Chapter 3 & 4 Flashcards
What is transportation?
The movement of products from one location to another.
Two types of transportation
- external transports
- intra-site transports
Give examples of external transports
- planes
- trucks
- trains
Give examples of intra-site transport
- conveyor belts
- fork lifts
Name the most typical types of external modes of transportation and the differences between them.
- SEA: speed; services response (lower); shipment size (larger); transportation and handling cost (less expensive)
- RAIL:
- TRUCK:
- AIR: speed (higher) services response (higher); shipment size (smaller); transportation and handling cost (more expensive)
Different transportation segments and the characteristics
- truckload (TL)/ Full Truckload (FTL):Low fixed cost
- Less than truckload (LTL)/ Part Load (PL): small lots
- Groupage/ Package Carriers (CEP): single items, expensive, fast and reliable delivery
What is intermodal transport? And name the different types.
The use of more than one mode of transport to move a shipment.
- Freight across modes
- Piggyback
- Roll on/Roll off
Name and explain the Inter model transport phases
- pre-carriage: from supply point to hub (mostly regional)
- main transport: transport from hub to hub (national or international)
- post- carriage: transport from hub to delivery points (mostly regional)
Main risks of transport and how to mitigate them
- shipment is delayed
- disruptions
- hazardous material
- decrease probability of disruptions
- alternative routings
- modified containers
Questions for knowing which mode of transportation
- is it time-critical to receive it?
- is there substantial uncertainty of demand from retailers ordering it?
- how large the shipment can be?
- how valuable are the products?
- do they need specific transport requirements?
What is an emission factor?
An agent that must be kept in mind when selecting a mean of transport. Because the emissions they produce affect climate change (greenhouse gases) and have an impact on health ( nitrogen oxide…)
What is distribution?
The steps taken to move and store a product from the supplier stage to the customer stage. It also directly affects cost and the customer experience.
Which are the 2 fundamental distribution strategies
- direct shipment strategies: items directly shipped from supplier to end customer.
- intermediate inventory storage point strategies: uses intermediate inventory storage points (warehouses or distribution centers)
Advantages and disadvantages of direct shipment and when to use it.
A
- retailer avoids expenses of operating and distribution center
- lead times are reduced
D
- manufacturer and distributor cost increases
Use:
- retail store requires fully load trucks
- lead time is critical
- manufacturer may be reluctant but may have no choice
Types of direct shipment with milk runs
- one to many
- many to one
Strategies inside intermediate inventory storage point strategies:
- traditional warehousing strategy
- cross-docking strategy
- centralised pooling
- transshipment strategies
What is traditional warehousing?
It can be centralised and decentralised management
- C: decisions made at central location for entire supply network. Leads to global optimisation
- D: each facility identifies its most effective strategy without considering the impact on other facilities. Leads to local optimisation
What is cross-docking strategy?
Warehouse function as coordination point instead of inventory storage points. Llegan los products y se montan en otros trucks para llegar al retailer lo más rápido posible. Goods pasan muy poco tiempo en warehouse.
Problems of cross-docking?
- require a significant startup investment and are difficult to manage
- a fast and responsive transportation system is necessary
- forecasts are critical, need for information flow
- effective only for large supply or distribution systems
Pros and cons of direct shipping
P: no intermediate warehouse// simple to coordinate
C: high inventories (large lot size)
Pros and cons of direct shipping with milk
P: lower transportation costs for small lots// lower inventories
C: increased coordination complexity
Pros and cons of all shipments via central DC with inventory storage
P: lower inbound transportation cost through consolidation
C: increased inventory cost// increased handling at DC
Pros and cons of all shipments via central DC with cross-docking
P: low inventory requirement// lower transportation cost through consolidation
C: increased coordination complexity
The network structure that we create affects (customer service & supply chain costs)
- response time
- product availability
- customer experience
- order visibility
- returnability
- inventory costs
- transportation costs
- facility costs
- information
Different distribution strategies
- single channel strategy
- multi channel strategy
- cross channel strategy
- Omani channel strategy
End customer distribution strategies
- drop shipping
- manufacturer storage with direct shipping and in transit merge
- distributor storage with carrier delivery
- distributor storage with last-mile delivery
- manufacturer storage with customer pickup
- retail storage with customer pickup
