Supply Chain Exam 3

Disadvantages of private warehouses

-high start-up cost -fixed location -fixed size and costs

Opportunities of operating your supply chain globally:

-increased revenue -increased sourcing options

Rule 2: managing perceived waiting times

-it is hard to play catch-up -you may only get one chance to get it right

Service capacity decisions

-long-range -short-range -balance

Mode of Transportation: Truck

-most flexible mode of transportation - carries > 80% of U.S. freight (Because of interaction with other transportation modes to and from ports & warehouses) -Carries nearly anything from packaged household goods, to building materials, to liquid petroleum, etc. -Competes with Rail and Air for short-to-medium hauls. -Impacted by the truck driver shortage and Hour-of-Service rules -general freight carriers -specialized carriers -less than truckload (LTL) -Full-truckload (FTL)

Managing service capacity

- Level demand strategy -Chase demand strategy

Demand exceeds capacity: to minimize the cost of hiring and laying off employees the following strategies deal with periods of high demands:

- cross-training and sharing employees so that they can help on the task that is busy at the moment. -Using part-time employees (e.g., during the holiday season) -Using customers- "hidden employees" (e.g., self check out) -Using technology (e.g., Scanning documents in insurance industry for use in multiple departments as necessary) -Using employee scheduling policies (e.g., nurses have to work alternating holidays)

Improving service productivity is challenging due to:

- high labor content - individual customized services - difficulty of automating services - problem of assessing service quality

10 major laws/ initiatives in 2 immediate years post 9/11

-"Focus Assessment" (replaces CAT) -Container Security Initiative -Automated Customs Environment (ACE)- Replaces ACS -24-Hour rule -Trade Act of 2002 -C-TPAT (customs-trade partnership against terrorism) -TCMP- Trade Compliance Measurement Program -The Bio-Terrorism Act of 2002 -US Customs and border protection -department of homeland security established

Customer lifetime value (CLV)

-A prediction of the net profit attributed to the entire future relationship with a particular customer. -Some customers are worth a lot more than others, and identifying your key or top tier customers can be extremely valuable to your business. -CLV is an important metric for determining how much money a company is willing to spend on acquiring new customers and how much repeat business a company can expect from particular customers.

Target marketing

-A segment of customers a company has decided to aim its marketing efforts and ultimately its products and/or services towards. A well-defined target market is the first element of any marketing strategy -Target Marketing is usually much more effective than mass marketing, as it allows the company to focus efforts on marketing to those customers most likely to respond. -It is a more efficient use of the company's resources and it reduces the chances of being a nuisance to those potential customers who do not fit the targeted criteria. -Using e-mail or direct mail saves labor and postage, and reduces the chances of being a nuisance.

Mode of Transportation: Pipeline

-Accounts for approximately 2% of total US freight -Most reliable form of transportation -Lowest per unit cost for transportation -Limited variety of commodities. -Materials are transported in a liquid or gaseous state; petroleum, natural gas, drinking water, gasoline -Little maintenance needed once the pipeline is running.

Mode of Transportation: Air

-Accounts for approximately 5% of total US freight -Generally the fastest mode of transportation. -Most expensive mode of transportation -Cannot carry extremely heavy or bulky cargo. -Ideally, items with a high cost to weight ratio.. -Half of the goods transported by air are carried by freight-only airlines, e.g., FedEx. Other half in passenger planes with luggage -Paired with trucks for door-to-door delivery

Mode of Transportation: Water

-Accounts for approximately 5% of total US freight -Includes inland waterways, coastal and intercostal, and deep-sea cargo shipments. - inexpensive, but it is also slow and inflexible -Primarily used for heavy, bulky, low value materials like coal, grain, sand, and petroleum. -Competes with rail and pipeline for some cargo shipments. -Paired with trucks for door-to-door delivery.

Mode of Transportation: Rail

-Accounts for approximately 9% of total US freight -Competes for transportation when the distance is long and the shipments are heavy or bulky. -rail is slow and inflexible but it has the most capability. -Paired with trucks for door-to-door delivery. (As a result, rail carriers have begun purchasing motor carriers and can now offer point-to-point pickup and delivery service)

A typical cross-border shipment involves:

-Accurately completing and filing about 35 documents. -Compliance with over 600 laws and 500 trade agreements which are constantly changing. -Interfacing with about 25 parties, including Customs, carriers, freight forwarders, other government agencies, etc.

WTO functions include:

-Administering agreements -Forum for trade negotiations -Trade disputes -Monitor trade policies -Aid for Developing countries -International organizations

Outpost factories setup in a location with proximity to:

-Advance suppliers. -Competitors. -Research facilities & universities for materials, components and products.

Reverse Logistics is often viewed as:

-An "unwanted" supply chain activity. Many companies outsource this activity to a 3PL -A cost of doing business -A quality or regulatory compliance issue

Relationship Marketing or permission marketing

-An approach to selling products and services in which a customer explicitly agrees in advance to receive marketing information. Customers self-select the type and time of communication they want. -Example: An "opt-in" e-mail, where a potential customer signs up in advance for information about certain products or services. The customer is giving permission to the company to provide them with marketing and sales information. -Permission marketing is about building an ongoing relationship of increasing depth with customers -Permission marketing does not typically create immediate sales, but rather grabs a customer's attention and preserves a business relationship..

Poor Reverse Logistics Can Hurt a Company:

-Can affect the entire supply chain financially -Can have a large impact on how a consumer views a product or brand, potentially impacting future sales. -Retail returns = 6% to 10% of sales

Flexibility

-Can be short or long term contract -For seasonal products -Add storage capacity even on short notice

Churn Reduction

-Churn is the process of customers changing their buying preferences because they find better or cheaper products and services elsewhere. -Churn Reduction is all of the efforts companies develop to _stop losing customers_to the competition

Types of warehouses

-Consolidation -Break-Bulk -Cross-Docking

Disadvantages of 3PL:

-Control: A company will not have direct control over the logistics operation. -Dependency: Outsourcing logistics creates a dependency on the 3PL. -Pricing: The company is locked into the pricing model specified in the contract.

Advantages of 3PL

-Cost: Eliminates the need for a company to invest in warehouse space, technology, and staff to execute the logistics process. -Logistics Expertise: Knowledgeable of industry best practices and the latest developments in technology. -Efficiency: 3PL's can leverage relationships and volume discounts, which result in lower overhead and the fastest possible service.

Penalties For Violations Can Be Substantial

-Criminal penalties -civil penalties -statutory sanctions

Service Capacity Planning Challenges

-Customer arrivals fluctuate and service demands also vary. -Customers are participants in the service and the level of congestion impacts on perceived quality. -Idle capacity is a reality for services -Inability to control demand results in capacity measured in terms of inputs (e.g. number of hotel rooms rather than guest nights).

Managing service quality

-Customer satisfaction with the service depends not only on the ability of the firm to deliver what customers want, but on the customer's perceptions of the quality of the service received. -Service quality _depends on the firm's employees to satisfy customers varying expectations. Service quality may vary from person-to-person even within the same organization. -The key is to exceed the customers expectation. . . so you also need to help form their expectations. -recovering from poor service quality

What is customer service?

-Customer service as a philosophy -Customer service as an activity -Customer services as a performance measure

Queuing system input

-Customers are the demand source for services and their arrival triggers the start of the service experience. -Customers generally appear in predictable arrival patterns (e.g., the dinner rush at a restaurant). -There are models used to predict customer arrivals such as a Poisson distribution

Strategically significant customers are:

-Customers with high life-time value, i.e., customers that will constantly buy the product(s) or use the service(s) in the long-term. -Customers who serve as role models or benchmarks for other customers. -Customers who inspire change in the supplier and/or the supply chain.

Products have little value to the customer until they are moved to the customers point of consumption:

-Delivered at the right time. -Delivered to the desired location. -Customers can only be external or internal.

Regulation's Cons:

-Discourages competition -Does not allow prices to adjust based on demand or by negotiation.

Technology and Trends in Transportation

-Driver Monitoring -Traffic Coordination -Safety Technology -Platooning -New Concept Trucking -Vertically Folding Shipping Containers -Driverless Trucks -Drone Delivery

Nations forming trading groups:

-European Union (EU): [1950] 27 members countries in Europe -North American Free Trade Agreement (NAFTA): [1994] U.S., Canada, & Mexico -Southern Common Market (MERCOSUR): [1991] Argentina, Brazil, Paraguay, & Uruguay -Association of Southeast Asian Nations (ASEAN): [1967] 10 member countries in in SE Asia -Common Market of Eastern and Southern Africa (COMESA): [1993] 19 member countries in Eastern & Southern Africa

Event based marketing

-Event based marketing is a form of marketing that identifies key events in the customer and business lifestyle . -When an event occurs a customer specific marketing activity is undertaken. -An event can be something basic and predicted, like the end of a contract, a holiday, a season, e.g., Memorial Day, 4th of July, Halloween, "Black Friday", "Cyber Monday", Christmas, etc., or something more detailed and personal, like a birthday, a marriage, or a graduation. -Event-based marketing is a more personalized form of marketing which can help to form personal connections with the customers.

Other transportation intermediaries

-Freight Forwarder - Load or Transportation broker -Shipper's association -Intermodal marketing company

Business Clusters

-Geographic concentrations of interconnected companies and institutions. -Research parks and special economic / industrial zones serve as magnets for business.

Environmental Issues

-Global warming, air pollution, and acid rain are debated as being the price of industrialization. -Trade liberalization creates the need for environmental cooperation

Transportation regulations:

-Granger laws (1870s) -Transportation Act of 1920 -Motor Carrier Act of 1935 -Transportation Act of 1940 -Federal Aviation Act of 1958 -Department of Transportation Act of 1966

Trade Compliance Systems (or global trade management)

-Have become a vital tool for every major importing and exporting company in the US. -Really the only way to keep current with all of the continuously changing laws, regulations and procedures. -Trade Compliance Systems csn automate the process of checking every transaction. -For commercial and non-commercial products against every legal regulation before import or export.

Predicting Customer behaviors

-If a company is selling products and services to customers, they can also collect customers buying history, preferences, and trend information, which could then be used to predict customer buying behaviors going forward. -This information could also be used to determine how effective marketing, advertising and promotions have been in the past, and whether these practices should be continued or altered. -This predictive information could be used to create a more accurate forecast and a more effective marketing and sales budget.

Poor Reverse Logistics Problems Include:

-Inability of information systems to handle returns -Lack of worker training in reverse logistics procedures -Little or no identification on returned packages -Need for adequate inspection and testing of returns -Danger of placing returned products back into sales stocks

Typical services offered by 3PL's include:

-Inbound Transportation -Outbound Transportation -Warehousing -Pick and Pack -Freight Forwarding -Customs Brokerage -Customs Clearance -Order Taking -Billing and Invoicing -Inventory Auditing -Freight Bill Auditing and Payment

Benefits of Trade Compliance Systems

-Increased level of compliance compared to a manual process. -Decreased number of physical inspections by US Customs & Border Protection -Faster release of shipments by US Customs & Border Protection. -Avoidance of fines and penalties. -Opportunity to interface with other systems.

Business clusters reasons for success:

-Innovation and competition can be geographically concentrated. -Close cooperation, coordination, and trust among clustered companies -Fierce competition among rival companies -Companies recruit from local skilled workers

Waiting time management techniques

-Keep customers occupied -Start the service quickly -Relieve customer anxiety -Keep customers informed -Group customers together (they often talk to pass the time) -Design a fair waiting system -exp: "The wait time from this point is..." & " The ride is stopped but will resume in 4 minutes"

Export process: the shipper must

-Know the product or technology being exported -Know where it is being produced -Know where and to whom it is being sent -Know who will use the product -Know whether there are any illegal restrictions in the order, L/C or other document (e.g. Boycott clauses).

Labor issues

-Labor availability, productivity, and skill. -Unemployment / underemployment rates -Wage rates; turnover rates; labor force competitors

Service layout strategy

-Layouts designed to reduce distance traveled within the store -Departmental layouts to maximize closeness desirability -e.g., Doctors office waiting room -e.g., Service center at the car dealership, pet grooming, car wash, etc. (i.e., Watch them working on your prized possession

Positives of a single warehouse

-Less complicated -Operating costs and inventory will be lower -No duplication of equipment, warehouse staff, and managers -Network will be centralized and the company will have its best people, equipment and inventory systems concentrated in one place. -Warehouse can more actively focus on the needs of its customers.

LTL & FTL

-Less-Than-Truckload Shipments -Full Truckload Shipments

Service location strategy:

-Make it easy for customers to find the facility/store. -Once they arrive, make it easy to find what they want, or to find what you want them to find. -e.g., Drop off / pick up your clothes at dry cleaners on the way to work.

Negatives of a multiple warehouse

-More complicated -Operating costs and inventory will be higher as each warehouse costs money to staff and operate. -Duplication of equipment, warehouse staff, and managers -Network will be decentralized and the company will have to spread its best people, equipment and inventory systems across a larger network.

Queue system assumptions:

-Most queuing models assume that customers enter the queue, and stay in the queue until served. That may not be true: -balking is when a customer refuses to join the queue. -reneging is when customers decide to leave the queue. -Queuing models assume there is an infinite length of a queue

Logistics is necessary to:

-Move goods and materials from suppliers to buyers -Move goods and materials between sites (internal and external) -Move finished goods to the customer -Products have little value to the customer until they are moved to the customers point of consumption.

Advantages of public warehouses

-No capital investment or property taxes -Flexibility -Lower costs and reduced risk -Access to special features and services -exp: think of it as a hotel for inventory

Focus on Strategically Significant Customers

-Not all markets and customers are equally important. -Building relationships with customers that provide little value can be counterproductive. -Relationships should be built with strategically significant customers that are likely to provide the most value for the effort.

Step 1: Creating the CRM plan

-Objectives of the CRM program -CRM's fit with corporate strategy -New applications to be purchased or developed -Integration or replacement of existing legacy systems -Personnel Requirements - personnel, training, policies, upgrades, and maintenance -The costs and time frame for implementation

U.S Department of Homeland Security

-On March 1st 2003, DHS assumed responsibility for securing our nation's borders and transportation systems which straddle 350+ official ports of entry and connects our homeland to the rest of the world. -The Department's first priority is to prevent the entry of terrorists and the instruments of terrorism, while simultaneously ensuring the efficient flow of lawful traffic and commerce.

Foreign Trade Zones (FTZ's)

-Physical areas inside the US supervised by U.S. Customs and Border Protection that are considered to be outside of the U.S. territory. -Usually located at or near a port of entry. -Foreign and domestic merchandise may be moved into FTZs for operations not otherwise prohibited by law, including these Permitted Activities -While in the FTZ, merchandise is not subject to U.S. duty or excise tax. -U.S. duty and excise tax, if applicable, are only payable when the material is moved outside the FTZ for consumption. -Foreign-trade zone sites are subject to the laws and regulations of the United States as well as those of the states and communities in which they are located. -There is no limit on the time material may remain in the zone. -Internationally, similar areas are called Free Trade Zones.

Source factories are basically an offshore factory that includes:

-Plant management involvement in supplier selection -Plant management involvement in production planning -More developed local infrastructure -Access to skilled workforce -Low production costs

Disadvantages of public warehouse

-Potential for incompatible computer systems -Specialized services may not be what is required/needed -Space may not be available when/where needed

Key tools and components of CRM

-Predicting Customer Behaviors -Personalizing Customer communications -Segmenting customers -Target Marketing -Event based marketing -Cross Selling and Up-Selling -Relationship Marketing or permission marketing -Customer Defection analysis -Churn reduction -Customer lifetime value (CLV)

Contributor factory is basically a server factory that includes:

-Product development. -Production planning. -Procurement decisions. -Supplier development.

Step 6: providing CRM training or all users

-Provide and require training for all of the initial users and then provide training on an ongoing basis as applications are added -Training can also help convince key users like sales, call center, and marketing personnel of the benefits and uses of CRM applications

Warehouse ownership types:

-Public Warehouses -Contract Warehouses -Private Warehouses

Queue system characteristics

-Queue discipline describes the order in which customers are served. -Queuing can be comprised of single or multiple lines. -Queue lines can be serviced by either a single server or multiple servers. Multiple servers can also act in series or in parallel.

The most common forms of intermodal transportation involve:

-Rail and Motor Carriers (i.e., trucks) -Rail and Water Carriers -Roll-on/Roll-off Ships

Transportation Deregulations:

-Railroad Revitalization and Regulatory Reform Act (1976) -Air freight deregulated in 1977 -Motor carriers deregulated in 1980 -Shipping Act of 1984 -ICC Termination Act of 1995 -Ocean Shipping Reform Act of 1998

Automated Sales Force Tools

-Sales force automation (SFA) -Sales activity mangement -Sales territory management -lead management -knowledge management

Statutory Sanctions

-Seizure and forfeiture of items in violation, including the vessels and aircraft carrying the items. -Loss of import and/or export privileges for a business unit, division, or for the entire company. -Detailed inspections of every single shipment, and delayed release by US Customs & Border Protection.

Differences between goods and services

-Services cannot be inventoried (in most cases). Typically, services are produced and consumed simultaneously. -Services are often unique to the customer (e.g., insurance policies, legal services, tax preparation, etc.) -Services have high customer interaction -Services are decentralized. Due to the inability to inventory or transport most services, they must be located near to the customer base.

Taxes and Incentives

-Several levels of government must be considered when evaluating potential locations. -Tariffs are federal taxes that are designed to protect local businesses. -Countries with high tariffs discourage importing goods into the country and encourage multinational corporations to produce locally.

Rail Shipments

-Shipments involve building materials, construction equipment, coal, gravel, sand, lumber, etc. -Aging infrastructure and equipment are an issue.

Decisions driving warehouse management include:

-Site selection -Number of warehouse facilities in the network -Layout of the warehouse(s) -Methods of receiving, storing, retrieving, and distributing products and materials.

Fees will vary based on what is being stored and/or based on:

-Size and weight of the pallets -If they can be stacked -How fragile the product is -Value of goods (risk of theft) -Hazards associated with the goods

Criminal penalties

-Substantial Fines (and/or) -10+ years imprisonment

Civil penalties

-Substantial fines per occurrence -Individual and/or company sanctions

7 Major Laws/Acts in the 70 years from 1930-2000

-Tariff Act of 1930 & Subsequent Regulations -Anti-Smuggling Act of 1935 -Public Laws 95-410 -Trade & Tariff Act of 1984 -Title VI of the NADTA- "Mod Act" & Subsequent Regulations -CAT Audits- Compliance Assessment Team Audit -FDA/USDA- Presidential initiatives for safety of imported goods.

Challenges of global supply chain:

-Tariffs or duties (i.e., import taxes) -Transporting goods across borders -Customs, business practices, and regulations vary by country -Foreign markets are not homogeneous even within the country

Access to special features and services:

-Temperature-controlled storage -Customer Service, Inventory Ordering, etc. -Office space for customer's sales, accounting, etc.

Regulation's Pros:

-Tends to assure adequate transportation service throughout the country. -Protects consumers from monopoly pricing, safety, and liability.

Segmenting customers

-The practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing. -In simple terms, grouping customers to create specialized communications about products. -There are many different ways to group customers, e.g., by demographics, income, geography, buying preferences, etc. -Segmenting customers allows a company to zero in on a particular population of customers to sell a specific product, or to define a specific product(s) for a particular segment of customers. -If a company can identify different segments of customers, they can potentially be more efficient and effective in the use of their resources by tailoring programs and initiatives for each segment.

Supply Chain Management in the Service Industry

-The tangibility of the end product. Services are generally not tangible [i.e., you can't touch or hold them in your hands] -The involvement of the customer in the service process. Customers are much more directly involved in the service industry -The assessment of quality. Quality is assessed differently in the service industry -The labor content. There is a much higher ratio of labor to materials in the service industry -The family location considerations. Services are largely provide and heavily impacted by location decisions.

CRM's role in supply chain management

-To be successful, a company must find ways to meet its customers needs; otherwise, just as any firm would react with a non-performing supplier, the customer goes elsewhere and takes years worth of future purchases with them. -Just as companies must create methods for finding and developing good suppliers, companies must create methods for becoming and staying good suppliers themselves. -Because many companies do not sell their products directly to end-product consumers, companies may also need to train and certify that their intermediate customers are able to adequately represent their company's products.

International Freight Security

-Transportation across national boundaries introduces added complexity, particularly security. -Since 9/11 there is more conflict between the U.S. government and industry regarding more security and restrictions for international shipments.

Personalizing Customer Communications

-Understanding customer behaviors and preferences, allows a firm to customize communications aimed as specific groups of customers and is likely to result in greater levels of sales. -When a company communicates with their customers they need to use the customer's "language" and communicate with them in a meaningful way. -Communication that is personalized sends a message to the customer that the company cares about them. -It is a powerful way to differentiate the company from its competitors and it helps to build customer loyalty.

Logistics Management Software Applications:

-Warehouse management systems (WTS) -Transportation management systems (TMS) -Global Trade Management Systems (GTM)

key questions to ask to determine waiting time strategy:

-What is the average arrival rate of the customers? -In what order will customers be serviced? -What is the average service rate of providers? -How are customer arrival and service times distributed? -How long will customers wait before they either leave or lower their perceptions of service quality? -How can customers wait even longer without lowering their perceptions of service quality?

Export process

-When a shipment is ready to be exported, the shipper will file export documents for the goods' at the port of departure. -Shipments must conform to Export Administration Regulations -Complete and submit a Shippers Export Declaration (SED) -Submit a Commercial Invoice for the product.

Service capacity- examples

-airline capacity: number of seats and number or planes -restaurant capacity: number of tables -hotel capacity: number of rooms

cloud computing (Software as a service)

-ala carte and on demand offerings accessed via web browser -Changing the cost structure of CRM applications

Advantages of private warehouse

-control -visibility -cost

Transportation Company Classifications:

-control carriers -private carriers -common carriers -exempt carriers

Service strategies

-cost leadership -differentiation -focus

Trends in CRM

-customer data privacy -social media -cloud computing

Global Logistics intermediaries

-customs brokers -international foreign forwarders -trading companies -Non-Vessel-Operating Common Carriers (NVOCC)

Service recovery stems require:

-developing recovery procedures that are though out proper to the bad event happening -training employees in these procedures prior to the event -empowering employees to remedy customer problems and recognizing them when they do. (exp: employee who rented a U-haul to delivery a part to a customer on a weekend)

Cross selling

-occurs when a company sells an additional related or complementary product or service to an existing customer after the initial purchase. - Example: "Would you like fries with that?" -Example: If you're buying an item on Amazon.com, you may be shown other similar items to the one you are looking at, or companion products to the item that you are considering.

high customer contact systems

-personal shopper -hair stylist -financial manager

Customer Service Elements

-pre-transaction elements -transaction elements -post-transaction elements

Secondary functions of a warehouse:

-quality inspection -repackaging -assembly operation

Primary functions of a warehouse:

-receiving -storage -picking -packing -shipping

Five R's of Reverse Logistics

-returns -recalls -repairs -repackaging -recycling

Advantages of contract warehouse

-services -cost -control

Queue system design

-single channel -multiple channel

Types of queues:

-structured queues -unstructured queues -mobile queues

Low customer contact systems examples:

-ticket kiosk -vending machine -automated teller machine (ATM)

Advantages of cross-docking warehouse

-transportation cost savings - Operational efficiency -inventory efficiency

Short Haul

0 - 200 miles from the driver's home terminal

Why do companies need CRM?

1. Acquire new customers 2. retain their existing customers 3. help meet the changing expectations of customers -Due to things like as social and demographic factors, economics, competitor's products and marketing efforts, and other market experiences.

Global location decisions involve:

1. Defining each facility's strategic role (i.e., what type of facility) 2. Determining the location for each facility (i.e., where in the world) 3. Identifying the market(s) that each facility serves

The fundamental questions to be answered in establishing a warehouse network are:

1. How many warehouses does the company need? 2. Where should they be located?

12 pillars of competitiveness

1. Institutions 2. Infrastructure 3. Macroeconomic stability 4. Health and primary education 5. Higher education and training 6. Goods market efficiency 7. Labor market efficiency 8. Financial market sophistication 9. Technological readiness 10. Market size 11. Business sophistication 12. Innovation

Warehouse network strategy:

1. Market Positioned Strategy 2. Product Positioned Strategy 3. Intermediately Positioned Strategy

Global facility types

1. Offshore Factory 2. Source Factory 3. Server Factory 4. Contributor Factory 5. Outpost Factory 6. Lead Factory

DHS is the government agency who's mission is to:

1. Prevent terrorist attacks within the United States 2. Reduce America's vulnerability to terrorism 3. Minimize the damage from potential attacks and natural disasters

The main reasons that cross docking is implemented is to:

1. Provide a central site for products to be sorted and combined for delivery to multiple destinations in the most productive and fastest method possible. 2. Consolidate 3. Break-Bulk

Types of Services

1. Pure services 2. End products 3. State utility

Goods are not legally entered into US commerce until:

1. The shipment has arrived within the port of entry 2. Delivery to the shipping destination has been authorized by CBP (following submission and review of required documentation) 3. Estimated duties have been paid.

Objectives of transportation

1. To maximize the value to the company through price negotiations 2. To make sure service is provided effectively 3. To satisfy customers' needs

6 steps to a successful CRM program

1. creating the CRM plan 2. involve CRM users from outset 3. select the right application and provider 4. integrate existing CRM applications 5. establish performance measures 6. providing CRM training for all users

The 5 dimensions of service quality

1. reliability 2. responsiveness 3. assurance 4. empathy 5. tangibles

The 4 primary activities of service response logistics:

1. service capacity 2. waiting times 3. distribution channels 4. service quality

Seven R's Rule

1. the right product 2. the right quantity 3. the right quality 4. the right place 5. the right time 6. the right customer 7. the right costs

Right-to-Work Laws

25 states have laws protecting the right of employees to decide whether or not to join or support a union.

Transportation Cost Savings

8 FTL Shipments are less expensive per unit than 16 LTL Shipments.

Repackaging

95% of returned products are because customers are dissatisfied with them not because there are defective. These products are typically repackaged and returned to inventory for restock or resale in secondary channels.

Service capacity utilization

= actual customers served per period / capacity

Cross Docking

A LEAN concept because it eliminates the need to store inventory, and reduces some transportation, which are both wastes.

public warehouse

A business that provides storage and related warehouse functions to companies on a short or long-term basis, generally on a month-to-month basis for a fee. -Own their own equipment and hire their own staff to manage the facility. -Fees are typically a combination of a monthly storage fee plus a pallet-in fee and a pallet-out fee. -They may also have some document fees and account management fees

Offshore Factory

A factory set up for manufacturing or assembly in a country where labor and/or raw materials are less expensive, for eventual import back into the manufacturer's home country. -Manufactures products at low cost with minimal technical and managerial resources -Take advantage of low labor costs -Import or acquire parts locally, then export to the manufacturer or directly to customers -Local management serves in a supervisory roll not in making management decisions. -exp: Clothing produced in Bangladesh, Indonesia

Server Factory

A factory set up to take advantage of government incentives, and/or reduced tax/tariff barriers, to meet regional or local market needs. -Firm uses government incentives -Low exchange risk and tariff barriers to reduce taxes and logistics costs. -Makes minor improvements to product and processes -Set up to serve the local market -exp Coca-Cola bottling. Mix the final ingredients to take advantage of exchange rates, tariff, & taxes.

Private Warehouse

A storage facility that is owned by the company that owns the goods being stored in the facility. -Generally established by companies that have a large volume or highly valuable goods, or the need for some type of specialized storage or handling. -Can be operated as a separate division within a company -Can be co-located on-site with manufacturing, or off-site. -Exp: think of it as buying a house for inventory

Goals and benefits of CRM

A successful well-designed program can provide companies with many improvements and benefits. 1.Increased customer satisfaction. 2. Increased customer loyalty and retention. 3. Faster responses to customer inquiries. 4. Increased revenue. 5. Growth of the customer base through referrals. 6. A simplified and more cost effective marketing & sales process. 7. Increase sales effectiveness.Closing sales faster. 8. Increased sales through cross-selling and/or up-selling. 9. Access to updated customer information and personalized interactions. 10. Automation of repetitive tasks.

General Freight Carriers

A trucking company which handles a wide variety of commodities in standard trailers. Freight is generally palletized. -These can be LTL or FTL carriers. [see next slide for definition] -They carry the majority of goods shipped. -Does not require the use of specialized equipment.

Specialized carriers

A trucking company which handles the movement of cargo that requires specialized equipment for transportation because of the shipment's size, weight and shape. -Transport commodities like liquids, petroleum, household goods, building materials, and other specialized items.

Contract Warehouse

A variation of public warehousing that handles the shipping, receiving, and storage of goods on a contract basis for a fee. -The contract can be for an entire building, or for a defined portion within a building. -Usually requires a client to commit to services for years rather than months. -The fee structure may be fixed cost, cost-plus, or a combination of both. -The company providing the space handles the employees, equipment, and maintenance. -Exp: think of it as renting an apartment for inventory.

Warehouse network

A warehouse network is simply the number of, and the relationship between, the warehouses that a company has in their organizational structure. -Trade-offs that will determine how many warehouses the company needs and where they should be located are: The level of customer service the company wants to provide or The amount of inventory the company is willing to invest in.

Assurance

Ability to convey trust and confidence to customers.

Shipping Act of 1984

Allowed ocean carriers to pool shipments, assign ports, publish rates, and enter into contracts with shippers

Land Availability and Costs

As land and construction costs in big cities continue to escalate, the trend is to locate in the suburbs and rural areas.

Inventory efficiency

As there is no storage at the warehouses, total inventory in the supply chain can be reduced.

Break-Bulk

Break down large product loads into smaller loads for transportation for an easier delivery process to the customer.

Load or Transportation broker

Bring shippers and carriers together

Bundle of service attributes

Bundling services can deliver more than expected and enhance customer satisfaction. -supporting facility -facilitating goods -explicit services -implicit services -exp: banking industry

FOB Shipping Point/Origin

Buyer pays freight costs. -Seller places goods Free On Board with the carrier at the seller's location, and buyer pays freight costs. -Ownership of the goods passes to the buyer when the public carrier accepts the goods from the seller. -Buyer assumes the risk for in-transit loss or damage

Reduced Lot Sizes and Shipping Quantities

By reducing lot sizes and shipping quantities, a company can increase velocity in the warehouse, and get shipments out faster. Faster throughput is a LEAN concept.

Step 4: integrate existing CRM applications

CRM is a collection of various applications implemented over time. -Customer contact mechanisms need to be coordinated so that every CRM user in the firm knows about all of the activity associated with each customer. -Centralized database or data warehouse containing all customer information.

Green Reverse Logistics Programs

Can have a positive impact on the environment though activities such as recycling, reusing materials and products, or refurbishing unused products. -These programs can reduce environmental impact on landfills and deal with dangerous contaminants. -Example: Unused pharmaceutical product returned to the pharmacy rather than "flushing it down the toilet" which ultimately causes the drug to end up in the water supply.

Long-range

Capacity can be used as a preemptive strike where the market is too small for two competitors to co-exist (e.g., the first to build a luxury hotel in a mid-sized city may capture all the business) -A strategy of building ahead of demand is often taken to avoid losing customers.

Balance

Capacity decisions must be balanced against the costs of lost sales if capacity is inadequate . . . or against operating losses if demand does not reach expectations.

Level demand strategy

Capacity remains constant regardless of demand. When demand exceeds capacity, queue management tactics deal with excess customers -One line instead of many lines at a Bank or at McDonald's so its 1st come 1st serve. -Numbers at the deli in the grocery store. Note: This technique does not work well in a Hospital Emergency Room.

Chase demand strategy

Capacity varies with demand. So you can handle fluctuations but must take appropriate actions prior. Need to have options. -Open up additional line(s) -Call in additional off-shift workers to meet increased demand

Private warehousing: high start-up costs

Capital to build or buy a warehouse. Long, risky investment. Cost of hiring and training employees. Purchase of material handling equipment.

Transportation Act of 1920

Changes to interstate commerce act

Market Positioned Strategy

Close to customers to maximize distribution services and improve delivery. -Few suppliers; many customers

Product Positioned Strategy

Close to supply source to collect goods and consolidate before shipping products out to customers. -Many suppliers; few customers

Consolidate

Combine smaller product loads into one method of transport to save on transportation costs.

Increased Automation

Companies are using automated systems like pick to light, voice picking, conveyor systems, automatized guided vehicles (AGV's), and robotics to improve efficiencies and throughput times in the warehouse.

Global Location Decisions

Companies can locate anywhere in the world due to increased globalization, technology, transportation, and open markets. Facility location must be part of the firm's supply chain strategy.

The Weighted-Factor Rating Model

Compares the attractiveness of several locations along a number of quantitative and qualitative dimensions. -Identify the factors -Assign weights to each factor. The weights sum to 1. -Determine a score for each factor. -Multiply the factor score by the weight, then sum the weighted scores -The location with the highest total weighted score is the recommended location.

Reliability

Consistently performing the service correctly and dependably

freight forwarder

Consolidates LTL shipments into FTL shipments. -They take small shipments from multiple companies and consolidate them into larger shipments.

social media

Creating and cultivating virtual communities around product or brand is a powerful way to engage consumers

Customer service as a performance measure

Customer service is a category of performance measures, such as the percentage of orders delivered on time and complete, the number of orders processed within acceptable time limits, etc.

Customer service as a philosophy

Customer service is a company-wide commitment to providing customer satisfaction by placing emphasis on quality and quality management.

Customer service as an activity

Customer service is a particular task that a firm must accomplish to satisfy the customer's needs. Order processing, billing and invoicing, product returns, and claims handling are all typical examples of the customer service activity.

Managing Customer Satisfaction

Customers being given opportunities to provide feedback about product(s), service(s), the organization, etc. This can be done through surveys, questionnaires and direct phone calls to customers asking them their opinions. Decisions have to be made regarding how to capture the data, and how to analyze the information so you can use it productively going forward. -It is of very little value until it can be analyzed and acted upon. -Most companies will need some type of a database to manage the data.

Returns

Customers return products for a number of reasons. An item may be defective, damaged, seasonal, fail to meet expectations, or be excess inventory.

Freight: Terms of Sale

Delivery and payment terms agreed between a buyer and a seller.

Managing distribution channels

Distribution channels involve traditional methods and new channels that incorporate new Internet technologies -entertainment combines restaurant and entertainment elements (e.g., Medieval Times, Rainforest Café, Dave & Busters, etc.) -entertailing combines retail with entertainment elements (e.g., Mall of America has a ferrous wheel, rock climbing wall, fashion shows, play area, etc.) -edutainment (infotainment) combines learning with entertainment to appeal to customers looking for substance along with play (e.g., Epcot Center, Liberty Science Center. etc.) -franchising -international expansion -internet distribution strategies

Increased revenue

Do this through global business (i.e., more customers) and economic opportunities.

Increased Sourcing Options

Do this with more potential sources of supply to choose from including potential economic opportunities.

Step 2: Involve CRM users from outset

Employees should understand how it affects their jobs -Create a project team with members from all affected organizational areas. -Test with a pilot application

knowledge management

Enables quick decision making, better customer service, and a better-equipped and happy sales staff.

net-rate pricing

Established discounts and accessorial charges are rolled into one all-inclusive price. Pricing is tailored to the individual customer's needs

Warehouse

Facility used to story purchases, work-in-process (WIP), and finished goods inventory.

Outpost factory

Factory set up in an area with an abundance of advance supplier, competitors, research facilities, etc. -exp: Raleigh, Durham, Chapel Hill NC. Research Triangle Center. UNC, Duke, IBM , Cisco, etc. Silicon Valley, Calif.

Step 3: select the right application and provider

Find an appropriate application and determine the extent of customization -Visit trade shows, read trade literature, hire consultant, etc. -Compare based on performance, security, reporting capabilities, system availability, etc.

Contributor Factory

Focused on product development and engineering for products that they manufacturer -exp: 1973 Sony built a Server factory in Wales and then 15 years later got involved in development, planning, etc. and now is a Contributor factory

Repackaging

For specific customer orders.

Warehousing

Function that allows a company to receive, store, breakdown, repackage, and distribute items to a manufacturing location, or finished products to a customer

Capacity exceeds demand (too much capacity)

If capacity exceeds demand, instead of disposing of excess capacity (e.g., laying off personnel), find other uses for the available capacity -Do other jobs when it's not busy. -Example: in a restaurant you might have workers clean the bathrooms, prep for the dinner rush, etc. -Do training or cross training -Use demand management techniques to shift demand from peak demand periods into non-peak periods by offing incentives like discounts and special sales -Example: early bird specials, 20% off from 9am to noon, etc.

Demand exceeds capacity (not enough capacity)

If the demand exceeds capacity, and the provider does not currently have the capacity to serve all of the customers, there are three basic alternatives: 1. turn customers away and not service them, i.e., lose business. 2. make them wait until service is available for them 3. increase service capacity, i.e., the number of service personnel and the associated infrastructure to provide the service. -This situation makes forecasting service demand critically important, particularly because services cannot be inventoried or carried out in advance.

Regional Trade Agreements:

Impact local decisions. -European Union (EU): [1950] following WWII, consists of 27 members countries in Europe -North American Free Trade Agreement (NAFTA): [1994] Removed most barriers to trade and investment among U.S., Canada and Mexico. -Southern Common Market (MERCOSUR): [1991] among Argentina, Brazil, Paraguay, and Uruguay -Association of Southeast Asian Nations (ASEAN): [1967] among 10 member countries in in SE Asia -Common Market of Eastern and Southern Africa (COMESA) [1993] among 19 member countries in Eastern and Southern Africa

Currency Stability

Impacts business costs and consequently location decisions. -A few years back, Brazil had 1000% annual inflation rate. Not so easy to set prices in that currency environment.

Return of Unsold Goods

In some industries, goods are distributed to downstream members in the supply chain with the understated that the goods may be returned for credit if they are not sold e.g., newspapers, magazines, even pharmaceuticals. -This acts as an incentive for downstream members to carry more stock, because the risk of obsolescence is borne by the upstream supply chain partner. -The risk is that the downstream member in the supply chain might exploit the situation by ordering more stock than is required and returning large volumes.

Internet distribution strategies

Internet retailing is growing faster than traditional retailing Primary advantages of the Internet include the ability to offer convenient sources of real-time information, integration, feedback, and comparison shopping -pure strategy -mixed strategy

Cost leadership

Lowest cost service provider. Requires large capital investment in state-of-the art equipment and significant efforts to control and reduce costs. -Examples: Auto diagnostics software, route planning to reduce windshield time, UPS optimization, etc.

Source Factory

Manufactures products at low cost but with skilled workers and significant managerial resources. -exp: Hewlett-Packard Singapore factory produced calculators and keyboards

Pure strategy

Many retailers today sell products exclusively over the internet. -exp: amazon

Intermediately Positioned Strategy

Midway between supply source and customers, when distribution requirements are high and product comes from various locations -Relatively equal number of suppliers and customers

Customs Brokers

Move global shipments through customs and handle documentation.

International Foreign Forwarders

Move goods to and from foreign destination

Shipper's Association

Nonprofit cooperatives which arrange for members' shipping

Repairs

Not all products that are returned are disposed. Manufacturers may identify the failure and repair, refurbish or remanufacture the product to like-new condition and return it to stock, or harvest various components for re-use.

Private warehousing: fixed location

Not easy to move to another location if the market changes.

Rail and Water Carriers

Offer point-to-point pickup and delivery service known as Container-on-Flatcar (COFC)

Rail & Motor Carriers

Offer point-to-point pickup and delivery service known as Trailer-on-Flatcar (TOFC)

Private warehousing: control

Offers greater flexibility in designing the warehouse and gives users significant control over operations.

Green Warehousing

One of the more sustainable goals for a green warehouse is to make it a net zero energy user.

International expansion

Operate / partner with firms familiar with the region's markets, suppliers, infrastructure, government regulations, and customers Must address language and cultural barriers

Non-Vessel-Operating Common Carriers (NVOCC)

Operate like freight forwarders but use only scheduled ocean liners.

Private warehousing: cost

Operating cost can be 15% - 25% lower if the company achieves at least 75% utilization.

U.S Customs and Border protection

Originally established in 1789, U.S. Customs and Border Protection (CBP) controls the import process -It is the gateway agency for more than 20 other government agencies each of which has some control over various aspects of international trade. -Its' mission is to safeguard America's borders thereby protecting the public from dangerous people and materials while enhancing the Nation's global economic competitiveness by enabling legitimate trade and travel. -CBP works to secure and facilitate imports arriving in the U.S., accommodating the increasing volume and complexities of international trade. -"pushing the borders back"

Shipping

Outgoing shipment of parts, components, and products. Includes packaging, marking, weighing, and loading for shipment.

Exempt carriers

Person or company specializing in services or transporting commodities exempt from regulation by the Interstate Commerce Act.

Common carriers

Person or company who transports freight for a fee that can be hired by anyone to transport goods.

Contract carriers

Person or company who transports freight under contract to one or a limited number of shippers.

Receiving

Physical receipt of material, identification, inspection for conformance with the purchase order (quantity and damage), put-away, and preparation of receiving reports

Packing

Placing one or more items of an order into an appropriate container for safe shipping , and marking and labeling the container with customer shipping destination data, and other information that may be required.

Website Self-Service

Portals for customers to access their account information, check operating hours, ask questions, see product information, find contact information, check on orders, get shipping information, etc. -Customers can put their own information into the system which avoids having the company take the time to do it, and also potentially eliminates errors. -Customers can edit and modify the information accordingly. -Customer can opt into or out of future sales, subscriptions, corporate information, emails and other information if desired

Positives of a multiple warehouse

Potentially faster delivery to customers from a decentralized network that is geographically dispersed throughout the market, assuming adequate inventory in each warehouse

Motor carriers deregulated in 1980

Promote competitive, safe and efficient motor transportation

Responsiveness

Promptly and timely service

Global Trade Management Systems (GTM)

Provides global visibility, standardization, and documentation to comply with international trade regulations.

Empathy

Providing caring attention to customers.

Intermodal Marketing Company

Purchase blocks of rail capacity and sell it to shippers

Trading Companies

Put buyers and sellers from different countries together and handle export/import arrangements, documentation and transportation.

Mobile queues

Queues formed virtually with technology. Customers can use technology such as a smartphone to place their name in a real-time electronic queue such as at a restaurant. This type of queuing has provided a great deal of flexibility and allows for reduced stress level on the part of the customer.

Railroad Revitalization and Regulatory Reform Act

Railroads could change rates without ICC approval

Recalls

Recalls are more complex than basic returns because they typically involve a product defect or potential hazard and may be subject to government regulations, liability concerns or reporting requirements.

Ocean Shipping Reform Act of 1998

Requirement for ocean carriers to file rates ended

Customer data privacy

Rules and laws regarding invasion of privacy include Patriot Act in the US and Internet Privacy Law in the EU

Sales territory management

Sales managers obtain information on each sales rep's activities

lead management

Sales reps can follow prescribed tactics when dealing with prospects to aid in closing the deal

FOB Destination

Seller pays freight costs. -Seller places goods Free On Board to the buyer's place of business, and the seller pays freight costs. -Ownership of the goods remains with the seller until the goods reach the buyer. -Seller assumes the risk for in-transit loss or damage.

Focus

Serve a narrow niche better than other firms. -Examples: Grocery shopping for you, Mechanic specializing in Volvo or Porsche repair, Custom stereo in your house or car

Managing service capacity

Service capacity can be expressed as the number of customers per day, per shift, per hour, per month, or per year, that the company's service system is designed to serve. -Regardless of the specific breakdown, it's the number of customers that the service provider can service at any one time. -The planned capacity for the service environment.

Service Capacity Planning

Service providers are 100% reliant on the customer to create the flow of demand, which has a direct impact on their ability to fully utilize capacity.

Facilitating Goods

Services may require the use of Facilitating Goods which are tangible elements that are used or consumed by the customer or the service provider along with the service provided. -These items need to be purchased, transported, received and warehoused in order to provide the service activity. -Generally these supply chain activities occur behind the scenes (i.e., out of view of the service customer) -Customers have no idea how these facilitating goods actually get to the destination but they sure notice if they are not available as expected!

Pure services

Services offering very few or no tangible products to customers (e.g., consulting, storage facilities, training / education, etc.)

State utility

Services which directly involve things owned by the customer (e.g., car repair, dry cleaning, haircut, and healthcare).

End products

Services which offer tangible components along with the service component (e.g., restaurants; food along with the dining service)

Shipments by Air

Shipments involve very light, high-value goods that need to travel long distances quickly including; jewelry, fine wines, pharmaceuticals, racehorses, etc.

Transportation Pricing

Since deregulation, negotiating prices is common - cost of service pricing -value of service pricing -combination pricing -net-rate pricing

CRM is not for every customer:

Some customers don't want to be committed to every brand and/or relationship.

Lead Factory

Source of product and process innovation and competitive advantage across the entire organization (world-class) -Source of innovation. -Competitive advantage of the organization. -exp: Intel factory in Penang, Malaysia opened in mid 1970's, now is a lead factory. This is your "Go-To" factory

Access to Suppliers and Cost

Supplier proximity influences the delivery of materials and the effectiveness of the supply chain.

Utility Availability and Cost

Supply of electricity has not always kept pace with the high speed of development. -China (2006) made several factories shut down for 1 day/week -In heavy industries the availability and cost of energy are critical considerations. -Telecommunication costs have dropped dramatically. Many organizations now have back office operations and call centers internationally to serve the U.S. market.

ICC Termination Act of 1995

The Interstate Commerce Commission (ICC) was eliminated

Contract warehousing: duration

The client company is expected to enter into a contract for a specific period of time; generally three years.

Service delivery system

The delivery of services can be expressed as a continuum with mass produced, low-customer contact systems at one end, and highly customized, high-customer-contact systems at the other end. -Some service offerings blend these delivery systems together -Service delivery systems may be designed to keep these separate in order to use various and different management techniques to maximize performance in each area. -Any service system should be audited often to assess performance

Transportation

The function of planning, scheduling, and controlling activities related to the mode, carrier, and movement of inventories into and out of an organization.

Short-range

The lack of short-term capacity planning can generate customers for the competition (e.g., if restaurant staffing is inadequate to handle the volume of customers arriving at the restaurant, customer will likely go elsewhere)

Cross-Docking Warehousing

The logistics practice of unloading materials from an incoming truck or railcar and loading these materials directly onto outbound trucks or railcars, with little or no storage in between to reduce inventory investment and storage space requirements

Tangibles

The physical characteristics of the service including, facilities, servers, equipment, associated goods, and other customers.

Service Response Logistics

The primary concern of service response logistics is the management and coordination of the organization's service activities - Demand management tactics are also important, as services cannot be inventoried and customer demand must be met

Customer Defection Analysis

The process of analyzing the customers who have stopped buying to determine why.

Storage

The safe and secure retention of parts or products for future use or shipment.

Negatives of a single warehouse

The single warehouse (i.e., centralized network) may take longer to deliver product to some customers who are remote from the central location.

Access and Proximity to Markets

The trend in manufacturing is to be within delivery proximity of your customers. -Logistics timelines and costs are the concerns, so that reinforces a clustering effect of suppliers and producers to places that offer lower cost labor and lower real estate prices. -In the service industry, proximity to customers is even more critical. You can't service a washing machine if your technician is 3000 miles away.

Global Location Factors

These are factors used to compare and contrast one potential location against another when making global location decisions -Competitiveness -Taxes and Incentives -Currency Stability -Access and Proximity to Markets -Labor Issues -Right to Work Laws -Access to Suppliers and Cost -Utility Availability and Cost -Environmental Issues -Land Availability and Cost -Quality of Life Issues -Business Clusters -Trade Agreements

Structured queues

These queues are set in a fixed position such as a super market checkout line, airport or bank. In some cases queue management systems can be structure with numbers such as "take-a-ticket number" allowing a person to walk around and wait for their number to be called.

Step 5: establish performance measures

This allows the firm to: -Determine if objectives have been met -Compare actual to planned variance (take action to correct issues)

Fourth Party Logistics (4PL)

This type of company is an interface between the client company and multiple logistics service providers. -A company will select a lead logistics partner (referred to as a 4PL) that is then charged with managing the activities of all the other 3PL's being used by the company. -Ideally, all aspects of the client company's supply chain handled by 3PL's would be managed by the 4PL organization.

Third Party Logistics (3PL)

This type of company is an outsourced provider that manages all, or a significant part, of an organization's logistics requirements for a fee. -3PL providers charge a fee for their services. -They typically generate a 10 to 20% savings in logistics costs. -Favored by small businesses -Used to a significant degree for international logistics.

Sales activity management

Tool offering sales reps a guided sequence of sales activities

Warehouse Management Systems (WMS)

Track and control the flow of goods from receiving dock to outbound shipment. New technologies, such as RFID tags, facilitate tracking.

International Trade Compliance

Trade regulations and related content are at the heart of ITC, but staying up-to-date is a major challenge because: -The information changes frequently -It's often made available only in a foreign language -It's not always produced in an electronic form -Is a major concern and dozens of laws, regulations and rules have to be checked and complied with for every import and/or export transaction. -Millions of shipments cross into the US annually providing the US with goods and services: -Businesses violating trade regulations face fines of up to 40% of the value of the merchandise for "negligence," which can mean simply failing to keep certain necessary records.

Differentiation

Unique service created based on customer input and feedback. -Examples: Sunday car servicing at Hyundai, Ford, etc. Being different from another local dealer. This may be helpful in selling a car to someone who can't take off work on a Monday-thru-Friday when their car needs repair.

Sales force automation

Used for documenting field activities, communications with the home office, and retrieving sales history in the field.

Transportation Management Systems (TMS)

Used to select the best mix of transportation services and pricing.

Break Even Model

Useful location analysis technique when fixed and variable costs can be determined -Identify the locations to be considered. -Determine the fixed cost of land, property taxes, insurance, equipment, and buildings. -Determine the unit variable cost, materials, utilities, and transportation costs. -Construct the total cost lines. -Determine the break-even points on the graph. -Identify the range over which each location has the lower cost.

Interstate Commerce Act of 1887

created the Interstate Commerce Commission (ICC).

Break-Bulk Warehouse

Warehouse operation that divides full truckloads of items from a single source or manufacturer into smaller, more appropriate quantities for use or further distribution. -Located closer to the customer base so that the smaller LTL shipments travel the shorter distance, while the larger FTL shipments from the single source travel the longer distance before arriving at the break-bulk warehouse.

Assembly operation

Warehouse operation that puts products together with other items/components before shipping them out to the final customer. -exp: literature, spare parts, advertising materials

Consolidation warehouse

Warehouse operation that receives products from different plants or suppliers, sorts them, and then combined them with similar shipments from other plants or suppliers for further distribution. -Located closer to the supply base so that smaller LTL shipments travel shorter distance and can be consolidated into larger FTL shipments traveling longer distance to the customer.

Operational Efficiency

Warehouse operations are more efficient as the material does not have to be stored at the warehouse, moving directly from receiving to shipping.

LEAN Warehousing

Warehouses and distribution centers are continuing to develop their LEAN capabilities -Cross Docking -Reduced Lot Sizes and Shipping Quantities -Increased Automation -Green Warehousing

Import Process

When a shipment reaches the US, the Importer of Record (i.e., the owner, or purchaser) must file entry documents at the port of entry.

Unstructured queues

When people form queues somewhat informally in various directions and locations. These types of queues are seen in retail stores, at an airport waiting for a taxi, people waiting for an ATM machine, etc.

Recycling

When products reach the ends of their useful lives and must be scrapped, companies must find safe, cost-effective and environmentally friendly ways to dispose of them. By salvaging, reclaiming and re-using components, companies can reduce costs and minimize waste.

Private warehousing: fixed size and costs

When volume is low, the company still assumes the fixed costs.

Mixed strategy

While others use it as a supplemental distribution channel. -exp: walmart

Picking

Withdrawing components from stock to make assemblies or finished goods, or to ship to a customer.

Quality-of-Life Issues

You will need people to work at these locations - so consider the following Quality-of-Life issues in terms of maturity, sophistication, robustness, etc., in each location, and do a comparison/evaluation: -Education -Economy -Natural Environment -Social Environment -Culture -Healthcare -Government / Politics -Mobility -Public Safety -Recreation

Hybrid Approach

a "hub and spoke" where there is a centralized warehouse (i.e., the "hub") which holds most of the inventory linked to a series of smaller geographically dispersed warehouses (i.e., the "spokes") which hold only a small amount of inventory to support their local area in the immediate time frame -The hub warehouse feeds the spoke warehouse with inventory as necessary on a regular basis. -Operating costs are lower because the spoke warehouses are smaller than in a purely decentralized model. -Inventory is also lower as all of the safety stock is held centrally, which generally means that less total safety stock is required because all of the risk and uncertainty is managed centrally. -Customer service is generally better than in a purely centralized model since some of the inventory is maintained closer to the customer.

5% improvement in customer retention can result in:

a 75% increase in profits

CBP protects the U.S. through.....

active inspections at ports of entry.

Because transport by water is so cheap:

almost any item may be shipped by water including: automobiles, produce, containerized cargo, etc.

Global services

are increasing all over the world and managing them involves a number of issues: -Identifying global customers. -Labor, facilities, and infrastructure support vary by country -Legal and political issues: -Laws may restrict foreign competitors. -Domestic competitors and the economic climate: -Managers must be aware of local competition and their environment.

Implicit services

attitude of the servers, atmosphere, waiting time, status, privacy, security, and convenience

Explicit services

availability and access to the service, consistency of service performance, comprehensiveness of the service, and training of service personnel (e.g., vault, safe deposit boxes, loans, etc.).

A successful CRM program is:

both simple and complex. -It is simple in that it involves training users within the company to make customers feel valued. -It is complex in that it also means finding affordable ways to identify potentially thousands, if not millions, of customers and their needs, and then designing customer contact strategies geared toward creating customer satisfaction and loyalty among your segments of customers.

Motor Carrier Act of 1935

brought motor carriers under Interstate Commerce Commission control.

Contract warehousing: cost

can be bundled in the contract and negotiated at a lower cost.

Contract warehousing: Services

client can obtain specialized services tailor-made to suit their needs.

Contract warehousing: control

contract warehousing offers a degree of control at a reasonable price

Department of Transportation Act of 1966

coordination of all transportation-related matters.

Federal Aviation Act of 1958

created air traffic and safety regulations and the national airport system.

World Trade Organization

deals with the global rules of trade between nations. Its main goal is to ensure that trade flows as smoothly, predictably and as freely as possible.

Disadvantages of contract warehouse

duration

Franchising

e.g., fast food restaurants, temp agencies, tax businesses, etc.) Allows business to expand quickly in dispersed geographic markets Protects existing markets Builds market share and facilitates business when owners have limited financial resources.

Deregulation

encourages competition and allows prices to adjust as demand and negotiations dictate.

Transportation Act of 1940

established Interstate Commerce Commission control over domestic water transportation.

Customer Defection Analysis and Churn Reduction:

go hand-in-hand to determine why customers leave and finding ways to retain them.

Quality inspection

incoming and outgoing.

CBP has a strong base of...

industry partnerships and technology to safeguard the American public and promote legitimate international commerce.

Private warehousing: visibility

inventory, material flow, handling, supervision, and associated costs.

Managing waiting time

involves managing both the actual waiting time and the perceived waiting time.

Up-selling

involves persuading a customer to buy a more expensive item or upgrade a product or service to make the sale more profitable. It also involves selling the customer extra features or add-ons to the product they are already buying or considering. -Example: "Would you like to super-size your order?"

Field Service Management

involves setting up the company operations to allow customers to _interact directly with the company's service personnel. -Customers can call the service people directly, and make an appointment with the service person to come out to service the product. -Since customers are communicating directly with product specialists for service issues, it is more likely that the right diagnosis can be made quickly, which will help to ensure customer satisfaction.

Reverse Logistics

involves the process of moving a product from the point of customer receipt to the point of origin to recapture value or ensure proper disposal. -Backwards flow of goods from customers in the supply chain -all about damage control and making the process as customer-friendly as possible -cost 4 - 5 times as much as forward logistics and requires on average 12 times as many processing steps. -not a new problem

value of service pricing

is a pricing strategy which sets prices based on the value perceived by the customer, i.e., "priced at what the market will bear".

Cost of service pricing

is the setting of a price for a service based on the costs incurred in providing it.

Full Truckload (FTL)

is the transport of goods that fill up a full truck, or a partial load shipment occupying an entire truck. -Advantages: Best way to transport large shipments. Ideal for high risk or delicate freight shipments. Considerably faster than LTL. -Disadvantages: Costs more than LTL

Less than Truckload (LTL)

is the transportation of relatively small freight, i.e., the freight does not require the entire space of a truck. -Advantages: Can be cost effective. There are more available carrier options. Ideal for small businesses. -Disadvantages: Increased risk of theft/damage. Increased shipping times and delays

Recovering from poor service quality

keeping customers loyal and coming back serves as good word of mouth advertising.

The true value of warehousing:

lies in having the right product in the right place at the right time. Warehousing provides time and place utility; the availability necessary to give materials true value.

Call centers

links an organization and its customers together. -It is a facility housing personnel who respond to customer queries. These personnel may provide customer service or technical support. -It gives customers quick access to the information they want and enhances the customer-to-business relationship_. -Help continuously monitor customer service parameters in an effort to gauge performance and improve quality and efficiency. -By utilizing a Call Center, the company's internal resources can be freed up to focus on the company's core competencies

Supporting facility

location, layout, architectural appropriateness, equipment, decoration. (e.g., drive-up tellers, ATM's, etc.)

Multiple channel

multiple phase, multiple servers acting in parallel. Example: customer, to one of multiple fast food order takers, to fast food cook

Single channel

multiple phase, multiple servers acting in series. Example: customer, to hostess, to wait staff, to chef.

Queuing systems

system is used to help control the flow and prioritization of people expecting to receive a service. -Queues can be utilized for almost any situation where large numbers of persons are gathering, or waiting in line to purchase tickets, enter a facility, etc. -Queues are common in airports, amusement parks and retail stores.

Post-transaction elements

occur after the sale Includes warranty repair capabilities, complaint resolution, product returns, operating information, etc.

Transaction elements

occur during the sale Includes the order lead time, the order processing capabilities, the distribution system accuracy, etc.

Managing Perceived waiting times

often, demand exceeds expectations and capacity -No one likes to wait in line, however it is a reality, and even a necessary evil, for many service offerings. -There are mathematical formulas used to help predict wait times. These formulas are based on certain predetermined assumptions and probabilities. -There are also techniques for reducing the time spent waiting, and/or the perception of the time waiting, for the service to be delivered. -Disney and other theme parks use these techniques. -The answer is to try and keep the customers' mind of off waiting.

Long Haul

over 200 miles from the driver's home terminal

Private carriers

person or company that transports its own cargo as a part of a business that produces, uses, sells or buys the cargo that is being hauled.

Pre-transaction elements

precede the sale Includes customer service policies, the mission statement, the organizational structure, system flexibility, etc.

combination pricing

price is set at a value between cost-of-service minimum and value-of-service maximum. Most carriers use some form of combination pricing. Common in highly volatile markets and changing competitive situations

Carriers

refers to the company that transports the goods

Mode

refers to the way in which goods are transported

Granger Laws (1870s)

regulated the railroads

Blended delivery example

restaurant

CBP is also concerned with:

revenue collection (i.e. tariffs and duties). Revenue is determined by item such as: -Correct valuation (price paid or payable) -Correct classification -Country of Origin (COO) -Identification of the merchandise -Identification of buyer and seller and whether they are related

Rule 1: managing perceived waiting times

satisfaction= customer perception greater than or equal to customer expectation

Multiple channel

single phase, single server. Example customer, to one of multiple available service representatives.

Single channel

single phase, single server. Example: customer, to service representative.

Intermodal Transportation

sometimes referred to as the sixth mode of transportation, but it is really the use of multiple modes of transportation to execute a single transport shipment -is growing substantially because it is fairly cost-efficient and cost-effective. -aka "Piggy-back" service

Roll On/Roll Off Ship

specifically designed to allow trucks to be driven directly on and off the ship without the use of cranes. -Provides flexibility and speed.

Facilitating goods

tangible elements that are used or consumed by the customer or the service provider along with the service provided. (e.g., deposit forms, statements, etc.)

Logistics

that part of supply chain management that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information, from the point of origin to point of consumption, in order to meet customer requirements.

Customer service

the act of taking care of the customer's needs by providing and delivering professional, high quality service before, during, and after the customer's requirements are met.

the right documentation =

the perfect order

Deemed Exports

the release of technology or source code that is subject to the Export Administration Regulations, to a foreign national (i.e., non-US citizen) located in the United States. -An intentional or unintentional export of controlled technology can easily occur within the walls of your company, even if located within the borders od the United States. -The release can ve visual, orall, through on the job training, or via systems access, etc -"Technology" is defined as the specific information necessary for the development, production or use of a commodity -Usually, technology is even more strictly controlled than a commodity -The proper controls are needed to ensure that any such export occurs ______ (i.e., with the proper licenses and approvals) and does not expose you or your company to penalties.

Loyal customers:

the source of most profits, and a relatively small percentage of those customers may generate most of the profits for the company.

Customer relationship management (CRM)

the transformation of the people, process, and technology required to become a customer-centric organization. -It involves acquiring, retaining and partnering with selective customers to create superior value for both the company and the customer. -It provides a means and a method to enhance the experience of individual customers so that they will remain customers for life. -about building and maintaining profitable long-term customer relationships beyond the one-off buy and sell transaction.

Clickstream

tracking how a customer navigates a website can help tailor a website's images, ads or discounts based on past usage of the site.

Balking

when a customer refuses to join the queue.

Reneging

when customers decide to leave the queue.