Physical Distribution Management Exam 3

Advantages of Unit Loads

-Additional protection -Pilferage is discouraged -More fragile items can be stacked inside the load -Mechanical devices can be substituted for hand labor - biggest advantage

Increased Customer Power

-Fast Supply Chain : time -Agile Supply Chain : ability to deal with changes in demand -Lean Supply Chain : elimination of waste -Reduction of the Bullwhip Effect : variability of demand across supply chain partners that result in lumps of inventory -Reduction of Inventory in the Supply Chain Supply Chains need to be fast and agile

Investment Recovery

-Identifying opportunities to recover revenues or reduce costs -Responsibility of procurement manager -Associated with various materials: •Scrap: excess material •Surplus: excess material •Obsolete: transfer from an old source to new source of material •Waste: spoiled and broken, no economic value Responsibility of a procurement manager associated with various materials: Scrap, surplus, and obsolete - have some economic value

Chemical Characteristics

-Incompatible products -Products requiring chemicals

Enablers of Supply Chain Management Implementation

-Increased Customer Power -Establishing Appropriate Relationship Structures -Leveraging Technology for Enhanced Visibility and Communication -Use of Supply Chain Facilitators

Materials Handling Equipment

-Labor intensive -Mechanized -Automated Sufficient volume is needed to justify high cost of automated equipment

Product Characteristics

-Physical -Chemical -Characteristics must be made known to consumers

Disadvantages of Unit Loads

-Provides large quantity that sometimes is of limited value to resellers dealing in smaller quantities -Must use mechanical or automated device to move -Lack of standardized pallet size

Boxmaker's Certificate (BMC)

Assures that boxes are sturdy enough to meet handling requirements

Supply Chain

"a combination of processes, functions, activities, relationships, and pathways along which products, services, information, and financial transactions move in and between enterprises from original producer to ultimate end-user."

Barriers to Supply Chain Management Implementation

-Regulatory and political considerations -Lack of top management commitment -Reluctance to share or use relevant info -Incompatible information systems -Incompatible corporate cultures -Globalization challenges

Evolution of SCM

-Relatively new concept : rarely mentioned prior to 1990 -Recognition grew when value could be found in coordinating various business functions -SCM philosophy: Coordinate not only within organizations, but across organizations

Building-Blocks Concept

-Smallest unit is consumer package -Each unit is stocked within the next larger one to protect the product

Kraljic's Portfolio Matrix

-Strategic (high importance, high complexity) : use long-term, cost-based contracts with key suppliers -Leverage (high importance, low complexity) : use reverse auctions -Bottleneck (low importance, high complexity) : use buying consortiums -Noncritical (low importance, low complexity) : use procurement cards

Physical Characteristics

-Substance form (solid, liquid, and gas) -Density of bulk materials -Ability to withstand exposure to elements -Perishables -Respiration (gases from the product that escape)

Packaging Testing and Monitoring

-Vibrations (causes settling) -Dropping -Horizontal impacts -Compression -Overexposure to extreme temperatures or moisture -Rough handling

SCOR Model (Supply Chain Operations Reference)

6 processes linked to : logistics, operations, and procurement Plan Source Make Deliver Return Enable

GSCF Model (Global Supply Chain Forum)

8 processes that involve all the business practices -Customer Relationship Management -Supplier Relationship Management -Customer Service Management -Demand Management -Order Fulfillment -Manufacturing Flow Management -Product Development and Customization -Returns Management

Supplier Development (Reverse Marketing)

A degree of aggressive procurement involvement not normally encountered in supplier selection Can include: -a purchaser initiating contact with a supplier -a purchaser establishing prices, terms, and conditions

Unit Loads in Materials Handling

A unit load (unitization) refers to consolidation of several units (cartons or cases) into larger units to improve efficiency in handling and to reduce shipping costs. Handling efficiency can be facilitated by mechanical devices (pallet jack or forklift) as well as by using a pallet or skid. A unit load is when you secure one or more boxes to a pallet or skid in order to handle with mechanical means.

Leveraging Technology for Enhanced Visibility and Communication

Computing Power - supply chain software Internet

Quality Programs

Important to match quality levels of all buyers and sellers in the supply chain -ISO 9000: international standards organization - level of quality, have to be recertified every 3 years -Six Sigma: 6 standard deviations; quality program, 3.4 defects per 1 million, certification program committed to high levels of quality with low defects -Malcolm Baldrige National Quality Award: 1 time award, holds for life

Establishing Appropriate Relationship Structures

Long-term Orientation -relational exchanges: ongoing -transactional exchanges Supply Chain Collaboration -supply chain partnership

Supply Chain Management and Integration

Long-term, mutually beneficial agreements -partnerships -strategic alliances -third-party arrangements -contract logistics Methods used to integrate -vertical integration -formal contracts -informal agreements

Packaging

Materials used for the containment, protection, handling, delivery, and presentation of goods Role: Serves to protect, to identify (label), to promote the relevant product

Socially Responsible Procurement

Meets the ethical responsibilities expected by society Has five dimensions: 1. Diversity 2. Environment 3. Human rights 4. Philanthropy 5. Safety Areas of ethical concern include: -bribes -kickbacks -handling confidential information -purchasing for one's private use -interfering with a legitimate bidding process -conflicts of interest

Unit Loads in Materials Handling (Cont.)

Slip sheet can be used in place of pallet -Saves vertical room -Requires more care when moving -Need mechanical means -1/80th the thickness of a pallet Load-planning software Bracing Inflatable dunnage bags Load is subjected to forces: -Vibration -Centrifugal: when you go around big turns -Roll -Pitch: going up and down hills

3PL

Someone you hire to do logistics for you

Materials Handling

The "short-distance movement that usually takes place within the confines of a building such as a plant or DC and between a building and a transportation service provider." -How the products are handled depends on whether they are packaged or in bulk -Handling may change the characteristics of the product

Supply Chain Management

The planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.

Procurement

The raw materials, component parts, and supplies brought from outside organizations to support a company's operations. Purchasing & Procurement - same thing Quantity and timing

Use of Supply Chain Facilitators

Third-Party Logistics (3PL) -logistics outsourcing -contract logistics Fourth-Party Logistics (4PL) primarily used in global companies -lead logistics provider (LLP) Core of scm: find more efficient providers

Successful Supply Chains have

an enterprise-to-enterprise point of view a systems approach across all organizations in the supply chain

Issues in Packaging

•Environmental Protection: -Reduce packing materials used -Use packaging materials that are more environmentally friendly with recycled content -Use reusable containers (closed-loop system) -Retain or support services that collect used packaging and recycle it (closed-loop system) (Closed-loop system considers the reverse flow of packaging; can be reused) •Metric System Usage - US, Liberia, and Miramar don't use the metric system •Packaging Inefficiencies - "Dead Air"