Logistics Test 2

Transportation management

-Refers to the buying and controlling of transportation service by either a shipper or consignee -Transportation is the MOST costly logistics activity for many organizations

Political factors international trade

-Tariff:to protect local business, tax imposed by govt -Nontariff barriers - restrictions other than tariffs that are placed on imported products • Import quota: Limits the amount or product (either in units or by value) that may be imported from any one country during aperiod of time "for the health and safety of the population" • Embargoes: The prohibition of trade between particular countries

unit loads in materials handling contd

-basic unit is a pallet -Can be constructed from wood, plastic, wood composites (such as fiberboard), paper, and metal -price is high for plastic and metal pallets but wood maintenance is higher

bilateral-ftas-regional

-bilateral: Bi-lateral agreements are between two nations • US currently in 20 bi-lateral FTAs -ftas: free trade agreements -regional: Regional trade agreements involve 3 or more nations

land and resources

-crop and forest land -water -food -energy Critical role of technology in mitigating resource scarcity

5 packaging inefficiencies

-increased loss • Increased damage • Slower materials handling • Higher storage costs • Higher transportation costs

Contributing factors for global flows and trade

-population=labor -urbanization -urban sustainability challenges -land and resources -technology and information

Role of ports global supply chain and security

-very important Ports are a critical part of global supply chains and a major focus for global security. • Over 90 percent of U.S.international trade passes through ports • Ports are bases of operation to deploy troops and equipment

urbanization

2030, 60% of world will live in urban areas, urban sustainability problems

documentary collection payment

A bank in the buyer's country acts on behalf of a seller for collecting payment for a shipment.

Documentation

Bill of Lading (BOL) • Most important single transportation document • Functions as a delivery receipt when products are tendered to carriers

International documentation (certificate of origin)

Certificates of origin specifies the manufacturing country

Rate (pricing) considerations, COMMODITY RATE

Commodity rate: One specific rate for every possible combination of product, weight, and distance

Rate (pricing) considerations, Density vs stow ability

Density: Refers to how heavy a product is in relation to its size • Viewed as primary factor for setting a product's classification Stow-ability: Refers to how easy the commodity is to pack into a load with other commodities • E.g., possible considerations involve the commodity's ability to be loaded with hazardous materials and ability to load freight on top of the commodity

Issues in packaging

Environmental protection: Reduce packing materials used • Use packaging materials that are more environmentally friendly with recycled content • Retain or support services that collect used packaging and recycle it (CLOSED-LOOP SYSTEM)--- circular economy

Rate (pricing) considerations, domestic terms of sale

FOB (free on board): is a term in international commercial law specifying at what point respective obligations, costs, and risk involved in the delivery of goods shift from the seller to the buyer under the Incoterms standard published by the InternationalChamber of Commerce. FOB origin - the buyer assumes title and control of a shipment at the point of pickup • FOB destination - the seller retains title and control of a shipment until it is delivered = the buyer assumes title and control of a shipment at the destination ---In other words, FOB specifies the point at which the title and control of a shipment passes from buyer to seller

Documentation Freight bill vs freight claims

Freight Bill: Invoice submitted by the carrier requesting to be paid Freight bill-paying service • Automated service in attempt to pay carriers within a specific number of working days Freight claims: Refers to a document that notifies a carrier of wrong or defective deliveries, delays, or other delivery shortcomings

Supply chain in global economy

Global trade growth has been fueled by free trade agreements (FTAs) that lift most tariff, quota, and fee/tax limitations on trade.The best supply chains compete successfully on a national, regional, and global basis.

Hazardous materials contd

Hazardous materials • Globally Harmonized System of Classification and Labeling ofChemicals (GHS) is a global system to classify and label hazardous materials • GHS provides three key pieces of classification and labeling information: • A symbol • A signal word (e.g., "danger") • A hazard statement (e.g., "explosion; severe projection hazard") • Implemented by 75 countries to date

technology and information, two dimensions

Internal: Technology as an "internal" change agent Enhanced efficiency, effectiveness, and ability of an organization to compete in the global marketplace External: Technology as an "external" change agent New forms of competition or new business models (e.g. omnichannel distribution, global outsourcing)

International logistics

International logistics refers to logistics activities associated with goods that are sold across national boundaries

4 forms of regrouping (allocating (bulk breaking))

Involves breaking larger quantities into smaller quantities

4 forms of regrouping (accumulating (bulk making))

Involves bringing together similar stocks from different sources

3rd mode (pieplines)

Most reliable mode Transportation is one way; no fronthaul and backhaul limited in what they can carry, high fixed costs

Packaging Fundamentals

Packaging: Refers to materials used for the containment, protection, handling, delivery, and presentation of goods Building blocks concept: A very small unit is placed into a slightly larger unit, and so on, to protect the product

Rate (pricing) considerations

Rate determination • Key responsibility of transportation managers Rate: Price charged for freight transportation (i.e. shipping cost) Fare: Prices charged for passenger transportation

4 forms of regrouping (assorting)

Refers to building up a variety of different products for resale to particular customers

Materials handling

Refers to the "short-distance movement that usually takes place within the confines of a building such as a plant or DC and between a building and a transportation service provider" short distance inside are own four walls or point a to b short

open account

Seller sends the goods and all documents directly to the buyer and trusts the buyer to pay by a certain date

4 forms of regrouping (sorting out)

Separating products into grades and qualities desired by different target markets

Rate (pricing) considerations, CLASS RATE SYSTEM

System to specify rate determination • Specifies each of the three primary factors: product, weight, and distance National Motor Freight Classification (NMFC): more effective standardization

Less than truckload (LTL) vs truckload (TL)

TL: (JB Hunt) Move directly from the shipper's location to the consignee's location, no terminals involved Focus on shipments greater than 10,000 pounds LTL: 150 lbs-10,000 lbs Too big to be handled manually; too small to fill a truck LTL trucks carry shipments from many shippers at the same time thus operate through a system of terminals

Cash in advance

The buyer completes the payment and pays the seller in full before the merchandise is delivered and shipped off to the buyer.

Package testing and monitoring

Three important kinds of information needed to properly design a protective packaging system: • Severity of the distribution environment • Fragility of the product to be protected • Performance characteristics of various cushion materials • Advisable to have packages pretested

Transportation

Transportation is the actual, physical movement of goods and people between two points Maximize value to firm through negotiation to provide profit contribution, make sure service is provided effectively Satisfy customer requirements while minimizing costs!

unit loads in materials handling

Unit load (unitization) • Refers to the consolidation of several units (cartons or cases) into larger units to improve efficiency in handling and to reduce shipping costs Handling efficiency: Facilitated by mechanical devices (pallet jack or forklift) as well as by using a pallet or skid

exact question

Urbanization, 2030, 60% of the worlds population will live in urban areas

Design considerations in warehousing

Velocity slotting - slot the most frequently picked items in the most accessible location to reduce travel distance Well-thought-out slotting plan can influence labor costs, pick and replenishment efficiency, and order accuracy General rule of thumb is that it is cheaper to build up than build out

Hazardous materials labeling look at specific labels for extra credit

address labeling of hazardous materials • Requirements involve: • Labeling • Packaging and repackaging • Placing warnings on shipping documents • Notifying transportation carriers in advance • Packages, containers, trailers, and railcars carrying hazardous materials must carry distinct placards identifying the hazard

Rate (pricing) considerations, ease of difficulty of handling and liability

ease of difficulty of handling: Refers to challenges to handling that might be presented by a commodity's size, weight, and soon Liability for loss and damage: Considers, among others, a commodity's propensity to damage other freight, its perishability, and its value • E.g., if the commodity needs temperature controlled or refrigerated transportation

1st mode airfreight

fastest mode for shipment exceeding 600 miles, expensive, high value, lower volume urgent

2nd mode motor carriers

flexible and cost is low compared to air

Fulfillment centers vs. cross-docking facilities

fulfillment centers: Focused on e-commerce orders cross docking facilities: Defined as "the process of receiving product and shipping it out the same day or overnight without putting it into storage

Interstate highway system

greatest public works project in the U.S., not railroad

import vs export

import come in exports go out

5th mode water carriers/transportation

inexpensive, slow, inflexible

letters of credit

issued by a bank and guarantees payment to a seller; i.e., buyer's bank sends a Letter of Credit as proof of sufficient and legit funds to the seller's bank.Payment is only remitted after all stated conditions are met by both parties and shipment has been shipped.

4th mode railroads

neither best or worst in any of 6 attributes middle of the road transportation

Private vs public warehouses

private: largest uses of private warehousing are retail chain stores, sufficient demand volume, high initial fixed cost public: : renting out space. Warehouse labor safety practices monitored (OSHA)

Rate (pricing) considerations 3 shipping price factors

product, weight, distance

population = labor

self explanatory

Rate determination (shippers vs carriers)

shippers: prefer lower classification number (lower rate) Carriers: prefer higher classification number (higher rate)

Role of warehousing

that part of the firm's logistics system that stores products. warehousing and transportation are substitutes

Intermodal transportation

using two of five modes, piggyback transportation, truck on train Ex: • Trailer-on-flatcar(TOFC) • Container-on-flatcar(COFC)

Types of warehousing

warehouses, distribution centers, fulfillment centers, cross- docking facilities

Warehouses vs distribution centers

warehouses: emphasizes storage of products, Primary purpose is to maximize the usage of available storage space Distribution centers: Emphasize rapid movement of products through the facility

5 modes of transportation

• Air • Motor carrier (truck) • Pipeline • Rail • Water

4 methods of payment

• Cash in advance • Letters of credit • Documentary Collections (aka.Bills of exchange) • Open account

Culture factors international trade

• Language • Use symbols rather than writing • National holidays • Time orientation • Means of doing business • Cultural norms

urban sustainability challenges

• Waste and pollution • Water and energy • Traffic congestions • Health problems • Green spaces • Poverty • Social security