Chapter 3 Role of logistics in supply chain

Chapter 3 Role of logistics in supply chain

1. Chapter 11 Transportation: Managing the flow of suply chain

   • TRANSPORTATION
     • In few words: is the art of movement of people or goods between original & final destination
     • Has a major economic impact on the financial performance of business
     • With efficient , effective transportation can build global supply chains
     • It must have: availability, capacity & cost that those affect the number, location to supply
     • Them capabilities must align with the company's goals
     • Efficiency promotes supply chain competitiveness
     • It will be affected by governmental like requirements that afeect cost structures &service capabilities
     • In USA government regulation of transportation has focused on copetition and pricing.
     • Environmental sustainability is also addressed by government regulations
     • The approach in customs in the United States is directed to health, safety and terrerismo while in Mexico the customs are concerned about raising money
     • Mode of transportation
       • Truck
         • Rail
           • Air
             • Pipeline
               • Plane
                 • Railroads
                   • Most economic structure
               • Provide the most economical form of transportation
               • Liquids & gases
             • Expensive and emergency mode
         • Economic structure
       • Water
         • Is a high variable cost business
           • Ocean transportation of goods is not cheaper.
     • Hire carriers
       • Truckload (TL)
         • 15,000 pounds or more
       • Less than truckload (LTL)
         • 150 pounds to 15,000 pounds
       • Small packeging carriers
         • 150 punds
     • Intermodal trasportaations
       • Refers to the use of two or more carriers of different modes
     • Terms of sales
       • Clarify the delivery & payment terms agreed upon a seller & a buyer
         • INCOTERMS
           • International transactions
           • FOB
           • EX WORKS
           • FCA
           • CIP
           • CIF
           • DAP
           • DAT
           • CPT
           • DDP
           • FAS
     • Transit time
       • adventage
         • Air transportations is very fast
       • disadventage
         • Nonetheless water, pipeline and rail are extremely slow
     • Modal capacities
       • Must be matched to the total weight and dimensions of shipments
     • Rate negociation
       • These negociation focus on developing contracts with carriers for a tailored set a transportations services & rates that fairly compensated the carriers
     • Shipment preparation
       • Set in mention by request, replenishment signal or preschedule order.
         • Maintain a trasportation routing guide
           • Are simple 1 or 2 page online documents that plainly state shipment requirements
     • Freight documentation
       • Bill of landing
         • Is the most important transportation document
           • It's create by the shipper of the goods to originate the shipment
       • Freight bill
         • Carrier's invoice
       • Claims form
         • Monetary loss
   • Clames of damage
     • Natural disaster
     • Miliraty attack
     • Act of public authority
     • Act of the shipper
     • Inherent act of goods
   • KPI's
     • Key performance indicators
     • Are objective measures of carrier of private fleet performance that are linked to supply chain sucess

2. contemporary supply chain profile

   • Supplier
     • Manufacture
       • Wholesaler
         • retailer
           • Customer

3. The challenge

   • Is to manage the entire logistics system in such a way in order to full meets and exceeds custmer expectations

4. Good logistics is business power: it means that logistics helps to build costumer loyalty

5. Logistics management

   • The art and science of management, engineering and technical activities concerned with requirements, desing and suplying and maintaining resources to support activies, plans & operations.
   • Physical distribution
     • This had a focus on the outbound side of the logistics systems (is like plan to market
   • Business sector
     • Inbound logistics
       • materials management to support manufacturing
     • Outbound logistics
       • Plan distribution to support marketing
     • Business logistics
       • Military logistic
         • Event logistic
           • service logistic
             • There are: The aqcquisitions, scheduling & management of facilities.
     • Value added roles of logistics
       • 1. Form utility
         • 2. Place utility
           • 3. Time utility
             • 4. Quantity utility
               • 5. Possesion utility

6. Logistics activities

   • Transportation
     • Warehousing & storage
       • Packing
         • Inventory control
           • Procurement
             • customer service
               • Facility locations
                 • Order fulfillment
   • Major cost categories
     • Warehousing and inventory cost
       • Transportation cost
       • Inventory cost is the is the expenses associated with holding goods in storage
   • The largest cost categories
     • Transportation
       • Inventory cost

7. Logistic in the economy

   • If more goods & service are produced, total logistic cost will increase

8. Interfaces with:

   • Operations
     • Cost reduction
   • Other areas
     • Like Finance area & accounting
   • Marketing
     • 4'P

9. Order cycle

   • Is the time that elapses from when a customer place an order until the order is received

10. Dollar value

    • Affects
      • Warehousing
        • Inventory
          • Transportation

11. Spatial relantioship

    • The location of fixed points of the logistic sistem with respect to demand and suplly points (ass lots of examples on the class)