Ch. 09 - Logistics - Warehousing & Transportation

Logistics

Moving and storing goods from the origin to the point of consumption

Goal of Logistics

Getting the right product to the right place at the right time.

Inbound Logistics

Moving materials from suppliers

Outbound Logistics

Moving finished goods to customers

True Value of Warehousing

it’s about storing and handling goods to create value for the customer.

Meant for long periods

Distribution Center

Moves goods quickly

focus is on flow.

Cross-Docking

Unloading goods from an incoming truck and loading them directly onto an outgoing truck with little to no storage

Consolidation Warehouse

Taking small shipments from many suppliers and combining them into one large, cheap truckload

Break-Bulk Warehouse

Taking one large shipment and breaking it into many small deliveries for local customers

Private Warehouse

A warehouse owned by the company making the goods (like a Walmart DC)

Public Warehouse

A warehouse you rent space in from a third party (good for short-term needs)

Contract Warehouse

Long-term, specialized outsourced warehousing (a middle ground between private and public)

Warehouse Network

The strategy of deciding how many and where to put warehouses

Centralized Warehouse Strategy

One big warehouse. Lower cost but slower delivery to far customers

Decentralized Warehouse Strategy

Many small warehouses near customers. Faster delivery but higher costs

Market-Positioned Strategy

Putting warehouses close to customers to improve service (like Amazon Prime)

Product-Positioned Strategy

Putting warehouses close to suppliers to collect raw materials cheaply.

Transportation

The functional area responsible for moving materials and products

Legal Forms: Common Carrier

Offers services to the general public at published rates.

Legal Forms: Contract Carrier

Serves specific customers under a negotiated contract

Legal Forms: Private Carrier

A company that transports its own goods (like a Touch oF Class van)

Truck

Most flexible. Moves 70% of US freight. Good for door-to-door.

General Freight Carriers

Carry any type of goods in standard trailers

Specialized Carriers

Carry specific items like liquids, cars, or heavy machinery.

TL (Truckload)

You buy the whole truck

LTL (Less-Than-Truckload)

You share the truck with other companies

Rail (Train)

Best for heavy, bulky items over long distances (coal, grain)

Air

Fastest and most expensive. Best for high-value, light, or perishable items (flowers, tech)

Water

Cheapest and slowest. Best for huge international shipments

Pipeline

Very limited; best for liquids and gases (oil, water)

Intermodal

Using multiple modes (like Truck $\rightarrow$ Train $\rightarrow$ Truck) to move one shipment.

Trailer-on-Flatcar (TOFC)

Putting a truck trailer on a rail car

FOB Origin

Buyer owns the goods the moment they leave the seller's dock

FOB Destination

Seller owns the goods until they arrive at the buyer's door

Freight Forwarder

A "travel agent" for cargo; they consolidate small shipments to save you money

3PL - Third Party Logistics

Outsourcing your shipping and storage to a specialist (like FedEx Supply Chain)

4PL

An organization that manages all your 3PLs for you

Transportation Management System (TMS)

Software used to plan, optimize, and execute shipments

Warehouse Management System (WMS)

Software used to track every movement inside the warehouse (receiving, picking, shipping)

Global Logistics Challenges

Longer lead times, different currencies, and customs paperwork

Reverse Logistics (Def)

The process of moving goods backwards from the customer to the seller

Why Returns Happen

Damaged goods, customer dissatisfaction, or unsold seasonal items

The 5 R's

Returns

Remanufacturing

Refurbishing

Repackaging

Recycling

Reverse Logistics Cost

often 4 to 5 times more expensive than forward logistics

Return of Unsold Goods

Suppliers let stores return unsold items (like newspapers) so stores will carry more stock

Green Reverse Logistics

Recycling or refurbishing to reduce environmental impact (like returning old meds to a pharmacy)