MGT 431 Final

fill rate

% of customer demand filled from on-hand inventory; measures magnitude of in-stock occurrences (is a complement to the in-stock rate); this is an effectiveness measure

in-stock rate

% orders without any stockout occurrences; measures frequency of in-stock occurrences; this is an effectiveness measure

how to calculate cash to cash cycle

(days sales A/R + inventory days) - days paying A/P

why do we need warehouses

- uncertainty in demand so they hold inventory - value-added manuf - consolidate/ship mix of goods and break bulk - get closer to customers - create kanbans to decouple production and support JIT

why is reverse logistics difficult (in 2 groups)?

-*control*: returns, recalls -*uncertainty*: condition of packaging, condition of product, costs

what logistics activities are most often outsourced to 3pls

-operational: domestic and international transportation -strategic: customer facing and IT

how to decide where to put a warehouse

-regional determinants: labor climate/rates, availability of transportation, proximity to markets, taxes/incentives, supplier networks, land costs -specific site determinants: transportation access via modes, traffic congestion, workforce, land costs/taxes

while warehousing uses lots of technology, people are still vital because

-they send information to the systems, like a picker scanning and RFID -someone programs the wms to make the right decisions -smart people have to design the warehouse for optimal efficiency

is reverse logistics cost higher or lower for the following categories: -transportation -holding cost -shrinkage (theft) -obsolescence -collection -sorting,quality -handling

-transp: higher -inventory holding: lower -shrinkage: much lower -obsolescence: may be higher -collection: much higher -sorting/quality diagnosis costs: much greater -handling: much higher

the warehouse management system deals with inventory in a FIFO or LIFO method?

FIFO; helps decrease the obsolescence risk with inventory...decreases risk of owning out-of-fashion merchandise

what are the two requirements of the company that they have to do to be able to achieve their information technology goals

1. ability to collect, store, disseminate info 2. willingness to share

3 key types of reverse logistics

1. e-commerce & returns 2. sustainability & recycling 3. safety & recalls

whats the basic Cintas supply chain process according to Brian Bensman

1. forecast/plan 2. pick suppliers & negotiate 3. look at internal manufacturing 4. send to DC 5. rental locations 6. customer delivery from rental locations

drivers of reverse logistics

1. growth in ecommerce and online shopping 2. greater focus on sustainability which has led to more recycling 3. more emphasis on safety regulations -> more product recalls

3 types of activities cash can come from

1. operations 2. investments 3. financing

what are the 2 key factors that the cash to cash cycle depends on?

1. process design & efficiency 2. power

what are some general principles of warehouse layout and design

1. use one-story facility 2. use straight line of goods 3. use efficient material handling equipment 4. use effective storage plan 5. minimize aisle space 6. make max use of facility height + add visual cues

what are the 6 fundamental principles of logistics

1. value is key & defined by customers 2. customer rules (but not all are created equal) 3. tradeoffs are everywhere, and lean principles lessen their impact 4. inventory is a friends (w benefits and costs) 5. fast is convenient but costly 6. change is the only constant in life - and logistics

only ____ if retailers account for the full price of returns

1/3

estimates say that about ___ to ____ percent of items bought online will be returned

15-40%

amazon was born in ____

1995

inventory turnover

COGS/inventory; this is an efficiency measure

what is one of the biggest enablers of effective logistics and SCM

IT and IT systems

which trade agreements does Cintas interact with most often?

NAFTA and CAFTA (central america)

a tennis ball in the garage to tell you when your car is pulled far enough to clear the garage door closing is an example of what type of visual management

Poka Yoke

walmart is using ____ to work on better information sharing

Retail Link

what was one particular logistics partner that Cintas mentioned they work with?

Scheider Logistics

define warehouse

a generic term for a facility where materials and goods are stored

centralized return center

a place that handles returns; consistent, accurate decisions, retail/manufacturing space is saved, enhances the image of companies if they partner with environmentally friendly partners, more rapid financial recovery when its in one place; quick trend identification

what does the lean principle of 5s dictate

a safe and orderly work environment is also an efficient work environment

poka yoke

a simple method used to detect, prevent, or control a defect in the operation. It helps to identify when there's an abnormality or something that isn't quite right; uses visual cues like outlines of tools/brooms so you know when they're missing/out of place

scenario analysis

a systematic process to analyze possible decisions by considering the outcomes under different assumptions; this challenges forward thinking companies & allows you to gain insights into future opportunities

what's the biggest challenge of lifecycle costing

accurately estimating all of the costs

what is included with the technology game changer for scm

additive manufacturing, big data & predictive analytics, robots (IoT), social media

taking time out of your supply chain by using information enables a more ___ supply chain

agile

what are the positive aspects of inventory

allows us to meet customer demands, buffer against uncertainty, and speculate (take advantage of lower prices)

how big is the secondary (returns) market as a percent of gdp?

almost 3% of GDP

square root of N rule

an equation that boils down to the fact that when you quadruple the # of warehouses, you double safety stock (difference in # of warehouses is under a square root)

what is inventory

an investment with holding costs that ties up capital and may change in value... it is worth MONEY

perfect order as defined by the supply chain council

an order delivered to the right place with the right product at the right time in the right condition in the right package in the right quantity with the right documentation to the right customer with the correct invoice (aka nothing went wrong)

pilot projects

another way to do a scenario analysis/complements it; proves concepts and develops a sure-fire implementation plan; allows companies to test small scale before major implementation

what are the two major types of 3PLs

asset-based and non-asset based

customer relationship management (CRM)

automatic system of customer management so you can segment and communicate with customers; allows for targeted promotions, product selection, new product development -- etc

elements of reverse logistics in order of importance and ability to reduce costs!!

avoidance***, gatekeeping, quick disposition, remanufacturing & refurbishment, asset recovery

elements of reverse logistics in order of importance

avoidance, gatekeeping, quick disposition, remanufacturing and refurbishment, asset recovery

what is the best way to reduce costs and hassle of returns?

avoidance.. to avoid the probability of returns in the first place

ellram said that the secondary market is really _____

beautiful hahaha

how has the 3pl industry changed in the last 20 years

become more sophisticated, standardized services, systems are much bigger issue, international demands, customers want better, faster, cheaper, customers want better integration, value-added services growing

do you have better or worse customer service when you have more warehouses

better; More warehouses = less distance to customers = lower order fulfillment cycle time

a warehouse management system is know as a _____ of the operation of warehouses

brain

goals of reverse logistics

capture value, recycle, reuse, reduce cost

____ is king!

cash!

according to Ellram, the ERP system is basically a company's ____________

central nervous system

what are some risks of not looking at reverse logistics holistically

china isn't taking our waste anymore, 82% of e-waste is going in landfills

closed loop system

circular economy where goods naturally go back into the system (a type of circular economy)

advantages of using stores for fulfillment

close to the customer, fast last mile, transfer between stores more quickly, inventory already available in the store

what are some reasons that sharing information externally is good

collaborate w/ major customers; detailed sharing leads to lower inventory costs and higher service levels

what are some fears associated with tracking and tracing?

companies knowing what I'm buying, can sense trends about a company based on what the company is buying, location/GPS issues

channel design is a good source of ________

competitive advantage

six sigma

complements lean practices; this was originally Motorola's response to 1980s japanese quality challenge (still in use today) -- refers to the greek letter that notates standard deviation. All about standardizing processes

benefits of a centralized returns center

consistent & accurate disposition of returned product, as well as specialization that reduces labor costs and reduced transportation costs

potential advantages of omni

consistent experience, should be lower lost sales while achieving the same customer service, lower inventory levels overall, requires good information systems, easier for customer to return, DCs serve all locations

how can you solve the problem of having too long production lead times

construct a larger warehouse

what is another name for third party logistics company

contract logistics or logistics service providers (LSP)

which type of warehouse ownership (private/public/leased/contracted) is able to provide value-added warehousing and logistics services by a comprehensive 3PL?

contract warehousing - the contract contains the duties of the workers

pros of owning warehouses

control, customer service, known costs and avoiding markups, increased security, higher real estate value

what is the key decision variable for whether or not to use 3pls

cost (it used to be high service or level of service, but now that high level of service is expected)

whats a common opportunity cost with the decision of how many warehouses to have

cost of poor service (adding more warehouses adds more warehouse costs, inventory costs and other costs, but allows you to miss out on the cost of poor service)

what are some things that transportation management systems do?

create vehicle loading/unloading plans, identifying optimal routes, tracking shipments, comparing modal options, providing comparative data to select the right carrier, track carrier performance

working capital =

current assets - current liabilities

potential disadvantages of omni

customer service could vary, possibly could lose more sales if a channel doesnt have inventory available, challenging to have inventory in the best place for customers, can be expensive to get info systems, some people could be trying to get the same inventory at the same time, more complexity in the DC design, pulling and shipping from stores is expensive and complex

what are results of data breaches

damage to reputation, disruption of operations, legal liability w/ laws and contracts

dwell time

days inventory sits idle/days inventory moves in supply chain; this is an efficiency measure

what happens during gatekeeping

decide whether to take the item back

what is the ordering vs holding costs tradeoff

deciding how much to order and how frequently to order;

what does lifecycle cost analysis tell us?

decisions you make in the design-and-development stage (i.e. deciding what materials to use and how you will assemble them) affect the usage and disposition costs

what does the square root of N rule determine

determines how the inventory will change to account for uncertainty in demand as number of locations changes

what are some keys to omni success

determining optimal ship points, developing efficient picking

why work with secondary market partners as a company?

dispose of the product quickly, recover as much value as possible, protect the brand

if a distribution center is quadruple the size of another distribution center, the EOQ of the large DC will be _____ the EOQ of the smaller one

double

if a distribution center is quadruple the size of another distribution center, the inventory turnover of the large DC will be _____ the inventory turnover rate of the smaller one

double

as the holding cost per unit increases, the Q* (quantity per order) goes _______

down

characteristics of a transactional relationship

driver: cost/price; arms length, minimal interaction, transitory... results in a commoditized relationships

strategic relationship characteristics

driver: innovation characteristics: trust-enabled, resources commingled, gain-sharing, long term; results: relationships are a competitive differentiator

cooperative relationship characteristics

driver: scale characteristics: joint planning, frequent interaction, information-intensive, value-added services, long term; results in relationships that are essential to day-to-day operations

gatekeeping

empowering front-line people to screen returned merchandise at the entry point to the reverse logistics system to determine how to handle the product; you have to make these decisions as close to the consumer as possible with easy rules and determining product target disposition ahead of time

is technology a solution or an enabler

enabler

what is the purpose of the visual management/poka yoke/5s stuff?

enhanced safety, efficiency and effectiveness

examples of closed loop systems

european glass bottle collection, kegs, cintas rugs and uniforms (this is largely about reuse)

t or f: if order placement cost decreases (K), the optimal order quantity (amount ordered per order) will increase

false... if a numerator EOQ item decreases, then so will the EOQ (amount per order)

t or f: every item should have a dedicated place in the warehouse

false; sometimes the less common skus should be placed randomly in multi-use spots because otherwise they take up space and increase distance to picking other items if there are too many dedicated places

t or f: there isn't a huge urge to change the working capital accounts into cash right away

false; there is a strong desire to turn all the WC accounts to cash quickly

t or f: amazon is completely online

false; they now own whole foods and have had some locations for christmas

t or f: lower inventory turns at smaller DCs means that those DCs are less efficient

false; this could be because they have smaller economies of scale and are not seeing their demand fulfillment as high in eoq

what's the goal in picking warehouse location

finding the geographic center - the location that minimizes the distance between you and your supply chain partners (suppliers and customers)

what are some main Cintas products

fire protection, uniforms, cleaning supplies (dispensers etc)

salvage brokers

first level brokers buy returns in bulk and sell to secondary markets;

is forward or reverse logistics more clear

forward

types of non-asset based 3PLs

freight brokers, freight forwarders, customs brokers, intermodal freight transporters, lead logistics providers (LLP), contract logistics

examples of warehouse-oriented 3PLs

fulfillment services, reverse logistics, public warehousing

what happens to roa if... income decreases

goes down

are 3PLs growing or staying constant size in the market

growing and taking on more responsibility

environmental returns

hazardous materials must often be returned for proper disposal

warehouse management systems (WMS)

helps automate and organize warehouse operations for efficiency/compliance; directs warehouse activities using RFID for tracking goods in warehouses

whats the point of an eoq for managers

helps determine size of an individual order

key phrase for why warehouses are valuable

helps you get product where it needs to be when it needs to be there at the lowest cost

waste management hierarchy

hierarchy of most to least favored options of waste management - prevention, minimization, reuse, recycling, energy recovery, disposal

as a company, do you want your days payable to be high or low

high because you want to wait to pay your suppliers

total logistics costs =

holding + ordering costs

bonded (customs) warehouses

holds inventory to delay the payment of taxes/duties; if it's never sold in the country it's imported into, the items can leave the country without ever paying the import taxes; 5 year max storage

what should you consider financially regarding outsourcing

identify relevant cash flows, define the timing of cash flows, calculate the net present value

is clicks and mortar more popular in the US or in Europe

in europe - particularly widely popular in the UK

what are the two metrics that customers care most about regarding inventory

in-stock rate, fill rate

key inventory effectiveness metrics include _____ and _____

in-stock rates, fill rates

what happens to inventory as we increase the number of warehouses

increased uncertainty that each facility experiences in the demand for its products because it's more specific/less spread across the portfolio

is Q dependent or independent of the total acquisition cost?

independent

is it easier to forecast demand for a product with dependent or independent demand

independent

EOQ is good for which type of demand

independent demand

what makes a great third party logistics company

innovation and customer-orientation, value-added services, standardization, good pricing

what metric measures how often inventories are depleted and replenished over the course of a given time period

inventory turnover

key inventory efficiency metrics include _______ and ________

inventory turnover (increase) and dwell time (want to decrease)

key inventory performance metrics

inventory turnover, dwell time, in-stock rate, fill rate

ways companies affect supply to get the item to the customer if you don't have the inventory where needed

inventory, multiple suppliers, fast shipping, expedite processing/manufacturing (excess capacity, overtime, fms), postponement, inventory pooling

what is the square root law of cycle stocks

it describes that when a distribution center's annual demand increases (D), the inventories (i.e. inventory turns) and EOQ only increase by the square root of that same increase. For example, if one DC serves quadruple the demand of another DC, the bigger DC only has double the inventory turns and double the EOQ as the first

what does the strategic profit model indicate for inventory

it shows how inventory management affects overall firm profitability

what does the term "sawtooth" mean regarding inventory

it shows the pattern of inventory consumption and replenishment over time

why wouldn't you want to outsource logistics?

lack of control, less visibility, maybe you have more internal expertise with the product/industry, too expensive if you have the ability to do it yourself

using information to substitute for inventory allows you to have a more ____ supply chain

lean

if you enable collaboration with the supply chain through information, then you could have a better ____ supply chain

learning

disadvantages of using the stores for fulfillment

less inventory variety, less efficient, double handling, stockouts - people buying before the orders are filled, more complexity in forecasting, costs!

would finance departments tend to prefer you have more or less warehouses

less to minimize required investment

RFID (radio frequency identification)

little microchips and antennas that can automatically identify the good and track it

as a company do you want your days inventory to be high or low

low -- inventory is valuable and accumulates costs

as a company do you want your days sales to be high or low

low because you want LESS days before sales

compared to a larger warehouse, a smaller warehouse should have ____ (higher or lower) inventory turnover... assuming all else is held equal

lower

other trends in 3PLs

major consolidation, projects getting larger and more complex, global projects, systems element, continued growth and flattening, more outsourcing of total supply chain

more information can allow companies to do what with their inventory

manage it better and have less inventory sitting around

how to enhance warehouse operations?

mapping, value stream maps, kaizen events to brainstorm opportunities for service enhancement and waste reduction

benefits of the secondary market

meaningful contribution to the GDP, drain for product that cannot be sold as first quality in the primary channel, keep products out of the landfills

product availability

measured by a fill-rate metric like item fill rate (items filled/items ordered), line fill rate, or order fill rate

distribution channels are an important way to ________

meet underserved markets that may not even realize they're underserved

cons of owning warehouses

more liability, high upfront costs, more assets, can decrease ROA, stuck in one location even if customer base changes, more risk!

are there more or less returns/recalls/recycling recently?

more! more ecommerce and therefore more returns/reverse logistics activity

which company launched six sigma

motorola - and cintas uses it now a lot too

outlet stores

move "seconds" or product that is not selling well through the primary market

does amazon have a negative or positive cash to cash cycle?

negative! classic amazon, good at everything

what is the lifecycle equation

net present value of the sum of design, manufacturing, operations, and end of life costs

how to implement avoidance

no free shipping, deadlines, cash/some store credit, try on

is the last mile problem solved?

no. if you think yes then look up the song "nobodys perfect" by hannah montana -- same thing - no complex business problem like this is solved immediately in the best way possible

are all returns of equal value

nope definitely not lol

what is the goal of asset recovery

obtain the maximum value when you have returns by limiting return periods, dealing with them quickly, or requiring that products are in a certain condition

common measures of order fulfillment EFFECTIVENESS

on-time delivery, order fill rate, order accuracy, line accuracy, order cycle time, perfect order completion

are operational or strategic activities more often outsourced

operational because most companies aren't comfortable with handing off their most strategic activities to people (losing control)

what are examples of integrated solutions

order fulfillment management, reverse-logistics execution

order cycle time

order fulfillment performance metric that measures the time from order placement to customer receipt of delivery

what is clicks and mortar

order online, pick up in store or at a dropbox

classic measures of warehouse productivity EFFICIENCY

orders picked/packed per hour, lines per hour, items per hour, cost per order, cost as a % of sales

what are some of the easiest ways to increase the cash flow without damaging stock

pay slower, reduce costs, creatively collect faster, maybe sell an asset

what is included in the resources category of the supply chain management game changers

peak oil or water etc

main purpose of TMS

plan and manage all transportation needs

what is lifecycle cost analyis

popular approach to sales that also applies to reverse logistics; it 1. considers all costs, 2. creates visibility and 3. reevaluates the system periodically;

what is a part of value-added warehousing?

postponement (configure to order), promotion support, help support regional differences/preferences, helps with returns and reverse logistics (incl separating repairable items and quality assurance)

define reverse logistics

process of planning, implementing and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods, and related info from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal LOL PROBS WILL NOT MEMORIZE

what happens during quick disposition (one element of reverse logistics)

product accepted and now you have to decide what to do

a relatively new function that warehouses can serve is ______

product processing for final assembly; it is helpful for companies to do this because they are able to do final revisions on the product based on customizations

define marketing returns

product returned because of slow sales, need to reposition inventory, or channel stuffing

types of ownership of warehouses

public, contracted, leased, private (manual), private (automated)

one major trend in getting products to customers

rapid growth in ecommerce

types of warehouses based on function

raw materials warehouses, distribution centers, cross-dock facilities, breakbulk warehouses, customs warehouses

why would companies engage in gainsharing

reasonable margin, opportunity for return, shared benefits, shared risks via offramps

what are traditional warehouse operations

receiving and unloading, storage placement, order selection, final processing/packaging, checking & verifying orders, consolidating and staging, loading & shipping, administrative, facility maintenance, equipment maintenance

asset recovery

reclaim or reuse materials that have scrap value

why outsource logistics?

reduce asset ownership, reduce employee base, lack of expertise (too many costs to getting expertise), better response from 3PL than an internal function, reduce costs; allow more free moving capital

avoidance

reducing reverse logistics costs making products and developing processes to eliminate returns and recalls

what are the aspects of reconditioning the items in reverse logistics

repair, refurbishment, remanufacture, cannibalize, recycle

remanufacture and refurbishment

repairing or making a product for resale or reuse

when was the birth of ecommerce

right around 2000

what happens to roa if transportation costs go up (less income) and assets go up

roa goes down

is EOQ robust or not?

robust - factors can be adjusted and it won't change too greatly since the square root is taken

pareto principle and how it applies to warehousing

rule that says 80% of the sales come from 20% of the goods so it explains how rack space should be dedicated to the highest volume and fastest-moving items. It justifies that your slower moving items can go into random places so they aren't taking up space and slowing down the other items

how do companies affect demand/ get customers to demand what you're able to supply

sales, free shipping, discounts for waiting/future sales, offering better substitutes for same/better price, order custom item (mto policy), subscriptions with discounts

3 paths to the secondary market

salvage brokers, outlet stores, other (auctions, internal dispositions, large internet wholesalers)

4 benefits of autonomous vehicles

savings, safety, shortages, sustainability

if you have 10 trailer loads of last fall's women's clothing that needs to be moved out of the retail stores and out of the manufacturer's distribution centers... what are 2 possible options of things to do

sell to salvage dealer or sell it to a value priced retailer such as ross or marshalls

how can cash flow be increased?

selling more goods/services, increasing price, collecting faster, selling an asset, reducing costs, paying slower, bringing in financing through equity or a loan

distribution channels

set of interdependent organizations used by a selling organization to provide its products or services to the marketplace; they are limited by own imagination and technology/costs

what's blockchain

shared ledger for recording the hisotry of transactions. It's secure and prevents tampering. All parties to transactions have to agree before the transaction is recorded. It stores the information in locks with links to form a chain. This allows companies to not have separate ledges and prevents errors/duplication/extra expenses

breakbulk

shipments are taken truckload to a place closer to customers, then LTL to final locations

Do you want your cash to cash cycle to be long or short?

short - think like you want cash faster so shorter cycle of cash becoming cash

what are the top 10 issues facing the logistics industry (maybe just read these to possible recognize on the exam)

shortage of drivers, hours of service, driver retention, ELD mandate, truck parking, compliance safety accountability, driver distraction, infrastructure congestion funding, driver wellness and health, economy

why might people be hesitant to share too much information/be too integrated with their customers/suppliers

some information can be used competitively

what are the 5s of warehousing (different from last ones slightly)

sorting, set in order, shine, standardizing, sustaining

average inventory varies as the _____ of demand

square root

multi-channel distribution centers

support ecommerce and retail stores and other channels;

what is included with the "people" category of SCM game changers

talent development, demanding customers, shifting age/population centers

what challenges do 3PLs face in the industry?

talent shortage, big data, omnichannel logistics, trend toward consolidating purchasing

scm game changers

technology, people, resources

what is gainsharing

the 3pl shares a portion of the variance between budgeted and actual costs with you as investments reduce the costs of service

what does the EOQ tell

the Q per order

what happens if brands put too much of their product in the secondary market

the brand name would be harmed/diluted. It could become seemingly less high end if it's being sold at discounts often

define dependent demand

the demand for the product depends on another bigger item (is a component part or input)

what else is affected in the EOQ formula as the order placement cost increases

the eoq overall increases because it is in the numerator of the EOQ equation

what are transportation economies

the fact that warehouses allow you to transport in full truckloads; inbound shipments are broken down and stored at the warehouse, and outbound shipments are consolidated and shipped from the warehouse

what is the key idea of omni channel

the idea of a single inventory: that all the company's channels are aligned so that the customer in all channels can access all inventories and return all inventories to the location convenient to the customer

what are production economies

the idea that producing in large lots (huge batches) is economically better and then it's stored until customers want it

what is the most expensive type of warehouse to operate

the private, automated

why might a distribution center look better if it is large

the square root of cycle stocks

what is one of the most important factors in deciding whether to own, lease, contract, or use a public warehouse?

the volume of product that will be handled over time (throughput); higher volumes justify higher fixed cost; the costs of ownership and automation can be spread over a large amount of inventory if you have a higher throughput

what is the undervaluation issue that Cintas faced

they accidentally were undervaluing the worth of products that were sent to Canada. They were forgetting the value of the logos, hangers, and many overhead costs in their value calculations

what is the key to dedicated distribution channels

they are set up only to fulfill the demand by customers;

why are 3pls appealing

they can take the logistics burden off your company so you can focus on building core competencies; they are experts in the key logistics services

what could happen if companies try to extend their payment terms too long to their clients/partners

they could make the whole supply chain more expensive, or damage relationships with service providers/suppliers

Briefly describe the Cintas global logistics network

they source from suppliers in Canada, Haiti and many other countries. In doing so, they deal with tariffs, import clearance, and try to get their products to duty-free countries before importing them into the US. They've run into some problems and Brian as the global compliance employee is on the line for any major missteps with their global logistics compliance

what is the goal of using information technology (IT) that companies have

they want to be able to inexpensively share accurate, relevant information with supply chain decision-makers

what was the issue with Customs that Cintas was facing

they were doing the necessary paperwork each time the goods crossed the border to canada and came back.

3pl meaning and definition

third party logistics company- external service suppliers that perform all or part of a company's logistics functions

what are the negatives of having inventory

ties up capital/cash, increased risk for theft/damage, it can become expired/outdated

how is reverse logistics different from forward

timing and quantities uncertain, many to one distribution points, packaging damaged/hard to handle, disposition unclear, less visibility, erratic volumes, adjusting book value is a big deal

what is the goal of quick disposition

to quickly and accurately decide what to do with the returned, recalled or recycled item

what is a retailers first choice of disposition?

to re-stock a returned item and sell it as new

what does it mean that IT is an enabler?

today's logistics and supply chain best practices, as well as today's global economy, are enabled by IT

center-of-gravity model

tool used to help identify the optimal location for a DC based on the locations and sales volumes of customers

what are some relative costs to think about with regards to the warehouse decisions (where/howmany etc)

total logistics costs, transportation costs, inventory carrying costs, warehousing costs, order processing costs, cost of poor service

main purpose of warehouse management systems

track movement and storage of materials in the DC system

3pl offerings continuum

traditional services -> value-added services -> integrated solutions.... margins increase as you go right on the continuum

types of relationships

transactional, cooperative, strategic collaboration

what are the 3 parts of the 3pl continuum

transactional, cooperative, strategic collaboration (increasing margins)

t or f: 3PLs are very adaptable

true

t or f: reverse logistics is a brand builder and a competitive weapon that contributes to profits

true

t or f: reverse logistics should be recognized as a holistic, value-adding process

true

t or f: target used to be all bricks and mortar before ecommerce became vital

true

t or f: warehouses enable smoother coordination of supply and demand

true

t or f: you always round up for EOQ

true

t or f: a negative cash to cash cycle is good thing

true: its good to have cash to cash happening quickly (very small)

t or f: a warehouse can allow a company to take advantage of quantity purchase discounts

true; they can't store large quantities of inventory without warehouses

e-commerce dedicated channel

type of e-commerce distribution channel that involves the customer ordering on one side and the DC shipping to the fulfillment center which then goes to the customer; it's set up to deliver only to ecommerce customers

what factors should be considered when deciding the transportation strategy

type of product, complexity, timing, customer service, cost increases if TLs aren't full

if transportation costs go up and assets go down, what happens to roa?

unclear - not enough info

types of pricing

unit rate/transaction pricing, cost +, or gainsharing

if warehouse costs go down and assets go down, roa goes ______

up

as annual demand and/or order costs increase, the quantity per order goes ______

up (increases too)

quick disposition

use simple rules and clear policies to quickly decide how to manage the returned product

what do inventory holding costs typically end up totalling as a percent of the unit value per year

usually 15-40% of unit value per year are holding costs

what are some areas of Cintas that require internal controls

valuation, classification, trade agreements and country of origin

hidden rocks/challenges with inventory

volatile demand, inaccurate forecasts, unreliable suppliers, quality problems, bottlenecks

throughput

volume of material or product that moves through a warehouse facility over a given time

asset returns

when assets like reusable pallets, racks, or totes need to be returned for future use

when would you want to own your own private warehouse rather than using public space (regarding customer service and headquarters)

when there are high customer service requirements and a need for a regional sales headquarters, it would be a good idea to own

reverse factoring (supply chain finance)

when there's a middleman between the supplier and the buyer... the supplier gets paid when they need to and the bank works it out with the buyer to make sure they're getting payment (maybe on different terms)

regarding volume and demand variability, when would you want a public warehouse rather than owning a private one

when volume is low and there is high variability in demand based on significant seasonality (you want to be able to have more or less space only when consumers are demanding that)

what is the portfolio effect of inventory and # of warehouses

when you have one warehouse, you are fulfilling all demand so some customers will demand more than others, resulting in the "overs" and "unders" cancelling each other out. When you add warehouses, you reduce the # of customers each warehouse serves, so there is a smaller portfolio effect at each location resulting in a net increase in safety stock network-wide

can 3PLs add significant value?

yes

should outsourcing logistics be looked at as a make-buy situation?

yes

what could be the case if inventory turnover is low and stockouts are high

you might have inventory but not the right inventory (there could be multiple products and one is selling out while the other is stockpiling)

cash to cash cycle

A measure of the number days between the time a company pays their supplier for inventory and the time that same company is paid for the same inventory by their customer

cross-docking

A technique whereby goods arriving at a warehouse from a supplier are unloaded from the supplier's FTL and loaded onto outbound trucks, thereby avoiding warehouse storage; try to not stay overnight

What system does Cintas use to enable their global trade?

Amber Road

automated storage and retrieval system (AS/RS)

Computer controlled equipment system that stores and retrieves cases or pallets from specified storage racks;

additive manufacturing

3D printing

cost + pricing

3pl charges a cost of service plus a management fee. this doesnt always incentivize continuous improvement

unit rate/transaction pricing

3pl charges you for each measurable activity; very popular but both you and the 3pl need to understand the true costs of providing desired services

Brian Bensman said that _____% of the good has to be made in the country that the tag claims the product was made in

50

if EOQ is 100, what is the average amount of cycle stock

50 (average inventory is the amount per order divided by 2)

WEEE

A European law which requires electronic equipment manufacturers to begin employing disassembly centers, take responsibility for products @ end of life

CTPAT

Customs-Trade Partnership Against Terrorism; allows customs preclearance (like TSA pre check); it's voluntary and led by US customers and border protection to focus on improving security of private supply chains

what do each of the letters D, Q, K, h mean in the EOQ

D: annual demand Q: quantity per order K: cost of placing an order h: holding cost

types of returns (PD CAME)

Product recalls Damage returns Consumer returns Asset returns Marketing returns Environmental returns

What is one way amazon is working to decrease the issues of forecasting

They're trying to bring the inventory closer to the consumer before the consumer even knows they want it

how do companies track/trace their goods

UPC codes, QR codes, RFID, blockchain