Chapter 9 Logistics Warehousing and Transportation

Pipeline

2% Most reliable Lowest per unit cost

Air

5% fastest mode of transportation Most expensive High cost to weight ratio

Water

5% total US freight Inexpensive but it is also very slow and inflexible used for heavy bulky low value materials

Rail

9% Competes for transportation when the distance is long and the shipments are heavy or bulky. is slow and inflexible but it has the most capability

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

Private Warehouse

A storage facility that is owned by a company that owns the goods being stored in the facility.

General Freight Carriers

A trucking company which handles a wide variety of commodities in standard trailers. Freight is generally palletized.

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

Contract Warehouse

A variation of public warehousing that handles the shipping, receiving, and storage of goods on a contract basis for a fee.

Transportation Broker

Bring shippers and carriers together

Freight Forwarders

Consolidates LTL shipments into FTL shipments.

Warehousing

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

Net Rate Pricing

Established discounts and accessorial charges are rolled into one all-inclusive price. Pricing is tailored to the individual customer's needs

Warehouse Network Strategy

Market Positioned Product Positioned Intermediately Positioned

Truck

Most Reliable 80% Carries nearly anything from packaged household goods, to building materials, to liquid petroleum, etc.

Shippers Association

Nonprofit cooperatives which arrange for members' shipping

Global Trade Management Systems

Provides global visibility, standardization, and documentation to comply with international trade regulations.

Intermodal Marketing Company

Purchase blocks of rail capacity and sell it to shippers

Secondary Functions of a Warehouse

Quality Inspections Repackaging Assembly Operations

Warehouse

Raw material purchases, work-in-process (WIP), and finished goods inventory.

Primary Functions of a Warehouse

Receiving Storage Picking Packing Shipping

Five R's of Reverse Logistics

Returns Recalls Repairs Repackaging Recycling

Transportation

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

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 shortage in between to reduce inventory investment and storage space requirements.

Warehouse Management Systems

Track and control the flow of goods from receiving dock to outbound shipment. New technologies, such as RFID tags, facilitate tracking.

Transportation Management Systems

Used to select the best mix of transportation services and pricing.

Consolidation Warehouse

Warehouse operation that receives products from suppliers or plants, sorts them, and then combines them with similar shipments from other plants or suppliers for further distribution. FTL Shipment (1 customer)

Break Bulk Warehouse

Warehouse operation that sorts or splits truckloads of items from a single plant or supplier into smaller, more appropriate quantities for use or local delivery. LTL Shipment (3 customers)

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

Value of Service Pricing

is a pricing strategy which sets prices based on the value perceived by the customer, i.e., "priced at what the market will bear".

4PL

is an interface between the client company and multiple logistics service providers.

3PL

is an outsourced provider that manages all, or a significant part, of an organization's logistics requirements for a fee.

A warehouse network

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

Intermodal Transporation

is sometimes referred to as the sixth mode of transportation, but it is really the use of multiple modes of transportations to execute a single transport shipment.

Cost of Servicing Pricing

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

Full Truckload

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

Less than Truckload

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

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. Common in highly volatile markets and changing competitive situations

Logistics

that part of supply chain management that plans, implements, and 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.