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Lecture 09 : Logistics Key Performance Indicators (KPIs) — Transcript

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0:01[Music]
0:22[Music]
0:25so hello dear friends welcome back to
0:27nptl online course on Logistics and
0:29supply I management so today we'll uh
0:33start a discussion on uh logistic key
0:37performance indicators so till now we
0:39have uh uh discussed about various
0:43aspects under Logistics function we
0:45talked about transportation we talked
0:47about warehousing we talked about
0:49storage we talked about um uh logistic
0:53service provider we talked about the
0:55national and international scenario uh
0:58as far as this Logistics industry is
1:00concerned right now after getting that
1:03in uh initial opinion about what
1:05Logistics is supposed to do and what
1:08Logistics is right now and what what is
1:10the current
1:12scenario we'll talk about or we'll try
1:15to identify some of the key performance
1:18indicators so that uh we can focus on
1:20those indicators and uh the overall
1:23customer experience can be enhanced in
1:26that way so in this session we try to uh
1:30discuss about the various types of key
1:32performance indicators and obviously
1:34then functional wise we'll go first for
1:37transportation indicators then Supply
1:40key performance indicators we'll talk
1:42about distribution uh performance
1:44indicators warehousing and Order
1:46management indicators and in the end
1:48Logistics overall performance indicators
1:51we'll talk about
1:53so so uh measuring and managing logistic
1:56performance involves evaluating various
1:59aspect effect of logistics operation
2:01obviously to assess efficiency
2:03Effectiveness and compliance so
2:06efficiency with respect to cost
2:09Effectiveness how effectively you are
2:11meeting the customer demands and
2:13compliance with the whatever your
2:15initial vision mission statements are
2:18and your goal objectives in line to
2:20those uh vision and mission statements
2:22right so if randomly we'll talk about
2:26the performance indicators you will talk
2:28about obviously as a customer you'll
2:31talk about whether you getting ontime
2:32delivery or not whether you are getting
2:34the uh variety or in the inventory or
2:38not whether your order is processed
2:41accurately right and at what cost you
2:44are getting that order right whether you
2:46are getting that door step delivery or
2:48not whether you are getting the orders
2:50as per your convenience or not and in
2:52the end whether when the final product
2:55is shipped to you and you are opening
2:56that packet whether your expectations
3:00are being met or not right so these are
3:02some of the points when we talk about
3:04key performance indicators right but
3:06it's not only one this is one aspect we
3:09are looking for the customer right so
3:11let me little bit uh try to you know
3:15elaborate on this point see these there
3:17are two extreme ends when we are talking
3:19about key performance indicators right
3:23when we are talking about performance
3:25indicators
3:27so first is what are the implications
3:32for the services providers right
3:34Services providers or the companies who
3:37are selling the products and services
3:41right so whatever if we are talking
3:44about e-commerce industry so all the
3:47e-commerce players what are the
3:49implication to those players when we are
3:51talking about kpis and second is the
3:55service level provided to
4:03customer so when we are actually we are
4:06making trade off between these two all
4:10the time whenever we are coming up with
4:11new Services new features or we are
4:14trying to Delight our customer there is
4:16tradeoff between exactly if I'll use the
4:19term is your responsiveness to customer
4:23your uh uh responsiveness to customer
4:26how responsibly you are delivering your
4:30product and services to customer and
4:32then at what cost you are giving those
4:36products and services so you have to
4:38make tradeoff between these two
4:40obviously if you are promising as very
4:43responsive player in the industry you
4:46will obviously have to compromise with
4:48the cost right you cannot be cost
4:51efficient at that
4:54time right because you cannot claim as
4:58cost efficient or you cannot be right
5:00the very best example is when swiggy is
5:03saying even a single piece of Suite can
5:06be delivered that means uh they are not
5:10bothering about economies of
5:13scales right so that means they are not
5:16combining order from so many different
5:18customers so they are ready to provide
5:21you even the single piece of Suite this
5:23is something you are responsive as a
5:26player right you are ready to meet the
5:29customer expectations demand at any
5:31level right so this this kind of
5:33logistics or distribution network is
5:35obviously targeted towards this kind of
5:39uh uh responsive kind of distribution
5:41Network when you are saying cost
5:43efficient so then the best example can
5:46be the world largest giant retailer
5:49giant that is Walmart they are saying
5:51that we are the most cost efficient uh
5:55player and we are selling even t-shirt
5:58at $5 right so then they need to take
6:01care of the economies of scale how many
6:03orders are coming from that particular
6:05reason and then as per that only you
6:08will process that right so always you
6:10are looking towards minimizing the cost
6:13of providing those things so at what
6:16level of services you are going and what
6:19is the cost that tradeoff you have to
6:22make between these two right you at the
6:25same time you cannot be uh extreme
6:28responsive uh and at the same time you
6:30cannot be cost efficient right somewhere
6:33you are uh finding the proper blend of
6:36these two and where you are saying you
6:38are a little bit responsive also you are
6:40responsive for your quality for delivery
6:43for variety for inventory all those
6:45things but on the other hand you are
6:46also saying that promising to your
6:49customers we are cost efficient as well
6:51and we are providing you the product
6:53with the minimum cost so these two
6:56parameters we need to keep in mind right
6:58so let's go through these types of kpis
7:01obviously when we are dealing with
7:03Transportation these are functional
7:05areas first is transportation Warehouse
7:07we can talk about Inventory management
7:09in the warehouse order fulfillment we we
7:11can combine in that right and then
7:14overall customer or supply chain
7:16performance we can divide into these
7:18four five categories right quickly we'll
7:20go through what we are looking for
7:22shipping time once order is placed how
7:25much duration it is taking to ship that
7:27product it is one kind of indicator see
7:31again when we are saying that these kpis
7:34the very basic purpose is two purposes
7:38are there first is to find out your
7:40current
7:41position where you are at on those kpis
7:46maybe you are rating the scale of one to
7:48up to maybe 10 where you are standing
7:50right now you are standing at six you
7:52are standing at 7 or somewhere at 9 you
7:54are leader in that industry maybe on
7:57that particular kpi right on the other
7:59other hand when you are saying the
8:01current position then you are also
8:04looking for benchmarking right so maybe
8:08in that particular let's say delivery
8:10time we are talking about delivery time
8:12right so if Amazon is saying the faster
8:16delivery player and you as industry
8:18partner or maybe uh being the major
8:20stakeholder in that industry you are
8:22also uh looking it as Amazon is very
8:25good in maybe minimizing the delivery
8:26time right so then you will keep with
8:29the respect to this kpi uh delivery time
8:32you'll keep Amazon as
8:35your your benchmark right so for
8:37different kpis you will find out your
8:40position current position where you are
8:42on that scale from 1 to 10 right and
8:44then you can find out the best player
8:46who is maybe different players can be
8:48there some are working on maybe two
8:50three point first two three points rest
8:52maybe next one is working on other two
8:55three points so in that way they are
8:56defining their USPS right so so uh
9:01because of those promises only they are
9:03you know convincing the customers so
9:05this is how we are providing the
9:07services differently from the other
9:09players order accuracy how many times
9:12you are correctly you know uh or uh
9:16delivery the order right so that will
9:18happen only when you are correctly
9:19recording the customer order right
9:22picking accuracy so how many time from
9:25inventory you are picking the right
9:27product there comes the role of
9:28Warehouse management where you are
9:30keeping all the inventory what are the
9:32automated Technologies you are have
9:34where uh you are having where you can
9:36you know read the barcodes and then you
9:39can identify the exact location so that
9:42within that delivery time can be ensured
9:45if you are saying that within 2 days it
9:48will reach so then you can only ensure
9:50when you are picking the right product
9:51from the inventory and then once it is
9:54picked up you will obviously pick it and
9:57pack so how much time it is taking to
10:00Pick and Pack the product order cycle
10:02time once the order is placed and then
10:05it is delivered how much time you are
10:07taking for that that is order cycle
10:10time equipment utilization rate so
10:14percentage of time equipment is in use
10:16let's say you are using uh uh any
10:19trolley or you are using container or
10:22you are using automated uh trolley
10:27right any equipment you are using in
10:30your Warehouse right so uh what is the
10:33percentage uh how much you are using
10:35that that will uh ensure your this uh uh
10:38equipment utilization rate Then trailer
10:41utilization rate then what percentage uh
10:45of that trailer you are using uh trailer
10:48is a kind of container so when you are
10:50storing that or transporting from one
10:52point or another Point how much capacity
10:54of that trainer you are utilizing uh
10:57trailer you are using uh in the end
10:59right so uh we target that always it
11:01should be greater than 90% of what
11:03capacity we are carrying we should
11:05utilize Always Somewhere you are if
11:07above 95% that means effectively you are
11:10using the trailer uh capacity right then
11:14Transportation cost from one place to
11:16other place you are moving the products
11:19per unit per kilometer or whatever unit
11:21you are using how much uh the cost is
11:25Right Transportation cost this is how
11:26you can find out right so then dwell
11:30time duration Goods spend at a location
11:33before moving to the next uh destination
11:35let's say if in the supply chain there
11:37is one Warehouse right so here what you
11:41are doing you are temporarily maybe
11:43storing that
11:45product then you are sorting that
11:47product and from here you are maybe
11:50directing that product to different PIN
11:52codes right so these are some of the
11:54operations maybe sometimes you are
11:56youing doing value adding activities or
11:58doing labeling
11:59or maybe you are doing that uh kitting
12:02kind of services right so then at that
12:06time uh the product is there in the
12:08warehouse so how much time that product
12:12is is spending at this warehouse this
12:15should be minimum because only then we
12:17can minimize the overall
12:20duration inventory carrying cost so how
12:23much inventory you are holding at a time
12:25so that the cost of that inventory is
12:27inventory carrying cost this is
12:29something always you are trying to
12:31minimize that cost but yes that minimum
12:34Safety stock you need to maintain so
12:36that as soon as the order come you can
12:39uh simply transport that order from the
12:41available inventory then warehousing
12:44cost so in the warehouse you are sorting
12:47the product handling the product storing
12:49the product sometimes see the cost is
12:52little high if there is Cold Storage
12:54right or special handling treatments are
12:57being done so in that case
13:00uh the cost will be little higher right
13:02as we have discussed in the previous
13:04sessions as
13:05well Pick and Pack cost so what is the
13:09cost you are picking locating the
13:11inventory and then packaging of the cost
13:14of packaging material you are using and
13:16the Manpower or maybe if it is automated
13:18then also you will calculate the total
13:21cost operating ratio efficiency measure
13:23comparing operating expenses to revenue
13:26right so total operating expenses you
13:29will find out and what is the revenue
13:31right if operating expenses are 10 and
13:33revenue is 15 this is how you can find
13:35out the percentage 10 divided by 15 and
13:38100 we'll we'll go through in detail all
13:40right this is just a hint use of
13:43packaging material so use of packaging
13:45material what type of material you are
13:48using first thing when you are deciding
13:50the material first is first thing is the
13:52safety of the product second thing is
13:55whether that packaging is sustainable or
13:57not because in many countries this now
14:00has been forced to the players who are
14:02doing this delivery Doorstep Delivery or
14:05who are even going for uh through the
14:07retail shops as well their packaging
14:10either they are fully responsible they
14:12are fully responsible for the packaging
14:14right once the produ product is consumed
14:16they have to ensure the recycling of the
14:19packaging or somehow it should be
14:21sustainable packaging or paper packaging
14:23which we should not you know degrade the
14:25environment right so number of shipments
14:27you are making Within specific period
14:30that also will show your efficiency how
14:32many times you are shipping the product
14:34inventory accuracy what your record is
14:37showing and actual physical inventory if
14:39we'll count so that should match so that
14:42is inventory accuracy inventory turnover
14:45how much inventory is sold and replaced
14:48with a new slot that is inventory
14:50turnover inventory to sales ratio will
14:53also tell you that this much inventory
14:55always you are maintaining and the sales
14:58is this much right right so that will
15:00ensure you whether uh are there any uh
15:05chances of stock out or you are keeping
15:07all the time excess inventory right so
15:11under these uh I already uh told you
15:13under transportation management Supply
15:15management distribution management
15:17warehousing management and Logistics
15:19overall performance we'll discuss about
15:21all these uh kpis key performance
15:24indicators so uh quick review
15:27Transportation obviously related to
15:30whatever we are doing in transportation
15:32we can measure the performance right so
15:34cost is one thing right and how we are
15:36carrying the products how many products
15:38we are carrying whether we are utilizing
15:40the full capacity or we are doing that
15:43vehicle routing is done properly or not
15:45so that we can optimize the route these
15:47are some of the measures we can use to
15:49ensure the transportation performance
15:52then Supply performance that uh
15:54obviously in the warehouse also you
15:56should uh ensure the smooth Supply from
16:00raw material suppliers also you need to
16:02ensure the smooth Supply so that we can
16:04you know continue with the production
16:06lines and then you need to uh replace
16:09the old stock with the new stock by
16:11consuming that inventory in the market
16:14so that it should not be outdated uh or
16:17expired right so that also you you'll
16:19ensure through Supply management
16:21distribution management obviously is uh
16:25when the final distribution to the End
16:28customer is happening through all that
16:30long chain or maybe through single
16:32player or career partner who is doing
16:34the delivery right so order accuracy on
16:38time delivery these are some of the
16:40points when you are picking the order
16:41when you are delivering packaging all
16:42those things will be there when we'll
16:44talk about the distribution management
16:46warehouse
16:48management first thing is how much
16:51capacity of the warehouse is being
16:53utilized fully right right that is first
16:55point second is how we are maintaining
16:58the inventory how much inventory we are
16:59maintaining that is direct cost to the
17:01company right how quickly we are from
17:04the dock to stock how quickly we are
17:06moving the inventory to the shelf so
17:08that it is available for selling
17:10purposes right and if we are going for
17:13some unplanned shipment that also
17:15happens right we cannot be always
17:16accurate with the uh our forecasting
17:19things right there is some error so if
17:22that situation occurs that we have to go
17:25for some unplanned shipment so how
17:27quickly you will respond your system
17:28will respond that is your warehouse
17:30management and logistic performance
17:33overall performance we'll see about uh
17:36how many uh orders we are delivering uh
17:39how many orders are on time how many
17:41orders are delivered with quality all
17:44damaged products so these all we'll see
17:47so one by one we'll go with
17:48transportation management first is
17:51average cost per order so let's say the
17:55cost is these are the components for uh
17:59which are contributing towards the cost
18:01marketing campaign $500 then cogs uh
18:05your operation cost is let's say 1,200
18:08packaging cost is there shipping cost is
18:10there then storage cost is there so
18:11you'll add up all these cost and total
18:13number of orders so simply you will
18:16divide this so this is the average cost
18:18per order right now see this absolute
18:21value will not help you right so that's
18:24why I told you this is one indicator
18:26your current scenario now you need to
18:29you know compare this with the Benchmark
18:31how the other players with the similar
18:33kind of products see you need to be
18:35careful when you are comparing the these
18:38kpis because similar product some
18:40products will you can deliver within
18:42with no you know damage with no
18:46inaccuracy with on time right so some of
18:49the orders are there which are maybe uh
18:52those kind of orders which are not ready
18:55right or semi-finished goods and then
18:57depending upon the customer inputs then
19:00you are preparing the final one right so
19:02then also these kind of goods are taking
19:04little more time so you can identify
19:06that right and uh uh because this cost
19:10you need to compare you can the other
19:13purpose of this is the unusual product
19:15you can find out which are you know
19:17giving you or adding more cost uh into
19:21your transportation cost so this is how
19:23you can calculate the average cost per
19:25order right second one is average trans
19:28Transportation cost so simply
19:31Transportation average how much distance
19:33you are covering per kilometer what is
19:35the cost right so then you can total
19:38distance whatever you are uh uh cost per
19:44kilometer total distance whatever you
19:45are covering you can find out right
19:47total cost and then you can find out so
19:51monthly 10,000 uh gross income you can
19:55divide this average Transportation cost
19:58with the total income now this will help
20:00you to identify that this 8% of this
20:04cost uh Transportation cost is
20:07contributing towards the overall gross
20:10income right so 8% only this
20:13transportation is taking from your gross
20:16income so this is uh how you can compare
20:19your average Transportation
20:21cost fright cost per unit shipped right
20:25now cost of the Fright how many unit you
20:29are shipping you can simply divide and
20:30you say 70 per unit now again this will
20:34help you to compare with the other
20:37players how they are doing the very
20:39basic implication is
20:41how properly you are using the cargo mix
20:45see there is fixed capacity in the cargo
20:48so how you are designing that space
20:50packaging that also somewhere it is like
20:52that this is completely filled these are
20:55filled and this much is you know un
20:58utilized
21:01capacity in the cargo so that means this
21:05capacity you are not using so this this
21:07will add the cost right so if my truck
21:11can this truck can take maybe 10 ton
21:14inventory so if you are the this is the
21:18quantity simple this is the cost right
21:20very simple diagram if I'll say if
21:24quantity is let's say 10 T if it is
21:26taking only one t cost will be highest
21:29if I'm saying it is carrying 2 ton cost
21:31will be somewhat per unit will be lesser
21:34if I'm saying carrying 3 ton quantity
21:37cost will be lesser so this cost will be
21:40like this incre uh decreasing initially
21:43up to 10 ton then if I'll increase to 11
21:46ton or 12 ton or increase further 13 ton
21:49because now I need to carry into
21:52different trucks right so when we are
21:55now going for the second option then
21:58again it will shoot up like because we
22:00are not properly utiliz utilizing the
22:03capacity of the other vehicle so this
22:04will increase right so this is the
22:06simple concept why the initial cost uh
22:09decreases with increase in quantity up
22:11to the maximum level of the maximum
22:13capacity of the container then comes to
22:15supply management Transit time to
22:19distance so this is simple how much time
22:23uh in 1 minute you can say or one minute
22:25or one day how how many miles you are
22:27covering right right so simple if 5 days
22:30you are covering these many miles per
22:32mile how many uh days are required
22:36025 this will show you how efficient
22:39your that particular mode of
22:41transportation is so if you you can
22:44compare road with train with ship with
22:48air right and then depending upon what
22:52time you have in hand you can say okay
22:55this is the
22:56025 maybe if you'll go by here it will
22:59be lesser right so then you need to
23:01prioritize your products which you need
23:03to transport by which mode
23:06right then second is stock rotation
23:09stock rotation in Supply management is
23:12another very important aspect because it
23:14will help you to you know uh avoid the
23:18uh your uh expired
23:22stock so if you want to you know avoid
23:26this outdated inventory so then you need
23:29to quickly rotate your stock you need to
23:32ensure the consumption of that so it
23:34will help you to monitor the Aging stock
23:36how we can calculate it total sales
23:39average inventory you are keeping so
23:41then stock rotation is 20 right so you
23:43can uh uh simply make this statement
23:46that this company sells through its
23:49stocks 20 times in this period so 20
23:52times it is rotating the stock right so
23:55that then depends upon which product you
23:57are dealing whether it is highly
23:59perishable in nature or you can maintain
24:01the inventory for 2 three days or you
24:03can maintain for a little longer maybe
24:06uh 20 days 1 month 6 months or one year
24:09so that depends upon the nature of the
24:11product out of network shipment so this
24:14is something unusual shipments but your
24:17supply management has to be you know
24:19responsive enough that you should not
24:21say that we cannot do that obviously you
24:24have to do that but the only concern is
24:26it will be expensive because you have
24:28not planned for that and then the maybe
24:31uh then dedicated Network you will be
24:33using to you know if you are uh daily
24:36you are supplying 100 orders maybe then
24:38these five orders are out of this plan
24:41so then for five orders you are doing
24:43all the exercise right so how much
24:45percentage you are doing this out of
24:46network shipment is 4% this again will
24:50happen if there is problem with your
24:54forecasting if you did not forecast
24:56properly right so then this out of plan
25:00things will
25:02come then comes to distribution
25:04management here we'll talk about ontime
25:07final delivery or usually we are saying
25:09ontime delivery right so you'll find out
25:13the ratio of the products you are
25:14delivering on time right so if you are
25:17delivering total 18 products 15 are
25:19delivered on time so 83% is the uh
25:23efficiency or you are delivering your
25:25products on time now this obviously will
25:29tell you the efficiency and performance
25:30of the supply chain but you need to take
25:32care of the quality also right if you
25:35are delivering broken product damaged
25:38packaging damaged product so then you
25:40cannot consider it as complete order
25:43right and the second case if the only
25:46let's say if in that package five items
25:49should be there but only three are there
25:50and two you are saying maybe another two
25:52days it will take because that were uh
25:54those two items were not available in
25:56the inventory so then also it will not
25:58be complete uh completed right so this
26:00is ontime delivery ontime delivery will
26:03only happen when there is ontime pickup
26:05your career partner is picking the
26:08product after confirming the order
26:10within time duration see these this
26:12cycle is complete right so it is
26:15starting with customer customer is
26:17finalizing the order then with the
26:20seller order should be ready once your
26:23order is recorded your seller should be
26:26ready with it and if I'm saying that
26:28that seller next stakeholder is your
26:31that career partner who will be picking
26:33up this product right then Courier
26:35partner will uh uh maybe distribute it
26:39or maybe uh store in the nearest uh
26:42Distribution Hub right from there it
26:45will go to the other state the location
26:48or the nearest Hub to the customer
26:51location then it will go to again the
26:53Fulfillment
26:56center and from fulf complement Center
26:59it will be given to delivered to the
27:01customer right this is how this C this
27:03complete cycle will happen now if this
27:06career partner is not picking on time
27:09that means the next cycle will be
27:10delayed so how many times uh the
27:14shipments are picked on time out of 46
27:1643 are picked on time so that means
27:1993.5% is the efficiency this will help
27:21you to find out the your carrier uh
27:24performance
27:25right then the third Point here is is on
27:28time shipping so again I told you from
27:31this point Distribution Hub to the next
27:35Distribution Hub if this Distribution
27:37Hub is in Delhi right or in goodgo right
27:40and I'm placing order from kakur so this
27:44uh distribution fulfillment center is in
27:46kakur right so first from this
27:49distribution Delhi Distribution Hub it
27:51will be shipped to
27:53Kolkata Hub right and then from Kolkata
27:56to maybe the nearest
27:58uh fulfillment center it will come from
28:00where it will be out for delivery maybe
28:02on the same day or maybe on the next day
28:05right so this ontime shipping is
28:07important only then the complete cycle
28:09will be done so if 23 orders are there
28:13and 18s were on fully on time means
28:15partially we will not consider so 18
28:18divided by 23 so 78.3% is the efficiency
28:22so obviously if you are targeting 100%
28:25order should be delivered on time so
28:28shipping should be on time your
28:30recording of order should be on time
28:32then uh your packaging of order should
28:34be on time then pickup should be on time
28:37then your uh shipping should be on time
28:40from nearest hub center uh to
28:42fulfillment center that uh pickup and
28:45drop should be on time and then finally
28:48the delivery to the customer should be
28:49on time so this this is complete cycle
28:52anything is creating a kind of
28:54bottleneck other activities will be
28:57delayed
29:00then next comes warehouse and Order
29:02management right so unplanned shipment
29:05this we talked about if you have no
29:07plans to ship these products and the
29:10problem is why this happened because we
29:12could not figure out the demand for
29:15those products right and now those kind
29:18of products are not available or maybe
29:20somewhere in the manufacturing or maybe
29:22somewhere semi-finished products so
29:24those many products are there right or
29:26even if you have those in your inventory
29:29but now for the day the the career
29:32partner has already picked the orders
29:34right now the maybe in the evening again
29:36the person will visit so that four five
29:38hours Gap will be there right or maybe 6
29:41hours or maybe if next day the uh
29:43picking career partner is coming so that
29:4612 hours Gap will be there so these
29:49unplanned shipment four total shipments
29:51are uh 4,000 so you can see. 1% of
29:55shipments are unplanned so so this uh
30:00this is a kind of you know the role of
30:02the managers to accurately predict it
30:04and then ship the material on time right
30:07order accuracy so order picking accuracy
30:11and this the this cycle will actually
30:14start with your recording the order when
30:17you are actually recording
30:20order so when you are recording the
30:23order you are recording the customer
30:24information as well
30:29right so customer information other than
30:32your payment information and uh the
30:35requirements for the products or special
30:37instructions given for delivery or for
30:40product or for variety or all that so
30:42there will be one very important thing
30:43is address so if you have read the
30:46address uh incorrectly or maybe when you
30:50you were recording that then it happened
30:53or maybe problem with the PIN code so
30:56then this this order inac will be there
30:59so uh you can just see order verified
31:02correct order pged today so 96% is the
31:06efficiency you can see that you are
31:08delivering the correct order but see
31:11this is uh when you are comparing most
31:14of the
31:16e-commerce players right just imagine
31:18the case when you are going an every
31:21airport what you are doing the first
31:23thing is you are dropping in your
31:26luggage right so so that luggage is
31:29carrying one slip where the barcode is
31:32there now how many times this is
31:35happening and what can be the cost if
31:38the the receiver or where we are reading
31:41that address information that this has
31:43to be rooted from kak from Kolkata to
31:46Delhi and instead of that it is rooted
31:49to let's say uh kcata to Amad this how
31:53many times this is happening right so if
31:55this is HP very rarely this happens but
31:58if it is happening this is again Big
32:00Challenge because then you you uh your
32:03customer will feel Dison and then it
32:06will be difficult right to track back
32:09and then you know deliver back the
32:11whatever package is right so you can
32:14just imagine the cost of that but in
32:16e-commerce we need to ensure the same
32:19kind of platform where you know your
32:22your packets are delivered uh on the
32:25right address inventory accuracy already
32:28I told you whatever your big uh books
32:31are showing and physical inventory if
32:33I'm counting that should match if
32:35physical inventry is this much
32:373458 and uh my books are showing 3506
32:41that means
32:4398.6% is the this is again very
32:46important as far as warehouse management
32:48is concerned because because the point
32:51here is the example I told you if I'm
32:54having 50
32:56tires and if one car is taking five
32:59tires to complete I should produce 10
33:02cars out of these by using these 50
33:05tires right so if I'm somewhere lacking
33:10with the inventory where that inventory
33:11is going so those things we need to find
33:15this is not because components sometimes
33:16are very very expensive right and
33:19obviously if one component is missing
33:21doesn't matter the cost of that
33:23component maybe the cost of the
33:24component is only 10 Rupees and the
33:26final product cost is 10 lakhs unless
33:29that component is not fixed in that
33:31product your product will not be final
33:34right so that way your efficiency should
33:37be there dock to stock how much time
33:41your Warehouse is taking to put the
33:44stock into the shelf right so that it is
33:47finally ready for sales right so if it
33:50is taking 12 hours 18 shipments are
33:53there so that mean it is taking 0.6
33:55hours per shipment to be to make it
33:58ready for the uh customers so that
34:02customer can pick those stocks and then
34:04they can purchase so this will also tell
34:07your efficiency unit processed per
34:09square fet this will show how much uh
34:13capacity of that uh Warehouse you are
34:16utilizing if only this much capacity is
34:18being utilized that means this is
34:20unutilized space so what we can do with
34:23this unutilized space right so uh that
34:27is again concern these many units are
34:29there this much square fet we are having
34:32so that means 3.7 units per square fet
34:35we are giving that uh area right but
34:39again that depends upon the products
34:41different products require different
34:43types of things if you are just talking
34:46about steel roads right maybe then this
34:50figure will be little lesser if you are
34:52talking about water tanks you are
34:56using and you are storing water tanks or
34:58steel roads in your Warehouse so
35:01obviously space required for these two
35:03items will be different right not only
35:05in the warehouse in the transportation
35:06truck as well maybe steel roads you can
35:09take maybe maximum capacity is 20 ton of
35:13that container you can take 20 ton right
35:17but water tanks because of the size
35:20limitation maybe then you may not be
35:23able to carry more than 210 because as
35:25per size the capacity is fully
35:29utilized space used in Warehouse so how
35:33much total area is, 1600 uh
35:3616,500 ft you are using only 3300 sare
35:40ft that means only 20% is being utilized
35:43right so this again you need to take
35:46care when you are talking about uh space
35:48utilization in Warehouse okay so how you
35:51can reach up to maybe 85 or 90%
35:54utilization of the space that is also
35:56very good point let's talk talk about
35:58now the overall Logistics performance
36:00cost per pound again I talked about
36:03shipping the water tank or shipping
36:07the steel
36:09rods now if you'll talk about weight
36:13obviously you will be carrying more
36:15weight when you are carrying the steel
36:17rods but when you are talking about
36:19water tank so weight is less but because
36:22of the big size you that limitation is
36:24there because there is no space in the
36:27container so this much is the cost of
36:30shipment only this much bait lbs you are
36:32carrying so that means 38 per pound
36:37right so that is the cost so maybe this
36:40is for particular industry this is the
36:43cost this range is totally totally
36:45relative to the Product
36:48Industry cost per mile total fixed cost
36:51assets you are using vehicle carrier
36:54whatever you are using variable cost of
36:56covering that distance whatever you are
36:58covering that total cost will be there
37:00divided by how many miles you are
37:03covering that will give you the uh
37:06rupees in terms of per unit or rupees
37:10per mile simply will give you the uh
37:15value so 1.34 per mile this is for
37:19particular product using uh maybe uh
37:23particular mode of transportation right
37:25so this this maybe for if you are
37:27talking about Road transportation for
37:29ship Transportation this may vary for
37:31air transportation obviously cost will
37:33be higher so that is there number of
37:35shipments now this will help you to
37:38identify the reasons countries from
37:41where the maximum orders are coming
37:43right so maximum orders you need to find
37:45out from where it is coming so that you
37:47can combine those orders and then you
37:49can even if required you can minimize
37:51the time of the delivery as well right
37:53so uh maybe you in the Metro City this
37:56is the only reason because of those many
37:58number of orders are there so same day
38:00delivery can be promised but if you are
38:02in saying somewhere in in Village so if
38:05you are covering maybe 10 kilm you are
38:07delivering only 20 products but in City
38:09maybe you are covering only 2 kilm you
38:12are delivering 500 orders right so
38:15population density is there and then
38:17depends upon product type also which
38:19type of product you are uh delivering
38:21then this will help you to analyze the
38:23seasonal fluctuations also right if
38:25seasonal fluctuations are there you are
38:27talking about fruits you are talking
38:29about vegetables right so that that
38:31demand demand will depend upon so
38:34monthly shipment by reason you can find
38:36out so so that again because if it is a
38:39kind of your Metro City maximum orders
38:42are coming so you can promise the same
38:45day delivery as well because in that you
38:48can enjoy the economies of scale because
38:51you can consolidate large number of
38:55orders then byproduct also so you can
38:57find out the information what type of
39:01products they want and what is the
39:03frequency of buying those types of
39:05products right so this is related to
39:08your logistic performance some of the
39:10key performance indicators we have
39:13identified right so in the very next
39:16session now we'll spend a couple of
39:17sessions on uh uh targeting how we can
39:22improve these performance indicators
39:24right so these are some of the
39:25references from where these uh uh slides
39:29have been prepared and other than that I
39:31have highlighted all the books referred
39:33uh those six seven books right so those
39:36are always there right so uh that's all
39:38from this session thank you very much

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