Logistics Flashcards
Logistics Definition
Logistics is that part of supply 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 the customers requirements
Outsourcing
The transfer to a third party of the management and delivery of a process previously performed by the company itself.
Involves handing process ownership over to a third party
Offshoring
The transfer of specific processes to locations in other countries.
The company still owns and controls the process in the new location.
What is an IML?
An inventory mixing location. (Public, contract, multi-cliet, private warehousing) Provide economic and service benefits. Takes care of material handling and packaging
Advantages of a Public Warehouse
Serve all legitimate users Require no capital investment on the user’s part Allows users to rent space as needed Can be rented on a month-to-month basis Offers more locational flexibility May provide specialized services.
Advantages of a Private Warehouse
Are owned or occupied on a long-term lease
Offer control to owner
Assume both sufficient demand volume and stability so that warehouses remain full, i.e., higher utilization rate.
Drawbacks of private warehouses include:
High fixed cost;
Necessity of having high and steady demand volumes;
May reduce an organization’s flexibility.
What is Contract Warehousing?
(Otherwise known as 3PL warehousing) Is a long-term arrangement providing unique warehousing services to one client. Both vendor and client share the risks associated with the warehousing
Less costly than private warehousing and more costly than public warehousing
What is Multi Client Warehousing?
Mixes attributes of contract and public warehouses
Services are less customized than those in a private facility
One of the biggest advantages in multi-client warehousing is cost
Services are purchased through minimum 1 year contracts
Are attractive to smaller organizations
Economic Benefits of Warehouses
Consolidation/Break Bulk, Assortment, Postponement, Stockpiling and Reverse Logistics
What are Potential Service Benefits of IML’s?
Spot stocking, full line stocking, production support and market presence
What is Spot Stocking?
Often used by manufacturers of seasonal products who, in addition to their core warehouse network, lease temporary facilities for specific periods.
What is Full Line Stocking?
Closest to the traditional warehouse in which the supplier stocks the full range of goods in anticipation of demands.
What is Production Support?
Production support may include maintenance of an inventory to support manufacturing operations.
What is Market Presence?
Often used as a justification for a local warehouse. Argument is that it provides a speedier response and, hence, will lead to an increase in market share.
What are the 5 Modes of Transport?
Road, Rail, Air, Water and Pipeline
What does Sea freight primarily transport?
Dry bulk commodities
Bulk petroleum, petroleum products and chemicals
Containers
What is MultiModal?
Using a combination of 2 or more kinds of transport in your logistics solution
Benefits of Multimodal Transport
Minimizes time loss at trans-shipment points
Provides faster transit of goods
Reduces burden of documentation and formalities
Savings on freight rates
Establishes only one agency to deal with
Reduces cost of exports
What is a Transport Management System?
A software package that automates the process of logistics-related activities
Why is Facility Location important?
Choosing locations for facilities like DCs, Warehouses and production facilities facilitate logistical effectiveness and efficiency.
Strategic Importance of Facility Location includes…
Cost considerations
Consumers have become sensitized to buy products only when prizes are low
Outsourcing decisions
Near sourcing. Example: Mexico
Customer service expectations continue to increase
Should an organisation rely on one or two facilities or multiple facilities?
More facilities and higher inventory costs, less transport costs
Less facilities and lower inventory costs, more transport costs
Location of customer or supply markets
Improvements in transportation & technology
Economic growth. Ex: McDonald’s in China.
What considerations should be made when deciding on the Network Design?
First and most important, the logistics network strategy must be understood.
Cost-based? Service-based? Or something else?
How many facilities?
What type of facilities?
Where?
Transport mode to be used?
Name some Logistics Information Management Systems
Enterprise Resource Planning (ERP), Radio Frequency Identification (RFID), Warehouse Management System, Transport Management System and Vendor Managed Inventory
Corporate Level Strategy is…
focused on determining the goals for the company, the type of business in which the company should compete and the way the company will be managed.
