Supply Chain Management FINAL EXAM - Taitt

SCM

Logistics

moving things from the point of origin to the point of consumption

Inbound Logistics

sending things from suppliers to manufacturers

Material Handling

moves goods and materials between sites

Outbound Logistics

moves finished goods to the customer

Warehouse

facility used to store goods and materials

Warehousing

the function that allows companies to store, repackage, and distribute to the customer

Functions of a Warehouse

receiving, storage, picking, packing, shipping

Secondary functions of a warehouse

quality inspections, repackaging, assembly operation

Public Warehouses

warehouses with privately owned equipment, privately run staff, monthly storage fee
Pros: no capital investment, flexible, low cost
Cons: Potentially incompatible computer systems, space not always available

Contract Warehouse

rent out space on yearly contract, for the whole building or a defined portion
Pros: specialized services tailor made for needs, cost can be negotiated, and more control
Cons: duration is longer

Private Warehouse

company owned storage, for companies with large volume or valuable goods, or special storage
Pros: better control, visibility, and cheaper in long run
Cons: high start up cost, fixed location, fixed size/costs

Consolidation Warehouse

goods from different suppliers stored in one warehouse. Many different goods sent out in one shipment

Break-Bulk Warehouse

goods from one supplier are stored, then sent out in many shipments. One good, many shipments.

Cross-Docking Warehouse

little/no inventory stored, transfer goods between trucks to be shipped off. Transportation cost savings, inventory efficiency

Warehouse network

how many warehouses needed, and where they are needed

Single warehouse

simple, lower costs and inventory, best people in one spot. Long delivery time

Multiple warehouses

quicker delivery. complex, high costs and inventory, spreads out the best people

Hybrid Approach

central warehouse (hub) holds most of inventory, then ships out to dispersed warehouses (spokes). Lowers operating costs and inventory, increases customer service

Market Position Strategy

warehouse close to customers to improve delivery. When there's more customers than suppliers

Product Position Strategy

warehouses close to suppliers to consolidate before delivery. More suppliers than customers

Intermediate Position strategy

warehouses at a midpoint between customer and supplier. Balances cost, inventory and customer service

LEAN warehousing

Includes methods such as cross docking, increased automation, reduced lot sizes and shipping quanitities

3rd party logistics (3PL)

using another company to do your logistics (outsourcing)

4th Party logistics (4PL)

Managees all 3PL companies

Goal of Transportation

maximize value, effective service, and satisfy customer needs

Contract Carrier

transports under contract to one or a few shippers

Common Carriers

transports for a fee, can be hired by anyone

Private Carriers

transports their own cargo as a part of their business

Exempt Carriers

specialize in transporting commodities exempt from regulation by Interstate Commerce Act

Mode of transportation

way of transportation

Carrier

Company that transports

Truck

most flexible form of transportation, most commonly used

General freight carriers

handles a variety of goods in normal trailers, like pallet goods

Specialized carriers

transport liquid petroleum, agricultural commodities, building materials, & other specialized items.

Less than truckload (LTL)

carriers move small shipments, when you don't have enough to fill a truck. Stop at depots and transfer locations to match load to the final location.

Full-Truckload (FTL)

the transport of goods that fill up a full truck, or a partial load shipment occupying an entire truck

Rail

slow and inflexible mode of transport, but has the most capability

Pipeline

most reliable and lowest per unit cost mode of transport. Materials transported in liquid/gas form

Air

fastest and most expensive mode of transport, paired with trucks for door to door delivery

Water

super cheap, super slow and inflexible mode of transport. Used for heavy/bulky shipments

Intermodal Transport

using multiple modes of transportation to get one product from A to B

Interstate Commerce Act

law that forces compliance between states with commerce laws

Cost of Service Pricing

set price based on costs incurred

Value of Service Pricing

set price based on value perceived by customer

Combination Pricing

set between Cost of Service minimum and Value of Service maximum. Very adjustable

Net Rate Pricing

set price to customer's needs

FOB Origin

buyer pays freight costs, ownership passes when it leaves the seller

FOB Destination

seller pays freight costs, ownership passes once good reaches the destination

Freight Forwarder

Consolidates LTL shipments into FTL shipments

Transportation Broker

bring shippers and carriers together

Shipper's Association

Nonprofit cooperatives which arrange for members' shipping

Intermodal Marketing Company

Purchase blocks of rail capacity and sell it to shippers

Types of Logistic Management Software

Warehouse Management Systems, Transportation Management Systems, and Global Trade Management Systems

Reverse Logistics

backwards flow of goods of customers back to the point of origin

5 R's of Reverse Logistics

returns, recalls, repairs, repackaging, recycling

Offshore factory

manufacturing and assembly done overseas to cut labor and raw material costs

source factory

similar to an offshore factory in that it cuts product cost, but with skilled workers and significant managerial resources

server factory

global facility that takes advantage of government incentives (tax reductions, etc.) to meet local market needs

contributor factory

global facility that is focused on product development as well as R+D

outpost factory

global facility set in an area with a lot of advance suppliers, competitors, research facilities, etc.

Lead factory

global facility that is the source of product and process innovation

Global Location Factors

taxes and incentives, proximity to markets, labor/land costs, business clusters, etc.

Weighted factor rating model

location evaluation technique the weights each factor differently based on importance

Break even model

location evaluation technique for when you know fixed/variable costs

Global trade opportunities

increased revenue and sourcing options

global trade challenges

this type of trade is complex, plus it introduces tariffs and duties

International Freight Security

lots of increased legislation post 9/11

US Department of Homeland Security

secures borders, ensures that flow of lawful traffic and commerce

US Customs and Border Protection

protects the US through active inspections at ports of entry, promoting legitimate commerce

Trade Compliance Systems

can automate the process of checking every transaction

Importer of Record

the owner, purchaser, or licensed customs broker must file entry documents for goods at the port of entry

Foreign Trade Zone

designated geographic region through which merchandise is allowed to pass with lower customs duties (taxes) and/or fewer customs procedures

Deemed Export

the release of technology or source code that is subject to the Export Administration Regulations, to a foreign national located in the United States.

Customs Brokers

move global shipments through customs and handle documentation

International Freight Forwarders

Move goods to and from foreign destination

Trading Companies

handle transactions between international buyers

Non-Vessel-Operating Common Carriers (NVOCC)

Operate like freight forwarders but use only scheduled ocean liners.

Customer Relationship Management (CRM)

transformation of people, process and technology required to become a customer first business. The philosophy of putting the customer first

What is CRM used for?

To acquire, retain and meet the changing expectations of customers

Strategically Significant Customers

These customers have high lifetime value, are role models and inspire change for other customers. These are the customers that CRM targets relationships with

Predicting Customer Behavior

If a company is selling products and services to customers, they can also collect customers buying history, preferences, and trend information, which could then be used to predict customer buying behaviors going forward.

Personalizing Customer Communications

Understanding customer behaviors & preferences, firms customize communications

Segmenting Customers

dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing

Target Marketing

Marketing directed toward those groups (market segments) an organization decides it can serve profitably.

Event Based Marketing

develops connections with customers based on events

Cross Selling

buying a related or complementary product after initial purchase

Up Selling

persuades buyer to upgrade or buy a more expensive item

Relationship/Permission Marketing

signing up for promotional emails

Customer Defection Analysis

figuring out why customers stop buying and reducing the loss of these customers

Churn Reduction

reducing customer defections

Customer Lifetime Value (CLV)

approximate worth of a customer to a company in economic terms; overall profitability of an individual consumer

Clickstream

tracking how a customer navigates a website can help tailor a website's images, ads or discounts based on past usage of the site.

Customer Service Philosophy

emphasis on quality and quality management to get customer satisfaction

Customer Service Activity

includes order processing, returns, etc

Customer Service Performance Measure

measures customer satisfaction

Seven R's of CRM

right product, quantity, quality, place, time, customer, and costs

Call Centers

deals with customer questions, connect the customer to the business

Ways to measure satisfaction

surveys, phone calls, etc. \-- all of these are held in a database

Website Self-Service

access accounts through portals to find information at an instant

Sales Force Automation (SFA)

automatically tracks all the steps in the sales process