MOD 4

Logistics and Transportation Fundamentals

Transportation and Logistics Overview

• Transportation: Defined as the movement of goods (and services) from one location to another.

• Logistics: A critical component of the supply chain responsible for planning, implementing, and controlling the efficient and effective flow and storage of goods, services, and related information from the point of origin to the point of consumption. This process aims to meet customer requirements effectively.

Cargo Classifications

• Bulk Cargo: This is free-flowing cargo that is stored loose and loaded using methods such as shovels, pumps, buckets, or scoops. Examples include:

  • Coal

  • Rice

  • Grain

  • Raw sugar

  • Oil

  • Sulfur

• Breakbulk Cargo: General or packaged cargo that is often containerized, typically measured in TEUs (Twenty-Foot Equivalent Units). Examples include:

  • Bagged or boxed rice

  • Canned goods

  • Boxed electronics

• Neo-Bulk Cargo: Cargo that exhibits characteristics of both bulk and breakbulk. Examples include:

  • Automobiles

  • Logs

  • Steel

  • Cattle

Freight Shipping Terminology

• TL and CL: Represent large shipments, specifically Full Truckload (TL) and Full Container Load (CL).

• LTL and LCL: Indicate Less than Truckload (LTL) and Less than Container Load (LCL), referring to smaller shipments that don’t fill a container completely and require the consolidation of multiple shipments.

Logistics Measurement Cube

• Cubic Capacity: The space available in a container or package for cargo.

• Cubing Out: When all the available space in a container is filled.

• Weight: Describes the heaviness of the cargo.

• Weighing Out: Occurs when cargo exceeds the weight limits of the container, preventing additional cargo from being added.

Transportation Terminology

• Multimodal: Involves the use of multiple modes of transport during a single shipment.

• Intermodal: A seamless form of multimodal transportation that allows shipments within one container for the entire trip without unloading or repackaging.

Planograms and Packaging

Planograms

• A schematic drawing illustrating optimal product placement on shelves to maximize space utilization and drive sales.

Packaging Reasons

Consumer-Related Reasons

• Marketing and Promotion: Enhancing product visibility and attractiveness.

• Product Information: Including essential details such as weight and volume.

• Legal Considerations: Compliance with regulations regarding warning labels, nutritional information, and safety seals.

Supply Chain Related Reasons

• Protection: Secures products from light, theft, dust, moisture, and impact.

• Support: Ensures stability for other products during handling and storage.

• Preservation: Extends the shelf life of perishable products.

• Facilitates Movement: Aids in the handling and transportation of goods.

Packaging Classifications

• Primary Packaging: The packaging in direct contact with the product, e.g., plastic bags, cans, or bottles.

• Secondary Packaging: Holds the primary packaging; examples include boxes and cases.

• Tertiary Packaging: Contains multiple secondary packages, often for shipping and handling, e.g., pallets and crates.

SCM Packaging Considerations

• Product Characteristics: Tailored to the specific goods, ensuring protection and durability.

• Supply Chain Trade-offs: Balancing materials for protection, weight, cost, and consumer safety.

• Destination Factors: Considering the final storage location, whether a retail store or a warehouse.

• Inventory Turnover: Planning packaging to accommodate replenishment needs and efficiency in transit.

• Legal and Environmental Considerations: Ensuring compliance with international product markings and sustainability mandates.

• Economic Factors: Analyzing the costs across the supply chain, expected losses, and gains from effective packaging solutions.

Competitive Labeling Information

• Labels can include names of companies or products, tracking numbers, and warnings about hazardous contents. Proper labeling helps manage risks and ensures compliance with legal standards. It also provides opportunities for technology integration in logistics, aiding in inventory management and tracking.

Shipping Containers

Standardized Containers

• Variants include 20-foot and 40-foot containers, measured in TEUs (Twenty-Foot Equivalent Units). Standard sizes make it efficient for cargo loading and shipping processes.

Controlled Atmosphere Containers (Reefers)

• These containers facilitate temperature control and maintain humidity levels during transit. Benefits include:

  • Extended shelf life of perishable goods.

  • Reduced decay and weight shrinkage.

  • Elimination of insects and harmful gases during transportation.

Reasons for Containers

• Intermodal Capabilities: Containers can be used across different modes of transportation (trucks, trains, boats).

• Protection and Security: Containers protect goods against theft and environmental conditions.

• Standardization: Facilitates easy handling and loading due to consistent container dimensions.

Container Considerations

• Itinerary and Logistic Planning: Factors include weight, size limits, and potential modes of transport.

• Energy Requirements: For temperature-controlled containers and their energy source needs.

• Customs: Streamlining documentation processes to expedite passage.

Transportation Comparison by Modes

• Road Transport Considerations: Assessing regulations, additional costs, and factors impacting competitiveness.

• Rail Transport Considerations: Evaluating access, cost efficiencies, and infrastructure needs.

• Ocean Transport: Analyzing bulk carriers, container ships, and the logistics surrounding waterway transport.

• Air Transport Considerations: Evaluating speed versus cost, compatibility of containers, and specific scenarios that necessitate air transport.

Infrastructure and Distribution

Infrastructure Overview

• Critical components include communication networks, legal landscapes, and the distribution of natural resources.

Distribution Warehouse Differences

• Warehousing: Focused on storage (safety stock, anticipation inventory).

• Distribution Centers: Designed for efficiency in movement and shipping consolidation.

Strategies in Distribution and Warehousing

• Cross Docking: Enables quick turnover of goods and enhances efficiency through real-time data.

• Outbound Consolidation: Involves packaging and assembly of items composed of various components, ensuring streamlined delivery.