Handling and packaging requirements

Limited research has been undertaken into the interface of product design and logistics (Dowlatshahi, 1999). Previously, designers had attempted to consider only marketing and manufacturing requirements in product development and packaging design (Vasquez et al, 2003), and latterly, the recyclability and recovery of the product. Tsoulfas and Pappis (2005) even failed to consider logistical aspects of product design when they examined the impact of environmental principles on supply chain designs and operations; similarly, studies concerning vehicle utilisation usually exclude any reference to the nature of the products being carried (McKinnon & Forester, 2001). Nevertheless, logistics and product design are undeniably linked through the activities of handling, packaging, stacking and transporting.

Unconventionally-shaped packaging causes problems all along the supply chain, as the larger and more oddly-shaped the range of packaging sizes, the greater the handling and delivery complexity and consequently, the less efficient the transport operation will be. By way of example, McKinnon & Forester (2001) observed that during the 2001 World Cup, a large British brewer designed a special multi-pack for canned beer in the shape of a football stadium, only handling 10 cans in the space usually occupied by 24. The result, a unit efficiency reduction from 65% to 27%, although no comment was made on the success of the promotion in terms of beer sales! So despite marketers wishing to attract customers with variety and speciality in packaging styles, from a transport efficiency viewpoint, standardisation and conformity are the most desirable packaging attributes.

Therefore, it should come as no surprise that a high percentage of products are conveniently packaged in rectangularly-shaped packaging i.e. boxes (Hoare & Beasley, 2001), which in turn, are repacked using tertiary packaging (i.e. handling equipment). More than two-thirds of all products are repacked at this stage, mostly from pallets to roll-cages (AT Kearney, 1997). Here again there are problems with proliferation (Penman, 1997), for instance, within Europe there are more than 30 different types of pallet.

Transforming Your HR Spend Into a Strategic Corporate Investment

Employees are a company's greatest asset yet they are also a company's greatest expense. From the first interview through on-boarding, payroll and benefits administration to retirement planning and termination, the employee lifecycle is fraught with costs and pitfalls. That's why annual HR costs per employee continue to go up instead of down-despite the widespread adoption of HR technologies.

Inefficient management of the employee lifecycle is problematic for two reasons. First, it costs you time and money that you'd rather allocate elsewhere. Instead of getting bogged down by administrative duties, employees should focus on contributing to the company's corporate strategy and bottom.

Second, you need to execute with excellence across the employee lifecycle. In today's super-competitive markets, it's more important than ever to hire and retain the right people-and to fully mitigate your exposure to legal and regulatory risks. So by optimizing the quality of your HR processes and policies, you also improve your bottom-line business performance.

As difficult as it may sound, it is actually quite possible to reduce HR burdens while optimizing the quality of delivery. This can be done by adopting five proven best practices:

1) Understand total current internal and external HR spending

2) Offload HR operations where appropriate

3) De-fragment management of the end-to-end employee lifecycle

4) Identify opportunities for getting more business value from HR processes5) Continually modify HR processes to adapt to changing conditions

Companies that do these five things can, in fact, substantially lower their HR-related overhead while improving the quality of HR processes. As a result, they are far better equipped to grow and compete in a world where skilled, committed people continue to play a central role in the bottom-line performance of the business.

The employee lifecycle

To succeed in today's challenging and highly competitive marketplace, your business needs skilled people who are committed to that success. People develop and design your products. They sell and support your customers. They figure out where you should spend your money and where you can save it. If you can't recruit and retain quality people-and keep them highly motivated-your business will suffer.

The relationship between employees and employers is, however, a complex one. Your computers won't go work for someone else if they are offered more money. Your company vehicles don't have children who need medical care. And you don't have to worry about your office furniture saying or doing anything that will land you in court for a sexual harassment suit.

In fact, your relationship with your employees extends across a lifecycle that is fraught with risks and opportunities. It is a complex relationship-and is likely to become even more complex as society and government regulations continue to evolve.

Who works for whom?

Because management of the employee lifecycle has become increasingly complex, HR costs continue to rise. According to PricewaterhouseCoopers LLC, mid-sized companies are spending almost $2000 per employee per year. And that same study revealed that the real cost of HR operations such as payroll has increased by 6% since 2003-despite expectations that technology would drive costs down.

There are several reasons that businesses continue to have to spend more and more on HR:

Higher visible costs

As everything about HR has gotten more complex, costs have gone up. Once upon a time, all you had to do to advertise an open position was take out an ad in one or two publications. Now, you have to navigate the Internet-which yields a deluge of applications to review. Health plans and tax codes are more complex. Employee turnover is higher. And the technology you put in place to automate HR require substantial investment as well. This all drives visible higher.

Higher hidden costs

The PricewaterhouseCoopers study also uncovered a wider range of hidden HR costs. These include "indirect" labor costs-such as the time it takes to approve submitted timesheets and physically distribute of paychecks. Hidden costs also include the time that business and HR managers spend dealing with benefit plan decisions and employee questions, as well as the ongoing costs associated with technology maintenance and upgrades.

Process gaps

According to this same study, companies pay a substantial premium for taking a fragmented approach to their time and attendance, payroll, workforce administration and benefits administration processes. These various processes are obviously interdependent, so companies that rely on different systems and/or different vendors to manage them have to link them manually or via some "one-off" software integration. The cost of maintaining these linkages can amount to $200 per employee per year.

Incessant change

In addition to being more complex than ever, HR is also increasingly subject to change. The healthcare benefit landscape is particularly in flux-but so are the many federal, state, municipal and industry-specific regulatory mandates to which companies are subject today. This constant change forces business and HR managers to almost continually review emerging requirements and available solutions.

The continued escalation in HR costs means that your company's resources are increasingly being consumed by overhead, rather than being invested in potentially more lucrative areas such as product development, marketing and customer care. More and more, you wind up working for your employees-instead of ensuring that your employees are working for you.

Risks and rewards

The complexity of the employee lifecycle doesn't just drive up costs. It also increases the potential for errors and omissions. So the challenge facing HR today isn't just to find ways to save money. It's also to continuously improve processes and outcomes.

There are several reasons why you need to pursue HR excellence at the same time as you try to reduce HR costs:

Recruitment and retention of quality employees

The ability of your company to successfully compete in today's fast-moving markets is largely contingent upon the quality of the people on your team. If your HR processes are weak, it is unlikely that you will be able to find, attract and retain the best possible candidates for every position at your company. If you achieve HR excellence, on the other hand, you will be able to hire and keep a better class of employee.

Motivation and development of employees

It's not just the quality of the people at the time you hire them that matters. What you do with that raw potential over time also has a significant impact on your long-term business performance. If you mess up people's paychecks, make it hard for them to get access to the benefits they need, don't appropriately reward exceptional work and don't quickly address workplace problems, your company's performance will suffer. If, on the other hand, you do all these things right, your employees will be more productive, take more initiative, have better morale, and make a consistently better impression on your customers.

Mitigation of legal and regulatory risks

Complex processes and constantly changing regulatory requirements can put your company at risk. These risks can include fines, legal fees, negative publicity and erosion of brand value. If your processes are not highly accurate and compliant, your exposure to these risks increases. By optimizing the quality of your HR processes, on the other hand, you can substantially mitigate your exposure to these risks.

Continuous alignment of HR spend with business objectives

Every company needs to align its HR spending and processes with its specific business objectives. If you're in an extremely price-sensitive market, you may need to whittle your spending down to the lowest amount you can reasonably achieve. If you're in a high-end/high-margin market, you may be willing to spend whatever it takes to get and keep the best and brightest people available. But chances are you're somewhere in between. There are areas where you might consider investing more to get more-and areas where you just want to minimize expenses. These priorities and objectives may also change over time as business conditions change. Quality HR processes enable you to align your HR spending with these shifting priorities, so you're always getting maximum business value from every HR dollar.

Marketing logistics value: Managing the 5 P's

In order to position logistics in its proper role in today's business environment, logistics leaders will have to do a better job of communicating, or marketing, logistics. The time for lamenting the lack of interest in logistics from senior management is over, and the time to become proactive is here. The logistics story will be understood when all logistics leaders begin to take the marketing initiative and the successes of the discipline are recognized.

Logistics executives are eager to be considered important players in the corporate game. They want to be involved in important decisions, to do something meaningful for the company, and to be recognized by their peers as members of a winning team. However, it seems that sales, marketing, and manufacturing enjoy the focus of management attention. Why? Let us suggest that logistics executives have done a poor job of marketing logistics within the organization.

This concept of "marketing" logistics borrows from the traditional concept of marketing. In other words, identify your customers, identify their needs, and combine the firm's resources to meet those needs. However, the concept of logistics marketing goes a little further. The purpose of this paper is to introduce the concept of the 5 P's and to provide the logistics executive with a framework for its implementation. The following discussion will focus on product, price, place, promotion, and people as elements of the logistics marketing mix.

The logistics executive does not have the traditional "product" to market. The logistics product is service, which can be different depending on the customer group. The first step, then, in logistics marketing is to identify the customer. Research has shown that logistics executives have multiple customers, both internal and external to the firm, and that the needs of these customers can be different. Internal customers, like marketing and manufacturing, might require superior logistics service on customer and plant deliveries. Senior management, as an internal customer, might require lowest possible logistics cost so the impact on the firm's bottom line can be minimized. The logistics executive must clearly understand how logistics influences other functions such as marketing and manufacturing. Logistics cannot be managed in a vacuum and the logistics executive must make the effort to thoroughly understand and appreciate the challenges being faced by the other functions.

The logistics needs of external customers are constantly growing and changing. The logistics executive must be sensitive to this, along with being aware of what is driving these changes. Most external customers are not traditional consumers but individuals in other organizations who are having their performance measured on certain goals. Logistics service offerings to these industrial customers must include not only the goals and requirements of the providing firm but also the goals of the receiving firm.

These customer requirements will drive the service, or product, offerings from logistics. Customers will no longer accept assembly line types of service offerings, or the "one size fits all" mentality. They expect logistics to be able to develop and implement service bundles that specifically meet their needs. This job shop mentality is what endears logistics to both internal and external customers.

Traditional logistics services would include order fill, on-time delivery, zero damage, and accurate invoicing. These are how firms competed with one another and gained competitive advantage. This is no longer the case. Today, these logistics services can be called "reliability" services. Customers expect 100 percent conformance at all times. Doing them well will not gain a firm business but performing them poorly will cost a firm market share. For example, Nabisco Integrated Logistics measures case fill by product family on a monthly basis and calculates lost revenue when case fill falls below 100 percent. This helps communicate to upper management the impact of logistics service on the firm's bottom line. It also helps justify investments in logistics resources to improve basic logistics services.

An evolving logistics product is what can be called "responsiveness" services. These would include store-built pallets, customer pick-up options, and special material handling options. These go beyond the basic logistics product and can actually increase a firm's market share if they are done well, as well as decrease market share if they are done poorly when compared to competitors. Procter & Gamble's Product Supply Group has a "toolbox" that it uses to assess customer needs and includes prescriptive solution tools to develop responsiveness programs for customers.5 These tailored logistics programs have helped Procter & Gamble differentiate itself in a competitive market.

Finally, the ultimate logistics product offering can be called "innovation" services. These involve integrating the logistics operations of the supplier and the customer into one coordinated logistics effort. Practices such as quick response logistics, continuous replenishment, vendor managed replenishment, and category management are examples of this product. Doing these well will provide the firm with a long term competitive advantage; doing them poorly will not usually affect competitive position. Becton Dickinson's supply chain management concept is a good example of innovation. The Supply Chain Services Division (SCSD) at BD establishes three levels of EDI integration with its major customers, where Level III is total seamless integration.

Marketing Logistics

Logistic managers are given the task of marketing logistics as well as communicating logistics with a purpose of positioning logistics in the present competitive environment. The cut-throat competition so commonly associated with many current organizations has caused most businesses all over the world to remain proactive and any organization which ignores the importance of logistics has to blame itself. The entire purpose of logistics is defined when the logistics managers start to take marketing initiatives.
Logistics and marketing management are concerned with the effective flow of products and services in the economy and pertain to the distribution of both consumer and industrial goods. Marketing is considered to be a vital part of an economy and there is a need for an efficient marketing system which can ensure that all marketing activities are carried out in accordance with the predefined goals of the business.




Logistics managers and executives nowadays are entrusted with the added responsibility of taking important decisions and they want a better due in return for their work by being recognized as members of the pivotal winning team.
Wholesalers, manufacturers, business firms and retailers are facing the urgent need to formulate implement policies pertaining to marketing. This can be done by the execution and development of executive marketing programs and strategies. The logistics executives and managers are primarily concerned with expansion of product line and product development, choice of the channels of distribution and are also concerned with the overall development of promotional programs and establishment of pricing methods and policies.
Logistics is primarily concerned with a high degree of development in the relations that concern marketing exchange. It is commonly believed that an effective marketing strategy creates opportunities for the implementation of logistics in addition to building up effective and efficient logistics systems.
A developed economy or an economy which is expanding its horizons for its overall development requires the integration of both logistics and marketing. This greatly influences the facilitation of the concepts of logistics and marketing. There is interplay between flow-oriented logistics and the market-oriented concept of marketing. Thus, the manufacturer of a product is benefited in such a way that he is enabled to increase the informational and material properties of the product as evaluated by the end-consumer. This integration also helps in stimulating the emergence of marketing logistics within the logistics structure to provide the customer with a wide range of options.
The concept of effective marketing which is widespread in the developed countries of the world allows modifications on the part of commercial mediators, their concerned functions and objectives. These mediators shift their base from traditional catering to solvent demand for goods which are demanded by the customers to respond to customer groups' particular demand. The marketing strategy allows the commercial mediators to get involved in supplying various means of production besides raising the standards of servicing by efficiently and effectively performing their functions. This also leads to a reduction in the levels of price and costs through the streamlining of product flows.
Thus, it can be rightly concluded that marketing and logistics are inter-related to each other and an organization which wants to achieve equilibrium of stability and overall development must consider them as an integral part of the organization.

Benefits of supply chains

Supply chains are so complicated that you might wonder if there is some way of avoiding them.

Sometimes  this  is  possible,  when  we  move  products  directly  from  initial  producers  to  ?nal customers  –  when,  for  example,  farm  shops  sell  vegetables  directly  to  consumers,  or  authors publish their works on the Internet. In general, though, there are very good reasons for having a longer supply chain. Suppose the population of a town decides to buy vegetables from a farm shop. This would have a minimal supply chain, but the whole population would travel sepa-rately to the farm. It would make more sense to have a transport company collect the vegetables and  deliver  them  to  a  central  location  in  the  town  –  like  a  supermarket.  If  the  transport company delivers to one town, it can easily deliver to other nearby towns, perhaps stopping at a depot to organise local deliveries. As there is a depot, vegetables can be put into storage while the supply is plentiful, and removed when there are shortages. If the vegetables need cleaning or preparation, the transport company can divert to a processing plant. Continuing in this way, you can see why a long supply chain develops, and what bene?ts it brings.

Supply chains exist to overcome the gaps created when suppliers are some distance away from customers. They allow for operations that are best done – or can only be done – at locations that are distant from customers or sources of materials. For example, coffee beans grow in South America, but the main customers are in Europe and North America. The best locations for power stations are away from both their main customers in cities and their fuel supplies. As  well  as  moving  materials  between  geographically  separate  operations,  supply  chains allow  for  mismatches  between  supply  and  demand.  The  demand  for  sugar  is  more  or  less constant  throughout  the  year,  but  the  supply  varies  with  the  harvesting  of  sugar  cane  and beet. When there is excess supply, stocks are built-up in the supply chain, and these are used after the harvests ?nish. Supply chains can also make movements a lot simpler. Imagine four factories directly supplying products to eight customers.

 The following list suggests some other bene?ts of well-designed supply chains (where we use the terms ‘wholesaler’ and ‘retailer’ as a convenient label for intermediaries):

? Producers  locate  operations  in  the  best  locations,  regardless  of  the  locations  of  their customers.
? By concentrating operations in large facilities, producers can get economies of scale.
? Producers do not keep large stocks of ?nished goods, as these are held further down the supply chain nearer to customers.
? Wholesalers place large orders, and producers pass on lower unit costs in price discounts.
? Wholesalers keep stocks from many suppliers, giving retailers a choice of goods.
? Wholesalers are near to retailers and have short lead times.
? Retailers carry less stock as wholesalers provide reliable deliveries.
? Retailers can have small operations, giving a responsive service near to customers.
? Transport is simpler, with fewer, larger deliveries reducing costs.
? Organisations can develop expertise in speci?c types of operation.

What is the Difference between 1PL, 2PL, 3PL, 4PL and 5PL logistics ?

The rise of 3PL in logistics and supply chain is now well evident but how far has 4PL developed and what is 5PL?

- A first-party logistics provider (1PL) is a firm or an individual that needs to have cargo, freight, goods, produce or merchandise transported from a point A to a point B. The term first-party logistics provider stands both for the cargo sender and for the cargo receiver.
A 1PL can be a manufacturer, trader, importer/exporter, wholesaler, retailer or distributor in the international commerce field. It can also be institutions such a government department or an
individual or family removing from one place to another.
Anyone having goods moved from their place of origin to their new place is considered to be first-party logistics provider.

- A second-party logistics provider (2PL) is an asset-based carrier, which actually owns the means of transportation. Typical 2PLs would be shipping lines which own, lease or charter their ships; airlines which own, lease or charter their planes and truck companies which own or
lease their trucks.

- A third-party logistics provider (3PL) provides outsourced or 'third party' logistics services to companies for part or sometimes all of their supply chain management function.
Well known 3PLs include DHL, Wincanton, Norbert-Dentressangle, CEVA & NYK Logistics

- A fourth-party logistics provider (4PL) is an independent, singularly accountable, non-asset based integrator who will assemble the resources, capabilities and technology of its own organisation and other organisations, incuding 3PLs, to design, build and run comprehensive
supply chain solutions for clients.

- A fifth party logistics provider (5PL) will aggregate the demands of the 3PL and others into bulk volume for negotiating more favourable rates with airlines and shipping companies.
Non asset based, it will work seamlessly across all disciplines.
The central ethos of 5PL is its commitment to collaboration and to obtaining a higher degree of resource utilisation in order to achieve savings and open up opportunities to secure the best possible solution at minimum cost/carbon etc.

Why Is Logistics Important?

Saturday night finds you as the host for a special birthday celebration for a friend at a local restaurant. You carefully planned everything ahead of time—the number of guests, the expected cost of the dinner, and the menu. Unfortunately, by the end of the evening, everyone agrees that the restaurant experience was a disaster. Your food arrived late, the specials were sold out, the wrong meal was served, the food was cold, and the wait staff were unresponsive. You will never return to this restaurant. How did this happen?
A dining logistician would say that the cooks, servers, and managers in the restaurant used poor logistics practices. The cooks did not determine the volume and lead times from ordering to delivering the goods, the servers did not communicate the order to the cooks, the staff did not follow quality assurance procedures, and the management did not communicate clearly with the customer.
Logistics is similar to dining at a restaurant. Simply put, “logistics is the flow of material, information and money between consumers and suppliers (Frazelle 2002)1. It incorporates the planning and execution of activities to move products from origin to destination. Logistics is often called supply chain management because a chain of partners, products, money, and information ultimately delivers the food (supply) to the patron (customer).
Figure 1, a distribution plan or pipeline for a typical supply chain, shows the many partners, facilities, and shipments that can make up a supply chain. Products arrive at a destination port by an ocean vessel, plane, or truck carrier; then a customs broker clears them through customs. Depending on the terms and service of the transportation, which defines who is responsible for what, another carrier transports the goods to a central warehouse, also called a distribution center. From there, products move through the distribution system until they reach the client.
Even before the shipment reaches the port, many transactions; negotiations; and steps that include product selection, forecasting, financing, and procuring the products; must be completed efficiently. All the steps involve a number of stakeholders.


If the people who attended the disappointing dinner party were asked why logistics is important, they might answer that the correct logistics in the restaurant would probably have resulted in better customer service. In fact, logistics and customer service are mutually dependent. Customer service drives logistics practices, and logistics practices impact customer service. In the field of public health, without product availability, a program or campaign will not be successful. Although customer service may be defined differently between corporate logistics and public health or disaster relief logistics, all logisticians operate according to the same six rights.

The Six Rights

• The right product


• In the right quantities


• And the right condition


• To the right place


• At the right time


• For the right cost.