Logi project vish (final 1)

CHAPTER 1 – LOGISTICS

1.1 INTRODUCTION

Logistics is the management of the flow of resources between the point of origin and the

point of consumption in order to meet some requirements, for example, of customers or

corporations. The resources managed in logistics can include physical items, such as food,

materials, equipment, liquids, and staff, as well as abstract items, such as time, information,

particles, and energy.

The logistics of physical items usually involves the integration of information flow, material

handling, production, packaging, inventory, transportation, warehousing, and often security.

The complexity of logistics can be modeled, analyzed, visualized, and optimized by

dedicated simulation software. The minimization of the use of resources is a common

motivation.

What is logistics?

Logistics is the management of the flow of resource between the point of origin and

the point of destination in order to meet some requirements

Planning implementing and controlling the physical flow of materials and finished

goods from point of origin to point of use to meet customers need at profit.

It is an interface between two companies which will fulfill the requirements

Logistics can include physical items such as food, materials, equipments,liquids etc.

Why logistics?

It allows for smoother flow of company processes and procedures increase

performance

Brings profit to company

Increases efficiency

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1.2 HISTORY

Logistics refers the movement of products or services to a designated location at the agreed

upon time, cost, and condition. Over the years, an entire industry has developed and today

companies hire professionals with training and experience in the field. Throughout the history

of logistics, the effective process manager has been strategic and able to take the initiative to

provide results within tight deadlines.

Origins

Ancient Roman and Greek wars are the backdrop to today's logistics. Military officers called

"logistikas" were responsible for ensuring the supply and allocation of resources, so that

soldiers could move forward efficiently. The art and science of logistics continued to find

military applications throughout the years since then, and most importantly during World

War II. The principles of military logistics have been refined for use in many industries.

After WW II, business awakened to the importance of logistics in adding value to products

and the marketing and manufacture of them. In the 1960s, it began to appear in business

literature in discussions about physical distribution, with a focus on outbound activity. The

next step was a focus on coordinating all aspects of supply chain management.     

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1.3Logistics Activities Today

Today there are many activities that are included as part of logistics:

• Filling orders

• Distribution and transportation of product

• Storage and warehousing

• Physical location of plants and warehouses

• handling materials

• purchasing

• Production planning

• Service and parts support

• Customer service

Because of the critical nature of many of these activities, companies often rely on outsourcing

some or all of their supply chain management activities. This has resulted in the development

of third party logistics companies for the most efficient movement and tracking of goods.

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1.4Logistics in different areas

Logistics recognizes that all the activities of material movement across the

business process areinterdependent and needs close coordination and these are to

be maintained as a system and not the functional silos.

System is shownas logistic mix including following functional areas.

Order processing

Information flow

Warehousing

Inventory control

Packaging

Transportation

ORDER PROCESSING

Order processing starts with the receipt of an order from a customer. It may be obtained by a

salesperson, be telephoned in, or arrive by mail. Regular buyers and sellers are often linked

electronically. As the buyer’s inventories become low, an electronic purchase order is

generated. It is communicated to the seller, whose computers will determine that the goods

are available, and the seller will inform the buyer, still using electronic methods, that the

order will be filled and shipped by a certain date. The first step in most order-processing

systems is to verify the accuracy of the order—that is, to make certain that the document

contains no internal errors that might mean the customer was uncertain about what he or she

was ordering. The next step is to verify the customer’s credit or ability to pay. After

determining from which inventory point to ship the goods, instructions are sent to that

warehouse to fill the order. At the warehouse an “order picking list” is given to a warehouse

worker, who assembles the specific order. In the packing area, it is checked and packed for

shipment, and the package is labeled. The traffic manager prepares the transportation

documents and notifies a carrier to pick up the shipment. An invoice for the goods is sent to

the buyer, and various inventory and financial records are updated. The shipper uses the term

“order cycle” to indicate the span of time between receiving and shipping the order. The

buyer uses the phrase to indicate the span of time between placing and receiving the order.

INFORMATION FLOW

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The physical distribution managers continuously need up-to-date information about

inventory, transportation and warehousing. For example, in respect on inventory, information

about present stock position at each location, future commitment and replenishment

capabilities are constantly required. Similarly, before choosing a carrier, information about

the availability of various modes of transport, theircost, services and suitability for particular

product is needed. About warehousing information with respect to space utilization, work

schedules, unit load, performances etc. is required.

In order to receive all the information stated above, an efficient management information

system would be of immense use in controlling costs, improving services and determining the

overall effectiveness of distribution. Ofcourse, it is difficult to correctly assess the cost of

physical distribution operations. But if correct information is available it can be analyzed

systematically and a great deal of saving can be ensured.

INVENTORY MANAGEMENT

Definition of 'Inventory Management'

The overseeing and controlling of the ordering, storage and use of components that a

company will use in the production of the items it will sell as well as the overseeing and

controlling of quantities of finished products for sale. A business's inventory is one of its

major assets and represents an investment that is tied up until the item is sold or used in the

production of an item that is sold. It also costs money to store, track and insure inventory.

Inventories that are mismanaged can create significant financial problems for a business,

whether the mismanagement results in an inventory glut or an inventory shortage.

Storage for inventory

If the company was to produce certain percentage of whole years output within in shorter

time,theywould need to tremendous labor and materials. So they need lot of materials within

shorter period. The goods they can get only from material inventory instead, they may

produce in slower schedule and stock them as inventory. Some type of organization may

carry inventory to ensure promptly delivery to customers.

Inventory decisions

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The important decisionsthat every company has to take regarding inventory is to order the

right quantity at right time and minimum cost. Right quantity means how much quantity to be

ordered keeping in view the demand, supply and cost aspect.

TRANSPORTATION

Transport or Transportation is the movement of people, animals and goods from one

location to another. Modes of transport include air, rail, road, water, cable, pipeline and

space. The field can be divided into infrastructure, vehicles and operations. Transport is

important since it enables trade between people, which in turn establishes civilizations.

Transport infrastructure consists of the fixed installations necessary for transport, including

roads, railways, airways, waterways, canals and pipelines and terminals such

as airports ,railway stations, bus stations, warehouses, trucking terminals, refueling depots

(including fueling docks and fuel stations) and seaports. Terminals may be used both for

interchange of passengers and cargo and for maintenance.Transportation helps to widen the

scope of market and thereby widen the scope of business. Transportation helps to maintain

price stability by ensuring proper balance between demand and supply. Due to efficient

transport system, perishable goods can be quickly transported from one area to the other area.

WAREHOUSING

A warehouse is a commercial building for storage of goods. Warehouses are used

bymanufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They

are usually large plain buildings in industrial areas of cities and towns and villages. They

usually have loading docks to load and unload goods from trucks. Sometimes warehouses are

designed for the loading and unloading of goods directly from railways, airports, or seaports.

They often have cranes and forklifts for moving goods, which are usually placed

ones standard pallets loaded into pallet racks. Stored goods can include any raw materials,

packing materials, spare parts, components, or finished goods associated with agriculture,

manufacturing and production.

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FUNCTIONS OF WAREHOUSING

1. Receiving goods

2. Identifying goods

3. Sorting goods

4. Dispatching goods to storage

5. Holding goods

6. Selecting, retrieving, packaging

7. Marshalling goods

8. Dispatching good

9. Preparing records and advices

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1.5 OBJECTIVE OF LOGISTIC MANAGEMENT

RAPID RESPONSE

F-flexibility objective of an organization: Some companies measure this as

response time to customer’s order. On an average how much time do we need to fulfill one

particular type of customer’s order in a year? This is a measure of rapid response.Logistics

should ensure that the supplier is able to respond to the change in the

demand very fast. Entire production should change from traditional push system to pull

system to facilitate rapid response. Instead of stocking, the goods and supplying on demand,

orders are executed on shipment to shipment basis information Technology plays an

important role here as an enabler. IT helps management in producing and delivering goods

when the consumer needs them. This results into reducing of inventory and exposes all

operational deficiencies. Now the management resolves these deficiencies and slashes down

costs. 

IMPORTANCE OF LOGISTICS

Logistics is an essential function in every organization. It is easiest to imagine in a

manufacturer, with forklift trucks unloading pallets from Lorries and moving them around

warehouses – but the same principles apply in any other organization. When a rock band goes

on tour they carry huge amounts of equipment. Procurement buys everything that is needed

on the tour, transport pack it andMove it to the next destination, receiving make sure that

everything arrives safely, warehousing keeps things safe until they are needed, materials

handlingMoves things between trucks and the stage, location decides where to perform. The

same types of decision are made with even the most intangible service, and An insurance

company decides what kind of branch network to have, where to Locate offices, who to buy

telephone and other services from, how to deliver information to customers, and so on.

Christopher15 supports this view, saying that ‘Logistics’ has always been a central and

essential feature of all economic activity. ‘Shapiro and Heskett16 agree, saying that, ‘There

are few aspectsof human activity that do not ultimately depend on the flow of goods from

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point of origin to point of consumption.’ Bowers OXET al.17 say that, ‘It is difficult to

visualize accomplishing any marketing, manufacturing or . . . commerce without logistics.’

To put it simply, without logistics, no materials move, no operations can be done, nothing is

made, no products are delivered, and no customers are served. Figure 1.9 suggests the role of

logistics is an essential part of every trade. Customers generate demand for products, which

operations create using necessary Resources – and logistics move everything around this

loop.

Not only is logistics essential, but it is also expensive. Unfortunately, it is difficult to

say exactly how expensive, because normal accounting conventions do Not separate logistics

costs from other operating expenditure, and there is always disagreement about the activities

to include. As a result, very few organizations can put precise figures on their logistics costs,

and many have almost no idea of the amounts involved. One obvious point, though, is that

expenditure onLogistics varies widely between different industries. Building materials, such

as Sand and gravel, have very high logistics costs compared with, say, jewelry,

Pharmaceuticals and cosmetics.

We have already mentioned the rule of thumb that logistics accounts for10–20% of GDP, but

you have to interpret such figures carefully. Malone18Suggests that the actual cost of US

logistics reached US$1.2 trillion by 2005,accounting for 10% of GDP – but this estimate

focuses on transport, which only accounts for 60% of total logistics costs.19 The UK

government says that 11% ofthe GDP comes from wholesale and retail trades and another 4%

from transport And storage, 20 suggesting that overall logistics costs are much higher.These

national figures translate into high costs for each company, and although they differ in detail,

everyone agrees that logistics is very expensive. Whether itis getting more expensive is open

to debate. Some people say that fuel, land,safety, environmental protection and employee

costs are rising and making logistics more expensive.

They argue that this is a long-term trend that will inevitably continue. An opposing view says

that improvements to logistics are more than compensating for price rises. This says that new

and more efficient methods – such as lower stocks, more efficient vehicles, fewer empty

journeys-business, lower overheads, and so on – mean that logistics costs are falling as a

proportion of product value. The Council of Supply Chain Professionals21reports a mixed

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picture suggesting that the cost of logistics in the USA more than doubled over the 20 years

to 2006, but then fell from 16% to 9% of GDP.

This is probably a common pattern, suggested that in 1980 logistics accounted for 32.5% of

the UK’s GDP, 22 but is now considerably lower.A broader survey in Europe23 suggests that

logistics costs fell from an average of 14.3% of sales revenue in 1987 to 7.5% in 2003, but

then began rising again

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CHAPTER 2

FREIGHT FORWARDING

2.1 MEANING

A freight forwarder, forwarder, or forwarding agent, is a person or company that

organizes shipments for individuals or corporations to get goods from the manufacturer or

producer to a market, customer or final point of distribution. . Freight forwarding services

guarantee that products will get to the proper destination by an agreed upon date, and in good

condition. The freight forwarding service utilizes established relationships with carriers of all

kinds, from air freighters and trucking companies, to rail freighters and ocean

liners. Freight forwarding services negotiate the best possible price to move the product along

the most economical route by working out various bids and choosing the one that best

balances speed, cost and reliability. A freight forwarding service generally provides one or

more estimates to the client along with advisement, when necessary. Considerations that

effect price will range from origin and destination to special requirements, such as

refrigeration or, for example, transport of potentially hazardous materials. Assuming the

client accepts the forwarder's bid, the freight is readied for shipping.

The freight forwarding service then undertakes the responsibility of arranging the transport

from point of origin to destination. A forwarder does not move the goods but acts as an expert

in supply chain management . A forwarder contracts with carriers to move cargo ranging

from raw agricultural products to manufactured goods. Freight can be booked on a variety of

shipping providers, including ships, airplanes, trucks, and railroads. It is not unusual for a

single shipment to move on multiple carrier types. 'International freight forwarders" typically

handle international shipments. International freight forwarders have additional expertise in

preparing and processing customs and other documentation and performing activities

pertaining to international shipments.

Information typically reviewed by a freight forwarder includes the commercial

invoice, shipper's export declaration, bill of lading and other documents required by the

carrier or country of export, import, and/or transshipment. Much of this information is now

processed in a paperless environment.

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The FIATA shorthand description of the freight forwarder as the 'Architect of Transport'

illustrates the commercial position of the forwarder relative to his client. In Europe, some

forwarders specialize in 'niche' areas such as rail-freight, and collection and deliveries around

a large port.Some forwarders handle domestic shipments only.

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2.2 OVERVIEW OF FREIGHT FORWARDERS’ RESPONSIBILITIES

Freight forwarders provide transport solutions to businesses wishing to send

packages, crates and containers from one country to another.Forwarders act on behalf of

importers and exporters to get their client’s goods to their destination on time and in good

condition. This means booking cargo with shipping lines, airlines, and rail or road carriers.

Some freight forwarders have their own road transport and may actually carry the goods

themselves.

A forwarder’s other responsibilities include preparing and checking bills of carriage,

arranging insurance, ensuring the lowest possible customs charges are levied and - where

necessary - arranging storage.This guide shows how trading conditions and insurance are

used to limit the financial risk for forwarders. It also explains international trade finance and

International Commercial Terms.

TRADING CONDITIONS AND LIMITING LIABILITY FOR FREIGHT FORWARDERS

All businesses are subject to a wide range of statutory regulations - such as employment law,

health and safety, public liability and accounting standards. There are also legal issues which

specifically affect freight forwarders and their customers.

The role of the freight forwarder is to make arrangements which enable goods to travel from

seller to buyer. This often involves a journey of several thousand miles, using more than one

mode of transport.

There must have been a sale - and contract - agreed between a seller and buyer for the supply

of goods before a freight forwarder is needed. Many of the elements of this contract impact

directly on the nature and detail of the contract eventually agreed between the forwarder and

their client - which could be the seller or buyer of the goods.

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TRADING CONDITIONS

To ensure the client and the forwarder fully understand - and agree upon - their

responsibilities in the transportation process, the client must be made aware of the

forwarder’s trading conditions. This needs to be done before details of the contract are agreed

- ideally at the quotation stage.

Trading conditions establish the circumstances under which any service is provided and

usually include limiting the forwarder’s liability in the event of a claim against them. Failure

to do this could leave the forwarder with unlimited liability - which could prove very costly.

Trading conditions also:

ensure the client knows their goods are not automatically insured

provide safeguards to help ensure the forwarder is paid once the job is done

protect the forwarder if the client fails to fully disclose the contents of a consignment, egg

hazardous material or goods of an exceptionally high value

2.3 FREIGHT AGENTS - AVOIDING THE RISK OF CUSTOMS CIVIL

PENALTIES WHEN ARRANGING EXPORTS

Freight agents act as third parties in arranging exports on behalf of exporters. These agents

are advised to ask for certain information from the exporter so they do not face the risk of

Customs Civil Penalties (CCPs). CCPs could apply because freight agents, as representatives

of exporters, also hold responsibility for the accuracy of information in documents and/or the

authenticity of documents attached to a shipment.

HM Revenue & Customs (HMRC) recommend that freight agents should routinely request

the following information from exporters:

Their UK Economic Operator Registration and Identification (EORI) number (this used to

be TURN) for use in box 2 of the declaration - see the guide on the Economic

Details of whom the goods are to be consigned to, their name and address in full

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A commercial reference that can be incorporated into the Declaration Unique

Consignment Reference (DUCR) to assist with the export audit trail

Details of where the goods are to be exported, i.e. country of final destination

Shipping or flight details (if known)

Correct value of goods and correct currency code

The Commodity Code if known, and a clear and unambiguous description of the goods,

their quantity, marks and numbers.

If the goods have been previously imported, or are later to be re-imported to a Customs

Relief, you need to know so that the correct export procedure code (CPC) can be applied.

If an incorrect CPC is used, it can lead to any Customs relief on Duty and VAT granted at

import, being liable for payment/repayment by the exporter or yourselves. If the

appropriate CPC is known, then this should be quoted on the export papers supplied by

yourselves yet, as specialists, you may still wish to verify that the code quoted is correct

Any reference numbers previously issued by HMRC such as Inward Processing Relief,

Outward Processing Relief authorizations or previous declarations should also be provided

After checking all the information provided by the exporter, you should also:

Where a UK EORI number is not provided, confirm that the exporter is not registered and

give consideration to the correct procedure to be used for the goods - i.e. is the export a

private export or, if commercial, should the exporter first obtain an EORI number?

Incorrect use of PR or UNREG terms may restrict your clients’ ability to zero rate their

goods for VAT purposes

Check that the destination is a third country and not an EU member state. Many exporters

are unaware of which countries are members of the EU and look to their agents to confirm

whether the goods qualify for export

Ensure that an item is entered for each Commodity and not bulked for convenience

Ensure that a declaration is made for each exporter and not bulked for convenience sake

(unless approved to do so within Memorandum of Understanding (MOU) approved

procedures). Where identity of the exporter cannot be confirmed, VAT zero rating may be

affected. For more information on using an MOU, see the guide on International Trade

Fast Parcel Operators

When receiving details from your customers, please use any DUCR provided. If

aDUCR is not provided then the guidance in the Tariff should be followed. In the air

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environment, air waybill (AWB) numbers are often used in the latter part of theDUCR yet

in other freight areas it is helpful, for audit purposes, to use exporters commercial

reference(s)

Owing to the increased use of official electronic records by HMRC, they strongly

recommend that, to assist exporters, the actual DUCR or Master Unique Consignment

Reference (MUCR) used or the CHIEF Export Entry Reference (EPU, Entry Number &

Date) is notified to your clients. HMRC need to be able to trace the shipment through the

traders’ records to enable them to help verify claims for VAT zero rating on exports.Many

shipments are notified via inventory booking references so these are also worth confirming

with Port loaders. Where goods have been consolidated, the higher levelMUCR should

always be used.

MANAGING THE RISKS OF FREIGHT FORWARDING

Freight forwarders have within their care - or control - goods and documents owned

by third parties that often represent large sums of money. This means good risk management

is the key to running a successful forwarding business.Freight forwarders can limit their

liability and cover some of the risks with insurance policies. However, it can be easy to

invalidate the benefits of limited liability through carelessness or ignorance. Also, some risks

are uninsurable - such as losses caused by terrorism.Risks can never be eliminated

completely, but with good practices and training, they can be minimised to acceptable levels.

This reduces the likelihood of unwanted claims that could severely reduce profits.It is

important that forwarders bring their trading conditions to the attention of the customer

before the contract is concluded. Failure to do so could prejudice insurance cover and

invalidate the protections of limited liability.

Other areas of the business where a forwarder needs to establish clear procedures -

which are understood by any staff involved - include:

getting written instructions from customers

controls over the issue and release of documents

managing subcontractors - ideally involving written contracts

handling dangerous goods - for more information, see the guide on freight forwarding -

moving goods

cargo security

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insurance claims

OPTIMIZE THE VALUE OF YOUR LOGISTICS DATA

Transportation data used in supply chain analysis typically includes product volumes,

lanes, cost per shipment and much more. Often, your freight audit and payment system is

your only source of consolidated shipping and expense data – for domestic & international;

inbound andoutbound.Cass turns large amounts of logistics data into valuable business

intelligence that enables critical expense management initiatives and more informed

decisions. Our analytics solution, CassPort, organizes data into a hierarchical OLAP (On-

Line Analytic Processing) structure. The cube structure allows you to view data from

multiple dimensions or perspectives. For example, you might want to view spend by product

category, by location and mode. You can sort and filter the data to look for interesting

patterns and trends. Such flexibility is the reason CassPort is frequently cited as the industry’s

most powerful BI engine. It’s more detailed, more user friendly and more robust than any

other.

The data provided in CassPort includes:

Expense detail down to the accessorial level

Invoice and document images, including EDI templates

Shipment details (origin, destination, mode, weight, SKU, stop-off location, etc.)

Cost allocation detail for each move

Payment details (including ACH/check number, adjustment amount and reason,

scheduled payments, etc.)

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CassPort gives shippers one authoritative source of accurate spend and related data. Slice and

dice the details any way you like.

HOW CAN YOU USE THIS DATA ?

Once you have visibility to reliable transportation data, you can

Prepare for contract negotiations 

Reduce accessorial expenses

Reduce or eliminate rogue spending

Determine landed costs

Feed upstream supply chain and financial analysis

Improve control of inbound spend

Aid in location analysis

Understand each component of your transportation

Improve capacity planning

FREIGHT AUDIT AND PAYMENT

Achieve Best Practices in Freight Audit and Payment

A best-in-class freight audit and payment solution gives shippers the tools they need for

effective transportation expense management. From easing the administrative tasks of invoice

processing, to creating cost savings through invoice audits, to delivering actionable business

intelligence, the benefits of an automated, best practice freight audit and payment solution are

many.

Choosing a freight audit and payment provider is a strategic decision. Although many aspects

of the solution are certainly tactical and task-oriented, the ability to deliver complex solutions

and powerful business intelligence is not.

Why Cass is the Industry Leader in Freight Audit and Payment

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After more than 50 years, Cass remains the largest provider, as well as the innovator, in the

freight payment industry. The world’s largest shippers continue to choose Cass for the

following reasons:

Expertise in all modes, including ocean, rail, parcel and multimodal

Processing and reporting for all move types, including outbound, inbound, third party,

intercompany and more

Advanced accounting capabilities

Global freight payment for all geographies and currencies

Commitment to process improvement

Advanced systems for the most complex transportation infrastructures and business

rules

Detailed and accurate business intelligence to support supply chain analysis

Financial strength and stability, which gives Cass the ability to scale our operations to

meet even the largest shippers’ needs

GLOBAL FREIGHT PAYMENT SOLUTIONS

Cass: Your Global Freight Audit & Payment Provider

Organizations with global transportation networks have much to gain by consolidating freight

invoice payment with one provider. Global visibility and operating standards top the list.  

One Authoritative Source of Global Spend Data

Visibility to global transportation spend is essential for effective supply chain management.

The single best source for gaining this visibility is a robust, best-practice, global freight

payment solution. Our global business intelligence platform, CassPort, provides an

integrated, global view for transportation spend, usage, and trend information.

Asingle source of global spend information will help you:

Gain a better understanding of how your transportation costs differ country to country

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Bring clarity to the complex business of managing ocean, forwarder and heavy air

shipping

Make accurately-informed international supply chain decisions

Better understand the impact of freight costs and volatile fuel costs on individual

products or raw materials

Determine landed costs for global shipments

A Global Standard for Invoice Payment

Standardizing processes globally brings efficiency and control to organizations. So does

decreasing the number of vendors providing critical services. Cass’ best-practice systems

create uniformity in reporting, accounting practices, invoice audit rules and much more.

THE CASS GLOBAL SOLUTION

All origin-destination pairs

All currencies

Currency conversion

Single global reporting platform

World’s largest global benchmarking database

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FREIGHT RATING

Superior Freight Rating Tightens Cost Controls

The Cass freight rating application, Ratemaker,is used to rate tens of thousands of shipments

each day for movements all over the world. Meeting the highest standards in freight rating,

Ratemaker supports all modes, complex geographical and mileage exceptions, all currencies

all rate types and accessorial charges.

During implementation, the Cass account team assists each client in extracting rate

information from its contracts and loading it into Ratemaker, the Cass freight rating engine,

to produce accurate rate tables. Rates must be precise and well maintained in order to

facilitate an accurate audit. Cass leverages extensive expertise in understanding all

transportation modes and billing terms, including Incoterms that will affect rating.

A comprehensive freight rating system is essential to maintaining tight cost controls. The

goal in freight audit and payment is to automate processes as much as possible. Freight rating

is key to achieving a high level of automation.

Your freight rating system serves two main functions; it enables the automated audit of

carrier invoices and freight accrual calculations.

Freight Rating for Invoice Audit Purposes

Cass clients inform Cass of their shipment activities electronically. Through secure system

integration between the Cass freight payment system and the client’s transportation

management systems (TMS), our clients transfer shipment files. Using Ratemaker, Cass rates

the cost of each shipment and creates a record within our freight payment system to later

audit against received freight invoices.

Freight Rating for Accrual Purposes

Cass clients can easily accrue for logistical expenses that have been incurred but not yet paid.

Cass provides accruals for:

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Shipments in which an invoice has been received, but not yet paid, because it is

scheduled for future payment.

Shipments that have taken place, but an invoice has not yet been received. In this

case, the Cass freight payment system is “aware” of the shipment because it has

previously received a shipment record from the customer’s TMS or other system.

The Cass freight audit and payment application reviews all invoices and distinguishes

between paid and non-paid shipments, and generates accrual files for each client. These

detailed files, customized to each client’s accounting rules, are delivered directly into the

client’s ERP or accounting system.

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CHAPTER 3

COMPANY PROFILE

3.1 INTRODUCTION

ARABITAL was born in 1989 in Milano, European center of all international business.

Arabital's President and partner Mr. EmilioCambiati has 30 years of experience in the

Middle Eastern market. He is in close contact with clients and agents alike and is experienced

with all transport needs whether it be special project to container movement to any Middle

Eastern port.Thanks to the president experience Arabital has thus achieved a leading position

throughout the Middle East and it is recognized in the forwarding world as closely linked to

the Middle Eastern workplace. Arabital’s Managing Director and partner Dr. Francesco

Gariboldi is graduated master bachelor's degree in Business Administration at the Bocconi

University in Milan. His financial background has been fundamental in the difficult task of

coordinating the administrative, financial and fiscal sector of arabital’s operations,

harmonizing financial and company strategy with the synergy and resources available.In this

way ARABITAL and its partners have built a commercial and financial alliance ideally

placedto achieve a prestigious operating level.

We “Arabital logistics India private limited” are one of the most trusted companies engaged

in rendering logistics solution and cargo transportation services such as ocean freight

forwarding services, professional freight forwarding services, air and sea freight forwarding

services, domestic freight services, open top shipping container, shipping reefer containers,

flat rack container, flat rack collapsible containers, cargo transportation services, hazardous

material packaging , hazardous handling agent, dangerous goods transportation and many

more. Our logistic services are known for being reliable, planned and cost-effective. We

operate through 90 offices across the globe, which enables us to fulfill the good movement

requirements to that clients. Due to our strong financial position we are able to coordinate

administrative, financial and fiscal sector to accomplish company objectives.

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Our organization has a separate warehouse, where different types of client’s products can be

safely stored. While rendering our logistics services, we are abide by norms laid down by the

regulatory bodies. Moreover, we are able to timely deliver our consignments as our business

is spread across Central America, North Europe, the Middle East, South-America, south/west

Europe, south East-Asia and North America. We are backed by 1000 dexterous professionals,

who enables us to carry out the entire business operations in a streamlined manner. Owing to

their constant support, we have been successful in creating a remarkable position in this

domain.

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Basic information

Business type: service provider

Year of establishment: 1989

Legal status: limited company

Warehouse services: we are offering warehouse services. The system includes modules to

cover all complex operations within the freight forwarding industry covering air freight, sea

freight, finance, sales, stores and hard functions.

Logistics services: Our logistics services is the only solution that can address all your

requirements and much more with the highest level of flexibility.

Freight services: we are offering freight services catering to freight forwarding industry

developed using latest technology. The system includes modules to cover all complex

operations within the freight forwarding industry covering air freight, sea freight, finance,

sales, stores and hard functions.

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Freight forwarder: As a freight forwarder are you worried of managing the multi-location

operations we wants to have an integrated modular facility to avoid double entries, a system

that dose not allow you to fail in any of the activities that you are suppose to perform.

Forwarding and logistics services is the only solution that can address all your requirements

and much more with the highest level of flexibility. Freight forwarding is a service catering to

freight forwarding industry developed using latest technology. The system includes modules

to cover all complex operations within the freight forwarding industry covering air freight,

sea freight, finance, sales and stores.

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3.2 CORPORATE PHILOSOPHY

OUR MENTORS

We have progressed immensely under the guidance of our mentor “Mr. EmidioCambiati” and

“Dr. Francesco Gariboldi”. Mr. EmidioCambiati holds vast experience of 30 years in the

Middle Eastern markets. Being the president and partner of our organization, he maintains

close coordination with the clients and agents, so that the containers are safely delivered to

the clients' premises.

Dr. Francesco Gariboldi is the managing director and a partner, who is responsible for

coordinating the administrative, financial and fiscal sector of our company. From Bocconi

University in Milan, he has completed his master bachelor's degree in business

administration. With the maximum utilization of available resources, he has achieved the

company objectives.

Our Mission

"Our mission statement is to be the most efficient and comprehensive distribution services

network through a continuous effort in upgrading the key elements that form the very basis of

service.

Service Portfolio

We are one of the leading organizations, engaged in rendering Cargo Transportation Services.

Our organization has wide spread network spread across the different parts of the globe,

which helps us in transporting clients goods, within the predetermined time-frame. We are

capable of transporting goods by the medium of road, air and sea transport. Moreover, we

handle all kinds of complex documentation issues, while rendering these services.

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SERVICES COMPRISES:

• Sea Freight Services

• Air Freight Services

• Project Forwarding

• Freight Forwarding Services

• Custom Clearance

• Transport Logistics

• Air Import & Export

• Warehouse Service

Some highlighting features of our services are:

• Consignment handled are insured ensuring no loss to customers

• Deliveries made within shortest time period

• "Door to door" delivery services

• 24 hours cargo pick up services by use of well maintained vehicles

• Custom clearance services delivered for transportation of cargo through air

• Based on specific cargo requirements as well as their budgetary constraints, carrier

Options provided to client

• Competitively priced services

We provide Air Freight services to many international destinations such as North America,

Latin and South America, Europe, Australia, New Zealand, the Middle East, the Indian Sub-

Continent, and South Africa.

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The steps of our Sea Freight Services are:

• Cargo Booking & Pick-up

• Delivery Verification

• Destination Customs Clearance

• Export Customs Clearance

• Export Documentation Preparation

• Forwarding

• Freight Consolidation

• Insurance Services

OUR TEAM

We have a team of 1000 expert professional, which is well aware about the business demands

and service implications. Hence, they can fulfill the logistic demands of various business

segments like:

• Institutional establishments

• Export as well as import establishments

• Corporate business houses

• Other companies who requires supply chain and logistics services

In order to provide status report of import as well as export shipments, our team members

follow through each & every shipment.

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Team:

Quality controllers

R & D personnel

Packaging experts

Administrative officials

Unskilled and other support service personnel

Skilled workers

Technical & Semi Skilled Workers

Moreover, these professionals work hard to attain the organizational objectives, under the

able guidance of the management.

QUALITY ASSURANCE

Being a quality conscious organization, we ensure that the Cargo Transportation Services are

rendered as per the guidelines laid down by the regulatory bodies. We ensure complete safety

of client’s consignments during transportation. Our organization has a capacious warehouse,

where the client’s products are stored safely. Being aware about the custom rules, we handle

complex paper works for our clients. Moreover, our quality controllers ensure that the logistic

services are rendered to the clients on the basis of ethical grounds.

We undertake the following steps, to maintain consistency in our logistic services:

Providing complete logistic solutions that fulfill complete packing assistance & cargo

movement requirements

Well defined process approach for safety of shipped consignment

Maximum precaution is taken while packing as well as unpacking of breakable and

bulk goods

FACILITIES

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We have required facilities that help us in rendering effective Cargo Transportation Services

to the clients. Our company operates through 90 offices across the globe, which enables us to

render the logistic services to the clients. These offices are equipped with latest

communication facilities, which enable us to communicate with partner, colleagues and

customers.

Our company provides solution for cargo, storage transportation and clearing of all kinds of

perishable & delicate goods, electronic components and heavy duty machines. Moreover, for

successful handling of stocks in safe manner, we have set up a voluminous warehouse. We

have developed excellent warehouse management system to handle our processes. Our

warehouse professionals conduct the task of reports information and data-collection on

inventories, processing and order placement.

BUSINESS NETWORK

The business network of our company is spread across the different parts of the world,

enabling us to render effective logistic services. We have 90 offices across different

destination for managing the consignments transported to various international destinations.

Owing to our excellent network, we are capable of transporting goods safely to client’s

premises.

The network of our company is spread across the following international destinations:

East Asia Central America

East Europe North Europe

South/West Africa Middle East

North Africa South America

East/Middle Africa South/West Europe

Caribbean South East Asia

Indian Subcontinent North America

Australia/NZ

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We execute our logistic services through the below mentioned offices:

6 African offices

17 Middle East offices

22 Far East offices

9 Indian offices

6 Italian offices

26 European offices

3 North American offices

Client Satisfaction

Being a client centric organization, we ensure that the requirements of the clients are fulfilled

in the best possible manner. Our logistic services are offered to the clients at cost effective

rates. By use of well maintained vehicle, we ensure 24 hours cargo pick up. We have a

network spread across Australia/NZ, the Indian Subcontinent, Caribbean, East/Middle Africa,

North Africa, South/West Africa and East Europe, which enable us to timely deliver the

shipment. Moreover, we have set up 90 offices across the different corners of the globe to

serve the clients more efficiently.

We also follow a set of actions for ensuring highly effective services to our clients such as:

Answering inquiries of clients

Complete documentation support

Consultancy for most effective mode of shipment

Complete customs clearance made prior to shipment

Constant tracking of cargo during transit stage

Timely delivery

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WHY ARABITAL?

Being a renowned Freight Forwarder company, we fulfill the goods movement requirements

of the clients regarding packaging, transportation, warehousing, loading & unloading and

insurance of goods. We have attained immense market appreciation, owing to our effective

logistic services. Some our strengths, which differ us from our competitors are:

Rich industry experience in good movement and various aspects of relocation

Operations handled by experienced industry professionals

Delivering efficient, reliable and affordable logistic solutions, we adopt consistent

service approach

Extensive destinations covered in India and abroad

Extensive experience in successfully handling different commodities

Customer centric business policy and actions

Committed to achieve customers' delight

Highly efficient working procedures

Strong internal working systems

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Import/Export Sea Freight

General Agent of Arabital Lines Corporation

Full container load service (FCL) + consolidation service, less than container loads (LCL) to/from

Europe, Middle Eastern countries and Far Eastern countries

CFS Operation in all our warehouses

Cargo expediting:

Readiness date

Vessel departure and arrival details

Documentation flow

Final delivery at site

Door to door service

Cargo quality control center for big customers

Packing Service

Warehousing

Customs clearance

Embassy and consulate legalizations

CFS import operations at port area, or handled in all our

Arabital warehouse

3.3FORWARDING PROCEDURE

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In this procedure initially the exporter or the shipper (who wants to export the goods)contacts

a particular CHA by sending all the details of consignment such as port of loading and port of

discharge, nature of contract, insurance, freight, gross weight, net weight, description of

goods will be exported. Total amount of government benefits will also be allowed.The CHA

then informs the particular freight forwarding agent about the proposal. The forwarder then

contacts the shipping company regarding the vessel, containers etc. and then sends the

quotation to the CHA.The CHA forwards it to the shipper. If he agrees the order is then

finalized and the final booking of the containers is being done. The shipping company then

send a booking list to the forwarder which containsdetails such as the nature of product, size

of container, vessel, port of loading,port of destination etc. The forwarder the contacts its

transporter to collect the empty containers from the port and Then goods are stuffed and

arrangement are made to send containers in load port. After getting containers inside the port

goods are loaded on planned vessel for its transport towards destination. After that bill of

lading is released from carrier arranged for transporting of goods.

The main documents required during this procedure are:

1. Invoice packing list

2. SDF form (statutory declaration form)

3. Shipping bill

In order to carry out any export procedure the export company/forwarding agent needs

to create an A.D code at the initial stage that is during the first consignment…and the A.D

code is then valid till the existence of the company/forwarding agent.

The documents required for generation of A.D code are:

1. IEC Copy

2. Bank details

3. Pan card of organization

4. Authority letter

DOCUMENTATION

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TO,

THE DY COMMISSIONER OF CUSTOMS

EDI SECTION, EXPORT DEPT.

NHAVA SHEVA.

SUB:-A.D CODE AND ITS IFS CODE REIGN.

Respected sir,

With reference to above, we are enclosing herewith the relevant document for and code,

drawback A/C and IFS. Code registration

We here by our authorize CHA STANDARD SHIPPING AGENCY 11/1010, HANDLE

THE SAME ON OUR BEHALF.

Thanking you,

Yours faithfully

Bank account registration form

(For drawback purpose)

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TO BE TYPE ON BANK LETTER HEAD NO HANDWRITING ALLOWED

DT.

The Asst. Commissioner of Custom

Export Dept,

NhavaSheva,

Sub - Registration of AD. Code, DBK A/C. & I.F.S. CODE

This is to certify that the M/S. ------ maintaining Current Account in our

(Branch name) since -----

IEC NO : ----

BANK NAME : ----

BANK ADD : ----

A/C. NO : ----

A.D.CODE NO. : ----

IFS.CODE NO. : ----

We certify that the above details are correct.

For: (EXPORTER name)

For: (bank name) proprietor

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AUTHORITY LETTER TO CHA

TO,

The DY.COMMISSIONER OF CUSTOM

EXPORT/SIIB DEPT.

J.N CUSTOM HOUSE

DISR: RAIGAD

Sub-authority letter for export custom clearance

Dear Sir

We hereby authorize you, M/S.STANDARD SHIPPING AGENCY(CHA NO.;11/1010)as

our customs house agent henceforth to represent us in customs to complete customs and

other related formalities in connection with our export consignments.

IEC.NO. ------

PAN NO-------

Thanking you

Yours faithfully

Exporter name and stamp

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COMPANY NAME

IEC NO:

IFS NO:

BANK NAME:

BANK ACCOUNT NO:

BANK ADDRESS:

A.D CODE NO:

I declare that the above details are correct.

For – (PARTY NAME)

PROPRITOR

(NAME)

We certified that the above details are correct

Signature of the bank manager along with the official seal no.

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CHAPTER 4

IMPORTANT LOGISTIC FUNCTIONS OF ARABITAL

4.1FUNCTIONS

1-TOTAL LOGISTICS

Total Logistics is an independent management consultancy specializing in all aspects of

commercial supply chains. Our work encompasses the complete scope of logistics, from

strategy definition to implementation and project management. Supported by class-leading

modeling tools, our experienced consultants deliver step change improvements to our

customers' operations. Our experience covers all industry sectors, from electronics to FMCG,

heavy industry, automotive and specialist retail. Our clients comprise major companies such

as Nestlé, Adidas, Coty, TK Maxx, Oxford University Press, Tesco, Unilever, Serco and

Coca-Cola Hellenic. Arabitaloperate on an international scale and have offices in the middle-

east and gulf countries,

Specialties- Supply- chain, logistics, consultancy, network modeling, distribution strategy,

warehouse design, inventory management, benchmarking, project management, change

management

2.SEA FREIGHT FORWARDING

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Our organization provides different types of Sea Freight Services to the clients at cost

effective rates. We are associated with reliable carriers, which enable us to safely deliver

clients' goods within the predetermined time frame. Our organization controls different

types corridors for better coverage, cost-effective rates, more sailing and flexible closing.

Goods are transported on reliable liners and till the final destination, we take maximum

care of goods. 

Advantages

Export license

Commodity inspection

Customs clearance

Prompt delivery

Careful transportation

3.-Warehouse Services

We are offering Warehouse Services. The system includes modules to cover all complex

operations within the freight forwarding industry covering air freight, sea freight, finance,

sales, stores and hard functions.

Warehouse Rental Services

We are engaged in rendering Warehouse Services to the clients, so that they can safely

store their goods. Our services are availed by renowned manufacturers, traders and

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suppliers from different parts of the country. Moreover, our warehouse is free from pests

and rodents as we take various pest cleaning measures.

Bonded Warehouse Services

We are one of chief organizations when it comes to providing all kinds of temporary

Warehousing services. Our niche lies in the fact that we give warehouses for long as well as

for short durations of time to store staple items like sugar, grains and other items.

Warehouse Management Service

We are also engaged in offering trained and experienced professionals for efficient

Management of Warehouse.

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Cargo Warehousing Services

We are one of the top ranked Logistic companies of India engaged in providing Cargo

Warehousing Services.

Dangerous Goods Inspection Services

Cargo and inspection are two complimentary and interrelated tasks. No cargo can start off

without being inspected, and similarly, the inspection process also happens at the

destination location.

The inspection officer must make sure that the dangerous goods are well organized, so that

they do not reach with each other. Any damages and contamination possibilities have to be

eliminated at the preliminary stage itself.

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4-Custom Clearance Services

We are involved in rendering different types ofCustom Clearance services to the clients.

Being an authorized custom house agent, we handle documentation, custom broking and

inland clearance for our clients. Our custom freight and custom clearance services include

carting / receiving goods, custom documentation and examination of shipments.

Furthermore, we handle all kinds of Custom Clearance paper works for our clients. With

ample experience and domain knowledge,we specialize in providing pour customs with a

range of custom clearance services. these solutions are delivered as per the exact needs

and requirements of our customers. These quick ,prompt and hassle-free services include

end to end solutions include the following duty drawback DEPB registration advance

license verification (DEEC AUDIT) bond cancellation adv.EPCG discharge of bank

guarantee.EPCG focus market registration focus product registration drawback.

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5- Cargo Transportation Services

Cargo Transportation Services

We are engaged in offering a wide range of Cargo Transportation Services to our clients.

The wide range of these services include discharge and loading of bulk, baggage, container

and other commodities. We transport the cargo to the loading location, upload the cargo in

containers and other material, and complete the related shipping documents. 

Dangerous Goods Transportation

Dangerous Goods Transportation products may include:

Combustible products.

Toxic poisonous substances.

Corrosives and all kinds of oxidizing agents.

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4.2CONTAINER DIMENSION

Our dry containers come in several sizes and designs:

• 20’ with payload up to 28.2 metric tons

• 40’ 8’ 6” with payload up to 28.8 metric tons

• 45’ 9’ 6” high with a total capacity of 85 cubic meters

We offer various types of extra equipment:

• Hanger beams which allow transport of garments on

Hangers without further packing

Our dry containers come in several sizes and designs:

• 20’ with payload up to 28.2 metric tons

• 40’ 8’ 6” with payload up to 28.8 metric tons

• 45’ 9’ 6” high with a total capacity of 85 cubic meters

We offer various types of extra equipment:

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• Hanger beams which allow transport of garments on

Hangers without further packing

• Lashing bars and lashing rings to give your cargo

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CHAPTER 5

SUPPLY CHAIN

5.1 INTRODUCTION TO SUPPLY CHAIN MANAGEMENT

A supply chain is a network of facilities and distribution options that performs the

functions of procurement of materials, transformation of these materials into intermediate and

finished goods, and the distribution of these finished products to customers. Supply- chain

exist in both services and manufacturing organizations, although the complexity of the chain

may vary greatly from industry to industry and firm to firm.

Another definition is provided by the APICS dictionary when it defines SCM as the design,

planning, execution, control and monitoring of supply chain activities with the objective of

creating net value, building a competitive infrastructure, leveraging worldwide logistics,

synchronizing with demand and measuring performance globally.Supply chain management

is the process of planning, implementing and controlling the operations of the supply chain

with the purpose of satisfying the customer’s requirement as efficiently as possible, supply

chain spans all movement and storage of raw materials, work in progress, inventory and

finished goods from the point of origin to the point of consumption.

Supply chain is a system by which organizations source, make and deliver their

products or services according to market demand.

Supply chain management operations and decisions are ultimately triggered by

demand signals at the ultimate consumer level.

In other words supply chain management is a set of approaches used to efficiently

integrate.So that the product is produced and distributed

Suppliers

Manufacturers

Warehouses

Distribution centers

In the right quantities

To the right locations

And at the right time

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5.2 SUPPLY CHAIN MANAGEMENT TODAY

If we take the view that supply chain management is what supply chain management

people do, then in 1997 supply chain management has a firm hand on all aspects of

physical distribution and materials management. Seventy-five percent or more of

respondents included the following activities as part of their company’s supply chain

management department functions:

Inventory management

Transportation services procurement

Materials handling

Inbound transportation

Transportation operations management

Warehousing management

Moreover the supply chain management department is expected to increase its range of

responsibilities, most often in line with the thinking that sees the order fulfillment process

as one coordination set of activities. Thus the functions most often cited as planning to

formally include in the supply chain management are:

Customer service performance monitoring

Order processing/customer service

Supply chain management budget forecasting

On the other hand, there are certain functions which some of us might feel logically

belong to supply chain management which companies feel are the proper domain of other

department. Most difficult to bring under umbrella of supply chain management are:

Third party invoice payment/audit

Sales forecasting

Master production planning

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5.3 IMPORTANCE OF SUPPLYCHAIN MANAGEMENT

1. Reduced inventories along the chain efficiently supply chain management helps to

reduce the inventory level to be maintained by each member in the chain. This is

possible due to good co-operation and coordination among the members in the chain.

2. Better flow of informationSupply chain leads to a better flow of information among

the members of the chain rightfrom the supplier of raw materials up to the final

customers. In supply chain Management the information flows from top to bottom as

well as from bottom to top.Hence, the firm is able to adopt to changes and provide

response whenever needed.

3. Customer satisfaction when a particular product is introduced and advertised in the

market,then the product hastobe made available in all the markets of the country so as

to make product accessible to the customer. Thus, the supply chain management helps

in customer satisfaction by creating place utility and providing the customers with

demanded products at convenient locations.

4. Competitive edgeSCM provides a competitive edge to the company in the market by

facilitating the availability of goods in all the convenient locations easily accessible to

the customers.

5. Builds trustSCM builds trust and cooperation among members of supply chain by

sharing true information. Better trust among members leads to a win- win situations.

6. Avoids wastageDue to adaption of supply chain management techniques, the level of

wastage gets reduced which adversely reduces the manufacturing cost, inventory cost,

labour cost etc.

7. Quick responsesthe SCM helps the company in giving quick response to their

customer due to adoption of activities like JIT and EDI etc.

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5.4 OBJECTIVES OF SUPPLY CHAIN MANAGEMENT

Supply chain management is consists of all parties (including manufacturer, marketer,

suppliers, transporters, warehouses, retailers and even customers) directly or indirectly

involved in fulfillment of a customer. The main objectives of supply chain management are

to improve the overall organization performance and customer satisfaction by improving

product or service delivery to consumers.Supply chain management involves movement and

storage of all materials including raw materials, work in progress and finished goods.

The fundamental objective of supply chain management is to add value or to maximize the

overall value generated. Supply chain management becomes a tool to help accomplish

corporate strategic objectives. The other objectives of supply chain management are:

Replenishment of the material or product whenever required

Cost quality improvement

Shortening time to order

Faster speed to market

Enhancing customer service

Expanding sales revenue

Reducing inventory cost

Improving on-time delivery

Reducing order to delivery cycle

Reducing lead time

Reducing transportation cost

Reducing warehouse cost

Reducing /rationalize supplier base

Expanding width/depth of distribution

Reducing working capital

Taking assets of the balance sheet

Accelerating cash to cash cycles

Increasing inventory turns

To look for sources of revenue and cost

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5.5APPLICATION OF SUPPLY CHAIN MANAGEMENT IN

ORGANIZATION

The most important thing is to first understand the customer’s true needs. Companies that

want to improve their competitive position by reducing their order-to delivery cycle are

looking to supply-chain management to help them achieve that goal. Because SCM

encompasses all processes involved in producing and delivering a product to the customer, it

offers the opportunity to identify bottlenecks that can slow down activities along the entire

supply chain.

Young berg gives the example of an automaker that wants to build individual cars to order for

delivery within one week. A supply chain analysis might discover that the seat supplier

doesn’t have the capability to produce and deliver seats in a variable colourquence —

jeopardising the car manufacturers ability to offer its customers the kind of services its

envisions. Inevitability, such problems will affect delivery to the final customers, much as a

domino falling at the front of a line eventually causes the one at the end to topple too.

To obtain the greatest possible improvement in the total product cycle, it may be helpful to

think of the supply-chain dominoes falling backward. In other words, under a supply chain

management philosophy, customer demand is what drives the activities required to fulfill that

customers demand, all the way back to raw materials suppliers at the beginning of the

production process. That is why it is important to first understand the customer’s true needs,

then work back from that, more house says: once the correct information is in hand,

companies can design their supply chain processes to provide what the customer truly needs.

Without that information says young berg, companies risk falling into the ‘wasted excellence’

trap, providing a higher service level or faster cycle time than is necessary. “It doesn’t

provide you with a competitive advantage, but it saddles you with costs that may not yield

you anything,” he explains

The process delivers an error free shipment, completed in one handling step. Provides a direct

quality feedback to the operator and allows you to manage each worker based on his or her

individual performance=quality input.

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CHAPTER 6

TIME MANAGEMENT

6.1 MEANING

Just in Time or JIT method creates the movement of material into a specific location at the

required time, i.e. just before the material is needed in the manufacturing process. The

technique works when each operation is closely synchronized with the subsequent ones to

make that operation possible. JIT is a method of inventory control that brings material into

the production process, warehouse or to the customer just in time to be used, which reduces

the need to store excessive levels of material in the warehouse.

JIT is a method to plan the time and optimize the complete supply chain from raw material

(production) until the purchase of the good to the end customer. Many advance industries are

using just in time protocols to reduce cost by managing inventories. Any firm assisting in the

implementation of just in time inventory management will see increasing demand over time.

The basic idea of this method, which was developed in the years around 1980 in Japanese

companies, is to decentralize the material procurement and to adjust it in the short run,

depending on the manufacturing and order situation. Thus, stocks can be reduced and

resulting cost reduction takes place. JIT is mainly used in high volume industries such as

automotive industry.

JIT Case example: Production and Logistic of SMART

Smart-vile located in Hambach (FR) is unique in view of logistics, because they have

completely no stock. Only a small buffer at the assembly line. Nearly all suppliers are located

around the assembly line within Smart-vile and deliver their parts just-in-time or even just-in-

sequence. The assembly line looks like a “+” and the suppliers are located in the corners

between the lines. Have a look on the following graphic. Nearly all supplier equip smart with

ready modules. This is called “Modular Sourcing”.

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About Just-In-Time (JIT) concept

What is the Just-In-Time concept?

Since the emergence of this term it was difficult for sciences and business people to define it.

Companies are using JIT concept, but actually, they are not realizing that JIT must be

integrated in company philosophy and no just dead letters. Just in Time (JIT) production is a

manufacturing philosophy which eliminates wasteAssociated with time, labor, and storage

space. Basics of the concept are that the Company produces only what is needed, when it is

needed and in the quantity that is needed. The company produces only what the customer

requests, to actual orders, not to forecast. JIT can also be defined as producing the necessary

units, with the required quality, in the necessary quantities, at the last safe moment. It means

that Company can manage with their own resources and allocate them very easily. Following

figure shows a drawing of the JIT concept.

Smart is the car-manufacturer with the lowest vertical integration, worldwide (only 10%).

About 70% of all needed materials are produced from suppliers within Smart-vile and

delivered straight to the production line. 20 % is delivered in JIT-principle from suppliers

located outside of Smart-vile.

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As a positive result, no warehousing is needed at all. Every supplier has access to the

individual Order-data of each car. Thus, they can deliver the modules in the exactly needed

order. Even ready cars are stored only few days, as smart only produces on order. Smart has

its own train station to ship their cars worldwide.

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6.2 BENEFITS AND PROBLEMS

Benefits that JIT concept can provide to the company are huge and very diverse. The

Main benefits of JIT are listed below:

1. Reduced set up times in warehouse - the company in this case can focusesOn other

processes that might need improvement;

2. Improved flows of goods in/through/out warehouse - employees will be able To process

goods faster;

3. Employees who possess multi-skills are utilized more efficiently - the Company can use

workers in situations when they are needed, when there Is a shortage of workers and a high

demand for a particular product?

4. Better consistency of scheduling and consistency of employee work hours If there is no

demand for a product at the time, workers don’t have to be Working. This can save the

company money by not having to pay workers For a job not completed or could have them

focus on other jobs around the Warehouse that would not necessarily be done on a normal

day;

5. Increased emphasis on supplier relationships - having a trusting supplier Relationship is

important for the company because it is possible to rely on Goods being there when they are

needed;

6. Supplies continue around the clock keeping workers productive and Businesses focused on

turnover - employees will work hard to meet the Company goals.

Also, the benefits of JIT include: better quality products, higher productivity and lower

production costs. For better understanding of JIT benefits, figure 3 shows comparing between

flexible systems (based on Just-In-Time systems) and buffered/rigid Systems.It is certainly

that JIT concept can improve business performance and efficiency. Employee morale is likely

increased and that is one most important benefit that comes from using the foregoing concept.

Of course, we must not forget that now the Company is allowed to remain competitive.There

are several problems which are connected within JIT concept. Maybe the Major problem with

JIT operation is that it leaves the supplier and downstream Consumers open to supply shocks.

With shipments coming in sometimes several Times per day, the company is especially

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susceptible to an interruption in the flow. For that reason, some companies are careful to use

two or more suppliers for most of their assemblies. The hidden costs are present and they

include labor union Leverage, problems with flexible manufacturing systems (FMS),

problems developing For the flexible workforce, difficulties with supplying commodities

using JIT, increased Expenses for suppliers.

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6.3 FINDINGS

As I visited the organization I found that the organization has around 1000

expert professionals working for the organization who are well aware about the entire

business. They know how to fulfill the logical demands of various business segments through

effective strategy n efficient decision making. ARABITAL INDIA PVT is on the path of

success and can become the leading freight forwarding organization through their sincere

efforts.

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Personal interview

1. How do you feel working in this organization? I am very much satisfied and comfortable working in this organization and

wish to render service for many more future years in this organization

2. Has the firm always been successful in delivering the products without delay in said time?

Yes the firm has always been successful in delivering the services on time due to proper scheduling and planning.

3. Do you carry out your business activities with only one particular shipping company?

No, we have tie- up with many other shipping companies also.

4. Who is the other third party involved in your business activities? The other third party involved in our business activities is CHA and BROKER.

5. What is the mode of payment offered to the clients by the Arabital? The mode of payment offered to our clients is through cheques,RTGS,NESP.

6. How many clients do you have in total? Most of our clients are from the gulf countries.

7. What are the benefits provided by the government in this sector? There are no benefits provided by the government in this sector.

8. How do you cope up with the natural calamities? We cope up with the natural calamities by maintaining proper warehouse

facilities, by proper adequate storage planning and proper packaging of goods.

9. What is the future of logistics in India? The future of logistics is very bright in India as logistics is now becoming an

important part in the economy.

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10.What about the career aspect for students in this field? Students interested in logistics and freight forwarding have a bright future in

this field. One can gain immense knowledge relating to transportation n freight forwarding activities in this field.

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6.4 CONCLUSION AND RECOMMENDATONS.

Implementation of any project related to logistic is just like a magician’s trick of pulling a

scarf out of his hand, and as he pulls it the scarf keeps going and going. It is a good way to

think of planning and running a project related to logistic. At first you see the initial scarf –

the need to plan the logistics flow of a product through a supply chain –and while it may be

large you think you understand the scope of it. But as you pull at it, many more scarves –

many aspects of the project – become apparent, and like watching the magician, you’re not

always sure where they are coming from. Based on the recommendations and suggestions for

logistics arrangements, till date more than 70% of material has been dispatched by siemens.

More than 450 no’s of vehicles have moved and LR’s have been issued under this project and

all the LR’s have been duly receipted at site without any misplacement and damage to

material. All this has beenachieved with proper planning and co-ordination amongst the

entire channel partners i.e. Siemens, suppliers and logistic service provider.

Main recommendations to handle logistics activities

1. Complete transparency amongst all the channel partners.

Proper co-ordination and transparency is very much required amongst all the channels

partners, so that effective utilization of resources can be done at all the stages of the logistic.

Along with this timeliness of the information flow is very much important in such type of

project. For example the information about the exact size and weight of the consignment

should be available from supplier to the transporter for enabling him to finalize the most

suitable vehicle

2. A sense of mutual trust and risk sharing mechanism.

Since in this type of logistic project three main parties are involved and the main priorities

are different of each of them. For success of the project in the most cost effective way, a

sense of mutual trust and risk bearing ability should be their.

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3. Selection of feasible and practical approach.

One of the most important thing in such type of project is to evaluate no of feasible options

and then selecting the most practical option or the approach. Before planning any activity,

select no of options available considering the various resources available and the limitations.

And then the most feasible approach should by implemented.

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WEBLIOGRAPHY:

www.arabital.com

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