RG

SCM 300 Module 4

Transportation & Logistics

  • Transportation (T)

    • Movement of goods and services between geographic points.

  • Logistics (L)

    • Sub-set of Supply-Chain Management (SCM).

    • Plans, implements, controls the forward & reverse flow and storage of goods, services, information.

    • Goal: Meet customer requirements efficiently (cost) and effectively (service).

Cargo Classifications

  • Bulk Cargo

    • Free-flowing, stored loose; loaded by shovel, pump, bucket, scoop.

    • Ex: Coal, rice, grain, raw sugar, oil, sulfur.

  • Break-Bulk Cargo

    • General/packaged; often containerized; measured in TEU’s.

    • Ex: Bagged rice, canned goods, boxed electronics.

  • Neo-Bulk Cargo

    • Hybrid of bulk & break-bulk; uniform pieces but handled individually.

    • Ex: Automobiles, logs, steel, cattle.

Freight Shipping Terminology (Size/Carrier)

  • TL / CL – Truckload / Container-load (full vehicle).

  • LTL / LCL – Less-than-truck/container-load; needs consolidation.

Logistics Measurement Concepts

  • Cube – Total internal space available.

  • Cubing-Out – Volume full before hitting weight limit.

  • Weight – Mass of cargo.

  • Weighing-Out – Hit legal weight max before volume full.

    • Trade-off question: \text{Revenue\/load} = f(\text{Density})

Transportation Terminology

  • Multimodal – ≥2 modes in one shipment.

  • Intermodal – Seamless multimodal; same container door-to-door, no re-packing.

Planograms

  • Store-level schematic for shelf placement.

  • Optimises: space usage, visual impact, sales, inventory turnover.

Packaging – Core Ideas

Consumer-Related Drivers

  • Marketing & promotion (branding, colour, design).

  • Product info: weight, volume, nutritional, legal warnings.

  • Legal compliance: safety seals, multilingual labels.

Supply-Chain Drivers

  • Physical protection: light, dust, moisture, impact, theft.

  • Support & stability: stack strength for pallets/shelves.

  • Preservation: extends shelf life (perishables).

  • Handling efficiency: ergonomic grips, forklift pockets.

Packaging Classifications

  • Primary – Direct contact w/ product (plastic bag, can, bottle, shrink-wrap).

  • Secondary – Contains primary unit(s) (box, case, drum).

  • Tertiary – Bulk handling unit (pallet, crate, stretch-wrap, straps).

Package Size & Modularity

  • Packages should align with:

    • Pallet footprint 48" \times 40" or metric 1.2\,m \times 1.0\,m.

    • Container internal dim 7.7'\,W \times 7.83'\,H \times 19.35'\,L (20’).

  • Typical cube puzzle examples:

    • 2'\times2'\times1' (2 per pallet layer).

    • 1'\times1'\times1' (8 per layer).

SCM Packaging Considerations

  • Product traits: fragility, density, value.

  • Trade-offs: protection vs cost/weight.

  • Destination factors: store shelf vs warehouse rack, climate, crime.

  • Inventory turnover speed: fast movers need less robust packs.

  • Logistics itinerary:

    • Modes, vibration, temperature swings, handling equipment.

    • Security branding vs “quiet” packaging.

  • Legal: international marks, recycling laws, green directives.

  • Economics:

    • \text{Total cost} = \text{Pack cost} + \text{Ship cost} + \text{Expected loss} - \text{Ops gains}.

Competitive & Intelligent Labelling

  • Data on label: company, SKU, price, tracking no., bar/QR codes.

  • Security: hiding/highlighting hazardous or high-value items.

  • Tech investments: scanners, software, AI for auto-reorder, sortation.

Shipping Containers – Physical Basics

  • Standard ISO boxes: 8'\,W \times 8.5'\,H.

    • 20-footer L=20' ⇒ 1\,\text{TEU}.

    • 40-footer L=40' ⇒ 2\,\text{TEU}.

  • Variants: open-top, flatrack, garmentainer, high cube, reefers (CA).

Controlled Atmosphere (Reefer) Specs

  1. Temp range 80^\circ F \text{ to } -20^\circ F ( 27^\circ C \text{ to } -29^\circ C ) ±0.25^\circ F.

  2. Airtight / watertight.

  3. Gas composition regulated (O\textsubscript{2}, N\textsubscript{2}, CO\textsubscript{2}).

  4. Humidity control.

  5. Powered by plugs or gensets.

  6. Microprocessor data-logging (insurance evidence).

Reefer Benefits

  • Extend transit window; open distant markets.

  • Slow ripening via nitrogen flushing.

  • Minimise moisture loss & weight shrink.

  • Pest/bug elimination through O\textsubscript{2} deprivation.

  • Removes auto-produced ethylene/CO\textsubscript{2} gases.

Container Use Advantages

  • True intermodalism (truck/rail/ship; rarely air).

  • Speeds handling (10 pallets ≈ 1 move).

  • Security vs theft/smuggling.

  • Global size standardisation → universal cranes, chassis.

Managerial Considerations

  • Full itinerary weight/size limits for every leg.

  • Own vs lease; backhaul empties.

  • Energy access for reefers en-route & at yard.

  • Customs compliance → consider 3PL/broker + e-docs.

  • Air cargo uses distinct Unit Load Devices (ULDs).

Modes of Transportation

Road (Truck)

  • Regulated: driver hours, gross vehicle weight \leq 80,000\,lb in US.

  • Cost drivers: fuel, tolls, insurance, taxes.

  • Strengths: 95 % on-time, door-to-door flexibility, 2nd-fastest.

  • Weaknesses: costly per mile; fragmented regulations across borders/states.

  • Key role in intermodal drayage.

Rail

  • Cheaper per ton-mile vs truck; less sensitive to fuel spikes.

  • Higher payloads; fewer weight limits.

  • Cons: vibration damage (~3 % losses), poor punctuality (~70 %), slow (<30\,mph avg), infrastructure dependence.

Ocean / Waterway

  • Ship categories:

    • Bulk: oil, ore, LNG, grain.

    • Container: break-bulk in TEUs.

    • Neo-bulk: RO/RO for vehicles, lumber.

  • Pros: lowest cost/ton-mile; handles huge volume/weight/odd shapes.

  • Cons: slow; theft/damage risk; port capability variability; heavy documentation.

Air

  • Carriers: integrators (overnight) & combination/freight lines.

  • Pros: Speed → lower cycle stock, less shrinkage, maintenance spare uptime.

  • Cons: Highest cost; container incompatibility limits intermodal.

  • Use cases: High -to-weight, perishables, emergencies, high insurance, short shelf life.

Comparative Snapshot (Trucks vs Trains; Ships vs Planes)

  • Cost hierarchy ($/kg-km): Ship < Rail < Truck < Air.

  • Speed hierarchy: Air > Truck > Rail > Ship.

  • Reliability: Truck high; Air high (weather sensitive); Rail low; Ship moderate.

  • Capacity: Ship > Rail > Truck > Air.

Infrastructure Elements

  • Hard assets: roads, rail, ports, airports, intermodal cranes, DCs.

  • Soft networks: IT & communications, utilities (fuel grids), labour skill base.

  • Legal environment: customs, environmental laws, certificates/licences.

Distribution & Warehousing Concepts

  • Warehouse = Storage buffer → mitigates supply/demand uncertainty; provides proximity.

  • Distribution Center (DC) = Flow-through hub; data-driven; breaks bulk & consolidates.

Warehouse/DC Extended Roles

  • Downstream: shelf-ready picks, labeling, kitting, value-add/postponement, QA inspection.

  • Upstream returns: central return centre → recovery, refurbish, recycle, disposal.

Strategic Models

  1. Traditional (buffer stock)

    • Manufacturer ships full trucks to mixing warehouse.

    • Example flow (p.44): 7000 units in, 5600 out, 1600 remain.

  2. Cross-Docking (modern, POS-driven)

    • Real-time data; trucks unload & immediately reload.

    • Example (p.45): 4500 in, 4500$$ out, 0 storage.

  3. Assembly/Packaging Consolidation (p.46)

    • Multi-component items converge, are packed, then enter retail DC chain.

These notes capture every principle, definition, metric, example, numerical spec, and managerial implication discussed in the transcript, organised for rapid study and cross-referencing with course objectives.