Order Received to supply 50, 000 Eggs daily

THE EGG STORY

Convenient & Economic Transportation - Railways

Used Modern Packaging & Trial Run Conducted

RESULTS

Disastrous !!!!!

Breakage Over 25%

EGGS EGGS

INNOVATIVE PACKAGING - EGGS

Eggs in EARTHEN pots Reached Destination

with near ZERO Breakage

Savings Added to Bottom Line

PURPOSE OF PACKAGING

Containing Product & Defining Amount Consumer Will Purchase

Protect Product From Contamination/ Environmental Damage/ Tampering/ Pilferage/ Theft

Facilitate Transportation/ Storing of Products

Carry Information & Colorful Designs That Make Attractive Displays

Packaging is Concern Of Logistics/ Production/ Marketing/ Legal Departments

PACKAGING TYPES

Consumer Packaging/ Interior Packaging Marketing Refer To as ‘Silent Sales Person” Provides Information Important for

Selling Product Motivating Customers To Buy Giving Maximum Visibility on Retail Shelf

Industrial Packaging/ Exterior Packaging Primary Concern of Logistics Provides

Protection to Product in Storage/ Transportation Information On Desired Method of Handling Ease of Handling

Allows Effective Use of Transportation Vehicle

Both Types Overlap & Need Simultaneous AttentionWhile Developing/ Designing Effective Packaging

UNITISATION

Process of Packaging Products Most Suitable Economically Viable

Unit Size of Packaged Product Consumption/ Usage Pattern Convenient, Safe and Economical Handling Realistic Weight/ Volume Ratio (Wt/ Cu)

Size and Form of Unit at One Level Affects Unitisation at All Levels of Distribution Channel

EXAMPLES

CONTAINERISATION

• Ensures Efficient/ Safe Transportation• Goods Arrive Intact/ in Good Shape• Clean/ Showroom Appearance Undiminished • Standardised Sizes Fit to Form Modular Loads• Standardised Strength/ Weight Limits for Stacking

PALLETISATION

• Pallet Sizes Standardised as Units• No of Cases/ Boxes, Product-Size Dependent

CONTAINERIZATION

Ideal in Load Unitization/ Material Handling System Compatibility

Containers - Large Steel Boxes For Storing/ Transporting Goods

Containers Made Waterproof/ Pilfer-Proof Allowing Storage in Open Yard Eliminating Need for Standard Warehousing

Standardized Material Handling Equipment Can be Used To Move Containers

Standardized Containers Used in International Trade/ Goods Movement

Costs Restrict Extensive Use of Containers in Material Handling

Easy Interchange Between Different Transportation Modes

Containers Used Extensively For Long Distance Hauls

In Multi-Modal Transportation Containers Move as UNIT From Seller to Buyer

MECHANISED HANDLING INCREASES SPEED

SEA-FARING CONTAINERS

PALLETIZATION

Pallet is Portable Platform Made of Wood/ Plastic/ Corrugated Cardboard for Stacking Goods During Transportation/ Storage

Often Goods Placed on Pallets During Manufacture And Remain Palletized Until Order Picking Requires Breaking Bulk Quantities

Palletization Helps Movement of Goods Using Standard Mechanical Material Handling Equipment To Handle Wide Variety of Goods

Palletization Helps in Load Unitization To Increase Weight/ Volume Handled Per Labour Hour

Palletization Increases Space Utilization By Providing More Stable Stacking Allowing Higher Stacks in Storage

Popular Pallet Size Standardized in Many Countries USA – (40 × 48) Inches -Easily Placed Side by Side in Container/ Truck Australia – (46 × 46) Inches Brazil – (1200 × 1000) mm India/ Europe – (48 × 48) Inches/ (32 × 40) Inches/ (36 × 42) Inches

REUSABLE BOX BIO-DEGRADABLE PACKAGING MATERIAL

PALLETWith

Cartons

EXAMPLES

BENEFITS OF UNITISATION

� Pilferage/ Theft in Transit Reduced

� Reduced Insurance Cost

� Simpler Documentation

� Less Individual Item Packaging

� Lower Transportation Costs

� Mechanised Handling Increases Speed

� Facilitates Computerisation

EFFECTIVE PACKAGING

Enhances Point of Sales Impact

Extensively Uses Reusable/ Recycle Able Boxes/ Pallets That are Standardized By Industry

Facilitates Handling/ Picking/ Inventory Control Through Use of Efficient Identification Systems - Bar Coding/ RFID Technologies

Eco-Friendly, Bio-Degradable Packaging Material

Effective Packaging Fulfils Objectives of Containing/ Protecting/ Communicating At Lowest Costs

SERVICE UTILITY

Transportation Provides PLACE Utility

Reaches Products to the Market/ Customer

Transportation & Warehouse Provide TIME Utility

Right Service At Optimum Costs Decided By Warehouse/ Transportation Trade- Off

Ensure Product Reaches the Market/ Customer in TIME

Supply Chain Success Closely Linked To Appropriate Use of Transportation

WAREHOUSE/ TRANSPORTATION TRADE-OFF

CostsRs

No of Depots

Total Cost

Depot Costs

TransportationCost

TOTAL COSTS DECREASE AS NO. OF DEPOTS INCREASE TILL A MINIMUM IS REACHED BEYOND WHICH COST-INCREASE IS RAPID

TRANSPORTATION MANAGEMENT

Satisfying Customers While Minimizing Costs & Making Profits

Maximizing Value of Services Offered By Correct Interpretation of Transportation Service Needs of Customers

Setting/ Negotiating Prices High Enough To Cover Delivery Costs Incurred While Making Acceptable Profit Contribution

Delivering Desired Services Most Efficiently & Effectively

Transportation Management Involves Making Decisions on How To Create Desired Service Level Using the Right Combination of

• Transportation Modes• Material Handling Systems• Storage Facility

Deciding on the Most Appropriate Vehicle Scheduling & Routing Arriving at Right Prices To Be Charged For Making Profit While Remaining Competitive

TRANSPORTATION DECISIONS

CARRIERS/ Transport Service Providers That Move The Goods/ Material

Key Players in Transportation Management

SHIPPERS That Require to Move Goods/ Material From One Location to Another Within the Supply Chain

Transportation Decisions Related To Shipper

Shipper Uses Transportation To Minimize Total Cost Related to Transportation/ Inventory/ Information/ Facilities While Providing Appropriate Responsiveness To Customer

Carrier Makes Investment Decisions Related To Building Transportation Infrastructure (Mode of Transportation) & Operating Decisions To Maximize ROA

Transportation Decisions Related To Carriers

FACTORS AFFECTING SHIPPER-DECISIONS

Shipper Designs Transportation Network/ Chooses Transportation Mode/ Assigns Shipments In Order To Achieve Promised Responsiveness At Lowest Cost of Fulfilling Customer Order

Shippers’ Decisions Affect Following Costs

Transportation Cost

Inventory Cost

- Variable – Paid to Carrier

- Fixed For Short Term Transportation Decision

- Variable When Designing Transport Network Facility Cost - Fixed For Short Term Transportation Decision

Processing Cost - Loading/ Unloading/ Other Processing Costs That Are Variable

Service Level Cost - Cost of Failing To Deliver As Promised

Transportation Decisions Involve Trade-Offs Among Costs

Vehicle-Related Cost - No. of Vehicles Purchased/ Leased Fixed Operating Cost - Size of Operating Facilities

Trip-Related Cost -

Quantity-Related Cost -

Overhead Cost -

Fixed Costs

Variable CostsLabour & Fuel Cost Required Per Trip

Loading/ Unloading & Fuel Cost Related to Additional Load

Cost of Operations & TM Software

FACTORS AFFECTING CARRIER-DECISIONS

Carrier Makes Investment Decisions/ Sets Pricing & Operating Policies Focused on Minimizing Both Fixed & Variable Costs

Transportation Decisions Involve Maximizing ROA

TRANSPORTAION MODES

Roadways

Railways

Airways

Waterways

Express Freight Service

Multi-Modal Revolution

ROADWAYS

Flexibility Size/ Weight of Consignments

• Truck Load (TL) • Less Than Truck Load (LTL)• Package Carriers/ Couriers (DHL/ UPS/ FedEx)

Loading/ Unloading Facilities Starting and Destination Points Any time Loading and Dropping Less Handling in Transit Easy to Integrate with Distribution System

Reliability Guaranteed Delivery Time at Destination

Availability Wide Range of Commercial Vehicles Numerous Transport Contractors

RAILWAYS

Suitability Odd Shape/ Large Weight Consignments Remote Areas Lacking Motorable Roads Bulky Consignments More Economical in Long Hauls

Limitations No Consistency in Lead Time Need Expensive Infrastructure/ Network Lack of Accountability Less Flexible

AIRWAYS

Suitable for High Volume / Light Products Perishable Goods Pilferage/Theft Prone Goods Emergency Supplies Markets Demanding High Availability

Limitations Higher Cost per Tonne-Km

Advantages Low Lead Time in Long Hauls Low In-Transit Inventory Low Stock Holding in Distant Markets Cost Saving in Protective Packaging

WATERWAYS

Inland/ Coastal Shipping Economical Suitable for Bulky Goods Ferry for Road Vehicles

Deep-Sea Shipping Development of Container Traffic Through Transport Concept

Short-Sea Shipping Ferry for Road Vehicles Feeder Services to Link Deep Sea Ports

EXPRESS FREIGHT

Advantages Fast / Reliable Transportation Reduced Cost of Holding Inventory Economy in Transport Packaging Less Chances of Pilferage / Theft Guaranteed Time of Delivery

Direct Destination/ Best Rout & Transport Mix

Limitations High Costs In Transportation Co-ordination

MULTI - MODAL REVOLUTION

Through Transport Concept

Easy Interchange Between Different Modes

Container Sizes Globally Standardised

Container Moves as UNIT From Seller to Buyer

Two/ More Carriers of Different Modes Used in Through Movement of Shipments One Rate Offered For One Carrier of Each Available Mode From Origin To Destination

Also Known As Inter-Modal Transportation Where All Modal Services Provided By Specialist Transportation Companies

MULTI-MODAL TRANSPORTATION

OneDocument

CustomerSupplier ContainerOn Forklift

Invoice

TRANSPORT MODE SELECTION

Product Related Shelf Life/ Perishable Goods Density (Weight/ Volume Ratio) Value/ Sales Volume Seasonality

Total Cost/ Benefit Level of Inventory in Distribution Chain Warehousing/ Depot Requirements Possibilities of Unitisation

Customer Related Size and Location Market Share/ Competitive Status

Least Cost Transportation Mode May NOT be the BESTfrom a Total Distribution Cost/ Benefit Point of View

TRANSPORT MODE VIS-À-VIS SC PERFORMANCE

SC Parameters Rail TL LTL Package Air Water

Lot Size 5 4 3 1 2 6

Safety Inventory 5 4 3 1 2 6

In -Transit Inventory 5 4 3 1 2 6

Transportation Costs 2 3 4 6 5 1

Transportation Time 5 3 4 1 2 6

1 - Lowest

6 - Highest

Faster Mode Preferred For Products With High Value-To-Weight Ratio Where Inventory Reduction is Important

Slower Mode Applicable For Low Value-To-Weight Ratio Products Where Reducing Transportation Cost Assumes More Importance

Cheaper Transportation Have Longer Lead Time & Larger Minimum Shipment Quantity (Lot Size) Resulting in Higher Inventory Levels

High Cost Transportation Justified If Total Inventory Gets Reduced

INNOVATIVE TRANSPORT MANAGEMENT

Fixed Time Daily Service through Consolidation of Complementary Goods for Same Destination

Cross-Docking Facilities

JIT Deliveries at Destination by Transport Contractor

In-transit Goods Treated as Buffer for Customer

Better Transportation Reliability when Shipper Controls

Satellite Tracking System for Better Monitoring (GPS)

Any Questions Please?