OMGT 4753 Final exam

dedicated fulfillment

(amazon) retailer operates two separate distribution networks to service "brick and mortar" (retail stores) and "clicks and motar" (internet sites)

When should rail be used

(high fixed costs and low variable costs) -bulk food, mining, heavy mnfg. In domestic/regional areas

when should motor be used

(low fixed costs and medium variable costs) 1. Consumer goods, medium/light mfg. in domestic/regional areas

when should air be used

(low fixed costs high variable costs) 1. High-value goods, rush shipments in domestic/regional international areas.

integrated fulfillment

(lowes) retailer operates one distribution network to service both "bricks-and-mortar" (retail stores) and "clicks-and-mortar" (Internet sites) channels

when should water be used

(medium fixed costs and low variable costs) 1. Bulk food, mining, chemicals in international/regional areas

perfect order

- A perfect order proceeds through all steps in the order management process without failure or managerial intervention.

ultimate goal of omni-channel retailing

to create a seamless shopping experience

intermodal transportation

two or more modes cooperating on shipment by publishing a through rate. It takes advantage of best characteristics of each mode.

supporting measurement

1. Information systems 2. Administrative

product/service related cost

distance, density, stowability, handling, liability

disadvantages of air

- Cost structure highly variable - Rates are highest - Reliability subject to weather more than other modes - Seek goods with a high value to weight ratio

advantages of air

- Earn about 90% of revenue - Transit times are fastest of the modes

SCM finance connection

- Focusing attention on the supply chain and the resources it utilizes is a means to improving financial performance. - Inventory levels affect the amount of capital required to finance the inventory. -Supply chain efficiency impacts time to process an order which bears on the order-cash cycle time. Profit= Revenue- costs - Where: Cost= (X%)(Revenue) - Then: Profit= Revenue - (X%)(Sales)= Revenue (1-X%) - Where: 1. (1-X%)=profit margin 2. sales= profit/profit margin

disadvantages of motor

- Highly variable - Smaller vehicle size - Relatively high cost compared to rail and water

challenges to implementing omni-channel in retail logistics

- Inventory visibility- identification, tracking, control (why?-fulfillment accuracy) - Product information- information and images (create individual shopping experience) - Customer analytics- predictive analytics (create individual shopping experience) - Fulfillment strategy- (DOM)distribution order management (determine optimal fulfillment location)

disadvantages of water

- Long transit times - High capability

role of transportation in logistics

- Most widely used - Low barriers to entry (contributes to the vast # of carriers in the motor industry. Comprised of for-hire and private fleet options. Truckload carriers (LT), Less than truck load (LTL), small package carriers) - Low fixed cost, high variable

advantages of water

- Relatively low cost mode - Do not own the rights of way - Easy entry and exit - Long distance mover of low value and bulk type material. - Low rates - Low accessibility - Large high capacity cargo holds

different categories of logistics performance measures

- Time: captures the effectiveness dimension - Cost: captures the efficiency dimension - Quality: captures the customer service dimension Other/ supporting: - Order cycle time (OCT): once an expedited order cycle time is established for customers, service failures can be measured

disadvantages of rail

- Very small number of carriers - High fixed costs - Accessibility can be a problem - Transit times are spotty, but are generally long - Service is the biggest customer concern

advantages of rail

- capable of carrying a wide variety of products, more than other modes - reliability and safety are generally good and improving - premium intermodal services. (straight piggyback &containerized freight, double stacks, road railer service)

Advantages of Motor Carriers

- high accessibility - transit times are faster than rail and water

strategic importance of transportation

-Physical link: Interconnectedness throughout the supply chain; forward and reverse flows. -Time and place utility: As with all aspects of SCM, provide product where and when it is needed to support Marketing and Sales. -Transportation costs: Manage intricacies of transportation costs the factors that impact costs and adapt to volatility. -Cost trade-offs: Balance between efficiency and effectiveness in all transportation operations.

when firms cannot meet perfect order

-failures added to cost to correct problem and lost sales -some customers will request the order be canceled and some will refuse the order -the refused order represent lost sales revenue that must be deducted from total sales

logistics variables impact the balance sheet?

-revenue (effectiveness) -costs (efficiency) -asset utilization

trends and tech that will self ochestrate

1. Autonomous fleets 2. Data replaces fuel 3. Less-asset centric brokers 4. Uber of trucks 5. Blockchain

drivers of supply chain design

1. Changes in global trade patterns 2. Changes in customer service requirements- the emergence of omni-channel supply chains 3. Shifts in customer and/or supply market locations 4. Changes in corporate ownership/merger and acquisition activity 5. Corporate organizational change 6. Cost pressures 7. Competitive abilities

dimensions of the perfect order

1. Correct order entry 2. Items are available 3. Ship date allows delivery 4. Order picked correctly 5. Paperwork complete 6. Timely arrival 7. Shipment NOT damaged 8. Correct invoice 9. No errors in payment processing

cost measurement

1. Finished goods inventory turns 2. Days sales outstanding 3. Cost to serve

4 modes of transportation

1. Motor carriers 2. Rail 3. Water 4. Air

quality measurement

1. Overall customer satisfaction 2. Processing accuracy 3. Perfect order fulfillment

4 P's of marketing

1. Price 2. Product 3. Promotion 4. Place

5 fulfillment models

1. integrated fulfillment (lowes) 2. dedicated fulfillment (amazon) 3. pool distribution 4. direct store delivery 5. flow through fulfillment

3 elements of omni-channel retailing

1. omni channel strategy must align with the firms "go-to market" strategy 2. the fulfillment process must be integrated regardless of order entry point 3. "Ease of shipping" for the consumer is a priority regardless of where or how the order is placed.

Time measure

1. on time delivery/ receipt 2. order cycle time/ variability 3. response time 4. forecasting/ planning cycle time

five performance measurements of perfect order

1. order entry 2. Inventory available 3. warehouse if not, damage-free 4. carrier OT, damage-free 5. accurate invoice

7 R's of logistics

1. right product 2. right quantity 3. right place 4. right time 5. right condition 6. right customer 7. right cost

omni-channel retailing

A direct to consumer (D2C) business model where all sales channels ranging from online, mobile, telephonic, mail order, self-service, and physical retail establishments are aligned, and fulfillment processes integrated to provide consumers with a seamless shopping experience in alignment with the company's brand proposition.

future of transportation

Drone-enabled deliveries which could rapidly transform society.

how does logistics impact equity and cash flow?

Improved earnings: it increases revenue, reduce costs, better asset utilization

Amazon change example

They have keeva robots to keep 50% more inventory into warehouse. It has improved efficiency 20% so it takes 15 min to fill orders instead of 90. Items are stocked wherever but amazon has a database that tells where each item is and a computed finds the fastest route for any item in an order to be picked up.

link between SLM and transportation

Transportation is the physical link connecting the firms to its suppliers and customers.

market related value

competition, market location, regulations, freight balance, seasonality, international

economy of scale

cost per unit of weight (lb.) decreases as the size of the shipment increases

direct store delivery

involves a manufacturer delivering its product directly to a retailer's stores, bypassing the retailer's distribution network.

stopping in-transit service

permits the shipper to use a CL or TL rate and drop off portions of the load at various intermediate destinations; the carrier charges a stop-off charge for each stop, but this is usually much less than shipping the load at LCL or LTL rates.

Pool Distribution

small retailers use third party logistics companies, or pool distributors, for store delivery, allowing them to achieve efficiency of a truckload shipment for the line haul and the effectiveness of allowing stores to receive LTL orders on a regular schedule

economy of distance

the cost per unit of distance (miles) decreases as distance increases

flow through fulfillment

the product is picked and packed at the retailer's distribution center and then sent to the store for customer pickup or delivery.

logistics impact on ROA

· A major financial objective for any organization is to produce a satisfactory return for stockholders. · The absolute size of the profit must be considered in relation to the stockholders' net investment, or net worth. · An organization's financial performance is also judged by the profit it generates in relationship to the assets utilized, or return on assets (ROA). · The supply chain plays a critical role in determining the level of profitability in an organization. · Return on assets (ROA) is a metric that is used as a benchmark to compare management and organization performance to that of other firms in the same or similar industry.