Chapter 3 Logistics

Experts agree that the annual expenditure to perform U.S. Business Logistics operations in 2016 was approximately _________ or _____________ trillion USD

7.5% $1.39

Logistics involves the management of _____________________, as well as a combination of __________________________.

A) Order Processing B) Inventory C) Transportation A) warehousing B) Materials Handling C) Packaging

The key to quality is _________________ ________________ of availability and operational performance

Accurate Measurement

Subsequent refinements provided a more comprehensive understanding of logistical cost components and identified the critical need for developing total cost analysis and ____________-_____________ _____________ capabilities.

Activity-Based Costing

_____________________ is the probability of having inventory to consistently meet customer material or product requirements.

Availability

Firms with world class logistics operations often enjoy a _______________ ________________ as a result of providing their most important customer's superior service.

Competitive Advantage

Only through ________________ and ________________ performance measurement is it possible to determine if overall logistical operations are achieving desired service goals.

Comprehensive Consistant

Logistics is not just about _________________ _____________ or ________________

Cost Containment Reduction

________________ of ____________________is the payment for shipment between two geographical locations and the expenses related to maintaining in-transit inventory.

Cost of Transportation

The three key features of Transportation

Cost of Transportation Speed of Transportation Transportation Consistency

Understanding total cost opened the door to examining how functional costs interrelate and impact each other. Such impacts are classified as ___________-________-______________ ____________. Factor of Cost Minimization

Cost-to-Cost Tradeoffs

Formulation of a sound strategy requires a capability to estimate operating cost necessary to achieve alternative service levels is known as ___________ _____________ _____________-_____________.

Cost/Service Trade-Offs

Goes beyond reverse logistics - Recycling - Product Recall and Product Disposal

Cradle-to-Cradle Logistics

A _____________ _____________ operation involves shipments from multiple suppliers arriving at a designated time at the handling facility. Inventory receipts are sorted by destination across the dock and consolidated into outbound trailers for direct delivery.

Cross-Dock

Logistical Operations within Inventory Flow Include

Customer Accommodation Manufacturing Procurement

What are the combined logistics support units of an enterprise

Customer Accommodation Manufacturing Procurement

It is through the ________________ ___________________ process that the timing and geographical placement of inventory become an integral part of marketing.

Customer Accommodations

Logistics should be managed as an integrated effort to achieve ________________ _____________ at the lowest _________________ ______________ ______________. Logistics performed in this manner creates ________________________.

Customer Satisfaction Lowest Total Cost Value

____________ distribution typically uses the expedited services of premium transport combined with information technology to rapidly process customer orders and achieve delivery performance.

Direct (Delivery)

- In contrast to inventory echeloning are systems designed to ship product direct to the customers destination from one or a limited number of centrally located inventories. - Use of Expedited or Premium Transportation ***An automobile dealer utilizes a direct logistical operating arrangement for fast-moving products or materials.

Direct Delivery

_________ ____________ = ratio of time inventory sits idle in comparison to the amount of time it is being moved to a desired location.

Dwell Time

Classification of a logistical system as having an ______________ structure means that the flow of products typically proceeds through an established arrangement of firms as it moves from origin to final destination Use of Warehouses

Echelon

What are the three structure of logistical operating arrangements

Echelon Direct Combined

The ideal logistical arrangement is a situation wherein the inherent benefits of _________ and ______________ logistics structures are combined.

Echelon Direct

Supplier---->Industrial Distribution or Consolidation Warehouse----->Manufacturer-------->Wholesale or Distribution Center------Retailer------>Customer

Echelon Structure

Almost any level of logistical service can be achieved if a firm is willing to commit the required resources. In today's operating environment, the limiting factor is _______________, not _________________.

Economics Technology

The key to achieving logistical leadership is to master the art of matching operating competency and commitment to key customer _____________ and _____________________.

Expectations Requirements

To achieve lowest total cost means that ____________ and ________________ assets committed to logistics must be held to an absolute minimum.

Financial Human

A firm's operational performance can also be viewed in terms of its ______________ to accommodate unusual and unexpected customer requests.

Flexibility

Preplanned contingency strategies to prevent logistical failures, typically based on the importance of meeting the needs of a specific customer is called __________ ________________.

Flexible Structure

_____________ ____________ is common in these four different situations: - A customer serviced by design from two similarly adjacent warehouse facilities to enable order fulfillment from either. - A customer serviced from different facilities based on size of order - Selective inventory stocking strategies at different locations based on product attributes. - Introduction of Integrated Service Providers, Cross Dock or Flow Through Operations and/or Consolidation Centers - TRUE VALUE EXAMPLE

Flexible Structure

__________________ and ________________ of customer requirements are the two areas of logistical work driven by information.

Forecasting Communication

___________________ ________________ primary objective is to reconcile an streamline information connectivity to improve overall supply chain performance

Information Flow

_____________________ _________________ identifies the notion that specific locations within a logistics system produce, send, and receive information thus enabling, in an ideal setting, the integration of this information across all operating areas.

Information Flow

_______________ _______________ that facilitates system flexibility is providing new ways to achieve high availability for customers without correspondingly high capital investment in inventory. Information that facilitates flexibility with respect to inventory availability is critical to achieving high-level logistics performance.

Information Technology

The _________________ to a performance cycle is demand, typically an order that specifies requirements for a product or material.

Input

Performance cycles become dynamic as they accommodate __________________ requirements

Input/output

For supply chain to realize the maximum strategic benefit from logistics, the full range of functional work must be _________________, as decisions in one functional area will impact cost of all others.

Integrated

The Logistics Performance Cycle is the basic unit of supply chain design and operational control. In essence, the performance cycle structure is the framework for implementation of ________________ ____________ across the supply chain.

Integrated Logistics

What are the first three functional areas of logistics

Integrated Nature - Integral part of other areas Forward Facing Logistics Reverse Logistics

__________________ __________________ __________________ is used to consolidate products for delivery ***For example, True Value Company partners with 3PL Yusen Logistics for the consolidation of less-than-full-container-load purchase orders at two facilities in China. This consolidation operation results in multiple purchase orders being consolidated to obtain full-container economies that ship directly to True Value's regional distribution centers.***

Integrated Service Provider

The ______________ requirements of a firm are directly linked to the facility network design and the desired level of customer service.

Inventory

Logistical Operations process is viewed in terms of two interrelated flows _______________ and ____________________

Inventory Information

Logistical performance is measured in terms of ______________ _________________, ________________ ______________, and _______________ _____________.

Inventory Availability Operational Performance Service Reliability

By performing above industry average with respect to _____________ ____________, ___________, _________________ of __________, and _______________ ____________, logistically sophisticated firms are ideal supply chain partners.

Inventory Availability Speed Consistency of Delivery Operational Efficiency

Core Common Goal of supply chain synchronization: Reduce __________ _______________ _______________

Inventory Dwell Time

__________________ __________________ is concerned with movement and storage of inventory in the form of materials, work-in-process, and finished products.

Inventory Flow

To achieve the objective of ______________ _______________, an integrated logistics system must control asset commitment and turn velocity. It is the control of asset commitment and turnover

Inventory Reduction

***The object of an ____________ _____________ is to achieve desired customer service levels, common referred to as ____________ _________ with the minimum inventory commitment.***

Inventory Strategy Fill Rates

Few Products Sold without some guarantee the product will perform as advertised

Life Cycle Support

Two Common Characteristics Designed to manage inventory positioning Range of alternative is limited by information technology

Logistical Operating Arrangement

________________ adds value to the supply chain process when inventory is strategically positioned to achieve sales.

Logistics

______________ ____________ is the process and activities that create value focused on the design and administration of a system to control the timing and geographical positioning of raw materials, work-in-process, and finished inventories at the lowest total cost.

Logistics Management

****_____________ _______________ should be designed to achieve customer service goals while maintaining the lowest possible financial investment in inventory.****

Logistics Systems

Creating ___________ ____________ is costly

Logistics Value

The _________________ _____________ Proposition is a unique commitment of a firm to an individual or selected customer group.

Logistics Value

__________________ is concerned with the probability of logistical performance failure, such as damaged products, incorrect assortment, or inaccurate documentation.

Malfunction

the overall concern of __________________ support is not how production occurs but rather what, when, and where products will be manufactured

Manufacturing

The operational locations that are linked by information and transportation are referred to as ________________

Nodes

Facility network design is concerned with determining the

Number of Facilities Location Ownership Arrangement

The potential for logistical services to favorably impact customer experience is directly related to _________________ _______________ _______________. Balances Cost and Flexibility

Operating System Design

The key and main goal is ____________________ ____________________.

Operational Consistency

________________ ________________ deals with the time required to deliver a customer's order.

Operational Performance

The inherent dilemma of performance cycle uncertainty is that the structure of the performance cycle itself, operating conditions, and the quality of the logistical operations all randomly introduce _________________ _________________.

Operational Variance

The key objective in _______________ ______________ is to balance components of the logistics system to achieve the desired service level at the lowest total cost.

Order Processing

What are the five areas of logistical work? ***Each area must work together in order to achieve lowest total cost and add value ***

Order Processing Inventory Transportation Warehousing, Materials Handling and Packaging Facility Network

In most supply chains, customer requirements are transmitted in the form of _________________

Orders

Supply chain _________________ is the ***level of performance**** expected from the combined logistical operations. (EERS Model)

Output

The _______________ _________________ represents the elements of work necessary to complete the logistics related to customer accommodation, manufacturing, or procurement

Performance Cycle

The goal of ________________ _________________ ______________ is to achieve planned time performance.

Performance Cycle Synchronization

A major objective of logistics in all operating areas is to reduce ______________ ________________ ________________

Performance Cycle Uncertainty

____________________ is concerned with purchasing and arranging inbound movement of materials, parts, and/or finished inventory from suppliers into manufacturing or assembly plants, warehouses, or retail stores.

Procurement

Supported by a robust IT infrastructure, the goal of logistics is to support _____________________, _______________, _________________ supply chain operational requirements.

Procurement Manufacturing Customer

In manufacturing, the process of acquisition is typically called ___________________________

Purchasing

Focus on Continuous quality improvement Total Quality Management

Quality

When a malfunction occurs, a firm's logistical competency can be measured in terms of ______________ _______________.

Recovery Time

Because logistics is both old and new, the rapid change taking place is called ________________

Renaissance

The combinations of ____________ ___________ and _____________ required to achieve superior logistics are challenging to integrate, but once achieved, such integrated competency is difficult for competitors to replicate.

Resources Skills Systems

A firm's ability to satisfy customer requirements in a timely manner is referred to as ____________________

Responsiveness

To operationalize logistical integration within a supply chain context, six operational objectives must be simultaneously achieved: ***The relative importance of each is directly related to a firm's logistical strategy****

Responsiveness Variance Reduction Inventory Reduction Shipment Consolidation Quality Life Cycle Support

______________ __________________ is an important part of warehousing is the receipt, processing and disposal of returns and damaged inventory.

Reverse Logistics

Both Government required (recycling) and disaster recovery (product recalls) are critical

Reverse Logistics Capabilities

Alignment of capabilities with firms goals and financial constraints: The more significant the service failure impact upon a customer's business, the greater priority placed on error-free logistical performance is known as ____________ _____________.

Service Benefits

Elements of the logistical value proposition include _______________ ______________ and ______________ ________________.

Service Benefits Cost Minimization

The quality of performance - how consistent is known as ________________ _______________.

Service Reliability

________________ _________________ involves the _______________ attributes of logistics.

Service Reliability Quality

Transportation Cost is the most significant logistical expenditure. Transportation Cost is directly related to product type, size of shipment, and distance traveled

Shipment Consolidation.

Information Flow may include

Size of Order Status of a Given Work Process Availability of Inventory Urgency of a Given Order

Operational performance involves delivery _____________ and _________________.

Speed Consistency

What are the five performances under Operational Performance?

Speed Consistently Flexibility Malfunction Recovery Time

________________ of _________________ is the time required to complete a specific movement

Speed of Transportation

Leveraged operations require joint planning concerning the logistics work that each participating firm in a supply chain will perform and be held accountable for.

Supply Chain Synchronization

Multifirm operational integration across a supply chain is referred to as ________________ ________________ ___________________.

Supply Chain Synchronization

_________________ __________________ ________________ seeks to coordinate flow of materials, products, and information between supply chain partners to reduce duplication and redundancy.

Supply Chain Synchronization

_______________ _____________ concept used in the past is based on achieving the lowest possible cost for each individual aspect of logistics with little or no attention to integrated total cost trade-offs.

Total Cost

________________ _________________ ________________ _____________ includes all expenditures necessary to perform logistical requirements.

Total Cost Logistics Model

____________________ ____________ ______________ _________________ focuses on total cost tradeoffs.

Total Cost Logistics Model

______________ _____________________ _______________ and _____________ is the new perspective concerning logistical total costs

Total Cost Theory Practice

____________________ ______________________refers to variations in time required to perform a specific movement over a number of shipments.

Transportation Consistency

True Or False The key strategic issue is how to outperform competitors in a cost-effective manner.

True

True or False

True

True or False A well-designed logistics effort must provide high customer impact while controlling operational variance and minimizing inventory commitment. Most of all, it must be relevant to the customer.

True

True or False All customer relationship systems have one common feature: They align manufacturers, wholesalers, and retailers into supply chain arrangements to provide customers product availability.

True

True or False Consumers expectation is for timely, error-free logistics every time they order, even during the busiest periods. They have little or no tolerance for failure to perform. The consumer expectation has continued to increase as e-commerce, direct to consumer shipping has become a staple of modern business

True

True or False Depending on the operational mission of a particular performance cycle, the associated work may involve one or many firms, and may have significant variance in complexity (Catalog Company VS Wallmart)

True

True or False In most situations, the cost/benefit impact of logistical failure is directly related to the importance of service to the end customer. In other words, the more significant the service failure impact upon a customer's business, the greater the priority placed on error-free logistical performance.

True

True or False In the broader supply chain context, operational synchronization is essential with customers as well as material and service suppliers to link internal and external operations as one integrated process.

True

True or False In the context of supply chain management, logistics exists to move and position inventory to achieve desired time, place, and possession benefits at the lowest total cost.

True

True or False Integrated logistics services link and synchronize the overall supply chain as a continuous process and is essential to achieve the desired outcome of a given supply chain's value proposition.

True

True or False Inventory has limited value until it is positioned at the right time and at the right location to support ownership transfer or value-added creation.

True

True or False It is also necessary to hold operational expenditures as low as possible while meeting customer service goals.

True

True or False Logistical quality is the product of careful planning supported by employee training, operational dedication, comprehensive measurement and continuous improvement.

True

True or False Logistics is concerned with getting the right products to the right place at the right time.

True

True or False Operational performance is concerned with how a firm handles all aspects of customer requirements, including service failure, on a day-in and day-out basis.

True

True or False The logistics of integrated supply chain management consists of; First, cost and service are emphasized. Next, the logistics value proposition is developed. Then, traditional business functions that combine to create the logistical process are reviewed. Next, the objectives of integrated logistics are reviewed . Finally, the importance of logistical synchronization to supply chain integration is highlighted in terms of performance cycle structure and dynamics.

True

True or False The more responsive the supply chain design, the greater the importance is of accurate and timely information regarding customer purchase behavior.

True

True or False The operational management of logistics is concerned with movement and storage of inventory in the form of materials, work-in-process, and finished products.

True

True or False The performance cycle is the primary unit of analysis for logistical design and synchronization

True

True or False The processing of the orders involves all aspects of managing customer requirements, including initial order receipt, delivery, invoicing, and collection.

True

True or False The relative importance of each facet of operational information is directly related to the degree to which a supply chain is positioned to function on a responsive or anticipatory basis. ***This constitutes the basic paradigm shift taking place in 21st century supply chain design.***

True

True or False The typical enterprise seeks to develop and implement an overall logistical competency that satisfies customer expectations at a realistic total cost expenditure.

True

True or False To improve service performance, goals need to be established on a selective basis. Some products are more critical than others because of their importance to the customer and their relative profit contribution.

True

True or False Use of different strategy (Echelon Vs. Direct) depending on customer value, inventory value, and goals specific to unique business channels. Example: Automobile Replacement Parts, Machine Parts to Industrial Firm

True

True or False Variance results from failure to perform any facet of logistical operations as anticipated.

True

True or False Very seldom will either the lowest total cost or the highest attainable customer service constitute the appropriate logistics strategy.

True

True or False Within a firm, the challenge is to coordinate functional competency into an integrated supply chain focused on servicing customers.

True

True or False Firms typically focus on delivery consistency first and then seek to improve delivery speed.

True

Elimination of operational disruptions Variance results from failure to performance facet of logistical operations anticipated. All Operating areas of a logistical system as susceptible to variance

Variance Reduction

________________________ ______________________, the elimination of operational disruptions, is one basic objective of integrated logistics management.

Variance Reduction

Logistics is a combination of a firm's what?

order management inventory transportation warehousing