Supply Chain Management Final?
Southwest Air entering into a contract with the Dallas Cowboys football team
Example of Contract Carriers
Carriers who transport exempt products such as produce, livestock, coal, garbage, or newspapers. School buses, taxis, and ambulances
Example of Exempt Carriers
Walmart's private fleet of trucks
Example of Private Carriers
Southwest Air, Greyhound, and Carnival Cruise Lines
Examples of Common Carriers
Trading Companies
Firm that puts buyers and sellers from different countries together and handles all of the export/import arrangements, documentation, and transportation for both goods and services
7. Assess and Improve External Process Integration and SupplyChain Performance
Firms eliminate poor-performing suppliers and unprofitable customers to concentrate efforts on developing beneficial relationships and strategic alliances with their remaining suppliers and customers by building, maintaining, and strengthen gin the relationships
Exempt Carriers
For-hire carriers, but they are exempt from regulation of services and rates
Apply the time-cost model to a given project, perform associated calculations (cost per time period to expedite), demonstrate when, how, and what to crash
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Claim (loss and damage)
A document filed with the carrier to recover monetary losses due to losses, damage, delay, or overcharges by the carrier
FOB Origin Pricing
A price quotation in which the buyer may decide to purchase goods and provide the transportation to the shipping destination; in this case, the supplier quotes are lower
FOB Destination Pricing
A price quotation that includes transportation to the buyer's location when products are purchased from a supplier
Cost-of-Service Pricing
A pricing strategy used when carriers desire to establish prices that vary based on their fixed and variable costs
Value-of-Service Pricing
A strategy that allow carriers to price their services at competitive levels the market will bear
Freight Bill
Carrier's invoice for charges for a given shipment. Credit may be desired if the charges are worth more than freight
Private Carriers
Carriers not subject to economic regulation and typically transport goods for the company owning the carrier
Non-Vessel Operating Common Carriers
Carriers that operate very similar to international freight forwarders but normally use scheduled ocean liners
Lower costs, low substitutability, higher product value, large purchase size, special warehousing, diverse product line, low customer service
Centralized Warehousing based on: Costs, Substitutability, Product Value, Purchase Size, Special Warehousing, Product Line, and Customer Service
Making owner "whole" and concealed loss or damage
Challenges of determining value of claim and determining responsibility for loss:
Intermodal Market Companies
Companies that act as intermediaries between intermodal railroad companies and shippers
Cross-Docking
Continuous replenishment logistics process at distribution center, where incoming goods resorted/consolidated and then shipped out to their final destinations, without the need to store the goods. Generally takes place within 24 hours after shipment arrives
Higher costs, high substitutability, lower product value, small purchase size, no special warehousing, limited product line, high customer service
Decentralized Warehousing based on: Costs, Substitutability, Product Value, Purchase Size, Special Warehousing, Product Line, and Customer Service
Work Breakdown Structure
Defined the hierarchy of project tasks, subtasks, and work packages
1. Identify Critical Supply Chain Trading Partners 2. Review and Establish Supply Chain Strategies 3. Align Supply Chain Strategies with Key Supply Chain Process Objectives 4. Develop Internal Performance Measures for Key Process Effectiveness 5. Assess and Improve Internal Integration of Key Supply Chain Processes 6. Develop Supply Chain Performance Measures for the Key Processes 7. Assess and Improve External Process Integration and SupplyChain Performance 8. Extend Process Integration to Second-Tier Supply Chain Partners 9. Reevaluate the Integration Model Annually
Describe all 9 steps of the Supply Chain Integration model:
Bill of Lading
Detailed list of a shipment of goods in the form of a receipt given by the carrier to the person consigning the goods.
6. Develop Supply Chain Performance Measures for the Key Processes
Develop external performance measures to monitor the links with trading partners regarding the key supply chain processes
Sorting
Function of the warehouse separating products into grades and quantities
Assorting
Function of the warehouse to build up a variety of products
Accumulating
Function of the warehouse to increase quantity and make bulk
Allocating
Function of the warehouse to reduce quantity and break bulk
1. A team member can work on several projects 2. Technical expertise is maintained within the functional area 3. The functional area is a "home" after the project is completed 4. Critical mass of specialized knowledge
Functional Project Advantages (4):
1. Aspects of the project that are not directly related to the functional area get short-changed 2. Motivation of team members is often weak 3. Needs of the client are secondary and are responded to slowly
Functional Project Disadvantages (3):
Accumulating, Allocating, Assorting, and Sorting
Functions of a warehouse (4):
Task
Further subdivision of a project - usually shorter than several months and performed by a single group or organization
Customs Broker
Global logistics intermediaries that move international shipments through customs for companies as well as handle the necessary documentation required to accompany the shipments
Work Package
Group of activities combined to be assignable to a single organizational unit
3. Align Supply Chain Strategies with Key Supply Chain Process Objectives
Identifying important processes linking each of the supply chain trading partners and establish process objectives to assure that resources and efforts are effectively deployed
1. Identify Critical Supply Chain Trading Partners
Identifying partners who will enable the successful sale and delivery of end products to the final customers
CPM with a Single Time Estimate, Time-Cost Models and Project Crashing, and CPM with Three Activity Time Estimates
Three types of Network Planning Models:
North American Free Trade Agreement (NAFTA)
Legislation that began on January 1, 1994, and will eventually remove most barriers to trade and investment among the U.S., Canada, and Mexico
Project Management
Management activities of planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project
2. Review and Establish Supply Chain Strategies
Management identifies the basic supply chain strategies associated with each of its trading partner's goods and services
1. Enhanced communications between functional areas 2. Pinpointed responsibility 3. Duplication of resources is minimized 4. Functional "home" for team members 5. Policies of the parent organization are followed
Matrix Project Advantages (5):
1. Too many bosses 2. Depends on project manager's negotiating skills 3. Potential for sub-optimization
Matrix Project Disadvantages (3):
Shipper's Association
Non-profit membership cooperatives which make domestic or international arrangements for the movement of members' cargo
Transportation
Objective is to maximize value to firm through negotiation to provide profit contribution, make sure service is provided effectively, and satisfy customer needs
Logistics
Objective is to move goods from suppliers to buyers, materials through the manufacturing system, and finished goods to the customer
Common Carriers
Offer transportation services to all shippers at published rates between designated locations. Must offer to general public without discrimination
Customs-Trade Partnership Against Terrorism Program (C-TPAT)
Partnership between U.S. Customs, the International Cargo Security Council and Pinkerton, whereby companies agree to improve security in their supply chain in return for "fast one" border crossings
Activity
Pieces of work that consume time
CPM with a Single Time Estimate
Planning model used when activity times are known with certainty to determine timing estimates for the project, each activity in the project, and slack time for activities
CPM with Three Activity Time Estimates
Planning model used when activity times are uncertain to obtain the same information as the Single Time Estimate model and probability information
Time-Cost Models and Project Crashing
Planning model used when cost trade-off information is a major consideration in planning to determine the least cost in reducing total project time
High throughput volume, stable demand variability, high market density, special physical controls, high customer service required, high security requirements, multiple use needed
Private Warehousing based on: Throughput Volume, Demand Variability, Market Density, Special Physical Controls, Customer Service Required, Security Requirements, Multiple Use Needed
4. Develop Internal Performance Measures for Key Process Effectiveness
Procedures and metrics must be in place to collect and report internal performance data for the eight key processes
5. Assess and Improve Internal Integration of Key Supply Chain Processes
Process coordination and collaboration internally between the firm's functional areas as well as externally between the firm and its trading partners
ERP system, develop understanding of internal supply chains, assess the level of information access across functional boundaries, use common database to make product, customer and supplier decisions
Process of Assessing and Improving Internal Integration
Eight Key Processes
Processes within aligning supply chain strategies with key supply chain process objectives
Internal functional policies regarding types of parts purchased and used, manufacturing processes employed, designs, warranty and return policies, and amount of outsourcing employed
Products that are competing based on quality should translate their product strategies into
Favorable environmental impacts or carbon footprints as intermediate goods and services are purchased, produced and moved along SC
Products that are competing based on sustainability should translate their product strategies into
Functional Project
Project housed within a functional division
Matrix Project
Project structure blending the pure and functional projects so different projects can borrow resources from functional areas
Global Trade Management Systems (GTMS)
Provides global visibility, standardization, & documentation of product returns, while minimizing reverse logistics costs. Monitors carrier and supplier performance, automating customs entry, and improving compliance with international trade regulations
Low throughput volume, fluctuating demand variability, low market density, no special physical controls, low customer service required, low security requirements, no multiple use needed
Public Warehousing based on: Throughput Volume, Demand Variability, Market Density, Special Physical Controls, Customer Service Required, Security Requirements, Multiple Use Needed
1. The project manager has full authority over the project 2. Team members report to one boss 3. Shortened communication lines 4. Team pride, motivation, and commitment are high
Pure Project Advantages (4):
1. Duplication of resources 2. Organizational goals and policies are ignored 3. Lack of technology transfer 4. Team members have no functional area "home"
Pure Project Disadvantages (4):
Apply the critical path method to a given project, perform associated calculations (ES, EF, LS, LF, slack), and answer related questions
Quantitative*---
Water, Railroad, Motor, Air
Rank transportation modes by slowest to fasted transit times:
Water, Air, Railroad, Motor
Rank transportation modes from least accessible to most accessible:
Pipeline, Water, Railroad, Motor, Air
Rank transportation modes from least expensive to most expensive:
Reverse Logistics
Refers to the backward flow of goods from customers in the supply chain occurring when goods are returned, either by the end-product consumer or by a business customer within the supply chain
Foreign Trade Zone
Secure sites within the U.S. under the supervision of the U.S. Customs Service where materials can be imported duty-free as long as the imports are used as inputs to production of goods that are eventually exported
Foreign-Trade Zones (FTZs)
Secure sites within the U.S. under the supervision of the U.S. Customs Service. This is where materials can be imported duty-free as long as the imports are used as inputs to production of goods that are eventually exported
Pure Project
Self-contained team works full-time on the project
Project
Series of related jobs usually directed toward some major output and requiring a significant period of time to perform
Contract Carriers
Serve specific customers under contractual agreements
Foreign Freight Forwarders
Service providers that move goods for companies from domestic production facilities to foreign customer destinations, using surface and air transportation and warehouses
Process Integration
Sharing information and coordinating resources to jointly manage a process or processes
Project Milestone
Specific events in the life of the project
Market Positioned Strategy
Strategy recommend when there are high levels of distribution flexibility and customer service
Intermediately Positioned Strategy
Strategy recommended when distribution service requirements are relatively high and customers order product assortments purchased from many suppliers
Product Positioned Strategy
Strategy recommended when there are large numbers of goods purchased from many sources of supply and assortments of goods ordered by customers
Product Positioned Strategy
Strategy that located warehouses close to the sources or supply to enable the firm to collect various goods while minimizing inbound transportation costs
Market Positioned Strategy
Strategy that locates warehouses close to customers, to maximize customer service levels
Intermediately Positioned Strategy
Strategy that places warehouses midway between the source of supply and the customers
Free and Secure Trade Program (FAST)
U.S. Customs' security program; the overall goal is to ensure the security of international supply chains and international trucking in particular. In order to participate, motor carriers must be certified and commercial drivers must complete an application and undergo a background check
Create VALUE for the services and products provided to end customers, which, in turn, provides benefits to the firms in the supply chain network
Ultimate goal of Supply Chain
Cold Chains
Temperature-controlled transportation, transfers, and warehousing
Right-Shoring
The combining of on-shore, near-shore, and far-shore operations into a single, flexible, low-cost approach to supply chain management
1. Maximize value to firm through negotiation to provide profit contribution 2. Make sure service is provided effectively 3. Satisfy customer needs
Three objectives of Transportation:
Warehouse Management Systems (WMS)
Track and Control the flow of goods from receiving dock to outbound shipment. Reduces distribution center labor costs, streamlining the flow of goods, managing distribution center capacity and reducing paperwork
1. Price 2. Transit time and reliability 3. Capability 4. Accessibility 5. Security
Transportation selection decisions (5):
1. Value-added packaging 2. Third party providers 3. Reduced labor intensity 4. Integrate warehouse information systems into logistics information systems 5. Emphasize "flexibility" to changing market conditions
Trends in Warehousing:
Intermodal Transportation
Two or more modes of transportation that combine to deliver a shipment of goods
Transportation Management Systems (TMS)
Used to select the best mix of transportation services & pricing. Provides real-time location tracking and uses technologies such as barcode scanners, RFID tags, Internet and GPS devices
Time Utility
When customers get products delivered at precisely the right time, not earlier and not later
Place Utility
When customers get things delivered to their desired locations
Lean Warehousing
When warehousing, cross docking, packaging, and freight consolidation is offered to companies who are looking to increase speed and reduce costs as much as possible to compete
Air
Which type of transportation is used for the delivery of light, expensive items?
To support the ultimate goal of Supply Chain Management
Why is Process Integration done?
Statement of Work
Written description of the objectives to be achieved
