Supply Chain Final

seven R's rule of customer service

1. the right product 2. the right quantity 3. the right quality 4. the right place 5. the right time 6. the right customers 7. the right costs + the right documentation = the perfect order

transportation and warehousing in services

facilitating goods need to be transported and warehoused in order to provide the service

5 modes of transportation: air

fastest and most expensive mode; approx 5% of total us freight spend; cannot carry extremely heavy/bulky cargo; ideal for items w high cost to weight ratio (jewelry, fine wines, pharmaceuticals, etc); paired w trucks for door-to-door delivery

global location factors: currency stability

impacts business costs and consequently location decisions

trade compliance systems (global trade management systems)

important for every major importing/exporting company in the US; automate the process of checking every transaction

return of unsold goods

in some industries, goods are distributed to downstream members in the supply chain with the understanding that the goods may be returned for credit if they are not sold (ex. newspapers, magazines, pharmaceuticals); acts as incentive for downstream members to carry more stock bc the risk of obsolescence is taken 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

opportunities for global supply chains

increased revenues through global business/economic opportunities; increased sourcing options w more potential suppliers to choose from

disadvantages of less than truckload (LTL)

increased risk of theft/damage; increased shipping times & delays

managing waiting time

involves managing both actual and perceived waiting time

5 R's of reverse logistics: recalls

more complex than basic returns bc they typically involve a product defect or potential hazard and may be subject to govt regulations, liability concerns, or reporting requirements

5 modes of transportation: truck

most flexible, carries more than 80% of us freight, carries anything from packaged household goods to building materials to liquid petroleum; competes w rail & air for short/medium hauls (short = 0-200 miles from driver's home terminal; long = over 200 miles); impacted by truck driver shortage & hour-of-service rules

queue system assumptions

most models assume that a customer will enter the queue and stay until served; assume infinite length of a queue

3 types of warehouses: cross-docking warehouse

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

primary concern of service response logistics

the management and coordination of the organization's service activities

warehouse network

the number of, and relationship between, the warehouses that a company has in their organizational structure

key tools and components of customer relationship management: segmenting customers

the practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing; by demographics/income/geography

key tools and components of customer relationship management: customer defection analysis

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

definition of transportation

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

transportation deregulation (1970-today): ICC termination act of 1995

the interstate commerce commission (ICC) was eliminated

2 internet distribution strategies

1. pure strategy: many retailers today sell products exclusively over the internet (ex: amazon) 2. mixed strategy: others use online retail as a supplemental distribution channel (ex: walmart)

3 service strategies

1. cost leadership 2. differentiation 3. focus

5 modes of transportation

1. truck 2. rail 3. pipeline 4. air 5. water

load or transportation broker

a transportation intermediary that brings shippers and carriers together

port of entry

any port designed by the US government where goods may enter the united states

advantages of full truckload (FTL)

best for large shipments; ideal for high risk/delicate shipments; considerably faster than LTL

why companies need customer relationship management

1. acquire new customers 2. retain their existing customers 3. meet the changing expectations of customers

strategies for dealing w periods of high demand (that do not involve hiring/firing)

1. cross-training and sharing employees so they can help on more tasks 2. using part-time employees (ex. holiday season) 3. using customers as "hidden employees" (ex. self checkout) 4. using technology 5. using employee scheduling policies (ex: nurses have to work alternating holidays)

european union (EU)

27 countries in europe (26 now bc of brexit tho)

major US international trade legislation

7 major laws/acts in the 70 years from 1930-2000 10 major laws/initiatives in 2 immediate years post 9/11

how much of operating costs does hiring, training, supervising, and equipping personnel account for

75%

4 transportation company classifications: exempt carriers

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

north american free trade agreement (NAFTA)

US, canada, mexico

definition of warehouse

a facility used to store purchases, work-in-process, and finished goods inventory

definition of warehousing

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

3 types of warehouse networks: single warehouse

advantages: less complicated, lower operating costs/inventory, no dupes of equip/staff/managers, centralized network disadvantages: may take longer to deliver product to some customers who are further from the central location

trends in customer relationship management: cloud computing (software as a service)

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

fourth party logistics (4PL)

an interface between the client company and multiple logistics service providers; 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;

global location factors: land availability

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

foreign trade zone permitted activities

assembly, exhibition, inspection, salvage, destruction, reclassification, manufacturing, processing, storage, testing, relabeling, repackaging

disadvantages of full truckload (FTL)

costs more than LTL

transportation regulation (1870-1970): interstate commerce act of 1887

created the interstate commerce commission (ICC)

freight terms of sale

delivery and payment terms agreed between a buyer and seller

marketplace

duties paid upon leaving FTZ and leaving US markets; no duties paid if re-exported

5 modes of transportation: pipeline

most reliable and cheapest (per unit cost) mode; approx 2% of total us freight spend; limited variety of commodities; materials transported in liquid/gaseous state (petroleum, natural gas, drinking water, gasoline); little maintenance required once pipeline is running

inbound logistics

moving goods/materials from suppliers to buyers

global logistics intermediaries: non-vessel-operating common carriers (NVOCC)

operate like freight forwarders but use only scheduled ocean liners

regulation pros & cons

pros: tends to assure adequate transportation service throughout the country, protects consumers from monopoly pricing/safety/liability cons: discourages competition, does not allow prices to adjust based on demand or by negotiation

benefits outbound

re-export duty exemption; inverted tariff relief; no duties for waste or zone-to-zone transfer

automated sales force tools: sales territory management

sales managers obtain info on each sales rep's activities

3 service strategies: focus

serve a narrow niche better than other firms (ex: custom stereo in your house)

types of services: pure services

services offering very few or no tangible products to the customers (ex. consulting, storage facilities, training/education)

types of services: state utility

services which directly involve things owned by the customer (ex. car repair, dry cleaning, haircut, healthcare)

types of services: end products

services which offer tangible components along w the service component (ex. restaurants come w food along w dining service)

types of queue systems: structured queues

set in a fixed position (ex: supermarket checkout line); can be structured as a "take a ticket number" type of thing so a person can walk around and wait for their number to be called

global location factors: taxes and incentives

several levels of government must be considered when evaluating potential locations; tariffs are federal taxes designed to protect local; countries with high tariffs discourage importing goods into the country and encourage multinational corporations to produce locally

decisions driving warehouse management

site selection, number of warehouse facilities in the network, layout of the warehouses, methods of receiving/storing/retrieving/distributing products/materials

5 modes of transportation: rail

slow and inflexible but has the most capability; approx 9% of total us freight spend; good for long distances w heavy/bulky shipments; shipments include building materials, construction equipment, coal, gravel, sand, lumber, etc; aging infrastructure/equip is an issue; paired w trucks for door-to-door delivery

customer relationship management is NOT meant for every customer

some customers dont want to be committed to every brand

blending delivery systems together

some services may be designed w different delivery systems to maximize performance in each area (ex: restaurants have customer-centric staff in the front and non-customer-centric staff in the back)

relationships should be built w

strategically significant customers that are likely to provide the most value for the effort

5 primary functions of a warehouse: storage

the safe/secure retention of parts or products for future use or shipment

4 types of transportation pricing: cost of service pricing

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

customer relationship management (CRM)

the transformation of the people, process, and tech required to become a customer-centric organization; philosophy of putting customer first; involves acquiring, retaining, and partnering w selective customers to create value for both parties; goal to maintain customers for life

intermodal transportation

the use of multiple modes of transportation to execute a single transport shipment; sometimes referred to as the sixth mode of transportation; growing substantially bc fairly cost-efficient and cost-effective

automated sales force tools: sales activity management

tool offering sales reps a guided sequence of sales activities

3 logistics management software applications: 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

global logistics: international freight security

transportation across national boundaries introduced added complexity/scarcity

full truckload (FTL)

transportation of goods that fill up a full truck, or a partial load shipment occupying an entire truck

less than truckload (LTL)

transportation of relatively small freight, i.e., the freight does not require the entire space of a truck

3 service strategies: differentiation

unique service created based on customer input and feedback (ex: sunday car servicing at hyundai/ford when other dealers are not open sundays)

automated sales force tools: sales force automation (SFA)

used for documenting field activities, communicating w the home office, and retrieving sales history in the field

queuing management systems

used to help control the flow and prioritization of people expecting to receive a service

balking

when a customer refuses to join the queue

advantages of cross-docking warehouses

1. centralization: provides a central site for products to be sorted and combined for delivery to multiple destinations in the most productive and fastest method possible 2. consolidation: combines smaller product loads into one method of transport to save on transportation costs 3. break-bulk: breaks down large product loads into smaller loads for transportation for an easier delivery process to the customer 4. transportation cost savings bc there are less FTL shipments 5. operational efficiency: material does not have to be stored since it directly moves from receiving to shipping 6. inventory efficiency: total inventory can be reduced since theres no storage

3 warehouse network strategies

1. market positioned strategy 2. product positioned strategy 3. intermediately positioned strategy

5 dimensions of service quality

1. reliability: consistently performing the service correctly and dependably 2. responsiveness: promptly and timely service 3. assurance: ability to convey trust and confidence to customers 4. empathy: providing caring attention to customers 5. tangibles: physical characteristics of the service

bundle of service attributes (ex: banking industry)

1. supporting facility: location/decoration/layout/equipment (ex: drive-up tellers and ATMs) 2. facilitating goods: tangible elements that are used by the customer along w the service provided (ex: deposit forms and bank statements) 3. explicit services: availability and access to the service, consistency of service performance, comprehensiveness of the service, and training of service personnel (ex: vault/safety deposit boxes/loans) 4. implicit services: attitude of the servers, atmosphere, waiting time, privacy, security, convenience

how supply chain management in the service industry is different from in manufacturing

1. the tangibility of the end product; services are generally not tangible 2. the involvement of the customer in; more involved in service industry 3. the assessment of quality 4. the labor content; much higher ratio of labor to materials in the service industry 5. the facility location considerations; services are more impacted by location decisions

3 basic alternatives if demand exceeds capacity

1. turn customers away and not service them 2. make them wait until service is available for them 3. increase service capacity

3 logistics management software applications

1. warehouse management systems (WMS) 2. transportation management systems (TMS) 3. global trade management systems (GTM)

global location factors: right-to-work laws

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

3 types of warehouse ownership: 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; they own their own equipment and hire their own staff; fees = combo of monthly storage fee + pallet-in and pallet-out fee

5 modes of transportation: truck: 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; transports commodities like liquids, petroleum, household goods, building materials, and other specialized item

3 warehouse network strategies: product positioned strategy

close to supply source to collect goods and consolidate before shipping products out to customers; many suppliers and few customers

recovering from poor service quality

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

customer service elements: post-transaction elements

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

5 primary functions of a warehouse: receiving

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

5 primary functions of a warehouse: 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 available for customers to access their account info, product info, contact info, etc; customers can make their own decisions about mailing services

disadvantages of public warehouses

potential for incompatible computer systems, specialized services may not be what is required/need, space may not be available where/when needed

global location factors: utility availability and cost

supply of electricity has not always kept pace with the high speed of development; in heavy industries the availability and cost of energy are critical considerations

examples of service capacity

1. airline capacity = # of seats and # of planes 2. restaurant capacity = number of tables 3. hotel capacity = number of rooms

3 types of warehouses

1. consolidation warehouse 2. break-bulk warehouse 3. cross-docking warehouse

4 transportation company classifications

1. contract carriers 2. private carriers 3. common carriers 4. exempt carriers

disadvantages of using a 3pl

1. control: company loss direct control over logistics operation 2. dependency: outsourcing = dependency on 3pl 3. pricing: company is locked into pricing model specified in contract

advantages of private warehouses

1. control: greater flexibility in warehouse design and operations 2. visibility: inventory, material flow, handling, supervision, associated costs 3. cost: operating cost can be 15-25% lower if company achieves at least 75% utilization

6 steps to a successful customer relationship management program

1. creating the CRM plan (objectives; new applications to be developed; integration of existing systems; personnel requirements; costs/time frame) 2. involve CRM users from outset (create project team w members from all affected organizational areas; test w pilot application) 3. select the right application and provider (compare options based on performance/security/system availability) 4. integrate existing CRM applications (centralized database) 5. establish performance measures 6. provide CRM training for all users

disadvantages of contract warehouses

1. duration: the client company is expected to enter into a contract for a specific period of tie; generally 3 years

disadvantages of private warehouses

1: high start up cost: capital to build/buy warehouse; long/risky investment; cost of hiring & training; purchase of material handling equipment 2: fixed location: not easy to move to another location if market changes 3. fixed size and costs: when volume is low, the company still pays the fixed costs

% of sales that end up getting returned (retail)

6-10%

shippers' association

a transportation intermediary that involves nonprofit cooperatives which arrange for members' shipping

key tools and components of customer relationship management: 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 the effort to stop losing customers to competition

key tools and components of customer relationship management: personalizing customer communications

clickstream: tracking how a customer navigates a website to help tailor ads; personalization shows customer that a company cares about them which is likely to result in more sales

3 warehouse network strategies: market positioned strategy

close to customers to maximize distribution services and improve delivery; few suppliers and many customers

automated sales force tools: knowledge management

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

US department of homeland security (DHS)

government agency whose mission is to 1. prevent terrorist attacks within the US 2. reduce america's vulnerability to terrorism 3. minimize damage from potential attacks/natural disasters

importance of warehousing

having the right product in the right place at the right time

benefits of trade compliance systems

increased level of compliance compared to manual process; decreased number of physical inspections by US customs; faster release of shipments by US customs; avoidance of fines and penalties; opportunities to interface w other systems

5 primary functions of a warehouse: shipping

outgoing shipment of parts, components, and products; includes packaging, marking, weighing, and loading for shipment

challenges of global supply chains

tariffs/duties (import taxes); transporting goods across borders may involve new partners; different customs/business practices

location evaluation techniques: break even model

useful when fixed and variable costs can be determined; basically figure out the fixed cost of land/property taxes/insurance/equipment/buildings and the unit variable cost/materials/utilities/transportation costs and determine break even points on the graph

4 types of transportation pricing

1. cost of service pricing 2. value of service pricing 3. combination pricing 4. net-rate pricing

customer service as a philosophy

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

3 types of warehouse ownership: 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 specialized storage/handling; can be operated as a separate division within a company; can be co-located on-site w manufacturing or it can be off-site

penalties for violations

criminal penalties: substantial fines and/or 10+ year imprisonment civil penalties: substantial fines per occurrence and individual and/or company sanctions statutory sanctions: seizure/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; detailed inspections of every single shipment and delayed release by US customs

service capacity planning challenges

customer arrivals and service demands vary; level of congestion impacts perceived quality; idle capacity is bad but real; inability to control demand results in capacity measured in terms of inputs (ex: number of hotel rooms rather than guest nights)

queuing system input

customers are the demand source for services and their arrival triggers the start of the service experience; generally appear in predictable arrival patterns (dinner rush at restaurants)

strategically significant customers are

customers w high life-time value (customers that will constantly buy the products or use the services in the long-term), who serve as role models for other customers, who inspire change in the supplier

types of services

pure services, end products, state utility

reneging

when customers decide to leave the queue

LEAN warehousing

1. cross-docking: eliminates need to store inventory & reduces some transportation 2. reduced low sizes/shipping quantities: faster throughput is a LEAN concept 3. increased automation: conveyor systems, voice picking, pick to light, automatized guided vehicles, robotics improve efficiencies 4. green warehousing: sustainability to become a net zero energy user

international expansion

operate/partner w firms familiar w the region's markets/suppliers/infrastructure/government regulations/customers; must address language and cultural barriers

advantages of using a 3pl

1. cost: eliminates need for a company to invest in warehouse space/tech/staff 2. logistics expertise: knowledgeable of industry best practices & tech developments 3. efficiency: can leverage relationships & volume discounts

strategies for when capacity exceeds demand (that do not involve firing)

1. do other jobs when it's not busy (ex: clean or prep in a restaurant) 2. do training/cross-training 3. use demand management techniques to shift demand from peak demand periods into non-peak periods by offering incentives like discounts and special sales (ex: early bird specials)

3 types of distribution channels

1. eatertainment 2. entertailing 3. edutainment (infotainment)

goals and benefits of customer relationship management

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

global location factors: 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

determining factors of how many and where warehouses are needed

1. level of customer service the company wants to provide: more customer service = more warehouses 2. amount of inventory the company wants to invest in: more warehouses = more inventory investment

objectives of transportation

1. maximize company's value through price negotiations 2. ensure efficient service 3. satisfy customer needs

6 types of global facilities

1. offshore factory 2. source factory 3. server factory 4. contributor factory 5. outpost factory 6. lead factory

3 types of warehouse ownership

1. public warehouses 2. contract warehouses 3. private warehouses

3 secondary functions of a warehouse

1. quality inspections: incoming and outgoing 2. repackaging: for specific customer orders 3. assembly operation: puts products together w other items before shipping (ex. literature, spare parts, advertising materials)

most common forms of intermodal transportation

1. rail and motor carriers (trucks): offer point to point pickup and delivery service known as trailer-on-flatcar (TOFC) 2. rail and water carriers: offer point to point pickup and delivery service known as container-on-flatcar (COFC) 3. roll-on/roll-off ships: specifically designed to allow trucks to be driven directly on and off the ship without the use of cranes, provides flexibility & speed

5 primary functions of a warehouse

1. receiving 2. storage 3. picking 4. packing 5. shipping

5 R's of reverse logistics

1. returns 2. recalls 3. repairs 4. repackaging 5. recycling

rules for managing perceived waiting times

1. satisfaction when customer perception is greater than or equal to customer expectation 2. hard to play catch-up so dont mess up the first time

4 primary activities of service response logistics

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

differences between goods and services

1. services cannot be inventoried 2. services are produced and consumed simultaneously 3. services are often unique to the customer (insurance policies, legal services, tax prep) 4. services have high customer interaction 5. services are decentralized and must be located near customer base bc of inability to inventory or transport services

advantages of contract warehouses

1. services: clients can obtain specialized services to suit their needs 2. cost: can be bundled in the contract and negotiated at a lower cost 3. control: contract warehousing offers a degree of control at a reasonable price

queuing system designs

1. single channel, single phase, single server (ex: customer to service rep) 2. single channel, multiple phase, multiple servers acing in series (ex: customer to hostess to wait staff to chef) 3. multiple channel, single phase, single server (ex: customer to one of multiple available service reps) 4. multiple channel, multiple phase, multiple servers acting in parallel (ex: customer to one of multiple fast food order takers to fast food cook) **look at slide 166 for visuals**

3 types of warehouse networks

1. single warehouse 2. multiple warehouses 3. hybrid approach

5 R's of reverse logistics: repackaging

95% of returned products are bc customers are dissatisfied w them, but bc they are defective; these products are typically repackaged and returned to inventory for restock or resale

service delivery system

The delivery of services can be expressed as a spectrum w mass produced, low-customer contact systems at one end (ticket kiosks/vending machines/ATMs), and highly customized, high-customer-contact systems at the other end (personal shoppers/hair stylists/financial managers)

customer service as a performance measure

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

6 types of global facilities: 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 w minimal technical/managerial resources; low labor costs; local management serves in supervisory roll but not in making management decisions ex. clothing produced in indonesia

6 types of global facilities: 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 govt incentives, low exchange risk/tariff barriers to reduce taxes/logistics costs; makes minor improvements to products/processes; set up to serve the local market ex. coca-cola bottling; mixes the final ingredients to take advantage of exchange rates/tariffs/taxes

key tools and components of customer relationship management: event based marketing

a form of marketing that identifies key events in the customer/business life cycles; ex. birthdays/holidays/marriages; personalized

customer service as an activity

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

key tools and components of customer relationship management: customer lifetime value (CLV)

a prediction of the net profit attributed to the entire future relationship w a particular customer; some customers are worth more than others

4 types of transportation pricing: value of service pricing

a pricing strategy which sets prices based on the value perceived by the customer (ex. priced at what the market will bear)

key tools and components of customer relationship management: target marketing

a segment of customers a company has decided to aim its marketing efforts towards; more effective than mass marketing

freight forwarder

a transportation intermediary that consolidates LTL shipments into FTL shipments; they take small shipments from multiple companies and consolidate them into larger shipments

intermodal marketing company

a transportation intermediary that purchases blocks of rail capacity and sells it to shippers

5 modes of transportation: truck: general freight carriers

a trucking company which handles a wide variety of commodities in standard trailers; freight is generally palletized; can be LTL or FTL carriers; carry majority of goods shipped; does not require specialized equip

international trade compliance

a typical cross-border shipment involves: about 35 accurately filed documents, compliance w over 600 laws and 500 trade agreements, facing about 25 parties including customers, carriers, freight forwarders basically international trade activities are a lot to handle bc info is always changing

3 types of warehouse ownership: contract warehouse

a variation of public warehousing that handles the shipping, receiving, and storage of goods on a contract basis for a fee; contract can be for an entire building or for just a part of it; usually requires client to commit for years rather than months; fee structure may be fixed cost, cost plus, or a combo of both; the company providing the space handles the employees/equipment/maintenance rather than the warehouse

3 types of warehouse networks: multiple warehouses

advantages: faster than single warehouse bc decentralized network disadvantages: more complicated, higher operating costs/inventory, dupes of equip/staff/managers, decentralized network means best people/equip/inventory is spread across a larger network

franchising

allows business to expand quickly; protects existing markets; builds market share; facilitates business when owners have limited financial resources

key tools and components of customer relationship management: relationship marketing/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 (ex. opt-in emails); all about building an ongoing relationship w customers

third party logistics (3PL)

an outsourced provider that manages all, or a significant part, of an organization's logistics requirements for a fee; typically generate 10-20% savings in logistics costs; favored by small businesses; used a bit for international logistics

measuring customer satisfaction

can be done through surveys/phone calls/etc; must capture and then analyze the data; most companies need to use a database to manage

service capacity decisions: long-range

capacity can be used as a preemptive strike where the market is too small for two competitors to co-exist (ex: the first to build a luxury hotel in a mid-sized city may capture all the business)

service capacity decisions: 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

managing service capacity: level demand strategy

capacity remains constant regardless of demand; when demand exceeds capacity, queue management tactics deal with excess customers (ex: grabbing a number at the deli for first come first serve)

service capacity utilization

capacity utilization = actual customers served per period / capacity

managing service capacity: chase demand strategy

capacity varies w demand so you can handle fluctuations but must take appropriate actions prior (ex: open up additional lines)

3 types of distribution channels: eatertainment

combined restaurant and entertainment elements (ex: rainforest cafe)

3 types of distribution channels: edutainment (infotainment)

combines learning w entertainment to appeal to customers looking for substance along w play (ex: liberty science center)

3 types of distribution channels: entertailing

combining retail w entertainment elements (ex: mall of america has a ferris wheel, rock climbing wall, etc)

global location decisions

companies can locate anywhere bc of increased globalization, tech, transportation, and open markets

key tools and components of customer relationship management: predicting customer behaviors

company can collect customers buying history, preferences, trend info to target marketing efforts

location evaluation techniques: weighted-factor rating model

compares attractiveness of several locations through quantitative and qualitative factors; basically identify factors and assign scores and weights to each

customer defection analysis and churn reduction are

complements to determine why customers leave and to find ways to retain them

US customers and border protection (CBP)

controls the import process; mission is to safeguard america's borders thereby protecting americans from dangerous people and materials while enhancing global economic competitiveness by enabling legit trade/travel; protects US through active inspections at ports of entry

advantages of less than truckload (LTL)

cost effective; more available carriers; ideal for small businesses

downsides of reverse logistics

costs 4-5x as much as forward logistics; requires on avg 12x as many processing steps; often viewed as an "unwanted' supply chain activity (many companies outsource this to a 3PL) or a cost of doing business or a quality/compliance issue

trends in customer relationship management: social media

creating virtual communities around a brand

global location factors: world trade organization (WTO)

deals w the global rules of trade between nations to ensure that trade flows as smoothly, predictably, and as freely as possible; functions include administering agreements, forum for trade negotiations, trade disputes, monitoring trade policies, aiding developing countries, international organizations

service recovery systems require

developing recovery procedures that are thought out prior 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

technology and trends in transportation

driver monitoring, traffic coordination, safety technology, platooning, new concept trucking, vertically folding shipping containers, driverless trucks, drone delivery

deregulation

encourages competition and allows prices to adjust as demand and negotiations dictate; US transportation industry remains mostly deregulated

green reverse logistics programs

environmentally friendly activities such as recycling, reusing materials/products, refurbishing unused products

4 types of transportation pricing: net rate pricing

established discounts and accessorial charges are rolled into one all-inclusive price; pricing is tailored to the individual customer's needs

global location factors: regional trade agreements

european union (EU), north american free trade agreement (NAFTA), southern common market (MERCOSUR), association of southeast asian nations (ASEAN), common market of eastern and southern africa (COMESA)

global location factors

factors used to compare/contrast one potential location against another when making global location decisions 1. competitiveness 2. taxes and incentives 3. currency stability 4. access and proximity to markets 5. labor issues 6. right to work laws 7. access to suppliers and cost 8. utility availability and cost 9. environmental issues 10. land availability and cost 11. quality of life issues 12. business clusters 13. trade agreements

6 types of global facilities: outpost factory

factory set up in an area with an abundance of advance suppliers, competitors, research facilities, etc.; set up in a location within proximity to competitors, advanced suppliers, and research facilities/universities for materials/components/products ex. Raleigh, Durham, Chapel Hill NC. Research Triangle Center. UNC, Duke, IBM , Cisco, etc. Silicon Valley, Calif.

6 types of global facilities: contributor factory

focused on product development and engineering for products that they manufacture; basically an upgraded server factory that includes product development, production planning, procurement decisions, supplier development ex. 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

global location factors: quality-of-life

following considerations: education, economy, natural environment, social environment, culture, healthcare, govt, politics, mobility, public safety, recreation

foreign country export to USA/USA import from foreign country

foreign factory -> foreign warehouse -> foreign customs -> foreign port -> ocean shipment -> USA port -> USA customs -> USA warehouse -> USA factory

types of queue systems: mobile queues

formed virtually w tech; provides flexibility and reduced stress (ex: using a mobile app to place your name in an electronic queue at like a restaurant)

global location factors: business clusters

geographic concentrations of interconnected companies/institutions; reasons for success include innovation/competition can be geographically concentrated, close cooperations among clustered companies, fierce competition among rival companies, recruitment from local skilled workers

global location factors: environmental issues

global warming/air pollution/acid rain considered prices of industrialization; trade liberalization creates need for environmental cooperation

improving service productivity is challenging due to

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

issues with global services

identifying global customers; labor/facilities/infrastructure support vary by country; legal/political issues (foreign laws); domestic competitors and economic climate

third party logistics services

inbound/outbound transportation, warehousing, pick and pack, freight forwarding, customs brokerage, customs clearance, order taking, billing/invoicing, inventory auditing, freight bill auditing and payment

key tools and components of customer relationship management: up selling

involves persuading a customer to buy a more expensive item or upgrade a product or service to make the sale more profitable; involves selling the customer extra features or add-ons to the product they are already buying or considering

reverse logistics (aka returns management)

involves the process of moving a product from the point of customer receipt back to the point of origin to recapture value or ensure proper disposal; basically backwards flow of goods from customers in the supply chain; all about damage control and making the process as customer friendly as possible

customer relationship management program

involves training users within the company to make customers feel valued; can get complex bc finding out the needs of thousands/millions of customers can get ruff

waiting time management techniques

keep customer occupied, start service quickly, relieve customer anxiety, keep customers informed, design fair waiting system

global location factors: labor issues

labor availability/productivity/skill; unemployment/underemployment rates; wage rates; turnover rates; labor force competitors

service layout strategy

layouts designed to reduce distance traveled within the store (ex: being able to watch your car get washed or your pet get groomed)

call centers (or customer contact centers)

links an org and its customers together; where reps respond to customer queries; enhances customer to business relationship

benefits inbound

local and state tax breaks/benefits; duty deferral and reduction; streamlined cost-saving input procedures

3 types of warehouse networks: hybrid approach: advantages

lower operating costs (smaller spoke warehouses are more efficient than a purely decentralized model), lower inventory (safety stock is held centrally), better customer service (inventory is maintained closer to the customer than in purely centralized model)

6 types of global facilities: source factory

manufactures products at low cost but with skilled workers and significant managerial resources; basically an upgraded version of an offshore factory that includes plant management involvement in supplier selection/production planning, more developed local infrastructure, access to skilled workforce, and low production costs ex. HP singapore factory produced calculators and keyboards

global location factors: access and proximity to markets

manufacturing should be within delivery proximity of customers

establishing an FTZ

may be formed by any public entity, including quasi-governmental corporations/organizations

3 warehouse network strategies: 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

global logistics intermediaries: customs brokers

move global shipments through customs and handle documentation

global logistics intermediaries: international freight forwarders

move goods to/from foreign destination

outbound logistics

moving finished goods to the customer

material handling

moving goods and materials between sites (internal & external)

service location strategy

must make it easy for customers to find the store and what they want to do

advantages of public warehouses

no capital investment, no property tax, flexibility, lower costs, reduced risk, access to special features (ex. temp-controlled storage, customer service, etc.)

5 R's of reverse logistics: repairs

not all products returned are disposed; manufacturers may identify the failure and repair/refurbish/remanufacture the product to like-new condition and return it to stock or harvest various components for re-use

customer service elements: transaction elements

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

key tools and components of customer relationship management: cross selling

occurs when a company sells an additional related or complementary product or service to an existing customer after the initial purchase (ex. asking if you want fries w ur burger)

3 types of warehouse networks: hybrid approach

one hybrid network is 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 warehouses with inventory on a regular basis

4 transportation company classifications: 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

4 transportation company classifications: common carriers

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

4 transportation company classifications: contract carriers

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

foreign trade zones (FTZ's)

physical areas inside the US supervised by US Customs that are considered to be outside of the US 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 various permitted activities; while in the FTZ, merchandise is not subject to US duty/excise tax (only paid when the material is moved outside the FTZ for consumption); subject to both laws of the US as well as those of the states/communities in which they are located; no time limit on how long a material can remain in the zone

customer service elements: pre-transaction elements

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

value of products before they are moved to the customer's point of consumption

pretty low value

4 types of transportation pricing: combination pricing

price is set at a value between cost of service minimum and value of service maximum; most carriers use some form of this; common in highly volatile markets and changing competitive situations

how poor reverse logistics can hurt a company

problems include inability of info systems to handle returns, lack of worker training, little or no identification on returned packages, need for adequate inspection and testing of returns, danger of placing returned products back into sales stock; can affect how consumers view products or brands

3 logistics management software applications: global trade management systems (GTM)

provides global visibility, standardization, and documentation to comply w international trade regulations

global logistics intermediaries: trading companies

put buyers and sellers from different countries together and handle export/import arrangements/documentation/transportation

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

3 service strategies: cost leadership

requires large capital investment in state of the art equipment and significant efforts to control/reduce costs (ex: UPS optimization)

trends in customer relationship management: customer data privacy

rules and laws regarding invasion of privacy include patriot act in the US and internet privacy law in the EU

automated sales force tools: lead management

sales reps can follow prescribed tactics when dealing w prospects to aid in closing the deal

free on board (FOB) destination

seller places goods free on board to the buyer's place of business and seller pays freight costs; ownership stays w seller until buy receives goods; seller assumes risk for in-transit loss/damage

free on board (FOB) origin

seller places goods free on board w 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/damage

field service management

setting up the company operations to allow customers to interact directly w the company's service personnel

6 types of global facilities: lead factory

source of product and process innovation and competitive advantage across the entire organization (world-class); competitive advantage of the organization, source of innovation, basically your go-to factory ex. Intel factory in Penang, Malaysia opened in mid 1970's, now is a lead factory

global location factors: access to suppliers and costs

supplier proximity influences the delivery of materials and the effectiveness of the supply chain

definition of logistics

that part of scm 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

service capacity decisions: short-range

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

service capacity

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

deemed exports

the release of tech or source code that is subject to the Export Administration Regulations to a foreign national (non US citizen) located in the US; can be visual/oral/through job training/via systems access

3 logistics management software applications: transportation management systems (TMS)

used to select the best mix of transportation services and pricing

5 modes of transportation: water

very slow and very inflexible but also inexpensive; approx 5% of total us freight spend; used for heavy/bulky/low value materials (coal, grain, sand, petroleum); competes w rail and pipeline for some cargo shipments

3 types of warehouses: break-bulk warehouse

warehouse operation that divides full truckloads of items FROM A SINGLE SOURCE 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. (takes single FTL shipment and splits into several LTL shipments; opposite of consolidation) **break-bulk = breaking the bulk shipments

3 types of warehouses: consolidation warehouse

warehouse operation that receives products from MANY DIFFERENT plants or suppliers, stores them, and then COMBINES 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 (takes several LTL shipments and makes them in singular FTL shipments)

5 R's of reverse logistics: returns

when a customer returns a product for whatever reason, such as if an item is defective/damaged/seasonal/fails to meet expectations/excess inventory

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; must complete/submit a shippers export declaration (SED); submit commercial invoice for the product

import process

when a shipment reaches the US, the Importer of Record (the owner, or purchaser) must file entry documents at the port of entry; goods are not legally entered into USA commerce until: shipment has arrived within port of entry, delivery to shipping destination has been authorized by CBP, estimated duties have been paid; CBP is also concerned w revenue collection

types of queue systems: unstructured queues

when people form queues somewhat informally (ex: waiting for a taxi at an airport or people waiting for an ATM machine)

5 R's of reverse logistics: 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; companies can reduce costs and minimize waste

5 primary functions of a warehouse: picking

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