Logistics

Question 1

What is logistics management?

Answer 1

That part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers requirements

Question 2

The Logistics Chain

Answer 2

• Logistics organises the transport between suppliers and manufacturers as well as between the manufacturer and the warehouse
• Controls the data exchange between the warehouse and the stores
• Manages the manpower needed for the product to reach the customer from the store.

Question 3

Which business activities does logistics cover?

Answer 3

• Transportation
• Warehousing
• Material handling
• Packaging
• Inventory management
• Logistics information systems

Question 4

What are the 4 transportation modes?

Answer 4

1. Highway
2. Water
3. Rail
4. Air

Question 5

What are the strengths of highway?

Answer 5

• Flexibility to deliver when and where needed.
• Often the best balance among cost, flexibility, and reliability/speed of delivery

Question 6

What are the weaknesses of highway?

Answer 6

Neither the fastest nor the cheapest option.

Question 7

What are the strengths of water?

Answer 7

• Highly cost-effective for bulky items
• Most effective when linked to a multimodal system

Question 8

What are the strengths of rail?

Answer 8

• Highly cost-effective for bulky items
• Can be most effective when linked to a multimodal system

Question 9

What are the strengths of air?

Answer 9

• Quickest mode of delivery
• Flexible especially when linked to the highway mode

Question 10

What are the weaknesses of water?

Answer 10

• Limited locations
• Relatively poor delivery reliability/speed

Question 11

What are the weaknesses of rail?

Answer 11

• Limited locations, although less than water
• Not as fast as highway, but improving over time

Question 12

What are the weaknesses of air?

Answer 12

Often the most expensive mode on a per-pound basis

Question 13

What are Multimodal Solutions?

Answer 13

A transportation solution that seeks to exploit the strengths of multiple transportation modes through physical, information, and monetary flows that are as seamless as possible

Question 14

What is warehousing?

Answer 14

Any operation that stores, repackages, stages, sorts, or centralizes goods or materials.

Question 15

Why do organisations use warehousing?

Answer 15

Organizations use warehousing to reduce transportation costs, improve operational flexibility, shorten customer lead times, and lower inventory costs.

Question 16

What is Consolidation warehousing?

Answer 16

Pulls together shipments from a number of sources (often plants/suppliers) in the same geographic area and combines them into larger-and hence more economical shipping loads.

Question 17

Cross docking

Answer 17

• May use a cross-docking warehouse to break up large rail or truck shipments into smaller shipments to local customers.
• A cross-docking operation that receives goods from a single source or manufacturer is often referred to as break-bulk warehousing.

Question 18

Regional distribution center

Answer 18

• Remix the incoming goods and delivery to individual stores/customers, often multiple times a day.
• Can be a hybrid cross docking operation

Question 19

Logistics information systems

Answer 19

• Logistics managers often use decision support tools to design and fine-tune their logistics systems.
• Managers choose locations, determine the number of containers or vessels they need, estimate costs and travel times.
• Planning systems
• Execution systems

Question 20

What are Planning Systems?

Answer 20

Planning systems help managers with specific activities, such as selecting a carrier for an outgoing shipment or developing a weekly schedule of deliveries.

Question 21

What are Execution Systems?

Answer 21

• The most detailed level of a logistics information system.
• Ensure planned activities take place as expected
• Help managers identify problems

Question 22

Key questions of the Logistics Strategy?

Answer 22

1. Does the firm have the volume needed to justify a private logistics system?
2. Would owning the logistics system limit the firm’s ability to respond to changes in the marketplace or supply chain?
3. Is logistics a core competency for the firm?

Question 23

Does the firm have the volume needed to justify a private logistics system?

Answer 23

Firms with low volumes or sporadic shipping needs (e.g., transport of seasonal produce) are probably better off contracting for those services.

Question 24

Would owning the logistics system limit the firm’s ability to respond to changes in the marketplace or supply chain?

Answer 24

Investing in a private fleet of trucks or network of warehouses ties up capital and commits a firm to managing those systems.

Question 25

What are core competencies?

Answer 25

Organizational strengths or abilities, developed over a long period, that customers find valuable and competitors find difficult or impossible to copy. i.e specialized material transport (chemicals/gas…)

Question 26

Two measures of performance

Answer 26

1. The perfect order
2. Landed costs

Question 27

What are Landed Costs?

Answer 27

Indicates how efficiently logistics provides a service to the customer.

Question 28

What is The Perfect Order?

Answer 28

Indicates how effectively logistics serves the customer.

Question 29

What is the Percentage of Perfect Orders?

Answer 29

Represents the timely, error-free provision of a product or service in good condition.

Question 30

What is the formula for the Percentage of Perfect Orders?

Answer 30

100%*[(total orders - orders with 1 or more defects)/total orders]

Question 31

What is a Reverse Logistics System?

Answer 31

A complete supply chain dedicated to the reverse flow of products and materials for the purpose of returns, repair, remanufacture, and/or recycling.