Chapter 9 Logman

8/19/2019 Chapter 9 Logman

1/38

CHAPTER 9

DOMESTIC U.S. &INTERNATIONAL LOGISTICS

Principles of Supply Chain Management:

A Balanced Approach

Prepared by Daniel A. Glaser-Segura PhD


2/38

! "##$ South-%estern a di&ision of Cengage 'earning "

Learning Objective

!"# $"#% be ab%e t"'

( )nderstand the strategic importance of

logistics

( *dentify the &arious modes of transportation( Discuss the international aspects of logistics

( Describe ho+ logistics impacts supply chain

management

( ,amine the interrelatedness oftransportation +arehousing material

handling


3/38

! "##$ South-%estern a di&ision of Cengage 'earning /

Learning Objective (C"nt.)

( *dentify a number of third-party logistics

ser&ice pro&iders

( Summari0e the important aspects of

transportation regulation and deregulation

( Describe the &arious re&erse logistics

acti&ities

( Discuss some of the e-commerce issues in

logistics management


4/38

! "##$ South-%estern a di&ision of Cengage 'earning 1

C$a*ter Nine O#t%ine

( *ntroduction

( 2he 3undamentals of 2ransportation

( %arehousing and Distribution

( 2he *mpacts of 'ogistics on Supply ChainManagement

( 'ogistics Management *ssues

( *nternational 'ogistics

( 4e&erse 'ogistics


5/38


Intr"#cti"n

'ogistics is necessary to:

6 Mo&e goods from suppliers to buyers

6 Mo&e finished goods to the customer

Products ha&e little &alue to the customeruntil they are mo&ed to the customer7s point

of consumption

6 2ime utility- products are deli&ered at

the right time. 6 Place utility- products are deli&ered to

the desired location.


6/38


Intr"#cti"n (C"nt.)

'ogistics is:

9the process of planning implementingand controlling the efficient effecti&e flo+ andstorage of goods ser&ices and relatedinformation from point of origin to point ofconsumption for the purpose of conforming tocustomer re;uirements.9

Council of Supply Chain ManagementProfessionals


7/38! "##$ South-%estern a di&ision of Cengage 'earning <

T$e +#na,enta% "-

Tran*"rtati"n

T$e Objective "- Tran*"rtati"n

( Maimi0e &alue to firm through negotiation

to pro&ide profit contribution

( Ma=e sure ser&ice is pro&ided effecti&ely( Satisfy customer needs


8/38! "##$ South-%estern a di&ision of Cengage 'earning >

T$e +#na,enta% "-

Tran*"rtati"n (C"nt.)

Lega% +"r, "- Tran*"rtati"n 2ransportation ser&ice companies areclassified legally as either common contracteempt or pri&ate carriers.

6 Common carriers- offer transportationser&ices to all shippers at publishedrates bet+een designated locations+ithout discrimination.

6 Contract carriers- not bound to ser&e thegeneral public. Contract carriers ser&especific customers under contractualagreements.


9/38! "##$ South-%estern a di&ision of Cengage 'earning $

T$e +#na,enta% "-


Lega% +"r, "- Tran*"rtati"n

(C"nt.)

6 ,empt carriers- eempt from regulation

of ser&ices rates if they transportcertain eempt products li=e produce

li&estoc= coal or ne+spapers.

6 Pri&ate carrier- not sub?ect to economic

regulation typically transports goodsfor the company o+ning the carrier.


10/38! "##$ South-%estern a di&ision of Cengage 'earning @#

T$e +#na,enta% "-


T$e M"e "- Tran*"rtati"n

Motor Carriers truc=s- most fleible mode of

transportation carries ># of ).S. freight.

Competes +Erail air for short-to-mediumhauls.

6 'ess-than-truc=load '2' truc=-load 2'

carriers. '2' carriers mo&e small shipments

fees are higher.

6 General freight carriers carry the ma?ority ofgoods shipped include common carriers.

6 Speciali0ed carriers transport li;uid petroleum

household goods building materials other

speciali0ed items.


11/38

! "##$ South-%estern a di&ision of Cengage 'earning @@

T$e +#na,enta% "-


T$e M"e "- Tran*"rtati"n (C"nt.)

4ail Carriers- compete +hen the distance is

long the shipments are hea&y or bul=y.

6 4ail slo+ infleible but ha&e begun purchasingmotor carriers can thus offer point-to-point

pic=up deli&ery ser&ice =no+n as trailer-on-

flatcar 2F3C ser&ice.

6 4ail companies use each other7s rail cars.

eeping trac= of rail cars getting them +hereneeded can be problematic.

6 4ailroad infrastructure aging e;uipment are

also problems for the railroads.


12/38

! "##$ South-%estern a di&ision of Cengage 'earning @"

T$e +#na,enta% "-



Air Carriers- ,pensi&e relati&e to other modes

but fast. Air carriers transport about 5 of

).S. freight. 6 Airlines cannot carry etremely hea&y or bul=ycargo.

6 3or light high &alue goods o&er long distances

;uic=ly. Most small cities to+ns do not ha&e

airports. 6 Half of the goods transported by air are carried by

freight6only airlines 3ed,.


13/38

! "##$ South-%estern a di&ision of Cengage 'earning @/

T$e +#na,enta% "-



%ater Carriers- *nepensi&e slo+ infleible.

*ncludes inland +ater+ay coastal

intercoastal deep-sea. 6 *nland +ater+ay transportation is used forhea&y bul=y lo+-&alue materials e.g. coal

grain.

6 Competes +Erail pipeline.

6 %ater carriers are paired +Etruc=s for door-to-door deli&ery.

6 Supertan=ers are I@5## ft long "## ft +ide.


14/38

! "##$ South-%estern a di&ision of Cengage 'earning @1

T$e +#na,enta% "-



Pipeline Carriers- 'imited in &ariety they can

carry.

6 'ittle maintenance once pipeline is running. 6 Materials hauled in a li;uid or gaseous state.


15/38


T$e +#na,enta% "-


Inter,"a% Tran*"rtati"n

Combinations of the &arious transportation

modes is becoming a popular method.

6 2railer-on-flatcar 2F3C container-on-flatcar CF3C piggy-bac= ser&ice. 2he

same containers can be placed on board

containerships airliners.

6 4F-4Fs orroll-on-roll-off

containershipstruc= trailers containers to be directly

dri&en on off the ship +ithout the use

of cranes.


16/38


T$e +#na,enta% "-


Tran*"rtati"n Pricing 6 Cost-of-ser&ice pricing- &aries based on fied

&ariable costs.

6 Jalue-of-Ser&ice Pricing- ser&ices priced at

mar=et bearing competiti&e le&els.

6 2erms of Sale- includes transportation 3FB free

on board destination.

6 Pricing Kegotiation- Since deregulation

negotiating prices has become more common.

6 4ate Categories- Classified as line haul rates

class rates eception rates commodity rates

miscellaneous rates.


17/38

! "##$ South-%estern a di&ision of Cengage 'earning @<

T$e +#na,enta% "-

Tran*"rtati"n (C"nt.)Tran*"rtati"n Sec#rit/

6 Particularly important regarding airlinesecurity since Sept. @@ "##@

6 A&iation 2ransportation Security Act"##@- 2ransportation Security

Administration 2SA to o&erseetransportation security +hich o&ersees 1"$)S airports

6 Department of Homeland Security DHS"##/ created to pro&ide o&erall ).S.security leadership.

6 Kot all measures ha&e impro&ed securityas en&isioned


18/38

! "##$ South-%estern a di&ision of Cengage 'earning @>

T$e +#na,enta% "-


Tran*"rtati"n Reg#%ati"n &Dereg#%ati"n

6 Pro- 4egulation tends to assureade;uate transportation ser&icethroughout the country +hile protectingconsumers from monopoly pricingsafety liability.

6 Con- Deregulation encourages

competition allo+s prices to ad?ust asdemand negotiations dictate.

6 2oday ).S. transportation industryremains essentially deregulated


19/38

! "##$ South-%estern a di&ision of Cengage 'earning @$

T$e +#na,enta% "-


Tran*"rtati"n Reg#%ati"n 6 Granger la+s @>>


20/38

! "##$ South-%estern a di&ision of Cengage 'earning "#

T$e +#na,enta% "-


Tran*"rtati"n Dereg#%ati"n 6 4ailroad 4e&itali0ation 4egulatory 4eform Act

@$- *CC +aseliminated re;uirement for ocean carriers to filerates also came to an end.


21/38


22/38

! "##$ South-%estern a di&ision of Cengage 'earning ""

0are$"#ing & Ditrib#ti"n

(C"nt.)

I,*"rtance & T/*e "- 0are$"#e 6 Support purchasing production distribution.

6 Consolidation +arehouses collect '2' shipmentsfor transport in 2' or C' ;uantities.

Pri&ate %arehouses 6 o+ned by the firm storing goods.

6 Pro- 4educes the cost offers greater controlpro&ides better +or=force utili0ation cangenerate income ta ad&antages through

leasing of ecess capacity Eor assetdepreciation.

6 Con- F+ning a pri&ate +arehouse represents afinancial ris= loss of fleibility.


23/38

! "##$ South-%estern a di&ision of Cengage 'earning "/


(C"nt.)

Public %arehouses- 6 F+ned by for profit orgs contracted out

6 Brea=bul=: shipments are bro=en do+n itemsare combined into specific customer orders.

6 4epac=aging 6 Assembly

6 *ncoming outgoing ;uality inspections.

6 Material handling e;uipment maintenance documentation ser&ices

6 Storage

6 Pro- Pro&ides fleibility in&estment cost sa&ings

6 Con- 'ac= of control.


24/38

! "##$ South-%estern a di&ision of Cengage 'earning "1


(C"nt.)

Ri1 P""%ing & 0are$"#e L"cati"n 6 As the L of +arehouses increases the system

becomes more decentrali0ed. 4esponsi&eness

deli&ery ser&ice increase.

6 Ho+e&er +arehousing operating in&entorycosts also increase. 2rade-off bet+een costs

customer ser&ice must be considered.

Ri1 P""%ing

6 Describes the relationship bet+een the L of

+arehouses in&entory customer ser&ice.

6 4is= pooling is estimated by s;uare-root rule


25/38


Ri1 P""%ing & 0are$"#e L"cati"n

(C"nt.)

6 s;uare-root rule

0$ere'

S@ 2otal system stoc= for the K@ +arehouses

S" 2otal system stoc= for the K" +arehouses

N 1 L of +arehouses in the eisting system

N 2 L of +arehouses in the proposed system


(C"nt.)

1

2

N

N S2 3 (S4)


26/38



(C"nt.)

0are$"#e L"cati"n

,dgar Hoo&er

6 Mar=et-positioned strategy- +arehouses close to

customers to maimi0e distribution s&cs

impro&e transp. economies of scale.

6 Product positioned strategy- close to supply

source for firm to collect goods consolidate.

6 *ntermediately positioned strategy- mid+ay

bet+een supply source customers +hen

distribution re;uirements are high product

comes from &arious locations.


27/38

! "##$ South-%estern a di&ision of Cengage 'earning "<


(C"nt.)

0are$"#e L"cati"n

6 Jon 2hunen - transportation costs

should be minimi0ed +hen considering

facility location. Mar=et prices

production costs +ould be identical

regardless of +arehouse location

6 Greenhut- based on profit instead of

transportation costs. 2he optimum

location is one that maimi0es profits

+hich may not be min. cost location.


28/38

! "##$ South-%estern a di&ision of Cengage 'earning ">


(C"nt.)

5#tinTi,e 0are$"#ing

,mphasis on +arehousing to support N*2

operations:

6 Commitment to customers ser&ice ;uality

6 4educed lot si0es shipping ;uantities

6 ,mphasis on cross doc=ing

6 *ncreased automation

6 *ncreased assembly operations


29/38

! "##$ South-%estern a di&ision of Cengage 'earning "$

I,*act "- L"gitic "n S#**%/

C$ain Manage,ent

T$ir Part/ L"gitic (6PL)

6 Pro&ide reliable timely deli&ery re;uired

by SCM

6 )sed to significant degree byinternational logistics

6 3a&ored by small businesses

6 Some firms outsource all of their logistics

needs to a lead logistics pro&ider orfourth party logistics pro&ider 1P'


30/38

! "##$ South-%estern a di&ision of Cengage 'earning /#

L"gitic Manage,ent

I#e

Envir"n,enta% S#tainabi%it/ in

L"gitic

6 Green logistics is a response to the need

for reducing carbon emissions and bydoing so can also sa&e money for the

firm

6PL S#**%/ 7ae Re#cti"n

6 by reducing the /P' supply base a firmcan achie&e lo+er prices and better

ser&ice as it becomes a larger customer


31/38

! "##$ South-%estern a di&ision of Cengage 'earning /@

L"gitic Manage,ent

I#e (C"nt.)

M"e & 6PL Se%ecti"n

6 firms identify the optimum transportation

ser&ices to minimi0e costs impro&e

customer ser&ice

3irms often use +eighted factor analysis

transportation intermediaries such as:

6 3reight for+arders

6 2ransportation bro=ers

6 Shipper Associations

6 *ntermodal mar=eting companies *MCs


32/38

! "##$ South-%estern a di&ision of Cengage 'earning /"

L"gitic Manage,ent

I#e (C"nt.)

L"gitic Manage,ent S"-t8areA**%icati"n

2ransportation management systems- used toselect the best mi of transportation ser&ices pricing.

%arehouse management- trac= control theflo+ of goods from recei&ing doc= tooutbound shipment. Ke+ technologies such

as 43*D tags facilitate trac=ing.4eturns management systems 4MS pro&ide

global &isibility standardi0ation documentation of product returns +hileminimi0ing re&erse logistics costs.


33/38

! "##$ South-%estern a di&ision of Cengage 'earning //

L"gitic Manage,ent

I#e (C"nt.)

Mea#ring L"gitic Per-"r,ance 6 Allo+s the firm to identify problems ma=e

impro&ements

6 Measures- deri&ed from benchmar=s or pre&ious

performance are similar to those used to select/P's.

Creating Strategic 6PL A%%iance 6 ,ffecti&e SC net+or=s often include strategic

alliances +ith pro&iders of logistics ser&ices

Per-"r,ing L"gitic A#it 6 2o monitor change firms often conduct an audit by

a multifunctional team


34/38

! "##$ South-%estern a di&ision of Cengage 'earning /1

L"gitic Manage,ent

I#e (C"nt.)

Ue "- eC",,erce Tec$n"%"gie in

L"gitic

( ,lectronic *n&oice Presentment Payment

,*PP- sending recei&ing in&oices online.( Supply Chain Jisibility- time-related benefits

that lead to SC success. Jisibility allo+s

better communication across org boundaries

( 2hird Party ,lectronic 2ransactionPlatforms- *nternet based transaction

systems pro&iding freight-matching ser&ices

auctions on-line mar=etplaces


35/38


Internati"na% L"gitic

Internati"na% +reig$t Sec#rit/

6 2ransportation across national

boundaries introduces added compleity

particularly security.

6 Since $E@@ there is more conflict bet+een

).S. go&t. industry to+ard more

security restrictions for inbound

shipments.


36/38



(C"nt.)

Internati"na% L"gitic Inter,eiarie

6 Customs Bro=ers- mo&e through customs

handle documentation.

6 *nternational 3reight 3or+arders- mo&egoods to foreign destination

6 2rading Companies- Put buyers sellers

together handle eportEimport

arrangements.

6 Kon-Jessel-Fperating Common Carriers-

operate li=e freight for+arders but use

scheduled ocean liners.


37/38

! "##$ South-%estern a di&ision of Cengage 'earning /<


(C"nt.)

+"reign Trae "ne 6 Secure sites in ).S. under super&ision of ).S.

Customs.

6 32Os offer storage eporting manufacturing

assembly repac=ing testing repairingser&ices.

N"rt$ A,erican +ree TraeAgree,ent (NA+TA)

6 Created in @$$1 remo&es most barriers to trade

in&estment among ).S. Canada Meico.


38/38

! "##$ S th % t di i i f C ' i />

Revere L"gitic

6 Bac=+ards flo+ of goods from customers

in SC +hen goods are returned by a

customer in the supply chain

6 4etail returns range 8 to 1# of sales

6 Fften is an un+anted SC acti&ity

6 Poor re&erse logistics can hurt firm

6 Green revere %"gitic *r"gra,

designed to return unneeded products forrecycling. 2hese programs reduce

en&ironmental impact on landfills deal

+ith dangerous contaminants.

Documents

Chapter 9 Logman