Supply Chain Final Exam ch. 9 &10

Server factory with example

***server factory - serves local markets **local markets benefit from this/ gov incentives -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 government incentives -Low exchange risk and tariff barriers to reduce taxes and logistics costs. -Makes minor improvements to product and processes -Set up to serve the local market ex) Coca cola bottling, you mix the final ingredients to take advantage of exchange rates, tariffs, taxes etc.

disadvantages of 3PL's

- Control ( a company will not have direct control over their logistics operation, at mercy of 3PL) - Dependency(outsourcing logistics creates a dependency on the 3PL, can be bad if 3pl does not deliver what they promise) - Pricing(company is locked into the pricing model specified in the contract)

Intermediately Positioned Strategy (& when is strategy used)

- warehouses are setup midway between supply source and customers to try to balance costs inventory and customer service -strategy used when distribution requirements are high and product comes from various locations -a warehouse network optimization study may be needed to determine the optimal number and location of warehouses in this strategy

explain transportation deregulation history and the period of deregulation from 1970 to today and how it changed different types of transportation

-** RAILROAD REVITALIZATION & REGULATORY REFORM ACT (1976) which means railroads could change rates without ICC approval -air freight deregulated in 1977 -motor carriers deregulated in 1980 *to promote competitive, safe, efficient motor transportation -Shipping Act of 1984 allows ocean carriers to pool shipments, assign ports, publish rates, & enter into contracts with shippers -** ICC termination Act 1955 (Interstate Commerce Commission ICC was eliminated)

describe truck (mode of transportation)

-***most flexible mode of transportation -carries more than > 80% of US freight (interacts with other transport modes to & from ports/warehouses) *think of last mile-usually last mile to get to customer is by truck -carries nearly everything from packaged goods, groceries, building materials, liquid petroleum etc -impacted by the truck driver shortage/hour of service rules -Competes with AIR & RAIL for short/medium hauls (short haul: 0-200 mi from driver home to terminal, long haul: over 200 miles from driver home to terminal)

explain 3PL fees, savings, who favors them, use in international logistics

-3PL providers typically charge a fee for their services -typically generate a 10 to 20% savings in logistics costs -favored by small businesses(that do not have their own logistics operation) -used to a significant degree for their international logistics (company more likely to use 3PL internationally than try to establish an in house operation in a foreign market)

how can green reverse logistics programs help? give an example

-Can have a positive impact on the environment though activities such as recycling, reusing materials and products, or refurbishing unused products -These programs can reduce environmental impact on landfills and deal with dangerous contaminants. ex) Unused pharmaceutical product returned to the pharmacy rather than "flushing it down the toilet" which ultimately causes the drug to end up in the water supply

What is warehouse network optimization

-Companies need to find the balance that will work for their products & markets -There are many consulting companies that offer services to help a company determine their optimal number of warehouses and locations by using a number of different optimization software programs -^software analyzes inputs (customer and manufacture locations) & then informs the optimal numbers of warehouses and locations based on the factors *these programs try to minimize the amount of transportation on both ends (inbound from your suppliers and outbound to your customers)

list some global location factors ***study for exam

-Competitiveness -Taxes and Incentives -Currency Stability -Access and Proximity to Markets -Labor Issues -Right to Work Laws -Access to Suppliers and Cost -Utility Availability and Cost -Environmental Issues -Land Availability and Cost -Quality of Life Issues -Business Clusters -Trade Agreements

advantages of 3PL's

-Cost (eliminates need for a company to invest in warehouse space, technology, and staff to execute logistics process) -Logistics expertise: 3pls are knowledgeable of industry best practices and the latest developments in technology (this is their core competency) -efficiency: 3PL's can leverage relationships & volume discounts, which results in lower overhead & fastest possible service

list/explain the 4 types of ways to negotiate transportation pricing

-Cost of Service Pricing: the setting of a price for a service based on the costs incurred in providing it *used for low value goods, or highly competitive situations -Value of Service Pricing: pricing strategy which sets prices based on the value perceived by the customer rather than the cost of the product ex) priced at what the market will bear *good for high value, non competitive goods -Combination Pricing: price is set at a value between cost of service minimum and value of service maximum, *most carriers use some form of combination pricing *typically used in volatile/competitive situations -Net Rate Pricing: established discounts & accessorial charges are rolled into one all inclusive price *pricing tailored to customers needs

what do fees in a public warehouse vary based on?

-Fees will very based on what is being store and: -Size and weight of pallets -if they can be stacked -how fragile product is -value of goods (risk of theft should be considerd) -hazards associated with goods -can have document fees & account management fees

list/describe some other transportation intermediaries (freight forwarder, load or transportation broker, shippers association, intermodal marketing company) ****STUDY FOR EXAM

-Freight forwarder: consolidates LTL shipments into FTL shipments, they take small shipments from multiple co. & consolidate them into larger shipments (middle man between carrier & org shipping product) -Load or transportation broker: brings shippers & carriers together *find shipments for carriers for a fee -Shippers Association: nonprofit cooperatives which arrange for members shipping -intermodal marketing company: purchase blocks of rail capacity & sell it to shippers

list some transportation regulations from 1870 to 1970

-Granger laws 1870 (for railroads) -**** INTERSTATE COMMERCE ACT of 1887 (Create Interstate Commerce Commission ICC) -transportation act 1920 (changes to interstate commerce act) -motor carrier act of 1935 (brought motor carriers under interstate commerce commission control) -transportation act 1940 (establish interstate commerce commission control over domestic water transportation) -federal aviation act 1958 (created air traffic and safety regulations and the national airport system) -department of transportation act 1996 (coordination of all transportation related matters)

list some more aspects of the hybrid approach

-Hub/central warehouse feeds the spoke warehouses (with inventory necessary on a regular basis) -Operating costs are lower (bc spoke warehouses are smaller than a pure decentralized model) -inventory is also lower (safety stock is stored in the central hub which means less total safety stock is required because all of the risk & uncertainty is managed centrally) -customer service is generally better * than in a purely decentralized model since some of the inventory is maintained closer to the customer

Warehouse network: hybrid approach (hub and spoke)

-Hybrid network where there is A CENTRALIZED warehouse (hub) which holds most of the inventory linked to a series of smaller geographically dispersed warehouses (spokes) which hold only a small amount of inventory to support their local area in the immediate time frame

explain some reasons why poor reverse logistics can hurt a company

-Inability of information systems to handle returns -Lack of worker training in reverse logistics procedures ex) *Macy's employees who cant help you -Little or no identification on returned packages -Need for adequate inspection and testing of returns -Danger of placing returned products back into sales stocks -effects entire supply chain financially -Can have a large impact on how a consumer views a product or brand, potentially impacting future sales

Source factory with example

-Manufactures products at low cost but with skilled workers and significant managerial resources Basically, an offshore factory that includes: -Plant management involvement in supplier selection -Plant management involvement in production planning -More developed local infrastructure (want to make sure infrastructure can handle what you do) -Access to skilled workforce -Low production costs ex) HP in Singapore produced calculators and keyboards *has more skilled workers and more managerial input and control

list advantages of public warehousing

-No capital investment or property taxes (public warehousing takes away need for a company to own or operate infrastructure) -Flexibility (can be a short or long term contract, can have seasonal products, can add storage capacity even on short notice, *if bus. conditions change co. is not tied into a long term commitment) -Lower costs and reduced risk (less costly compared to other types of warehousing, since theres no long term committment users can switch to another public warehouse in a short period of time) -access to special features and services (temperature controlled store, customer service, inventory ordering, office space for customer sales account dept etc)

what are some of the decisions driving warehouse management?

-Number of warehouse facilities in network -site selection -layout of the warehouses -methods of receiving, storing, retrieving, & distributing products and materials (ex) -manual - semi automated -fully automated)

list some technology/trends in transportation

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

explain and describe the 3 most common forms of intermodal transportation (rail & moto carrier, rail & water carrier, roll on/roll off)

-Rail & motor carriers (trucks): offer point to point pickup and delivery service known as Trailer on Flatcar (TOFC) -Rail and Water Carriers: offer point to point pickup and delivery service known as container on flatcar (COFC) -Roll on/roll off ship: specifically designed to allow trucks to be driven directly on and off the ship without the use of cranes *provides flexibility and speed *vehicles are driven toward ship

describe some more unfavorable things about reverse logistics

-Reverse logistics cost 4 - 5 times as much as forward logistics -requires on average 12 times as many processing steps often viewed as: -An "unwanted" supply chain activity Many companies outsource this activity to a 3PL - A cost of doing business - A quality or regulatory compliance issue

difference between supply chain management & logistics? (there is often a confusion)

-Supply chain management & logistics are not the same things *Logistics IS PART OF supply chain management (*specifically the parts of warehousing, transportation, & reverse logistics activities)

list/explain some logistics management software applications (warehouse management systems, transportation management systems, global trade management systems)

-Warehouse management systems WMS: track & control the flow of goods from receiving dock to outbound shipment, new technology such as RFID tags facilitate tracking, provide management with info it needs to efficiently control movement of materials in warehouse *supports day to day operations of warehouse -Transportation management systems TMS: used to select best mix of transportation services and pricing, TMS products serve as the logistics management hub in a collaborative network of shippers, carriers, and customers. -global trade management system GTM: provides global visibility, standardization, & documentation to comply with international trade regulations

Warehouse network

-Warehouse network is simply the number of, and the relationship between, the warehouses that a company has in their organizational structure (warehouse networks have single, multiple, and hybrid approaches)

Product positioned strategy (& when do companies use this strategy)

-Warehouses are set up close to supply sources to collect goods and consolidate before shipping products out to customers, if warehouses are close to suppliers the co. can also minimize transportation costs -*reverse of market positioned strategy -companies use this strategy when they have more suppliers than customers -*similar to consolidation warehouse setup, there will likely be LTL shipments coming in from suppliers at a shorter distance & consolidated FTL shipments going out longer distances to customers

explain the ranking of transportation modes (1 to 5 system) which one has the best ranking?

-based on accessibility, capability (can handle most kinds of freight weight size type etc), lowest per unit cost, reliability, speed -each category gets added up and has a total (COMPARED FOR EACH TRANSPORATION MODE) -5 types of transportation modes are included (truck, rail, pipeline, air, water) -1 to 5 BEST TO WORST (** MEANS THE LOWER THE RANKING THE BETTER) -*** TRUCK HAS THE BEST RANKING OUT OF ALL CATEGORIES overall but ranks #1 in accessibility

Public Warehouse

-business that provides storage & related warehouse functions to companies on a short term or long term basis (generally on a month to month basis) **HOTEL for inventory

who are the owners in a public warehouse? where does staffing come from?

-co. own their own equipment -and Hire their own staff to manage the facility

list types of warehouses

-consolidation -break bulk -cross docking

Where does the true value of warehousing lie?

-having the right product in the right place at the right time -Warehousing provides time & place utility (which gives materials true value)

Warehouse network: single warehouse (positives) & negative

-only one centralized warehouse operation,*operating costs and inventory will be lower Positives: -less complicated -operating costs & inventory will be lower -no duplications of equipment, warehouse staff, or managers -network will be centralized and the company will have its best people, equipment, & inventory system concentrated in one place -Warehouse can actively focus on the needs of its customers negative: single warehouse (centralized network) may take longer to deliver product to some customers who are remote from the central location

list disadvantages of a public warehouse

-potential for incompatible computer system (public warehouses may not have a system to suit the needs of a specific customer and are unlikely to invest in new system) -lack of specialized services (most public warehouse facilities provide local services which may not be what the company requires, *may not have specialized services that a specific company needs) -space may not be available when/where needed (space may not be available when and where a company wants it)

WHEN do products gain value to the customer?

-products have LITTLE VALUE to the customer until they are moved TO THE CUSTOMERS POINT OF CONSUMPTION (*this means customers care very little abt logistics/transportation activities, more interested when product is in proximity to them)

list some warehouse ownership types

-public warehouse -contract warehouse -private warehouse

what is reverse logistics (returns management)

-reverse logistics 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 *the backwards flow of goods from customers in supply chain *about damage control & making process consumer friendly *** KNOW THAT COMPANIES DO NOT WANT REVERSE LOGISTICS

advantages cross docking warehouse

-transportation cost savings: 8 FTL shipments are less expensive per unit than 16 LTL shipments -operational efficiency: warehouse operations are more efficient as the material does not have to be stored at the warehouse, moving directly from receiving to shipping -inventory efficiency: as there is no storage at the warehouses, total inventory in the supply can be reduced

what was deregulation?

-transportation industry started to go in reverse, these transportation systems became very popular and much needed and foreign transport companies started to impact the ability of US transportation to make money, so the gov. decided to deregulate the industry allowing US transportation co. more freedom so they could become more competitive

Contract warehouse

-variation of public warehousing that handles the shipping, receiving, and storage of goods on a contract basis for a specific client for a fee -contract can be for an entire building or defined portion -usually requires a client to commit to service for YEARS (long term rather than months) -fee structure may be fixed cost, cost plus or combo of both -the company providing the space handles the employees, equipment, & maintenance and has most responsibility *** RENTING AN APARTMENT for inventory

the fundamental questions to be answered in establishing a warehouse network are:

1. How many warehouses are needed? 2. Where should they be located?

the tradeoffs that will determine how many warehouses the company needs and WHERE they should be located are:

1. Level of customer service the company wants to provide: the greater desired custom service level - the more warehouses the company may need to geographically disperse inventory * to satisfy all customers 2. The amount of inventory the company is willing to invest in, the more warehouses the company needs- the greater the amount of inventory the company will need to invest

list/describe 3 objectives of transportation

1. Maximize value to the company through price negotiations (getting best price to transport goods whether their coming from supplier or going to customer) 2. Make sure service is provided effectively (few moves as possible, make sure product is not damaged through transportation) 3. To satisfy customer's needs (product right place at right time, moved efficiently effectively at lowest possible cost)

what are the main reasons cross docking is implemented

1. Provide a central site for products to be sorted & combined for delivery to multiple destinations in the most productive & fastest method possible 2. Consolidate: combine smaller product loads into one method of transport to save on transportation costs 3. Break bulk: break down large product loads into smaller loads for transportation for an easier delivery process to the customer

list & describe the 5 primary functions of a warehouse

1. Receiving: function encompassing physical receipt of material, identification, inspection for *conformance* with the purchase order (quantity & damage), put away, & preparation of receiving goods 2. Storage: safe and secure retention of parts or products for future use or shipment 3. Picking: withdrawing components from stock to make assemblies or finished goods, or to ship to customer 4. Packing: placing one or more items of an order into an appropriate shipping container for safe shipping, & marking/labeling the container with customer shipping destination data, & other info that may be required 5. Shipping: function for the outgoing shipment of parts, components, & products (includes packing marking weighting loading for shipment NOT transportation)

list/describe 5 R's of reverse logistics *** ON EXAM (returns, recalls, repairs)

1. Returns: customers return products for a number of reasons, an item may be defective, damaged, seasonal, fail to meet expectations, or represent excess inventory *1st step of revers logistics *need to find an efficient way to handle returns 2. Recalls: Recalls are more complex than basic returns because they typically involve a product defect or potential hazard and may be subject to government regulations, liability concerns or reporting requirements. *make sure to return a negative customer experience into a positive one 3. Repairs: Not all products that are returned are disposed. Manufacturers may identify the failure and repair, refurbish or remanufacture the product to like new condition and return it to stock, or harvest various components for re-use *make sure to not invest too much time or money into repairs

what are the 3 things logistics accomplishes?

1. move goods and materials from suppliers to buyers (inbound logistics) 2. move goods and materials between sites, either internally or between internal/external sites (material handling) 3. to move finished goods out to customers (outbound logistics)

list 6 global facility types ( in order from very basic to more complex)

1.Offshore Factory 2.Source Factory 3.Server Factory 4.Contributor Factory 5.Outpost Factory 6. Lead Factory

Offshore factory with example

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 *not sophisticated *don't need a lot of resources -Manufactures products at low cost with minimal technical and managerial resources -Take advantage of low labor costs -Import or acquire parts locally, then export to the manufacturer or directly to customers -Local management serves in a supervisory roll not in making management decisions. ex) clothing produced in Bangladesh, India

Private warehousing

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 of highly valuable goods, or need some type of specialized storage or handling -can be operated as a separate divisions within co. -can be co-located on site with manufacturing or off site *private/specialized *** BUYING HOUSE for inventory

explain air as a mode of transportation (how much it accts for, speed, what it carries, how it works, cost, pairings)

Air: -accounts for approximately 5% of total US freight spend -generally fastest mode of transportation (especially over long distances) -MOST EXPENSIVE mode of transportation -what it can carry: cannot carry anything heavy or bulky due to balance issues, or items with high cost to weight ratio, **shipment involve very light high value goods that need to travel long distance quickly ex) jewelry, fine win, pharmaceutical, race horses etc. -half can be carried in freight only airline ex) FedEx other carried in passenger planes with luggage -CAN BE PARIED WITH TRUCKS for door to door delivery

contracting vs breakbulk warehousing and location to customer base

Break bulk: at a strategic location between supplier and customer but its located closer to customer base (in contrast to warehouse) so smaller LTL Shipments travel shorter distance to customers while larger FTL shipments from single supply source travel a longer distance Contracting: also at a strategic location between supplier and customer, located closer to supply base so smaller LTL shipments travel the shorter distance and can be consolidated more quickly than larger FTL shipments traveling a longer distance

Global location decisions and what do they involve

Companies can locate anywhere in the world due to increased globalization, technology, transportation, and open markets. -Facility location must be part of the firm's supply chain strategy -Decisions involve: 1.Defining each facility's strategic role (i.e., what type of facility) 2.Determining the location for each facility (i.e., where in the world) 3.Identifying the market(s) that each facility serves

describe the 4 transportation categories (companies transporting freight/cargo regardless of mode of transportation are classified according to the categories)

Contract carriers: person or company who transports freight under contract to one or a limited number of shippers Private carriers: person/company that transports its own cargo as part of a business that produces, uses, or sells or buys the cargo that is being hauled Common carriers: person/company who transports freight or a fee that can be hired by anyone to transport ex) things you see on rail, air etc Exempt carriers: person/company specializing in services or transporting commodities exempt from regulation by the Interstate Commerce Act

advantages private warehouse

Control: Offers greater flexibility in designing the warehouse and gives users significant control over operations. Visibility: inventory, material flow, handling, supervision, and associated costs. Cost: Operating cost can be 15% - 25% lower if the company achieves at least 75% utilization.

list & describe the LEAN capabilities warehouses and distribution centers are continuing to develop (cross docking & reduced lot sizes and shipping quantities)

Cross docking: a LEAN concept because it eliminates the need to store inventory, reduce some transportation, which are both wastes *the more cross docking a company can do the leaner their operations are Reduced lot sizes and shipping quantities: by reducing lot sizes and reducing shipping quantities, a company can actually increase the throughput in the warehouse and get shipments out faster, smaller orders take less time to pick and keeps cost/inventory down*faster throughput and lower inventory are LEAN concpets

outpost factory with ex

Factory set up in an area with an abundance of advance suppliers, competitors, research facilities, etc. Setup in a location within proximity to: -Advance suppliers. -Competitors. -Research facilities & universities for materials, components and products. *want to obtain knowledge *typically near bus. clusters ex) pharma co. being close to RU for research opportunities

Contributor factory with ex

Focused on product development and engineering for products that they manufacture *helps stay above competitors Basically, a Server Factory which also includes: -Product development. -Production planning. -Procurement decisions. -Supplier development. ex) In 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 *focal point for specific co. activities/ new products etc

disadvantages private warehouse

High Start-up Cost: Capital to build or buy a warehouse. Long, risky investment. Cost of hiring and training employees. Purchase of material handling equipment. Fixed Location: Not easy to move to another location if the market changes. Fixed Size and Costs: When volume is low, the company still assumes the fixed costs. -also a lack of flexibility

What is return of unsold goods? what is a risk of it?

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 e.g., newspapers, magazines, even pharmaceuticals. *This acts as an incentive for downstream members to carry more stock, because the risk of obsolescence is borne by the upstream supply chain partner. Risk: 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.

Intermodal Transportation "6th mode of transportation" *study

Intermodal transportation is the use of multiple modes of transportation to execute a single transport shipment -it is growing substantially bc its cost efficient & cost effective *sometimes called the sixth mode of transportation

explain pipeline as a mode of transportation (how much it accts for, reliability, cost etc)

Pipeline: -accounts for approximately 2% of total US freight spend -most RELIABLE FORM OF TRANSPORTATION (doesnt matter if weather changes, etc) -*** LOWEST PER UNIT COST FOR TRANSPORTATION -limited variety of commodities -materials are transported in a liquid or gaseous state (ex- petroleum, natural gas, drinking water, gasoline) -**little maintenance is needed once the pipeline is running its a continuous flow (*any type of pipeline that moves material from one place to another is a form of transportation)

list & describe some other/secondary functions of a warehouse

Quality inspections: incoming and outgoing Repackaging: for specific customer orders Assembly operation: warehouse operation that puts products together with other items/components before shipping them out to the final customer (ex) literature, spare parts, advertising materials)

explain Rail as mode of transportation (how much it counts for, characteristics, issues etc.)

Rail: -accounts for 9% of total US freight spend -competes for transportation when the distance is long and the shipments are heavy or bulky **best for long distances heavy shipments -shipments can have building materials, construction equipment, coal, gravel, sand, lumber etc. -aging infrastructure & equipment are an issue -**rail is slow and inflexible but has THE MOST CAPABILITY -**can be paired with trucks for door to door delivery (so as a result rail carriers have begun purchasing motor carriers and can now offer point-to-point pickup and delivery service)

discuss pros & cons of regulation

Regulating/adding rules to transportation system: Pros: -assures 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

list/describe 5 R's of reverse logistics *** ON EXAM (repackaging, recycling)

Repackaging: 95% of returned products are because customers are dissatisfied with them not because there are defective. These products are typically repackaged and returned to inventory for restock or resale. *When testing reveals "no trouble found," these products are typically repackaged and returned to inventory as quickly as possible *Alternately, parts/products with minor flaws may be repaired, reconditioned, and repackaged for re-sale. 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. *good for high tech devices such as phones/laptop

what % are retail returns in all of sales

Retail returns = 6% to 10% of sales

free on board destination FOB destination

Seller arranges for transportation and adds charges to the sales invoice, Seller assumes the risk for in-transit loss or damage, Title does not pass to the buyer until delivery is completed *seller places goods free on board to the buyers place of business, & the seller pays freight costs, ownership of the goods remain with the seller until the goods reach the buyerr, seller assumes risk for in transit loss/damage

advantages of contract warehouse &1 disadvantage

Services: bc of the long term nature client can obtain specialized services that are tailor-made to suit their needs. Cost: can be bundled in the contract and negotiated at a lower cost *less costly bc it is managed by a 3rd party that takes the burden Control: contract warehousing offers a degree of control at a reasonable price, compromise bc client co. has some degree of control at a reasonable price disadvantage duration (client company is expected to enter in a long term contract for specific amount of time *generally 3 years)

Lead Factory with ex

Source of product and process innovation and competitive advantage across the entire organization (world-class) -Competitive advantage of the organization. -Source of innovation. *has a lot of new innovation & product development *your go to factory/ hub factory/ #1 factory

Transportation

The function of planning, scheduling, and controlling activities related to mode, vendor, and movement of inventories into and out of an organization. *to get the right product, to the right place, at the right time by ensuring the product is moved efficiently as possible from point of origin to point of destination

Cross docking warehouse *study

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. *speed throughput times, reduce inventory investment, reduce storage space

what are global location factors

These are factors used to compare and contrast one potential location against another when making global location decisions

discuss different rankings of the five types of transportation modes in the 1 to 5 system

Truck ranks the best overall but only ranks number 1 in the accessibility category. · Pipeline is the lowest cost and the most reliable. · Air is the fastest. · Rail has the most capability. · Water does not come in first in any category but is widely used for international shipments.

Consolidation warehouse

Warehouse operation that receives products from different plants or suppliers, sorts them, and then combines them with similar shipments from other plants or suppliers for further distribution. *small flexible shipments in, and large economical shipments out. The goal is maximizing transportation utilization while minimizing costs. ex) similar to carpooling where one person gets into a big car full of a bunch of ppl (less costly)

pt 1 of logistics chapter 9

Warehousing

explain water as a mode of transportation (total spend, what it includes, cost, speed, what its used for, pairings, competition)

Water: -Accounts for approximately 5% of total US freight spend *oldest form of transportation -includes inland waterways, coastal, and intercoastal, and deep-sea cargo shipments -inexpensive VERY CHEAP (similar to rail) -very slow and inflexible (similar to rail) -primarily used for HEAVY, BULKY, LOW VALUE materials ex)coal, grain, sand, petroleum *because its so cheap almost item can be shipped by water including automobiles, produce, containerized cargo etc -competes with rail & pipeline for some cargo shipments -paired with trucks for door to door delivery

Warehousing

all of the activities related to receiving, storing, & shipping materials to and from production or distribution locations -a function that allows a company to store all of the types of inventory (raw material, WIP, finished goods) the co. may have or need slides definition: Function that allows a company to receive, store, breakdown, repackage, and distribute items to a manufacturing location, or finished products to a customer

Fourth Party Logistics 4PL

an interface between the client company and multiple logistics service providers -a company will select a lead logistics partner (which is the 4PL) that is then charged with managing the activities of all other 3PL's being used by company -all aspects of the client company's supply chain handled by 3PL's would be managed by the 4PL organization

can customers be internal, external or both?

customers can be internal OR external

discuss some pros of deregulation is US transportation mostly regulated or deregulated?

deregulation: -encourages competition -allows prices to adjust as demand/negotiations dictate -US transportation industry mostly remains deregulated

what is the real value delivered the logistics function? 2 examples

ensuring product is: -delivered at the right time -delivered to the desired location

Warehouse

facility used to store inventory, purchases, work in process WIP, & finished goods inventory

general freight carriers and specialized carriers

general freight carriers: comprise the majority of the trucks you see out on the road-way, carrying most of the goods. These are trucking companies that engage in shipping pack-aged, boxed, and palletized goods that can be transported in standard, enclosed tractor-trailers, generally 40 to 48 feet in length. General freight carriers include common carriers as well as other kinds of carries discussed in this chapter. Specialized carriers: a trucking company which handles the movement of cargo that requires specialized equipment for transportation because of shipment's size, weight, & shape -transports commodities like liquids, petroleum, household goods, building materials, other specialized items

ch10

global logistics & international trade

list & describe the LEAN capabilities warehouses and distribution centers are continuing to develop (increased automation and green warehousing)

increased automation: companies are using automated systems such as pick to light, voice picking, conveyor systems, and robotics to improve efficiencies & throughput times *this is LEAN concept bc automation speeds up picking process and moves products faster/more accurately green warehousing: companies are looking at what sustainable/green programs they can implement in warehouse operations want warehouse to be a net zero energy user

describe the issue with warehouse network strategies and list the 3 main warehouse network location strategies

issue: companies need to determine whether it needs one or multiple warehouses and it also needs to determine which location strategy makes the most sense for the business, *strategy decision is different from one business to another depending on nature of business and amt of customers of co. 3 main warehouse network location strategies: market positioned strategy, product positioned strategy, intermediately positioned strategy

less than truckload LTL (advantages/disadvantages)

less than truckload LTL: transportation of relatively small freight, freight does not require entire space of truck, small shipments (advantage: cost effective, more available carrier options, **ideal for small businesses) (disadvantage: increased risk of theft/damage, increased shipping times & delays)

ch9

logistics: warehousing, logistics, & reverse logistics *this part of course focuses on return and delivery of SCOR model

what is mode vs carrier -what are some ex of modes of transportation

mode: refers to the way in which goods are transported carrier: refers to the company that transports the goods ex) truck, pipeline, rail, air, water

Warehouse network: multiple warehouses (positives and negatives)

multiple warehouses geographically dispersed throughout the market *likely be able to distribute to customers much faster Positives: -potential faster delivery to customers bc warehouses are everywhere (assuming adequate inventory in the warehouse) Negatives: -more complicated -operating costs higher and inventory higher -each warehouse costs money to staff & operate -Duplication of equipment, warehouse staff, & mangers -network will be decentralized and co. will have to spread its best ppl/equipment/systems across a larger network

list some typical services offered by 3PL's ***study for exam

some of the typical services offered: -inbound transportation -warehousing -pick and pack -outbound transportation -freight forwarding -freight bill auditing/payment -customs brokerage -customs clearance -order taking -billing/invoicing -inventory auditing

what is a freight term of sale? explain Free on Board Origin

term of sale: delivery & payment terms agreed between buyer & a seller, rights obligations etc Free on Board Origin FOB: Seller states price at point of origin and agrees to load a carrier, Buyer selects the carrier and pays for the transportation, Title passes to the buyer when the shipment originates, Buyer assumes the risk for in-transit loss or damage. *seller places goods free on board with the carrier at the seller's location & buyer pays freight costs, ownership of goods passes to buyer (when the public carrier accepts the goods from the seller), buyer assumes risk for in-transit loss or damage

What is logistics?

the part of supply chain management than plans, implements, & controls the efficient, effective flow and storage of goods, services, and related information, from the point of origin to the point of consumption, in order to meet customer requirements *Council of supply chain management professionals definition

Full truckload FTL (advantages/disadvantages)

the transport of goods that fill up a full truck, or a partial load shipment occupying an entire truck (advantages: best way to transport large shipments, ideal for high risk or delicate freight shipments, *faster than LTL) (disadvantage: costs more than LTL)

Third Party Logistics 3PL

third party logistics 3PL company is an outsourced provider that manages all or a significant part of an organizations logistics requirements for a fee

how to know which type of warehouse to choose:

to choose the most appropriate warehousing facility a company must: -consider all services desired -level of control that is required -length of time the storage facility would be required -cost also plays an important role (when choosing between privately owned or managed by 3rd party)

pt 2 of logistics

transportation

Break bulk warehousing

warehouse operations that divides full truckloads of items from a single source or manufacturer into smaller, more appropriate quantities for use or further distribution -similar to consolidation warehousing, has incoming shipments that are generally homogeneous from a single plant or supplier, **splits items into individual order/shipments for local delivery

Market positioned strategy (also describe whey companies use this strategy)

warehouses are set up close to customers to maximize distribution services and improve delivery time and minimize transportation costs -companies use this strategy when: they have many more customers than suppliers, and customers are spread out geographically around the market -*similar to break bulk warehouse setup there will likely be FTL shipments coming in from suppliers at a greater distance and LTL shipments going out shorter distances to customers