Topic 1: What is Logistics?

What forms the critical link in the supply chain?

(1) customer relationship management (2) supplier relationship management

Executives are giving logistics more focus because of...

(1) increase competition (2) shift of power (3) globalization (4) increased IT systems (5) increased product proliferation (6) increased delivery points

improving time and place utility to reduce returns by:

(1) reducing the price of slightly damaged goods (2) track customer orders and returns (3) shows how to assemble items

supply chain management (3 parts)

(1) supply chain network -- who are they key supply chain members (2) supply chain management processes -- processes should be linked to members (3) supply chain management components -- level of integration and management that should be applied for each process link

possession utility

(1) translates customer needs into product and service requirements (2) promotes the resulting product's value (3) facilitates exchange so the customer may "possess" it Basically making you desire to "possess" an item through marketing

The Lean Institute and the Toyota Production System have defined the following process for implementing learn techniques:

1. Look through the eyes of the customer 2. eliminate process waste 3. eliminate wasted time and space 4. repeat

Inventory Costs, Transportation Costs, Packaging Costs Tradeoffs

Increase inventory or transportation service --> decrease cost of lost sales but increases cost

product proliferation

SKU (stock keeping unit)

A Kaizen event is..? a. An event you hold to introduce lean principles in order to improve processes. b. A specific methodology used to introduce the idea of the eight wastes. c. An important method for improving organizational sustainability. d. All of the above

a. An event you hold to introduce lean principles in order to improve processes.

In considering the 8 wastes, which of the following is an example of overproduction? a. Giving the customer more product than ordered. b. Holding excess inventory. c. Cleaning more frequently than needed. d. None of the above

a. Giving the customer more product than ordered.

In logistics, processing deals primarily with which of the following? a. The flow of information and the visibility of shipments during movement and storage. b. The processing of payments quickly to improve cash flow. c. Reducing waste. d. Managing paperwork. e. None of the above

a. The flow of information and the visibility of shipments during movement and storage

In the 5 S's, which of the following is another way to say simplify? a. There is a place for everything, and everything in its place. b. Eliminate the things you are not using. c. Standardize and develop repeatable processes. d. Eliminate unnecessary movement waste.

a. There is a place for everything, and everything in its place.

Because product returns are typically much higher with online sales than with in-store sales, online retailers should: a. Understand why customers return products and develop strategies for reducing the number of returns. b. Limit returns for online items or charge hefty restocking fees. c. Find ways to drive customers into shopping at bricks-and-mortar stores. d. All of the above

a. Understand why customers return products and develop strategies for reducing the number of returns.

When considering logistics tradeoffs and what type of service level to emphasize, your company should consider which of the following? a. What are the most important service characteristics to its customers. b. How to be competitive based on price. c. There are really no such thing as tradeoffs. d. None of the above

a. What are the most important service characteristics to its customers.

_____ creates possession utility. a. Marketing b. Getting things where they are needed c. Logistics d. Supply chain management

a. marketing

Which of the following is not one of the seven rights of logistics? a. Right transportation b. Right place c. Right cost d. Right time d. None of the above; that is, they are all part of the seven rights

a. right transportation

value can only be assessed from the standpoint of ____ . a. The eyes of the customer b. Shareholder value c. A company's stock price d. None of the above

a. the eyes of the customer

excess processing waste

activities that the customer does not value and is not willing to pay for

service logsitics

all the people, facilities and supplies in place to effectively deliver services to customers (Hair salon)

defects waste

any work or product that is less than perfect

Which of the following does NOT describe transportation waste? a. Moving things by a more expensive mode than the customer needs. b. Excess movement done by people. c. Transshipping orders. d. Buying things from distant locations instead of locally. e. All of the above f. Only A, C, and D

b. Excess movement done by people.

Service logistics are...? a. The basis for customer service, which is the heart of logistics b. Focused on all the people, facilities, and supplies in place to effectively deliver services to customers c. The resources (facilities, people, and infrastructures) used to organized, deliver, and execute an event from initial schedule through teardown and clean-up. d. All of the above

b. Focused on all the people, facilities, and supplies in place to effectively deliver services to customers

Which of the following is NOT one of the eight wastes? a. Not utilizing staff talents b. Kaizen c. Inventory d. Defects

b. Kaizen

Because of government regulations, a standardized trailer can weigh up to no more than 40,000 lbs. What type of tradeoff does this regulation affect? a. Logistics vs. the value of an item b. Logistics vs. Weight Density c. Logistics vs. Susceptibility to loss and damage d. All of the above

b. Logistics vs. Weight Density

The earthquake in 2011 that hit the coast of Japan caused some major problems for Toyota's production system allowing GM to regain the crown of being the number one car seller by volume. Which of the following was the lesson learned from this disaster? a. Toyota needs to focus on the customer value approach focusing on what people value. b. Managers must balance lean operations with resiliency. c. The control of activities to eliminate waste and improve cost drivers is critical. d. Toyota needs to focus on the distribution routes, from raw materials through consumption.

b. Managers must balance lean operations with resiliency

Which of the following is not one of the 5 S's? a. Sustain b. Source c. Sort d. Sweep

b. Source

storage

balance inventory levels, locations, and choice of transport mode to serve your customers quickly

Which if the following is true regarding the tradeoff between transportation costs and service? a. We should use whatever transportation is required to achieve the customer's desired service level. b. We should make the customer pay for transportation costs. c. As the money we spend on transportation goes up, our cost of lost sales generally goes down. d. It is always a good investment to spend more money on transport to achieve higher service levels.

c. As the money we spend on transportation goes up, our cost of lost sales generally goes down.

Which of the following is true regarding how a product's value influences logistics costs? a. Warehousing cost is unaffected by the value as warehousing depends on the space something takes up. b. Transportation is unaffected by value as it is based on space and weight. c. Inventory costs go up because more valuable products tie up more cash. d. All of the above

c. Inventory costs go up because more valuable products tie up more cash.

Moving groups of people and suppliers, setting up camps, replenishing supplies and people, breaking camp and moving out describes which type of logistics? a. Event logistics b. Passenger logistics c. Military logistics d. Service logistics e. Humanitarian logistics

c. Military logistics

Humanitarian logistics involves...? a. Moving groups of people and supplies, setting up camps, replenishing supplies and people, and breaking camp down again and moving it out. b. Focusing on B2B issues c. Planning the effective flow and storage of goods as well as the exchange of information to alleviate the suffering of people d. All of the above

c. Planning the effective flow and storage of goods as well as the exchange of information to alleviate the suffering of people

Which of the following describes event logistics? a. The management of logistics to deliver relief after a disaster. b. Focused on all the people, facilities, and supplies in place to effectively deliver services to customers. c. The resources (facilities, people, and infrastructures) used to organize, deliver and execute an event from initial schedule through teardown and clean-up. d. Very predictable because every event is vastly different.

c. the resources (facilities, people, and infrastructures) used to organize, deliver, and execute an event from initial schedule through teardown and clean-up

sweep

clean and organize each day as you use things -- put them away

sustain

continuously follow this approach and implement it throughout your company

marketing and logistics (4)

customer service, pricing, packaging, retail location

When considering product fragility, which of the following is NOT true? a. As fragility increases, so does transportation costs. b. As fragility increases, so does packaging cost. c. As fragility increases, so does warehousing cost. d. As fragility increases, so does pilferage cost.

d. As fragility increases, so does pilferage cost.

When thinking about the various types of logistics, which of the following is true? a. There is very little in common from one type to the other. b. They are all virtually identical--only the names are changed. c. The book focuses on service logistics. d. Many of the key logistics principles we discuss are applicable to all of the various types of logistics.

d. Many of the key logistics principles we discuss are applicable to all of the various types of logistics.

The waste of motion is...? a. Movement of materials or information that does not add value. b. Paying for a more expensive mode of transport than your customer needs. c. Moving goods multiple times. d. Movement of people that does not add value. e. All of the above

d. Movement of people that does not add value.

The five S's...? a.Are an independent system to organize tools. b. Tell us there is no such thing as being too lean! c. Were invented by by Subaru as part of the Subaru philosophy. d. Remind us that resiliency matters. e. All of the above

d. Remind us that resiliency matters.

processing

deals with the flow of information and the visibility of shipments during movement and storage

place utility

delivering an item exactly where it is needed

shift in channel power

development of category killer stores has resulted in a shift of channel power from manufacturers to retailers

Listening to employee suggestions for improvement is an example of which 5S methodology for eliminating waste? a. Sort b. Simplify c. Sweep d. Standardize e. Sustain

e. Sustain

sort

eliminate unneeded items from the area, store thing not needed now -- organize

Lean Practices

eliminating all process, steps, and materials that do not add value

inventory waste

excess materials that customers or manufacturing don't currently need

quantity utility

focuses on delivering customers the right amount of product

increase competition

focuses on increased customer service and differentiating from other businesses

Kaizen Events

gatherings of people who are involved in the day-to-day management of the process (1) "How can this process be improve?" (2) "If we make this change, how will the rest of the process be affected?"

Tradeoffs

giving up something in order to get something else

The amount of money that is spent on logistics in the U.S. economy in dollar terms... a. Is flat b. Has increased over time c. Has decreased over time d. Not enough information to answer this question

has increased over time

simplify

have a logical place where everything belongs --- i.e. a place for everything and everything in its place

standardize

have standardized processes and procedures to maintain workplace order, ease training of new people

waiting waste

idle/wasted time when resources are not ready/available to use

In the 1980s, the largest category of logistics spend was... a. Inventory carrying cost b. Trucking cost c. Air freight cost d. Administrative costs

inventory carrying cost

overproduction waste

making more than the customer wants or than you have known demand for

transportation waste

movement of materials or information that does not add value

motion waste

movement of people that does not add value

logistics creates value through...

movement, storage, and processing (PMS)

military logsitics

moving groups of people and supplies, setting up camps, replenishing supplies and people, and breaking camp down again and moving it out

passenger logsitics

moving people (Airplane flights)

not utilizing staff talent waste

not challenging employees or listening to and encouraging their ideas

CSCMP's definition of logistics management

part of supply chain management that plans, implements, and controls the efficient forward and reverses flow and storage of goods, services, and related information between the point of origin and point of consumption

Bricks-and-Mortar Distribution Channels

physical distribution channels that move goods

humanitarian logstics

planning the effective flow and storage of goods as well as the exchange of information to alleviate the suffering of people (Red Cross assistance)

economic utilities

possession, form, time, place, quantity

form utiity

primary responsibility of purchasing and operations managers who acquire inputs and transform them into products or services of greater customer value

production and logistics (3)

product scheduling, plant location, purchasing

4 P's of marketing

product, price, promotion, place

In India, improves logistics has... a. Raised the standard of living for rural farmers. b. Virtually eliminated poverty. c. Eliminated hunger. d. All of the above

raised the standard of living for rural farmers

Event logistics

resources used to organize, deliver, and execute an event from initial schedule through teardown and clean up (Chinese New Year)

increasing number of delivery points

retail outlets are beginning to expand product offerings

seven rights of logsitics

right product to the right customer at the right time in the right condition in the right quantity at the right place and for the right cost

5S Methodology

sort ,simplify, sweep, standardize, and sustain

More developed economies... a. Rely on rail as a primary means of freight transport. b. Spend more on logistics because their products tend to be imported and shipped greater distance. c. Spend less on logistics costs because their logistics systems are more efficient. d. Logistics costs are unrelated to an economy's stage of development.

spend less on logistics costs because their logistics systems are more efficient

globalization

supply chains become longer and inventory levels are reduced

Gross Domestic Product (GDP)

the monetary value of finished goods and services produced within a country

CSCMP's definition of supply chain management

the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities, including coordination and collaboration with channel partners

infrastructure

the processes, people, equipment, and flows that support a particular industry

logististics infrastructure

the processes, people, equipment, and flows that support a particular industry

category captain

the product in charge of managing items that a company buys from a specific product category

cube

the space that product takes up (about 20-foot trailer)

Cube out

trailers is filled in terms of space before weight limit (40000lbs)

movement

transportation permits goods to flow from one place to another

Weigh out

truck is filled in terms of weight before space

the largest category of spending within logistics costs in the U.S. today is.. a. Inventory cost b. Trucking cost c. Air freight cost d. Administrative costs

trucking cost

increasing role of IT and information

turning data into useful information and trusting partners with information

total cost concept

view the sum of logistics operations as a system and seek to minimize cost of the system rather than individual functions

product density

weight density of a product shows how much a product weights vs how much space it takes up

time utility

when a product arrives when it is needed