warehousing is the status accorded to the warehouse receipt and whether such receipt is transferable by endorsement and delivery, along with the property in the 29An Overview 30 goods represented by such receipt. Under Section 2(4) of the Sale of Goods Act, 1930, a warchouse receipt is also included in the definition of documents relating to the goods title, But the law does not provide sanctity to such reccipt as a negotiable document, nor does it provide for the rights and obligations of warchouseman and holder of warchouse receipt. Since it is not negotiable instrument or document, it is mot possible to deal in the document title for trading in commodities and raise finance against the security of warchousing receipts. The new law fills these gaps and provides a new regulatory regime for warchousing business. Tt facilitates the issue of negotiable warchouse receipts by any person carrying on the business of warehousing. The salient features of this Act are enumerated below: * Major aim of the Act is to create provision for the advancement of warehouse and regulation of warchousc, negotiability of warchouse receipts and establishment of a Warehouse Development and regulatory authority. # A person who delivers goods to the warchouscman for storage is defined as a depositor and the goods are defined os all tangible goods excluding, actionable claims, money and securities whether fungible or not. * Definition of negotiable warchouse receipt recognizes negotiability of such receipt and provides for effect of transfer of goods represented thereby, when the receipt is endorsed and delivered (negotiated). «The law applies to any person who is registered as a warchouseman with. the authority of carying on the business of warehouse that is, maintaining warehouses for storage of goods and issuing negotiable warehouse receipts. + The law recognizes a warchouse receipt in electronic form issued by the warehouseman or by his duly authorized representative. * Any person desirous of undertaking the busmess of maintaining warehouse and issuing negotisble warchouse receipt has to obtain registration. Any person, firm, cooperative society, or any association of persons, whether incorporated or not, can function as warehouseman, + Existing warchouse business bas to apply for registration within 30 days from the date of commencement of the Act, * The law makes detailed provisions about particulars to be included in the warehouse receipts, their negotiability by endorsement and delivery, warranties on negotiation of warchousc receipt and issue of duplicate receipts. «The law provides for registration of accreditation agencies for issue of certificate of accreditation to the warchouse issuing negotiable warehouse receipts. * Any existing or firture warchouseman no intending to issue negotiable warehouse receipts is not governed by this law, Sueh a person can continue his business activity without obtaining registration. The above law has distinct benefits for the agriculturist as well as commoditytraders. Negotiable warehouse receipts will simplify trade in commodities by facilitating trade without physical handling of the commodities and other goods, Warchouse receipts as a document of title to goods can become collateral against loan, Development of modem warchouses would also enable storage of surplus crops and sale at a future date when there is demand for such goods/commodities 25 ACTS REGULATING THE LOGISTICS INDUSTRY IN INDIA The Indian logistics industry is governed and regulated by the following Acts: © Act of Carriage by Air, 1972 # Indian Carriage of Goods by Sea Act, 1925 © Motor Vehicles Act, 1988 (latest amendment made in 2022) * Multi-inodal Transportation of Goads Act, 1993 © Cartiage by Road Act, 2007 © Goods and Services Act, 2017 * Environmental Protection Act, 1986 * Consumer Protection Act, 2019 Major provisions of select Acts are discussed below: ‘The Motor Vehicles Act, 1988 ‘The Motor Vehicles Act firstly came into force in 1914 with the growth of road traffic the need for regulation on public safety and convenience was realized and the above Act which had limited functions resulted into passage of the Motor Vehicles Act, 1939. This Act was further amended in 1988 and the Motor Vehicles (Amendment) Bill, 2017 was passed by the Parliament on 10 April 2017, Key provisions of the Motor Vehicles (amendment) Bill, 2017 are as under: + Safety of pedestrians and non-motorised transport Safety of children during commuting © Recalling of vehicles © Stringent punishment for faulty road design, engineering and maintenance ‘+ Transparent, centralised and efficient driver's licensing system + Registration of new motor vehicles by vehicle dealers + Strict regulation of heavy motor vehicles (hmvs) such as trucks, buses and lorries © Stringent punishment for drunk-driving, over-speeding, violation of helmet and scat-belt laws * ~~ Revision of fines (Global SCM and Influence of Agencies 31An Overview 32 * Electronic monitoring and enforcement of road safety + Offences by juveniles * Dangerous driving ® Penalty for offences related to construction and maintenance of vehicles + National road safety board © — Transport aggregators * National transportation policy «Penalty multiplier + Compensation in hit-and-run cases Motor Vehicles Amendment Act, September 2019 Key provisions of the Motor Vehicles Amendment Act, September 2019 under which new penalty for following offences. for violation of road regulations were identified: * Unauthorized use of vehicles without license * Driving without license + Driving despite disqualification * Over specding «Drunken Driving * — Offences relating to secident * Causing obstruction to free flow of traffic * Driving without wearing heimet for motor cycle and scooter riders. * — Failure to provide free passage to emergency vehicles «Failure to use seat belt The latest amendment to Motor Vehicles Act was done in 2022 which deals with third party insurance and claims management, including filing claims with the Motor Accident Claims Tribunal. Carriage by Road Act, 2007 The Carriage by Road Act, 2007 by definition include common carriers! transport companies/goods booking agents/logistics and provides for their compulsory registration under the Act. It also prescribes procedure for suspension/revocation of their registration in case these transport companies fail to provide committed services to the consignor of goods in the country. The Act further prescribes, like in railways, that consignor of goods shall have to fill a Goods Forwarding Note in which the quantity, description, weight, packaging and value of the cargo to be transported by the common. carrier has to be mentioned with a legal responsibility of the accuracy of the facis filed in the goods forwarding note by the consignor, As such the common carrierftransport company shall be legally bound to issue consignment note/bilti/lomry receipt to the consignor/consignee.