TRA 6726 Topic 15
Returns Processing
Accepting, processing, and sorting customer returns via e-commerce so the customer does not need to visit a store.
Air Carriers -
Expensive relative to other modes but fast •Account for a small portion of total freight hauled •Cannot carry extremely heavy or bulky cargo •For light, high value goods over long distances quickly •Limited in terms of geographic coverage •Half of the goods transported by air are carried by freight-only airlines, like FedEx.
A warehouse management system is a standard system designed to support cross-docking
False
Asset-based 3PLs are brokers or intermediaries who utilize the assets of others to provide services
False
The challenge as a logistician is to evaluate and meet customer's needs at the lowest cost.
False
Logistics' Inflation-suppression Effect
Modern logistics systems have enabled a global economy, lowering price levels by 50% since 1990.
Modal Service Characteristics - Most Ideal Distance / Least ideal distance
Motor / Ship
You currently ship 6 LTL shipments (each weighs about 4,500 pounds) into the region at $400 per shipment. You identify a third-party warehouse operation that is able to unload (and reload) a full truckload for $300. You check with your carrier and discover that the truckload from Las Angeles to Las Vegas is $2,000. LTL delivery from the breakbulk facility to each customer is $150. Your question: Should you change your delivery model?
No
Asset-based 3PL
Own their own trucks and warehouse
The most reliable form of transportation is _____ Pipeline Water Air Rail Trucking
Pipeline
The slowest transportation mode is: a. Trucking b. Pipeline c. Water d. Rail e. Air
Pipeline
Modal Service Characteristics - Best for Greenhouse gasses / worst for greenhouse gasses
Pipeline / Air
Modal Service Characteristics - Most Deliv Reliability / Least Delivery Reliability
Pipeline / Ship
Freight Forwarder or NVOCC
They arrange for transportation across different modes and sell insurance for international shipments. They also sell expertise—expecially regarding export regulations and documentation.
For Warehouse Location, Use a
Total Cost Perspective
Lightweight but bulky
Truck will fill up in volume before weight; you will have to pay full weight.
Amazon's secret to beating Walmart in market share is its superior logistics service.
True
Breakbulk warehouses receive large-volume truckload shipments that are destined for several customers. TrueFalse
True
Countries with better logistics infrastructures and companies with better logistics systems are more competitive. TrueFalse
True
Improving service always costs more money TrueFalse
True
Logistics can be a source of strategic advantage
True
Using a breakbulk facility usually reduces shipping time versus LTL direct to customer. TrueFalse
True
Warehousing allows for economies of scale in production
True
Breakbulk
Unload large shipments and breakdown the contents to go into smaller shipments.
The biggest transportation mode in terms of spending is: a. Rail b. Trucking c. Air d. Ocean e. Pipeline
b. Trucking
The fastest transportation modes are also a. The most polluting b. The most expensive c. The least reliable d. All of the above e. Only a and b
e. Only a and b
To determine whether to use breakbulk warehousing, you compare a. Total cost of direct shipping versus using a breakbulk warehouse b. Identify the right location to minimize total breakbulk costs c. You consider intermodal options d. All of the above e. Only a and b
e. Only a and b
A warehouse management system: e. Only a and b a. Handles all of your day-to-day transactions b. Is connected with your ERP system c. Can be manual or automated d. All of the above
e. Only a and b a. Handles all of your day-to-day transactions b. Is connected with your ERP system
As transportation speeds up a. Transportation cost increases b. The cost of transportation declines c. Lost sales will decrease d. All of the above e. Only a and c
e. Only a and c
High value or Easy to Resell
ill be targeted for theft. Need to disguise and have extra security and/or insurance
Shipping LTL usually takes
longer and exposes your freight to greater loss or damage.
The SCOR Model
plan, source, make, deliver, return
warehouse management system (WMS).
receives and processes orders, directs putaway as well as order picking and packing, tracks inventory, and talks to all of your other IT systems, including your enterprise resource (ERP) system.
Breakbulk warehouses receive large-volume truckload (TL) shipments that are destined for
several customers
As you approach 100% perfection
the costs of service improvements rise more quickly.
Logistics makes sure goods and services are available
when you need them where you need them!
Warehouse
•Generic term for a facility where product is stored
Outsourcing
•Hire someone else to manage the process for you?
Distribution Center
•Often called a "mixing facility"
Transportation Routing
•Pick your routes based on shortest distance, shortest time, or your mode of transportation.
Cross-dock
•Receive incoming products and load on to a waiting trailer mixed with other products.
Breakbulk
•Receive large-volume TL, broken down and delivered using LTL
Customs Warehouse
•Store imported or exported materials in order to delay taxes
Truck Transportation Critical Issues
•The weight that can be placed in the truck •The hours that the truck can operate •The size of the equipment that can be used •The number of hours a driver may work •The training that a driver must have
Modal Choice
•What type of vehicle are you going to use to ship your product to meet customer expectations
Carrier Selection
•Who is your partner going to be? DHL, FedEx, UPS, USPS or someone else
As a value of a product goes up,
, related logistics costs for the product increase.
Characteristics of Transactional Relationship
- Arms Length - Minimal Interaction - Transitory Win "Who Cares"
Economist's View of Logistics
- Time Utility - Place Utility
Value-Added Services in Distribution Centers
1. Breakbulk 2. Mix / Assort 3. Store 4. Free Trade Zone 5. Customization 6. final assembly 7. Returns Processing 8. Repair or Refurbish
In Day-to-Day Operations, Minimize:
1. Distance Traveled 2. Unnesessary Movement 3. Wasted Space
Transportation Decisions`
1. Modal Choice 2. Carrier Selection 3. Transportation Routing 4. Outsourcing
Logistics Create Value Through. . .
1. Movement 2. Storage 3. Processing
The Seven Rights of Logistics
1. Right product to the 2. Right customer 3. At the right time 4. In the right condition 5. In the right quantity 6. At the right place 7. For the right cost
Types of Relationships in Shipment
1. Transactional 2. Cooperative 3. Strategic Collaboration
Driver of Transactional Relationship
Cost / Price
Non-asset-based 3PL
Do not own—act as brokers or intermediaries
Customs Brokers
"import connection." A customs broker is responsible for knowing all of the relevant rules and regulations from the point of origin through to the destination. Customs brokers know the right people at the right government agencies to help avoid or resolve shipping problems.
The most polluting mode of transportation is: a. Trucking b. Air c. Water d. Rail e. Pipeline
Air
Modal Service Characteristics - Best Transit Time / Worst Transit Time
Air / Pipeline
Modal Service Characteristics - Most Cost / Least Cost
Air / Pipeline
If you need help handling occasional shipping to certain areas, what would be a good type of relationship to have with a 3PL? a. Partnership b. Transactional c. Cooperative d. Strategic Collaboration
B. Transactional
FOB Destination who pays the carrier
Buyer
FOB Origin Responsible Party
Buyer
If a breakbulk strategy makes sense, you need to identify the right location to place the breakbulk facility to maximize total costs. TrueFalse
Flase
Place to store imported goods so you don't have to pay customs/duties until they are removed from the DC. If re-exported, you can avoid duties altogether.
Free Trade Zone
Intermodal transportation: Is a good idea that is not executed well Has to be between rail and truck Grew rapidly with the invention of containerization Is tough to deal with because containers are not standardized
Grew rapidly with the invention of containerization
Hold inventory securely until it is needed.
Hold
Water Carriers-Carriers-
Inexpensive, slow & inflexible. Includes inland waterway, coastal & intercoastal, & deep-sea. •Inland waterway transportation is used for heavy, bulky, low-value materials (e.g., coal, grain) •Development in deep-sea transportation and use of supertankers & containerships have made water transportation cheaper and more desirable •Competes w/rail & pipeline •Water carriers paired w/trucks for door-to-door delivery
Combing multiple modes is known as
Intermodal transportation The practice of combining transportation modes while moving products. .
An example of how product characteristics influence transportation is that if a product is high density ________ It is heavy for the space it takes up, and will maximize the weight allowed when the trailer is not very full by volume It will move slowly because it is heavy The truckload shipment will be very heavy, and you will have to pay more It can only be shipped via rail
It is heavy for the space it takes up, and will maximize the weight allowed when the trailer is not very full by volume
Final Assembly
Putting a bicycle together before shipping to a customer.
FOB Destination Responsible Party
Seller
FOB Origin who pays the carrier
Seller
Mix/Assort
Take a variety of products from different places, mix them into one shipment and ship them out together.
Logistics is:
That part of supply chain management that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements.
For Long-term Efficiency, Employ
The Right Technology
High Density
The truck will not be very full when it reaches full weight
Easily damaged
Will probably have to pay more for protective packaging, extra care in handling
Characteristics of Strategic Collaboration Relationships
Win - Win Drive : Innovation - Trust Enabled - Resources Comingles - Gain Sharing - Long Term
Characteristics of Cooperative Relationships
Win - Win Driver: Scale - Joint Planning - Frequent Interaction - Information Intensive - Value Added Service - Long Term
Logistics' Poverty-alleviation Effect
Xavier Sala-i-Martin, Columbia University economist, has noted that since 1970, the "percent of people living on a dollar a day or less—a traditional poverty measure—has fallen by 80%.... This is the greatest antipoverty achievement in world history."
What are the key activities in logistics? a. Movement, storage, and processing b. Returns, reuse, and recycling c. Managing customer payments, returns, and credits d. All of the above are equally important e. None of the above
a. Movement, storage, and processing
Visibility is a critical aspect in which of the following key logistics activities? a. Processing b. Value-added c. Rail d. Returns and reuse e. None of the above
a. Processing
The last mile shipping is: a. Shipping directly to the customer's door b. The fastest growing area in shipping c. A very profitable business d. All of the above e. Only a and b
a. Shipping directly to the customer's door b. The fastest growing area in shipping
Logistics inefficiency hurt Twinkies because _____ a. Twinkies had a short shelf-life, so could not be stored for long b. Logistics costs associated with Twinkies was extremely high versus the industry c. Theft of Twinkies was very high d. Both a and b
a. Twinkies had a short shelf-life, so could not be stored for long b. Logistics costs associated with Twinkies was extremely high versus the industry
As the value of a product increases, which of the following is also true from a logistics perspective? a. Sales will increase b. Inventory costs will increase c. Warehousing costs decrease d. All of the above e. None of the above
b. Inventory costs will increase
Which of the following is true about breakbulk warehousing? a. It is obsolete due to e-commerce growth b. It entails unloading large shipments and breaking down the contents to go into smaller shipments c. It includes mixing different product together and shipping them out d. All of the above are true e. Only b and c
b. It entails unloading large shipments and breaking down the contents to go into smaller shipments
What type of 3PL relationships are win-win, driven by scale, and characterized by joint planning and value-added services? a. Partnership b. Transactional c. Cooperative d. Strategic Collaboration
c. Cooperative
Rail Carriers
compete when the distance is long & the shipments are heavy or bulky •Slow & inflexible •New - purchasing motor carriers to offer point-to-point pickup & delivery service known as trailer-on-flatcar (TOFC) service •One trend is use of high-speed trains which range in the U.S. from 85 to 120 miles per hour
Less-than-truckload carriers
consolidate smaller loads from multiple customers to fill a trailer and achieve shipping economies.
Hold semi-finished products until an order is received then customize to customer specifications before shipping out
customization
A free trade zone warehouse is: a. A type of value-added warehousing service b. Allows companies to store imported goods so you don't have to pay customs/duties until they are removed from the DC c. Allows you to avoid duties altogether for goods you import and re-export d. All of the above
d. All of the above
Objectives of using a 3PL include which of the following? a. Minimize costs b. Deliver maximum service to customers c. Reduce the hassle of dealing with repetitive detailed activities d. All of the above e. Only a and b
d. All of the above
The following are basic rules of warehouse layout: a. Minimize waste of all types b. Vary the layout based on the type of warehouse (breakbulk, cross-dock, etc.) c. Minimize unnecessary movement d. All of the above e. Only a and b
d. All of the above
Which of the following are NOT among the seven rights of Logistics? a. Right time b. Right place c. Right cost d. Right transportation mode e. All of the above are part of the seven rights
d. Right transportation mode
Truckload carriers offer
direct door-to-door service between two locations for a single shipper
Repair or Refurbish
doing basic repairs on returned items or trade-ins, like cellphones, and creating refurbished units for resale or warranty replacement.
Modal choice affects: a. The type of vehicle used to ship your product b. Meeting customer transport expectations at the lowest cost c. Transportation service characteristics d. Costs of the transportation system e. All of the above
e. All of the above
Third-party logistics providers may help with the following activities: a. Transportation planning b. Electronic Data Interchange c. Visibility d. Warehousing e. All of the above f. Only a and d
e. All of the above