Exam 1 Flashcards
Logistics
A part of Supply Chain Management that controls the forward and reverse flow and storage of goods between the point of origin and the point of consumption
Supply Chain Management
an integrating function with primary responsibility for linking major business functions across companies into a cohesive and high-performing business model
8 Supply Chain Processes
- Demand Mgmt
- Customer Relationship Collaboration
- Order Fulfillment
- Service Development Launch
- Manufacturing Flow Management & Customization
- Supplier Relationship Collaboration
- Customer Service Life Cycle
- Returns Reverse Logistics
7 Rs of Logistics
- Right Product
- Right Customer
- Right Quality
- Right Quantity
- Right Place
- Right Time
- Right Cost
Evolution of Logistics Integration (1960 to 2000)
1960 - 13
1980 - Material Mgmt & Physical Distribution (Warehousing, Materials Handling, & Packaging)
1990 - Logistics
2000s - SCM
Key Tradeoffs faced by Logistics Managers
Logistics & Marketing in order to do better with customer satisfaction
Operational performance
Deals with speed
Service reliability
Deals with quality
3 Levels of Customer Relationship
- Customer service
- Customer satisfaction
- Customer success
The perfect order
– Delivered complete
– Delivered on time
– Delivered at the right location
– Delivered in perfect condition
– Delivered with complete and accurate documentation
Zero-Defect percentage
The probability that any order will be delivered with no defects is only 88.5%, but for each individual part it’s 97%
Customer’s expectations
If Perceived Performance is greater than or equal to Expectations then = Satisfaction
If Perceived Performance is less than Expectations then = Dissatisfaction
How are customer expectations formed?
- Past experience
- Word of mouth communications
- Requirements
- External communications
Bullwhip Effect
as firms move away from the consumer, variability in demand increases
Reducing the Bullwhip
- Decrease uncertainty and variability
- Reduce lead-time
- Develop strategic partnerships
Economic Order Quantity (EOQ)
is the amount that balances the cost of ordering with the cost of maintaining average inventory
Set of business processes that consistently provide superior value to the customer
- Unique
- Difficult to duplicate
- Sustainable
- Customer oriented
Transportation costs is typically what percentage of costs
60%
Example of logistics trade-off include:
- Trade-offs between warehouse and transportation costs
- Transport cost vs. inventory cost trade-offs
- Warehouse trade-offs include materials handling done manually, mechanically, or robotically.
1960s
7 Economic Drivers that Influence Freight Rate
- distance
- weight
- density
- stowability
- handling
- liability
- market
Safety stock
the shield that protects us from reaching zero inventory due to unknown increase in the demand or a purchase order that arrives late.
Factors determining freight rate
the form of the cargo, the mode of transport (truck, ship, train, aircraft)
Cross-docking
combines inventory from multiple origins into a pre-specified assortment for a specific customer
Newest and Least Utilized Transport Mode for Freight
Airmode
Sawtooth Model
shows how income adjusts to a change in aggregate demand
The 6 Transport Participants
- Shipper
- Consignee (Receiver)
- Carrier and Agents
- Government
- Internet
- Public
Modes of Transportation
– Rail (high fixed cost)
– Highway/ Turck (Most available, low fixed)
– Water
– Pipeline (high fixed cost)
– Air (Fastest but the most expensive - high variable cost)
Any innovative use of technology to support the supply chain from Dell
The supply chain plays a critical role in Dell Technologies’ vision for progress. We embed sustainability and ethical practices in everything we do.
Restrictive element
in-transit inventory is “captive”, usually inaccessible during transportation
Flexible element
inventory can be diverted during shipment to a new destination
Pipe (Modal Fixed & Variable costs)
Fixed: high
Variable: low
Air (Modal Fixed & Variable costs)
Fixed: low
Variable: high
Water (Modal Fixed & Variable costs)
Fixed: medium
Variable: low
Motor (Modal Fixed & Variable costs)
Fixed: low
Variable: medium
Rail (Modal Fixed & Variable costs)
Fixed: high
Variable: low
Most widely used systems are
- Trailer on a flatcar (TOFC)
- Container on a flatcar (COFC)
TOFC
Trailer on a flatcar
COFC
Container on a flatcar
Factors Influencing Inventory Levels (know 3)
- Service level objectives
- Average inventory (rate of demand, safety stock)
- Supply chain structure
- Number of products (forecast complexity, ICC)
- Inventory cost structure
How Supply Chain Structure affects inventory level (know 4)
- Transportation mode
- Warehouse locations/number
- Customer requirements
- Supply availability
- Channel position
- Order costs/requirements
- Cost of Capital
Factors Influencing Inventory Levels (know 3)
- Service level objectives
- Average inventory (rate of demand, safety stock)
- Supply chain structure
- Number of products (forecast complexity, ICC)
- Inventory cost structure
Safety stock
is added to base inventory to protect against a stock-out when Demand Uncertainty
Factors Contributing to Bullwhip
- Demand forecasting (updating)
- Promotions
- Lead time protection
- Price fluctuation
An effective logistics strategy must understand what four interrelated topics?
– Economic drivers (that influence rates)
– Costing (methods to allocate costs)
– Carrier pricing strategy (used to set rates)
– Rates and rating (mechanics used by carriers)
Demurrage Rail
charge for holding a railcar for more than 48 hours before unloading
Backhaul Load
a load that a commercial trucker takes on a return trip
