Supply chain Chp 9

Logistics

Logistics is:

that part of supply chain management that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information, from the point of origin to the point of consumption, to meet customer requirements.

Products have little value to the customer until they are

moved to the customer’s point of consumption

Warehousing

The true value of warehousing lies in having the right product in the right place at the right time. Warehousing and provides time and place utility, the availability necessary to give materials value.

Decisions driving Warehouse Management include:

Site selection

Layout of the warehouse(s)

Methods of receiving, storing, retrieving,

and distributing products and materials.

Primary Functions of a Warehouse

Receiving, Storage, Picking, Packing, Shipping

Secondary Functions of a Warehouse

Quality Inspections - incoming and outgoing.

Repackaging – for specific customer orders.

Assembly Operation

Warehouse Robotics

uses automated systems, robots, and specialized software to transport materials, perform various tasks, and streamline warehouse processes.

Automated Guided Vehicles (AGV’s)

replace manually-driven forklifts to transport materials within warehouse facilities, to navigate warehouse facilities by following routes marked by wires, tracks, or sensors embedded in the floor or other physical guides.

Automated Storage and Retrieval Systems (AS/RS)

automate the storage/retrieval of goods to speed up order fulfillment and materials handling operations. They operate as cranes on fixed tracks that traverse product aisles and vertical heights to deposit or remove items.

Collaborative Robots

are semi-autonomous mobile robots that help human workers perform tasks. They can speed up order fulfillment by delivering inventory items to stationary pick stations where human operators fulfill orders.

Public Warehouse

A business that provides storage and related warehouse functions to companies on a short or long-term basis, generally on a month-to-month basis for a fee.

Contract Warehouse

Many of the advantages and disadvantages of a public warehouse also apply to

Private Warehouse

A storage facility owned by the company that owns the goods being stored in the facility. Think of buying a House for inventory

Consolidation Warehouse

Warehouse operation that receives products from different plants or suppliers stores them and then combines them with similar shipments from other plants or suppliers for further distribution

Break-Bulk Warehouse

Warehouse operation that divides full truckloads of items from a single source or manufacturer into smaller, more appropriate quantities for use or further distribution.

Cross-Docking Warehouse

The transfer of goods from an inbound carrier to an outbound carrier, without the

goods being put away into storage is known as?

3 main reasons that cross-docking is implemented are to:

Provide a central site for products to be sorted, Consolidate, Break-bulk

Warehouse Network

the number of, and the relationship between, the company’s warehouses in their organizational structure.

Trade-offs that will determine how many warehouses the company needs and where they should be located are:

The level of customer service the company wants to provide, The amount of inventory the company is willing to invest in

Single Warehouse

Less complicated.

Operating costs and inventory will be lower.

Multiple Warehouses

Operating costs and inventory will be higher as each warehouse costs money to staff and operate. Duplication of equipment, warehouse staff, and managers.

Hybrid Approach

a “hub-and-spoke” where there is a centralized warehouse (i.e., the “hub”) that holds most of the inventory linked to a series of smaller geographically dispersed warehouses (i.e., the “spokes”) that have only a small amount of inventory to support their local area in the immediate time frame.

Market-Positioned Strategy

Warehouses are set up close to customers to maximize distribution services and improve delivery. Companies use this strategy when they have many more customers than suppliers

Product-Positioned Strategy

Warehouses are set up close to supply sources to collect goods and consolidate before shipping products to customers. Companies use this strategy when they have many more suppliers than customers.

Intermediately-Positioned Strategy

Warehouses are set up midway between the supply sources and the customers to balance costs, inventory, and customer service. This strategy is used when distribution requirements are high and

the product comes from various supply locations

Third Party Logistics (3PL)

an outsourced provider that manages all, or a significant part, of an organization’s logistics requirements for a for a fee.

Advantages of Using 3rd party logistics

Cost, Logistic Expertise, Efficiency

Disadvantages of Using 3rd party logistics

Control, Dependancy, Pricing

Transportation

The function of planning, scheduling, and controlling activities related to the mode, carrier, and movement of inventories into and out of an organization.

Contract Carriers

A person or company who transports freight under contract to a limited number of shippers.

Private Carriers

A person or company that transports its cargo as a part of a business that produces, uses, sells, or buys the cargo being hauled.

Common Carriers

A person or company that transports freight for a fee and can be hired by anyone to transport goods.

Exempt Carriers

A person or company specializing in transporting commodities is exempt from regulation by the Interstate Commerce Act.

Modes of Transportation

“Mode” refers to the way in which goods are transported, “Carrier” refers to the company

that transports the goods.

Intermodal Transportation

referred to as the sixth mode of transportation, but it is really the use of multiple modes of transportation to execute a single transport shipment.

The Interstate Commerce Act of 1887

a landmark U.S. federal law that authorized government regulation of the railroad industry to eliminate monopolistic practices, such as discriminatory rate-setting, pooling, and rebates. It established the Interstate Commerce Commission (ICC), the nation's first federal regulatory agency, requiring "just and reasonable" rates for interstate transportation.

ICC Termination Act of 1995

Abolishes the Interstate Commerce Commission (ICC).

Blockchain

a digitally distributed, decentralized, public ledger across a network. It provides all parties involved in the supply chain with unrestricted insight into all transactions.

Warehouse Management Systems

Track and control the flow of goods from the receiving dock to outbound shipment. New technologies, such as RFID tags, facilitate tracking.

Reverse Logistics

the process of moving product from the point of customer receipt back to the point of origin to recapture value or ensure proper disposal

5R’s

1. Returns

2. Recalls

3. Repair (and refurbishment, reuse manufacturing)

4. Repacking (for restock or resale in secondary channels)

5. Recycling, Disposal and Disposition

Global Trade Management Systems

Provides global visibility, standardization, and documentation to comply with international trade regulations

Free on Board (F.O.B.) Origin

Seller places goods Free On Board with the carrier at the seller’s location, and buyer pays freight costs.

Free on Board (F.O.B.) Destination

Seller places goods Free On Board to the buyer’s place of business, and the seller pays freight costs.