Chapter 9 Delivery
Direct Functional Responsibility of Supply for Logistics
Arranging in-bound transporation with suppliers or responsibility for supervising warehousing and stores.
Why would marketing turn to supply
Assist in est. relationships with 3pl's to operate distribution facilities and earehousing
Tracing
Attempts to determine the status/locations of items that have been shipped but have not yet been received.
Key document in the movement of goods
Bill of Lading
Freight Forwarders
Buy dedicated Space on Scheduled Carriers Can specialize as domestic or international, or by mode. Can provide value-added services.
FOB Destination / Freight Collect
Buyer Pays Freight Charges Seller owns goods In Transit Seller Files Claims If Needed
Road in comparison to others
Fast Reliable Low damage Low loss rates
Air Qualities
Fastest, High Cost, Must be combined with other modes Premium emergency mode
Exempt Carriers
For Hire carriers, BUT EXEMPT from regulation of rates and services. - INTERSTATE COMMERCE ACT
FOB
Free On Board
Transportation Service Providers
Freight Forwarders Brokers Custom House Brokers Specialized Service
Water Carries
Large Tonnage over Long Distance Bulk Commodities
3 Categories of Motor Carriers
Less than Truck Load LTL Truckload TL Small Parcel - Ground
Carrier Selection Criteria
TYPE of item shipped REQUIRED Delivery Time AVAILABLE Services RELIability/Service Quality FINANCIAL of CARRIER HANDLing of claim
Intermodal:
Takes advantage of different modes Shorter terminal delays Lower damage rates Less Handling Substantial Growth
Logistics
The management of goods from the point of origin to the point of consumption
Which is the bulk of Log. Costs
Transportation More than half of ALL Logistics Costs Could represent 40% of the item cost
3PL'S Services
Transportation Warehousing Inventory Cross-Docking
Private Carriers
Transportation for its company's own products and the company owns all related equipment and facilities.
Common Carriers
Transportation service to general public, all shippers, at published rates. Considerable flexibility in rates and routes
Transportation Carriers
Transports property or people by any means of conveyance. ex. motor carriers : LTL , TL, Small Parcel - Ground
T/F Each shipment must have a BOL
True; Bill of Lading a contract spelling out legal liabilities of all parties. Proof that a shipment was made and is evidence of ownership.
Custom House Brokers
Used for Import Activities Ensure documents are accurate and complete Can provide estimates of landed costs or payments to offshore suppliers, and insurance options available to shippers.
Water
Used inland and costal Inexpensive Slow Inflexible
Reassessment of Possibilities of using different transportation modes
Using Private trucking and Intermodal. Substantial Savings.
Transportation and Logistics Strategies
Value Analysis of Alternative Analysis and Eval of Shipper Price Analysis Cost Analysis Consolidation of Freight Reassessment of Different Transport Modes Outsourcing/3PL, ContractOut Safety Considerations Environmental Factors Dev. Closer Relationship with Carriers
Consolidation of Freight
Volume discounts may reduce transport costs. Systems contracts and blanket orders may help.
Disadvantages to Water Mode
Weather Security Concerns Requires Combination Climate Change Piracy Fuel Costs
Outsourcing/3rd Party Logistics/Contracting Out
When downsizing or focusing on core competencies, deciding to contract out to provide full logistics services should be considered.
Growth of Telecommunication comes from
increase size of service sector of the economy increase in knowledge workers importance of info sharing in all types of org.
Road operates under a
just-in-time system with suppliers in close proximity to mfg facility
Biggest problems facing Trucking Industry
lack of drivers, aging workforce, inability to attract qualified younger and minority candidates, expensive driver training programs, federal focus on unsafe drivers.
Unit Bill of Lading
4 Copies, extra is the railroad's way-bill. Moves w/ shipment and can assist in expediting freight movement. digital=electronic
The purchase of Logistics Services demands
A high degree of skill and knowledge if the costs of movement are to be minimized while meeting service needs.
Brokers
Agents that provide transportation service arrangements Charge shippers fee for arranging transportation services with a carrier.
Transportation Modes
Air (Cargo & Passenger) Water (Deep Sea, Lake, River) Land (Road, Rail) Intermodal Pipelines Telecommunication
Telecommunication- Radio Frequency Waves
Air - Wireless Copper Wire Fiberoptic Cable Transport instantaneously Unlimited Low Constraints High Network Costs Low Distr. Costs
Expedited Transportation
Any shipment that requires pickup service and includes a specific delivery guarantee. Typically less than 5 days. Via air, ground, LTL, or air export services.
Analysis and Eval of Suppliers
Carrier selection and eval systems can provide data needed for better decision making. Eval
Freight Bill
Carrier's invoice for services provided.
Examples of Water Transported Goods
Coal Grain Sand
Types of Carriers
Common Carriers Contract Carriers Exempt Carriers Private Carriers
Uniform Straight Bill of Lading
Complete BOL and contains the complete contract terms and conditions.
Environmental Factors
Concerns of clean air, water, the transport of hazardous material and fuel/energy consumption must be considered.
Intermodal Types
Containers on Flatcars - COFC Truck Trailers on Flatcars - TOFC
Development of a Closer Relationship with Selected Carriers
Data enabling better planning of transport requirements shared to take advantage of both buyer / carrier knowledge.
What type of trend do Logistics Costs have in the US
Decreasing
Factors that decline Logistics Cost
Deregulation of Transporation Technology Advances and E-Commerce Greaater emphasis on improving SC Process/Practice
Demurrage Charges
Detention Charges for Motor Carriers Incurred by shippers or receivers of merchandise.
Transportation Costs are influenced by
Distance Weight Density Stowability Handling Liability Market
Freight Claim
Document submitted to recoup financial costs from shipment loss/damage
Specialized Service Options
Expedited Transportation Small Shipment Same Day Service
Most recent cause of decline in logistics costs
Global Recesseion
When may transport costs account for less than 1% of total purchase costs?
High Value Low-Weight Low Bulk Example: Electronics Goods
Air Carries
High Value, Extremely perishable goods
Two types of Logistis
Inbout Outbound
Logistics Cost can be divided into 3 categories
Inventory Carrying Costs Administrative Costs Transporation
Cost Analysis/Reductions
Long Term Contracts Partnerships 3rd Party Involvement Freight Consolidation Demurrage Pckging all for cost reductions
What type of products may transport. costs account for as much as 40%
Low value, bulky, heavy Example: Agricultural commodities or construction materials.
Rail Advantage
Lower Variable Operation Costs Makes it attractive for hauling large tonnage over long distances
Goods Transferred by Logistics
Materials/Inventory Information
Value Analysis of Alternatives
May turn up totally adequate lower-cost transport arrangements
Concealed Loss or Damage
Merchandise is found short or damaged after the container is opened. Harder to determine where the damage occurred.
Land -Road
Motor Carriers, Trucks Most Flexible Mode Adv. of Point - to - Point Service, Any Distance, for varying weights and sizes.
Pipelines
Only transport products in either a liquid or gaseous state Limited Use Relative Low Operation Costs
Price Analysis
Rates vary substantially and decisions should be made ONLY AFTER considering all possibilities. Obtain Competitive Quotes Negotiation of BIG TICKET Transportation.
Unconcealed loss or damage
Referred to in situations when it is evident on delivery that loss or damage has occurred.
Safety Considerations
Safety issues may relate to pressure on drivers income, and shipper demands may result in shipper and carriers agreeing to legally unattainable schedules.
FOB Destination / Freight PrePaid
Seller Pays Freight Charges Seller owns goods In Transit Seller Files Claims If Needed
FOB Origin / Freight PrePaid
Seller pays Freight Charges Buyer owns goods In Transit Buyer Files Claims If Needed
Contract Carriers
Serves contractual shippers, for hire, to limited number of shippers under specified rates and services. Gen. lower rates because volumes are higher and predictable shipping.
Land - Rail
Share of market has declined steadily since WW2 Inflexible Slow High Loss and Damage Rates
LTL
Shipments are short haul, higher cost per hundredweight
Air Primary Advantage
Speed
Uniform Order Bill of Lading
Yellow paper, and is a sight draft bill of lading. Negotiable, surrendered to carrier at destination before goods are obtained. Prevents delivery until payment is made.
Expediting
applying pressure to a supplier in attempt to encourage faster delivery.
Supply plays a
vital role in delivery of goods and services in the supply chain