Week 1 - Introduction Flashcards
How is capacity shortage a challenge for supply chains? (2)
• It has led to disruptions such as several delays throughout the supply chain
• The average freight vs available space ratio was 78:22 compared to previously being 73:27 (According to TIMOCOM data)
What is the impact of capacity shortages on European logistics? (6)
• High transport price
• Frame contracts not respected
• Inflexible transport management system
• Inefficient warehouse capacity usage
• Delivery and pick up delays
• Low service levels
What are the key characteristics of logistics services? (5)
• Intangibility
• Inseparability
• Variability
• Perishability
• Cannot be owned
What is meant by intangibility in logistics services? (4)
• Services cannot be assessed by sight, feel, smell, taste
• Processes are as equally important as outcomes
• Service can only be evaluated after it has been consumed
• Services purchases may be perceived as more risky than goods - mainly due to the wastage and storing unused services compared to goods
What is meant by inseparability in logistics services? (3)
• Production of a service can’t be separated from its consumption
• Customers are co producers of a service
• Example are airplane or vehicle capacity
What implications does inseparability have for accessibility to services (3)
• Focuses on relationships rather than exchange
• Customer involvement includes self-service and cooperation with service personnel “partial employees”
• Service sold first then produced
What is meant by variability in logistics services? (3)
• Each producer-consumer encounter may be unique
• Difficult to maintain a quality control and consistency
• Seek to improve productivity through standardisation, and by training both employees and customers (role of communication)
What are the implications with variability in logistics services?
Need to have effective services recovery policies in place because it is more difficult to protect customers from service failures
What is meant by perishability in logistics services? (3)
• Services can’t be stored
• If the sale is not used the sale is lost
• Important to effectively manage supply and demand to smooth out the demand irregularities (forecasting)
When can services be stored?
When some information-based output can be recorded in electronic/printed form and re-used many times CRM
What are the implications with perishability?
Market definition and segmentation are essential
What is meant by ‘services can’t be owned’ in logistics services?
• Buyers have the right to a service but can’t re-sell the service once experienced
• Most services have no residual value (no value once it has been used)
What are the implications of logistics services being unable to own? (2)
• Customers obtain temporary rentals, hiring of personnel or access to facilities and systems
• Pricing often based on time
Define supply chain management (Christopher, 2005)
Is the management of upstream and downstream relationships. With suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole
What is the aim of supply chain management?
To evolve the company’s supply chain into an optimally efficient, customer-satisfying process, where the effectiveness of the whole of the supply chain is more important than the effectiveness of each individual department