BA 341 Essay
What are the top drivers for the use of performance management in logistics and SCM?
Stake holders look at the measurement activities and collected data in the form of metrics to help manage performance. There are 7 top drivers for the use of performance management. They are: 1. Increased reliance on contract manufacturers 2. Strategic importance of LSPs to supply chain success 3. Adoption of manufacturing management techniques (JIT, six sigma) 4. Customer expectations 5. A need for visibility around resource utilization 6. Information technology improvements 7. Empowerment of employees (affording them the opportunity to have visibility of KPIs and expectations of performance is seen as a motivator)
What are wicked problems?
A wicked problem is a problem that has no definitive end goal, no clear mission and no universal solution because multiple stakeholders are involved with ranging interests and value sets. To understand a wicked problem, one must understand the wider context, because any solution once it has been implemented will create consequences over a period of time. The outputs from one problem become the inputs from another forming a large interconnected network of systems and there is no right answer.
What is ABC analysis?
ABC analysis is used to separate out the most important items so that more attention can be focused on the important items. To fulfill the analysis the expenses incurred annually for each individual item are collected and the items are listed in the order from the highest expense to the lowest expense. 'A' items may be controlled closely, using the reorder point system; the less demanding periodic system may be used for 'B' items; and 'C' items may be blanket purchased once or twice in a year.
Briefly describe the three main areas of transport security technology and give an example of each security technology.
Access Controls: is a security measure to restrict access to objects or locations for certain personnel only. An example of this would be a key card that is only given to employees that can access a certain area or use a certain machine. Before they can enter they must scan/swipe their key card. Biometrics: is a security measure that restricts access by using your "biology metrics." An example of this would be using a finger print scanner or a retina scanning device before entering a restricted access location. Detection: detects motion or objects within a container. Examples include CCTV, gamma ray, and X-ray. Like when your luggage goes through security at the airport.
Why is a robust supply chain not necessarily a resilient supply chain?
Although a robust strategy is similar to resilience, a robust strategy does not in itself create a resilient supply chain. Resilience is the ability a system has to return to its original state after a disturbance whereas robust means strong, hardy or vigorous. A robust strategy and helps maintain normal conditions and enables a company to manage normal demand fluctuations in a normal environment despite the occurrence of a major disruption. However, when a disruption occurs it does not guarantee the resilience that will allow the company to return back to its desired state. On the contrary, it just provides the company the strength to continue normal operations in light of a disruption. Therefore, just having a robust strategy in place does not create a resilient supply chain.
Distinguish between LSP, 3PL and 4PL. What advice would you give to a company that is looking to replace multiple 3PL relationships with a single 4PL solution?
An LSP is a Logistics Service Provider as it is defined, that is exactly what it does- provide logistics services. There are multiple different categories for LSPs. Freight carriers, basic carriage of freight. Freight forwarders, make transportation and other arrangements. Couriers, urgent delivery of products (example: delta pink cargo system). Integrators, offer a seamless end to end service from consignor to consignee. Finally, Agencies, companies that combine buying power to gain reduced freight transport rates. 3PL is Third Party Logistics. Third party logistics companies provide multiple logistics services often times in an integrated fashion. Currently FedEx advertises itself as a 3PL company hoping to become a 4PL company. 4PL is Fourth Party Logistics. 4PL is a newer concept, trademarked in 1996. 4PL's offer companies radical solutions to totally outsource their supply chains. Accenture defines it as, "a company that is a supply chain integrator that assembles and manages the resources, capabilities, and technology of its own organization, with those of complementary service providers to deliver a comprehensive supply chain solution." The advice I would give a company looking to replace multiple 3PL relationships with a single 4PL solution would be, make sure that the solution falls within the 4PL's core competencies. Also, take into account the services that need to be provided, the costs for the services, the terms of carriage, speed, and the issues currently facing the 4PL company. It is important to do research before changing all of the built relationships, and to make sure that there are other options if the solutin for whatever reason fails.
What is cross-docking and when should it be used?
Cross-docking bypasses the storage areas in warehouses and distribution centers. From the 4 functions cross docking happens after goods are received and then sends the goods to dispatch (figure 10.3, page 193). Cross-docking should be used when goods don't need to go through the four value adding activities; creating bulk, breaking bulk, combining goods, and smoothing. It should also be used for fast-moving freight with a constant demand that spends less than 24 hours on site. Cross-docking reduces costs and improves customer service by accelerating the processing of freight requiring shipment. Cross-docking is a key enabler of quick response logistics because it maintains the flow of freight and reduces lead time.
Inventory holding cost is often viewed as a tradeoff with certain economical advantages. What do you consider the top two reasons (or tradeoffs) for holding inventory (table 9.1) and give an example of each.
Inventory holding costs are traded off with economical advantages and although inventory costs money, it is important because without it one minor problem could stop the entire supply chain. the reasons for holding inventory is to have a buffer against uncertainty. The top 2 buffers for uncertainty would be to maintain customer service levels for volatile demand with the economic trade off of production batch sizes and protect against delivery lead time variability with the trade off of transportation mode. You would want to hold inventory so if something goes wrong you can resend an object to maintain customer satisfaction and improve customer service. However, when running smaller batch sizes which is more economic, inventory is created and there is now a cost to hold that inventory. As well as with the transportation mode, you want to fill your load and now there is a cost for holding the extra inventory.
What are lean and agile strategies? What are the main factors impacting the use of either strategy?
Lean strategies combine the ideas of mass production and mass customization while trying to add value and eliminate all forms of waste. Waste can be both tangible and intangible from things like information to supplies. Lean strategies are mostly used for companies with predictable demand. Lean strategies also utilize the idea of postponement. Postponement is used to enhance customization processes by creating product differences as far downstream as possible. Agile is the ability to cope with volatility in demand and is used in situations with short lead time + unpredictable demand. Agile supply chains can be utilized in retail companies. Zara is an example of a company that uses agile supply chain strategies. They are able to see new trends, implement them into their clothing and get them to the consumer as soon as possible.
What are the generic warehouse functions? Explain.
No matter the scale or role the warehouse plays in the supply chain, the four main functions for warehouse are goods receiving, put away into storage, order picking and packaging, and goods dispatch. All activities within a warehouse can be associated with one of these four functions. Warehouse layouts are designed to optimize the flow of freight through these four functions. about the functions: 1. goods are moved from reserve storage locations to pick locations aka replenishment. 2. when orders from customers are received, a pick list is created and items are picked from the pick location and and packed to be ready for dispatch. During this process freight can be: broken down from a bulk consignment, grouped into a bulk consignment, combined with other freight or simply held until they are required. 4. at dispatch, freight and associated information are inspected against the original order and moved to the shipping area.
Distinguish between open-loop and closed-loop reverse logistics systems.
Open-loop systems have flows enter at one point of the logistics system and leave at another. In closed-loop systems origins (sources) and destinations (sinks) coincide so that flows cycle in the system.
What is the Internet of Everything and how does it impact logistics?
The Internet of Things or IoT has evolved into the Internet of Everything. the IoT generally referred to the network of physical objects intertwined with electronics, software, and sensors so that things could be interconnected. Now, the Internet of Everything or IoE encompasses beyond sensors communicating and steered by a central hub. Things now have the capability to to have direct communication with each other. Things have become more intelligent as well as autonomous. There are four components that make up the internet of everything: 1. data (how it is collected and used) 2. people (how they are connected, relevant and valuable) 3. things (physical devices and objects that are connected to the internet and each other) 4. process (delivery of the informations to the right person/machine at the right time) This impacts logistics because new technology advancements can be used to enhance productivity. For example, automation processes have reduced costs, error, and improved cycle times in logistics. RFID has revolutionized logistics making tracking, controlling and monitoring of packages and freight easier than ever before. Logistics companies now have the ability to use the EDI to share information with each other. The Internet of Everything has impacted logistics by making things more efficient.
Explain the key developments behind the evolution of logistics and SCM.
The key developments behind the evolution of logistics ans SCM include: - Falling product prices - Deregulation of trade - Productivity Improvements - Emphasis on reduced inventory - Company restructure - Reduced intensity of freight By increasing competitive advantage in the market place as well as standardizing products, companies were able to lower costs. By deregulating trade, companies were able to trade easier and this opened opportunity for globalization. This also helped developing economies begin to transform into emerging economies and provide opportunities for economic growth through ports and new jobs. Productivity improvements, which I believe is the most important, created new ideas like containerization. Containerization revolutionized the freight industry and made shipping more efficient and effective. Emphasis on reduced inventory created the idea of lean production and Just-In-Time inventory which also helped create the pull philosophy. This caused companies to undergo a restructure so they could use these ideologies to cut costs and make more money. By reducing the intensity of freight, objects were able to travel farther and faster which enhanced consumer satisfaction
Outline the various stages in the evolution of manufacturing. Where is the optimum point in this evolution and why?
The stages in the evolution of manufacturing are: craft production, mass production, and mass customization. Craft production was able to create high output variety objects at a low output volume whereas mass production was able to produce low output variety objects at a high output volume. However, we have now reached the optimum point in the evolution with mass customization. Mass customization allows for diversified objects at a high output volume. This is the optimum point because it allows companies to have a competitive advantage in the market by giving the consumer options, provides the company a way to reduce costs, and reduce production time. This enhances customer satisfaction and the company is able to produce products on a large scale which reduces the costs and amount of time. An example of this would be the automobile industry. Automobiles contain a similar base model however, the customer can customize the fabric interior, color, cup holders etc.
What are the different ways by which the environmental footprint of logistics and SCM can be reduced?
There are 3 main ways the to improve the sustainability of your supply chain system. 1. Redesign the supply chain. 2. Using scale to reduce the negative environmental effects of logistics activities. 3. Similarly promoting various efficiency solutions. #1 can be accomplished by making efficient warehouse and distribution center location decisions. #2 can be accomplished by moving freight in larger single loads to cut down on both unit costs and dis-benefits. #3 can be accomplished by transporting and handling freight more effectively, like using cleaner fuels on ships or trucks.