IMPACT OF LOGISTICS MANAGEMENT ON THE COMPETITIVENESS OF INDIAN ORGANIZATION

Abstract

Wars have been won or lost on the strength of logistics capability or lack of it. Triggering intense competition, globalization coupled with liberalization, forced both private and public firms to commit themselves to making available their product or service at the right cost, at the right time, in the right condition and in the right place to give maximum satisfaction to their customers. This research investigates the current logistics scenario in India and compares it with other developed economies. The objective of this research is to identify the investment amount and strategies for improving the logistics performance of Indian organizations. For achieving this objective extensive literature review was carried out and improvement in human resources, IT enabled logistics system, improvement in government regulation and development of infrastructure has been chosen as the four areas which require investment. Cost, time, reliability, flexibility and safety are chosen as the five competitiveness factors, which influence the logistics performance. These have been considered as the five components of the logistics performance index, which is considered as the main component of this study. Effect of investment on logistics performance index is the basis of the study. System dynamics modelling has been applied to generate various scenarios in simulated environment to formulate and test various investment plans and policies. The system dynamics methodology has been explained in detail and the models developed are validated and sensitivity analysis has been performed on them. The models are found to be stable. Scenario generation was carried out to formulate policies and to understand the model behaviour under different conditions. Interpretive Structural Modelling is applied to sixteen critical success factors chosen for logistics improvement. These factors are categorised into different categories using MICMAC analysis. This will help to understand the interdependencies among all the variables and also to identify the key performance variables. The study has major contribution to the research area as the models developed are very generic in nature and can be used by any government and organization for identifying the effects of investment on logistics performance. Also, the time frame required for the effects of improvement can also be simulated under various scenarios. Contributions of the study, limitations and scope for future work are also discussed