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Supply Chain Management 3050 > Chapter 5 - Logistics Management > Flashcards

Chapter 5 - Logistics Management Flashcards

1
Q

Logistics

A

The art and science of moving things from one point to another and storing them along the way.
- Plans, implements, and controls the efficient, effective forward and reverse flow of goods, services, and info between 2 points.

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2
Q

Outbound logistics costs

A

7% to 10% of each sales dollar

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3
Q

Logistical mandate - Customers want:

Donald Bowersox

A
  1. To receive exactly what they ordered
  2. Delivery of their orders at the agreed-upon time
  3. To pay as little as possible.
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4
Q

Materials Management

A
  • ENSURE THAT PRODUCTION HAS THE NECESSARY INPUTS AT THE RIGHT TIME AND PLACE.
    Concerned with the inbound movement and storage of:
  • raw materials
  • purchased components
  • subassemblies
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5
Q

Physical Distribution

A

Focuses on the outbound transportation and storage of finished products from point of manufacture to customer.
- MEET OR EXCEED CUSTOMER SERVICE EXPECTATIONS AT THE LOWEST COST

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6
Q

Logistical Order Cycle

A
  • Begins and ends with the buying company
  • Buyer recognizes a need and places an order.
  • Supplier processes the order
    1. Order Entry
    2. Production or picking of the order
    3. Preparation and packaging
  • Order is shipped
  • Order is inspected and accepted
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7
Q

Dwell Time Ratio

A
  • Evaluates the number of days inventory sits idle compared to the number of days the inventory is moving.
  • 90% of total order cycle is nonproductive.
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8
Q

The Order Cycle

A
  1. Recognition of Need
  2. Order Preparation
  3. Order Transmittal
  4. Order Processing
  5. Order Shipment
  6. Order Receipt
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9
Q

5 Primary Activities that Improve Order Fulfillment

A
  1. Inventory Management (rapidly fill orders)
  2. Facility Location and Design (production and delivery time)
  3. Transportation Management (reduces transit time and increases on-time delivery)
  4. Warehousing (cross docking, speeds process)
  5. Order Processing (eliminates delays and fills orders as specified)
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10
Q

Managing and Paying for Transportation

A
  • Buy product collect or prepaid
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11
Q

Buying Collect

A

The company takes ownership of the product at the supplier’s dock and arranges for necessary transportation.

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12
Q

Buying Prepaid

A

The supplier arranges and pays for the transportation, passing the costs on to the buyer.
- Gives suppliers an opportunity to make more money.

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13
Q

Transportation Management

A

Influences:

  • the number and location of facilities
  • inventory management
  • product and packaging design
  • customer service strategies
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14
Q

Modal Choice

A
  • Determines the service characteristics and costs of the transportation system.
  • Driver of transportation system design
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15
Q

6 General Modes of Transportation

A
  1. Rail
  2. Motor Carrier
  3. Pipeline
  4. Airplane
  5. Ship
  6. Cyberspace
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16
Q

Rail

A
  • Cost: High F, low V, inexpensive
  • Speed: Slow
  • Quantities: Large
  • Geographical Coverage: Widespread but limited by tracks
  • Environment: Low air pollution, high impact of new tracts
  • Distances: Medium to long
  • Required Infrastructure: tracks, rolling stock
  • Product Variety: Large, bulk goods
  • Reliability: Low loss, damage, less timely
  • Flexibility: Routing limited to track location, little door to door delivery
17
Q

Motor Carriers

A
  • Cost: High V, low F
  • Speed: Medium
  • Quantities: limited capacity
  • Geographical Coverage: widespread, limited by roads
  • Environment: High pollution
  • Distances: Short to medium
  • Required Infrastructure: Roads
  • Product variety: Large
  • Reliability: Limited loss, damage, more timely
  • Flexibility: Limited to road locations, good for JIT, door to door delivery possible
18
Q

Pipeline

A
  • Cost: High F, low V, very inexpensive
  • Speed: Non-issue
  • Quantities: Large of limited products
  • Geographical Coverage: Widespread, limited by unidirectional movement and landmass to support pipelines.
  • Environment: Pipeline leakage, impact on wildlife
  • Distances: Medium
  • Required Infrastructure: Pipeline
  • Product Variety: Petroleum products, liquid
  • Reliability: Very low loss or damage, timely
  • Flexibility: Routing limited to pipelines
19
Q

Ship

A 
Cost: High V, Low F, .008/ton mile
Speed: Slow, ocean is faster
Quantities: Large
Geographical Coverage: Global
Environment: Spillage from accidents, fisheries
Distances: long to very long
Required Infrastructure: ports, ships
Product Variety: Low variety of heavy, bulk
Reliability: loss, damage is high
Flexibility: Port to port
20
Q

Air

A

Cost: High V, Low F, very expensive
Speed: Fast
Quantities: Relatively small
Geographical Coverage: Widespread, air terminals
Environment: Noise pollution
Distances: medium to very long
Required infrastructure: Airports, planes
Product Variety: Large variety of small goods, often perishable
Reliability: low loss or damage
Flexibility: Air terminal to air terminal

21
Q

Cyberspace/Internet

A

Cost:Low V, Low F, extremely inexpensive
Speed: Extremely Fast
Quantities: Limited by # of source transmission lines or satellite access
Geographical Coverage: widespread
Environment: Non except new line construction
Distances: very short to very long
Required infrastructure: lines
Product Variety: limited to digital info.
Reliability: No loss, except through piracy
Flexibility: computer to computer

22
Q

Warehousing

A
  1. Store product in a finished goods warehouse located at a manufacturing facility
  2. Store the product in a distribution center (intermediate storage - used when many items from different sites are to be stored in a single location)
23
Q

Activities Performed in Warehouses and DCs

A
  1. Shipping and receiving goods and materials
  2. Materials handling and order processing
  3. Consolidating and distributing shipments
  4. Transportation management
  5. Product packaging and labeling
  6. Re-packaging and mixing of products
  7. Prep. of in-store displays
  8. light manufacturing or assembly
  9. Scrap and disposal
24
Q

Costs incurred when products sit in storage

A
  • Product obsolescence
  • damage
  • loss
25
Q

Cross-docking

A
  • Product arrives

- Product is mixed with other goods and sent in full truckloads to various locations.

26
Q

Logistics Skills

A
  • Logistics Outsourcing (3PL)
  • Shared Logistics Services (full TL quantities)
  • Network Rationalization
27
Q

Network Rationalization

A
  • Better understanding of customer needs, supplier capabilities, and service provider options
  • More sophisticated information technology
  • Need to master the art of relationship management

Supply Chain Management 3050 (8 decks)

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