Logistics Final Exam.docx

LOGISTICS FINAL EXAM Q4: SUPPY CHAIN A supply chain is a group of partners who collectively convert a basic commodity (upstream) into a finished product (downstream) that is valued by end-customers, and who manage returns at each stage. Each partner in a supply chain is responsible directly for a process that adds value to a product. A process may be defined as follows: Transforming inputs in the form of materials and information into outputs in the form of goods and service Supply chain management : Planning and controlling all of the processes that link partners in a supply chain together in order to serve needs of the end-customer. The focus of managing the supply chain as a whole is on integrating the processes of supply chain partners, of which the endcustomer is the key one. Supply chain management – boundaries and relationships: Supply chain management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the logistics management activities, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance, and information technology COMPARE BETWEEN LOGISTIC AND SUPPLY CHAIN

 Three basic ways of creating logistics advantage: Quality advantage: Most visible part of supply chain performance Defects, late deliveries, and unavailability are symptoms of quality problems influence negatively customer’s loyalty Concerns product quality and quality of service Time advantage: Time measures how long a customer has to wait in order to receive a given product or service Customer to customer lead time: the time it takes from the moment a customer places an order to the moment that customer receives the good If zero: product immediately available on supermarket shelf Speeding up supply chain processes may help to improve freshness of the end product or reduce risk of obsolete or over-aged stock in the system By following a product through a supply chain, we can discover which processes add value and which add time and cost but no value. Cost advantage: Cost is important for all supply chain processes Low costs low prices or high margins or a bit of each Many products compete specifically on the basis of low price Q5: 1.4. Optimizing supply chains 1.4.1. Logistics costs Selling price – breakdown of costs: Production costs: » 40% to 60%

Purchase costs raw materials Transformation Logistics costs: » 10% to 20% Marketing and sales costs: » 15% to 20 % Margin/profit: » 5% to 15% 1.4.2. Role of inventory costs Inventory costs: Purchase cost Cost of carrying inventory: Storage costs: -Cost of putting away stock receipts and moving material within the warehouse. (How much of your employees' time is spent in these activities?) -Rent + utilities for the portion of your warehouse used to store stock inventory. -Insurance and taxes on inventory. Inventory shrinkage and obsolescence. Opportunity cost of the money invested in inventory. (How much could you make if you were to take the money you're investing in inventory and invest it in a more traditional investment? If you are financing your inventory, how much interest are you currently paying the bank?) Ordering costs Out-of-stock costs 1.4.3. How to reduce inventory costs? Reduce volumes to be stocked Improve forecasts in order to reduce security stock Reduce the size of orders, of production units, of deliveries and increase their frequencies (Just-in-time) Stocking upstream in the logistics chain rather than downstream: Reduce time necessary for operation situated downstream in the logistics chain (e.g. order preparing) Place certain operations rather downstream in the logistics chain (e.g. postponement) Synchronize operations (Just-in-time) TRẮC NGHIỆM Traditional production schemes Push model is a method for organizing production according to market

demand forecast. This method creates the inventory and "push" of the market to meet the actual needs. The category of push system is that demand is forecasted and production is scheduled before demand is there. Just-in-time system (JIT) Just-in-time: not too early, not to late Based on pull model: Pull model based on the actual demands of customers for production and distribution rather than forecast. It means that the demands of the customer "pull" from the manufacture of goods on the market. The company does not manufacture products before receiving orders from customers

6. PL 1PL – First Party Logistics • A first-party logistics provider is a firm or an individual that needs to have cargo, freight, goods, produce or merchandise transported from a point A to a point B. The term first-party logistics provider stands both for the cargo sender and for the cargo receiver 2PL – Second Party Logistics • A second-party logistics provider is an asset-based carrier, which actually owns the means of transportation. Typical 2PLs would be shipping lines which own, lease or charter their ships; airlines which own, lease or charter their planes and truck companies which own or lease their trucks 3PL – Third Party Logistics • A third-party logistics provider provides outsourced or 'third party' logistics services to companies for part or sometimes all of their supply chain management functions 4PL – Fourth Party Logistic • A fourth-party logistics provider is an independent, singularly accountable, non-asset based integrator who will assemble the resources, capabilities and technology of its own organization and other organizations, including 3PLs, to design, build and run comprehensive supply chain solutions for clients. 5PL – Fifth Party Logistics • A fifth party logistics provider will aggregate the demands of

the 3PL and others into bulk volume for negotiating more favorable rates with airlines and shipping companies. Non asset based, it will work seamlessly across all disciplines Supply Chain Facilitators • Third-Party Logistics (3PL), also known as logistics outsourcing or contract logistics • Any logistics activity not performed in-house is representative of thirdparty logistics • Common 3PL activities involve inbound and outbound transportation, carrier negotiation and contracting, and freight consolidation Supply Chain Facilitators • Fourth-party logistics (4PL) or lead logistics provider (LLP) • Refers to a company whose primary purpose is to ensure that various 3PLs are working toward the relevant supply chain goals and objectives • Need to have the expertise to consider: • Supply chain solutions and potential trade-offs • Make constant objective decisions across a broad set of • value-adding activities 7. các hình thức IFF Method of Transportation of IFF The Transportation fall into one of three basic types: Land: - Road haulage agent in road transport Road transportation: Mainly linked to light industries where rapid movements of freight in small batches are the norm + Allows to go from door to door +Pre and post transport by road although main transport may be by air, sea, inland waterway or rail +Road infrastructures are large consumers of space with the lowest level of physical constraints among transportation modes. +High pollution - Railway agent or railway forwarder in railway transport Rail transportation: Railways are composed of a traced path on which are bound vehicles. They have an average level of physical constrains linked to the types of locomotives and a low gradient is required, particularly for freight. Heavy industries are traditionally linked with rail transport systems,

although containerization has improved the flexibility of rail transportation by linking it with road and maritime modes. Rail is by far the land transportation mode offering the highest capacity with a 23,000 tons fully loaded coal unit train being the heaviest load ever carried. Gauges, however, vary around the world, often complicating the integration of rail systems Water: maritime shipping and inland waterway. Loading agent or shipping agent in connection with inland waterway or sea transport Inland waterway transport: By rivers and channels Little energy consumption Not expensive but slow Heavy industries are traditionally linked with inland waterway transport systems, although containerization has improved the flexibility of inland waterway transportation by linking it with road and maritime modes Maritime transportation: Because of the physical properties of water, maritime transportation is the most effective mode to move large quantities of cargo over long distances. Containerization transport of smaller quantities and over shorter distances High terminal costs, since port infrastructures are among the most expensive to build, maintain and improve. Not expensive but high inventory costs as it is slow Air: Air freight agent or air freight forwarder in air transport Air transportation: High speed but expensive Air activities are linked to high-value freight (high-tech products, luxury goods), perishable goods (perishable by destination, by nature), goods that are sensitive to temperature, shocks…, goods that need to be moved in short delays Air routes are practically unlimited Air transport constraints are multidimensional and include the site (a commercial plane needs about 3,300 meters of

runway for landing and take off), the climate, fog and aerial currents 8. phân loại service và service air Express service, Priority uplift (Expedited): short transit time Standard service (Premier): normal transit time Consolidation service (Value): longer transit time due to waiting time for consolidation shipments