Logistics - Exam III (Ch. 10 - 15)

Explain the omni-channel concept.

"anytime, anywhere, anyhow, and any device." The idea here is that consumers have the options of where to buy, when to buy, and how to buy from a retailer.

What is the estimated 3PL spending in the US in 2018?

$195.8 Billion

Strategic Relationship

(alliance); more strategic and highly relational

Transactional Relationship

(vendor); Little or no integration or collaboration

How do transportation decisions affect inventory costs?

- similar cost to ship 10k lb LTL as 40k lb TL - a railcar has 4-5x the capacity of a TL - water transport vessels have higher capacity than rail - the more you receive at a time, the more avg inventory you will have on hand (higher ICC) - high transportation costs don't matter as much for more expensive items, making air a possible attractive option

What are the roots of modern day 3PLs (different areas they arose from)?

-transportation -contract logistics -freight forwarding -financial -information related -corporate subsidiaries

What are the top 5 outsourced logistics services in order?

1. Domestic transportation 2. Warehousing 3. International Transportation 4. Freight Forwarding 5. Customs Brokerage

Explain the various roles of distribution operations in Supply Chain Management

1. Enhance customer service 2. Balance supply & demand 3. Protect against uncertainty 4. Allow quantity purchase discounts 5. Support production requirements 6. Fulfill omni-channel demand 7. Promote transport economies

What are the top 5 most popular distribution center metrics?

1. On-time Shipments - Customer 2. Internal Order Cycle Time, in Hours - Customer 3. Dock to Stock Cycle Time, in Hours - Inbound Operations 4. Total Order Cycle Time, in Hours - Customer 5. Order Picking Accuracy (Percent by Order) - Quality

What are the 5 categories of metrics in the SCOR model?

1. Supply Chain Reliability 2. Supply Chain Responsiveness 3. Supply Chain Flexibility 4. Supply Chain Costs 5. Supply Chain Asset Management Efficiency

What are the elements of successful collaboration?

1. well understood goals and objectives 2. trust and commitment 3. organizational compatibility and communication 4. equitable sharing of gains and losses 5. benefits greater than going at it alone 6. dedication to continuous improvement 7. strategic plan to provide direction to the collaboration

What global region has the largest 3PL volume and compound annual growth rate?

Asia-Pacific

2PL

Asset-based logistics providers that physically move product through the supply chain (transport carriers of various modes).

Measures

Broadly stated / general, simple, no calculations

Horizontal Collaboration

Collaboration between suppliers who would conventionally be viewed as competitors

What are the differences between containerized freight and transload freight?

Containerized = loaded onto storage equipment at origin and delivered to destination on that same piece of equipment with no additional handling Transload = involves goods that are handled and transferred between transportation and equipment and mode multiple times

How does cross docking work?

Cross-docking is a practice in logistics of unloading materials from an incoming semi-trailer truck or railroad car and loading these materials directly into outbound trucks, trailers, or rail cars, with little or no storage in between

What are some common DC performance metrics?

Customer Facing Metric ex. Unit fill rate, case fill rate, order value fill rate Distribution Operation Metric ex. Distribution cost per unit, distribution cost ratio, capacity utilization

Explain the conditions when it is best to run your own (private) DC vs. using public warehousing or contract warehousing (3PL), and which of these has fixed costs?

Decision on facility ownerships - Private, public, or contract facilities - Should be made based on the organization's expertise vs. scope of tasks required and financial resources relative to the number and size of facilities needed.

Explain the trade-off between efficiency and effectiveness

Efficiency - How well resources expended are utilized; Providing the required service for the lowest cost Effectiveness - Gap between customer expectations and customer perceptions of the quality of the actual service delivered

What are some common challenges in running DCs?

Finding and retaining talent Demand forecasting Inventory management Fixed overhead costs Operator utilization Efficiency Item damaging Productivity

3PL

Firms that manage and/or provide logistics services on behalf of their clients andcustomers. Most of these organizations are non-asset based

4PL

Firms that provide broader scope of services to help manage elements of the supply chain, and typically may be more strategically involved than 3PLs would be

Sortation

Focuses on assembling like products together for storage in the distribution facility, processing or transfer to customers

Allocation

Focuses on matching available inventory to customer orders for an SKU

What are the differences between for-hire and private fleet operations in trucking?

For-Hire - avoids large capital cost of starting a private fleet - avoids time needed to build transportation expertise - avoids challenges inherent in operating a private fleet Private Fleet - accounts for nearly half of all US freight transportation spending and more than half of miles traveled - can operate at costs competitive with for-hire carriers while providing greater scheduling flexibility and control over transit time - promotional impact and prestige of having highly visible company trucks on the road

When was the first holiday season that marked the emergence of on-line buying of gifts?

Holiday 1999

How does inventory reduction affect the company financials?

It increases ROA by reducing investment in inventory.

1PL

Shippers or receivers of product moved through supply chain

What are the pros and cons of each of the 5 modes of transportation?

TRUCK - high variable cost, low fixed cost; can be slow RAIL - long distance movement for low cost goods; some high cost goods (cars); high fixed costs WATER - low value, high density bulk cargo; high variable cost AIR - high quality, low weight goods; expensive PIPELINE - low cost for liquids and gases

What effect does increasing on-time delivery performance have on net profit, ROA, and ROE?

Reduce lost sales, and it will have a positive effect on net profit, ROA, and ROE

Vertical Collaboration

Refers to collaboration typically among buyers and sellers in the supply chain

What is intermodal transportation, and why is it used?

Refers to uses of two or more carriers of different modes in the origin-to-destination movement of freight

Accumulation

The DC serves as a collection point for product coming from multiple origins and provides required transfer, storage, or processing services, allowing firms to consolidate orders and shipments for production and fulfillment processes

What is different about reverse flows in the supply chain compared to forward flows to the consumer?

They have been seen as a negative thing in the past, but they are actually beneficial for things such as green laws (ex. reusing boxes that an object is sent in)

How are retail store operations affected by omni-channel?

They must keep up with online retail stores and make their products easy to access

Explain the importance of the concept of transfer of ownership

Transfer of ownership is linked to responsibility for managing in-transit goods. This responsibility includes making key decisions regarding mode and carrier selection, insurance coverage, and routing. The flow of payments is also critical to timely completion of the transaction.

Which mode of transportation is #1 in the US in value of goods, tons, and ton-miles shipped?

Truck

How are WMS and auto ID tools such as bar codes and RFID used in DC operations?

Using RFID in conjunction with a WMS can lead to significant improvements, as it allows for real-time tracking and handling of products with great accuracy. In the warehouse, products can be easily located because all product movements are tracked and automatically registered in the system.

As the number of warehouses increases, what happens to warehousing costs, inventory costs, transportation costs, and cost of lost sales?

Warehousing costs INCREASE bc they are paying for more overhead space Inventory costs INCREASE bc they maintain a safety stock at each facility Transportation costs DECREASE bc distribution is not all coming out of one central hub Cost of lost sales DECREASE

What effect does 3-D printing potentially have on inventory levels and why?

Will significantly reduce the need to hold finished goods, parts, and raw materials inventories at strategic locations in the supply chain

The new 5G wireless technology is an example of what type of innovation?

mobile connectivity

Explain how to calculate asset turnover

net sales / average total assets

What are some commonly used transportation metrics?

on time delivery billing accuracy perfect delivery index

What are some examples of products made with 3-D printing technology?

parts for aviation ships

In which of these 4 categories does demand planning and strategic network design belong?

planning

What are the 4 primary categories of supply chain software?

planning execution event management business intelligence

What 3 network elements must be linked to create a robust operating environment?

process people technology

What are some common process measures in the categories of time, quality, and cost?

refer to figure 13.4 on page 517

What are the 4 R's of Sustainability?

reuse remanufacture recondition recycle

What are the key functionalities of a transportation management system (TMS)?

software used to plan freight movements, do freight rating and shopping across all modes, select the appropriate route and carrier, and manage freight bills and payments

What is slotting and what are some ways to optimize it?

the process of organizing a warehouse to maximize space and efficiency. Slotting can also improve the inventory management processes and reduce overall warehousing costs. Slotting is often organized by SKU number, product type, or any other type of product characteristic

What is transit time?

the total elapsed time that it takes to move goods from origin to destination

What is the outlook for supply chain talent management?

there is a supply-demand gap, and SCM talent is needed for companies to progress

What are the differences between data, information, and understanding?

• Data - unorganized facts that need to be processed (e.g., levels of inventory at ends of financial periods) • Information-data that has been gathered, processed, organized, and structured in a given context (e.g., average levels of inventory and/or levels of inventory by SKU) • Understanding - information that has been examined and studied in the context of specific business situations (e.g., inventory levels in relation to overall economic conditions, weather patterns, etc.)

Explain the difference between FOB origin and FOB destination

• FOB destination (delivered)o Seller is required to transport goods at own risk and expenseo Seller retains title to goods until offloadedo Seller assumes title to goods and risk of loss until satisfactory offloading and delivery at consignee's facilityo Seller pays freight bill and files loss and damage claims • FOB origin (shipping point)o Buyer controls or directs shipmento Buyer assumes title and risk of loss at seller's shipping pointo Buyer pays freight bill and files loss and damage claimso Title passes when shipment is tendered to carrier

What are the characteristics of a good metric?

• Is quantitative • Is easy to understand • Encourages appropriate behavior • Is visible • Is defined and mutually understood • Encompasses both outputs and inputs • Measures only what is important • Is multidimensional • Uses economies of effort • Facilitates trust

Explain the primary DC product handling processes - receiving, put-away, storage, replenishment, order picking, and shipping.

• Receiving- schedule carriers-unload vehicles-inspect freight- verify order • Put away- identify product- verify location- fill storage/pick slots- direct fill orders. • Storage- replenishment and put-away serve as storage locations • Replenishment- re-supply pick slots- move pallet quantity orders to shipping dock- verify moves. • Order picking- travel to pick slots- validate SKU and quantity- fill customer orders- prep and deliver product to shipping dock • Shipping schedule carrier- load vehicle- secure freight- complete paperwork- call for dispatch

What are the differences between TL, LTL, and small package carriers?

• Truckload (TL) carriers handle single shipments that use the full cubic capacity of the trailer or exceed 15,000 pounds. TL carriers provide direct service, picking up the load at the origin point and delivering it directly to the destination with- out stopping at freight-handling terminals.• Less-than-truckload (LTL) carriers move multiple shipments ranging from 150 pounds up to 15,000 pounds in each trailer. National LTL carriers use a hub-and-spoke network of local and regional terminal facilities to sort and consolidate shipments moving to a particular market area. Regional LTL carriers focus their efforts on a particular area of the country.• Small package carriers handle shipments up to 150 pounds and move multiple shipments on a single van or truck. They use networks similar to LTL carriers to move freight efficiently throughout the country. UPS, FedEx Ground, and the United States Postal Service are the primary U.S. small package ground carriers.

Collaborative Relationship

a buyer/supplier relationship marked by long-term cooperation

What are the 8 key characteristics that information must have to meet quality standards?

accuracy accessibility relevancy timeliness transferability usability reliability value

Explain how to calculate return on assets and how supply chain decisions such as changes in supply chain costs and inventories affect the income statement and balance sheet.

calculated as the ratio of its net income in a given period to the total value of its assets small changes in Income Statement amounts result in large changes in performance; large(r) changes in Balance Sheet amounts result in small(er) changes in performance

Indexes

combines two or more metrics into a single indicator. Usually an index is used to track trends in the output of a process. A logistics example of an index is the perfect order

5PL

companies that aggregate demands of 3PLs into bulk volumes to negotiate better rates with logistics service providers

What is reliability?

consistency of measurement

What are the 7 supply chain process enablers that information systems must support to help organizations achieve higher levels of performance?

cross chain visibility agility velocity synchronization adaptability segmentation optimization

What are the 4 levels in the supply chain analytics maturity model, and what are some examples of the analytical resources available for each?

descriptive- incorporates available data to answer questions such as what, where, and when certain supply chain activities, processes, or events are happening? This may take the form of routine data gathering, such as inventory levels, or perhaps ad hoc exercises to address a specific problem. predictive-questions such as what is likely to happen, what are the likely trends, and what are the results if certain events occur? Answering questions such as these involves formal analyses of available and relevant data, much of which may have been gathered initially for descriptive purposes. prescriptive- indicate the need to apply optimization technologies in an effort to identify a best solution to the current statement of the problem. cognitive-typically introduces social context and meaning into the analytical processes, as well as very high-level mathematical and statistical capabilities.

What is accessibility?

determines whether a particular mode is able to reach origin and destination points, as well as provide service over the specified route in question.

Full Collaboration

dynamic combination of both vertical and horizontal collaboration

In which of these 4 categories do Warehouse Management Systems and Transportation Management Systems belong?

execution

What are incoterms, and how are they used?

internationally recognized commercial terms that describe the responsibilities of the buyer and seller in the arrangement of transportation

Metrics

involves a calculation or a combination of measurements, often in the form of a ratio. Logistics examples would include inventory future days of supply, inventory turns, and sales dollars per stock-keeping unit

Assortment

involves the assembly of customer orders for multiple SKUs held in the distribution facility

What is the typical radius froM the origin that trucking operates within?

500 miles

What is the average shipping distance for rail movements?

554 miles annually