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Five Major External Forces that drive change
- Organizational Consolidation
- The Empowered Consumer
- Government Policy and Regulation
receiving, storing, and distributing incoming goods or material for use.
movement of material associated with storing, transporting, and distributing goods to its customers.
Generic Value Chain
- referred to as Porter's Value Chain
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 customer's requirements.
Four Subdivisions of Logistics
- Business Logistics
- Military Logistics
- Event Logistics
- Service Logistics
That part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, service, and related information from point of use or consumption in order to meet customer requirements
The design and integration of all aspects of support for the operational capability of the military forces (deployed or in garrison) and their equipment to ensure readiness, reliability, and efficiency.
The network of activities, facilities, and personnel required to organize, schedule, and deploy the resources for an event to take place and to efficiently withdraw after the event.
The acquisition, scheduling, and management of the facilities/assets, personnel, and materials to support and sustain a service operation or business.
Value Added Roles of Logistics
- The five principal types of economic utility which add value to a product or service are:
- Warehousing and Storage
- Industrial packaging
- Materials handling
- Inventory Control
- Order Fulfillment
- Demand Forecasting
- Production Planning/Scheduling
- Customer Service
- Facility Location
- Return Goods Handling
- Parts and Service Support
- Salvage and Scrap Disposal
- extremely significant to logistics, the location of fixed points in the logistics system with respect to demand and supply points.
- Very important to transportation costs, since these costs tend to increase with distance.
Two techniques of Logistics System Analysis
- Short-Run or Static Analysis
- Long-Run or Dynamic Analysis
fixed spatial points where goods stop for storage or processing.
Represent the transportation network and connect the nodes in the logistics system.
Complex Logistics Channel
Logistics Relationship Types
Vertical and Horizontal
These refer to the traditional linkages between firms in the supply chain such as retailers, distributors, manufacturers, and parts and materials suppliers.
Includes those business agreements between firms that have "parallel" or cooperating positions in the logistics process.
Range of Relationship Types
Transational Range of Relationship
Both parties in a vendor relationship are said to be at "arm's length"
Collaborative Range of Relationship
the relationship suggested by a strategic alliance is one in which two or more business organizations cooperate and willingly modify their business objectives and practices to help achieve long-term goals and objectives
Strategic Range of Relationship
represents an alternative that may imply even greater involvement than the partnership or strategic alliance
- Interaction/ Communication
- Performance Analysis
- Benefits and Burdens
- "compelling reasons to partner"
- all parties "must believe that they will receive significant benefits in one or more areas and that these benefits would not be possible without a partnership"
- "supportive corporate environmental factors that enhance partnership growth and development"
- As such, they are the factors that, if present, can help to ensure the success of the relationship
- occurs when companies work together for mutual benefit.
- goes well beyond vague expressions of partnership and aligned interests.
- Companies leverage each other on an operational basis and creates a synergistic business environment in which the sum of the parts is greater than the whole.
Seven Immutable Laws of Collaborative Logistics
- Collaborative Logistics Networks Must Support:
- Real and Recognized benefits to all members
- Dynamic creation, measurement, and evolution of collaborative partnerships
- Co-buyer and co-seller relationships
- Flexibility and security
- Collaboration across all stages of business process integration
- Open integration with other services
- Collaboration around essential logistics flows
- Essentially, a third-party-logistics firm may be defined as an external supplier that performs all or part of a company's logistics functions.
- Among these, multiple logistics activities are included, those that are included are "integrated" or managed together, and they provide "solutions to logistics/supply chain problems.
Types of Third Party Logistics Providers
Outsourced Logistics Services
Current-Future IT-Based Services
Next Generation of Logistics Outsourcing
Three Eras of Globalization
First Era of Globalization
The First Era (1400-1800) was initially driven by countries seeking materials and goods not available in their own land.
Second Era of Globalization
The Second Era (1800-2000) was driven by companies seeking goods and materials, labor, economies of scale, and markets.
Third Era of Globalization
The Third Era of Globalization (2000-present) was significantly characterized by the fact that it is being powered by individuals and smaller organizations.
Supply Chains in a Global Economy
- Economies and companies could improve their "wealth by allowing specialization of tasks.
- The advantage is true as long as you can sell the increased volume that is produced. It is an important role of logistics to help extend the market area of countries or companies through improved efficiency to lower the "landed cost" in new market areas.
Global Markets and Strategy
- The global business environment has changed significantly and become much more conducive to business activity between and among different countries
- Success in the global market place requires developing a cohesive strategy, including product development, technology, marketing, manufacturing, and supply chains
Global markets and strategy have four important characteristics:
- Standardization reduces complexity
- Global competition reduces the product life cycle
- Traditional organizational structures and business models frequently change
- Globalization introduces more volatility
Global Transportation Options
- The most pervasive and important global shipment method, accounting for two-thirds of all international movements.
- Major advantages are low rates and the ability to transport a wide variety of products and shipment size.
- Three major categories:
- Liner Service
- Charter Vessels
- Private Carriers
- Fast Transit times
- An advantage in packaging
- Disadvantage of air carriage is high rates
- Use motor transport when shipping goods to between the United States and Mexico or Canada.
- It is very common in Europe.
- Motor also plays a large part in intermodal shipments.
- International railroad use is also highly similar to domestic rail use.
- Intermodal container shipments by rail are increasing.
- Maritime bridge concepts:
- Land Bridge
Storage Facilities and Packaging
- Transit sheds provide temporary storage while the goods await the next portion of the journey.
- Carrier provided hold-on-dock storage free of charge until the vessel's next departure date.
- Public warehouses are available for extended storage periods.
- Bonded warehouses operate under customs agency's supervision and are used to store, repack, sort, or clean imported merchandise entered for warehousing without paying import duties while the goods are in storage.
- Export shipments moving by ocean transportation require more stringent packaging than domestic shipments normally do.
- The shipper may find settling liability claims for damage to export goods very difficult. Usually, the freight handling involves many firms, and these firms are located in different countries.