Logistics and Supply Chain

Logistics
Logistics is the flow of funds, goods and information between origin and
consumption. Logistics involves information, material handling, production, packaging, inventory,
transportation, warehousing and often security.

Supply chain operations

Supply chain operations include the systems, structures and processes to plan and execute the flow of
goods and services from supplier to customer.

Components of Logistics:

Forward Flow
Logistics has been defined as that part of the supply chain process that plans, implements, and controls
the efficient, effective flow and storage of goods, services, and related information from the point-of
origin to the point-of-consumption in order to meet customers’ requirements

Reverse Flow
Logistics has been defined as the movement of product or materials in the opposite direction for the
purpose of creating or recapturing value, or for proper disposal
Inventory control
Inventory management is to keep enough inventories to meet customer requirements, and simultaneously
its carrying cost should be lowest.
It is basically an exercise of striking a balance between the customer service for not losing the market
opportunity and the cost to meet the same.

Warehousing
Warehousing is the storing of finished goods until they are sold. It plays a vital role in logistics operations
of a firm. The effectiveness of an organization’s marketing depends on the appropriate decision on
warehousing.

Transportation
For movement of goods from the supplier to the buyer, transportation is the most fundamental and
important component of logistics.
When an order is placed, the transaction is not completed till the goods are physically moved to the
customer’s place. The physical movement of goods is through various transportation modes.

Material handling and storage system

The speed of the inventory movement across the supply chain depends on the material handling methods.
An improper method of material handling will add to the product damages and delays in deliveries and
incidental overheads.

Insurance
This provides coverage against physical damage or loss of goods during shipping, whether by land, sea or
air or even during storage.

Activities involved in supply chain operations

 transformation of natural resources – This involves the extraction of raw materials from the
earth and preparing of these raw materials to be converted to inputs for the manufacturing
process.
 movement and storage of raw materials – This involves the movement of raw materials from
the point of extraction to warehousing facilities where it can be stored and used at later time in
the manufacturing process
 processing of raw materials and components into finished goods – The final product is
eventually made from the conversion of the raw materials to final product eg. Bakery products
such as cakes and desserts.
 storage of work-in-progress and finished goods – After the goods are made they must be stored
before they can be distributed to wholesalers or retailers.
 delivering the finished product from point of origin to the point of destination – this involves
getting the final product from the manufacturer through the distribution chain to the consumer.

THE DISTRIBUTION CHAIN

Intermodal – is the movement of cargo from origin to destination by several modes of transport where
each of these modes have a different transport provider or entity responsible, each with its own
independent contract.. Multiple carriers contracted to fulfill a single journey.

Multimodal – is the movement of cargo from origin to destination by several modes of transport where
each of these modes have a different transport provider or entity responsible, but under a single contract.
A Single carrier contracted to fulfill a single journey.

Simply put, the key functions of both terminologies are the same, but the differentiation lies in the
contract and responsibility of the movement.

MODES OF TRANSPORT AND THEIR SUITABILITY FOR DIFFERENT GOODS

Air

Advantages
 deliver items quickly over long distances
 give high levels of security for sensitive items
 be used for a wide range of goods

Disadvantages
• air transport can involve higher costs than other options, and is not suitable for all goods
• flights are subject to delay or cancellation
• there are taxes to be paid in each airport
• fuel and currency surcharges will usually be added to freight costs
• further transportation may be needed from the airport to the final destination

RAIL
Advantages
 Rail transport is a cost-effective and efficient way to move goods.

Disadvantages
 routes and timetables available can be inflexible, especially in remote regions
 can be more expensive than road transport
 mechanical failure or industrial action can disrupt services

ROAD
Advantages
 Low cost
 Extensive road networks
 Possibility to schedule transport and tracking the location of goods
 Safe and private delivery

Disadvantages
 long distances overland can take more time
 there can be traffic delays and breakdowns
 there is the risk of goods being damaged, especially over long distances
 toll charges are high in some countries
 different road and traffic regulations on some countries

MARINE (CRUISE AND CARGO)

Advantages
• possibility to ship large volumes at low costs
• shipping containers can also be used for further transportation by road or rail

Disadvantages
• shipping by sea can be slower than other transport systems and bad weather can add further delays
• routes and timetables are usually inflexible
• tracking the goods’ progress is difficult
• port duties and taxes
• further transportation overland might be needed to reach the final destination
• basic freight rates are subject to fuel and currency surcharges

PIPELINE
Advantages of Pipeline:

1. They are ideally suited to transport the liquids and gases.

2. Pipelines can be laid through difficult terrains as well as under water.
3. It involves very low energy consumption.
4. It needs very little maintenance.
5. Pipelines arc safe, accident-free and environmental friendly.
Disadvantages of Pipelines:
1. It is not flexible, i.e., it can be used only for a few fixed points.
2. Its capacity cannot be increased once it is laid.
3. It is difficult to make security arrangements for pipelines.
4. Underground pipelines cannot be easily repaired and detection of leakage is also difficult.

DIGITAL DELIVERY
This is the delivery or distribution of digital media content such as audio, video, software and video
games.[1] The term is generally used to describe distribution over an online delivery medium, such as
the Internet, thus bypassing physical distribution methods, such as paper, optical discs,
and VHS videocassettes.

TRANSPORT DOCUMENTS

IMPORT LICENSES

BILL OF LADING
 STRAIGHT BILL OF LADING
ORIGINAL - NOT NEGOTIABLE
Bill of Lading Number:
FROM:
1. Shipper / Generator Location 2. Shipper / Generator Mailing
Address (if different)
A Top Generator
567 Oak Drive
Carterville, MI 48222 Phone No.:
Emergency Response Phone: Generator ID (if applicable):

TO:
3. Consignee / Facility Name and Address 4. Consignee / Facility ID#
Best Disposal
123 Main Street MIK23321456
Smithtown, MI 48333 Phone No.:

9. Notes:

DELIVERED BY:
5. Carrier/Transporter Name and Address 6. Carrier Transporter ID#:
A Great Transporter
123 Elm MIK987789987
Jonesville, MI 48222 Phone No.:
7 8.
a Containers
. 7b. 9.
BASIC DESCRIPTION Total 10. 11.
H UN or NA number, Proper Shipping Name, Hazard Class, N Ty Quantit Unit other
M Packing Group (if any) o. pe y Wt./Vol.
1. Antifreeze 40 D 2200 g Gallon
M

2.

3.

4.

18. Special Handling Instructions and Additional Information:

By signing below, Shipper hereby declares that the contents of this consignment are fully and accurately described above by the proper
shipping name and are classified, packaged, marked and labelled/placarded, and are in all respects in proper condition for transport
according to applicable governmental regulations. As shipper, I hereby certify that the liquid industrial by-product(s) are fully and accurately
described on this shipping document, in proper condition for transport, and that the information contained on the shipping document is
factual.
SHIPPER (Print Employee Name) Signature Month Day Year

Sam Redding
Carrier / Transporter (Print Driver Name) Signature
Sam 5
Month 16
Day 16
Year

John James Doe John James 5 16 16

Consignee / Facility Acknowledgement of Receipt (Print Name) Signature Month Day Year

16
Jane Smith
Jane 5
White Copy: Consignee/Facility Original ● Yellow Copy: Consignee to Shipper ● Pink Copy: Carrier/Transporter ● Green
Copy: Shipper Initial Copy
2
AIRWAY BILLS
ROLE OF TRANSPORT IN MARKETING;

1. Physical Supply of Products

Transportation carries necessary raw materials to factory for production of goods and supplies finished
goods to consumers. It creates place and time utility of goods by transporting from one place to another. It
easily carries finished to the hands of those who need and use them. This significantly increases aggregate
sales of goods. In fact, transport is such a key of marketing, which helps in carrying goods to the scattered
consumers in different places, narrows the gap between producers and consumers and facilitates to
distribute goods to the consumers at minimum cost and time.

2. Specialization

Transportation facility encourages division of labor and specialization on geographical or regional basis.
Transportation cost highly affects localization of industries. Production of goods may center at such place
where the environment is the best and production cost is minimum. This makes maximum utilization of
local resources possible, which is both economically and socially necessary.

3. Mobility of Labor And Capital

Transportation facility provides mobility to labor and capital. If more labor force is available at any place,
transport helps to carry it economically to necessary place. The means of transport carry labors from one
place to another. This encourages labor and capital to use and invest in more productive sectors.

4. Stabilization in Price

Transportation helps to bring stability in price of different products. It transports goods from more
supplied places to scarcely supplied areas. This establishes coordination between demand and supply, and
brings stability in prices. It helps to supply necessary goods regularly to the consumers. Besides
this, consumers get necessary goods at lower prices, because it encourages competition among producers
and makes mass production at lower cost possible.

Importance of transport in domestic, regional and foreign trade.

Beside economic importance, transportation has also social, political and cultural importance. It
establishes social and utility by narrowing geographical distance. It consolidates social and cultural utility
and strengthens national integration. It helps to establish relationship with foreign countries.
Transportation also helps widen knowledge and skill in different sectors. In this way, it helps establish
social utility, uniformity and integrity and strengthens national security.
IDENTIFY ADVANTAGES AND CHALLENGES OF SUPPLY CHAIN OPERATIONS;

Advantages: better quality of life; wealth creation; new and innovative job opportunities including
entrepreneurship, for example, telemarketing.
1. Expanded sourcing opportunities. A world market offers businesses opportunities to secure a
diverse selection of workers, materials, and products. This larger selection of goods and services
often means the opportunity to select higher-quality or lower-cost options.
2. The opportunity to reach new customers in new markets. Just as globalization offers more
materials and laborers, it also offers new customers in new locations with new needs.
3. More room to grow. New technologies and a shrinking globe mean that it is easier for
companies to grow generally: to produce more, offer more, and sell more. Expanding borders also
means expanding businesses and corporations.
4. More opportunities to save money. Globalization’s biggest benefit is that increases options:
options for source materials, options for workers, and options for transportation. More options
mean more chances to save on spending and increase profits.

Disadvantages: globalization, counterfeiting, product complexity, rapid product obsolescence, regulatory

complexity, management blunders, changing market conditions, natural disasters, and political instability.
1. Large-scale management issues. The opportunity to grow business goes hand-in-hand with the
issue of greatly increased supply chain complexity when it comes to management. Companies
must scale up all aspects of their business as it grows across borders, which can cause problems
that stretch the globe. Inventory issues and distribution issues are high on the list of problems
encountered by going global.
2. Greater risk. Having materials, factories, and customers all over the world means being at the
mercy of global events, from natural disasters, to port closures, to political uprisings.
Globalization requires that supply chain managers have detailed risk management plans in place
and that they are prepared when disaster strikes.
3. Global competition. You are not the only entity with access to supplies, products, and labor
around the world – you now have a lot of competition scattered across the globe. Globalization
necessitates that supply chains are highly efficient and and well-run in order to stay competitive
in a global market.
4. Information collection challenges. With different aspects of your supply chain scattered around
the world, and with an increasingly complex process for getting products to customers, data
collection and oversight can be huge new challenges. While big data analytics is helping some
supply chain managers tackle the issue of information collection, it is still a large problem that
has emerged alongside globalization.
5. Legal issues. Operating across borders means operating in countries that very likely have
different laws and regulations. For example, secret product details may not be safe in China,
where they have less stringent intellectual property laws. In another example, a country where
you have a factory may have very different employment laws than another where you have an
identical factory.
 IMPACT OF LOGISTICS AND SUPPLY CHAIN OPERATIONS
ON THE COMPETITIVENESS OF BUSINESS

Here are a number of solutions that if used will help a company gain the competitive advantage:
 Shipper Associations / Consortiums: By being a part of a shippers association, a business can
benefit from lower transportation rates due to the competitive negotiations and economies of
scale.
 Transportation Management Systems (TMS): Such platforms allow a business to manage their
data flow more efficiently and allows for visibility of performance and cost. Keeping an eye on
costs, transit times, delivery performance, freight claims, and compliance will allow for strategic
thinking and put a company a step in front of its competitors.
 Auto-Tender Functionality: This feature allows freight to be tendered directly to carriers,
greatly reducing the time spent scheduling a shipment. When set up using a least cost carrier, the
savings combined with the efficiency gain provide a great advantage.
 Advanced Tracking: Visibility and transparency are becoming more and more important in
business. Advanced tracking features have been adopted to give customers real-time information
on where their goods are.

2PL - 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 - 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 - 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.

IDENTIFY THE PROBLEMS LIKELY TO BE ENCOUNTERED IN DISTRIBUTION;

 availability of airport, harbor and docking facilities

 Delayed shipment,
 spoilage,
 misdirection of goods,
 inadequate warehousing facilities,
 lack of proper security measures,
 industrial unrest
 Ineffective communication.
OUTLINE MEASURES TO MITIGATE PROBLEMS IN DISTRIBUTION
 Government intervention.
 Communication network including use of the internet.
 Insurance.
 Selecting the most appropriate channel of distribution based on product.
 Use handling services with good reputation.
 Careful labelling and documentation.
 Avoid holding large stocks.
 Employing Security Company, use of security cameras.

IMPACT OF INFORMATION TECHNOLOGY ON

LOGISTICS AND SUPPLY CHAIN OPERATIONS.

Global Positioning Systems (GPS)

Logistics management, when distracted driving is an issue, helps fleets locate vehicles to update vendors
and customers regarding shipments. Updated GPS systems are able to accurately direct a driver on a safe
route, without showing roadways that don’t really exist or roadways that are not complete.

Geographic Information System (GIS)

GIS as a tool can be used to map manufacturing, warehouse locations, clients, supplier locations and
distribution centers, showing product supply or manufacturing facilities. Geographic Information Systems
helps in analyzing and representing the information visually, allowing for greater understanding of the
operating environment around the corporate. GIS can be used to analyze the routes. Route analysis helps
us to generate the most efficient route (best route / shortest route) that the vehicle should take between the
company and it supply chain link. Alternative routes can also be generated and analyzed. Alternative
routes help in rerouting of the supplies in case of problems (either man –made or natural) on one route.
GIS helps in identifying the locations of new depots and warehouses based on the factors like source of
incoming materials and the target market to which the stocks will move that is the different links in the
supply chain.

Portnet
The National Single Window for Foreign Trade Procedures, this is a computer tool which enables the e-
processing of authorizations, permits, certificates, customs documents and other deliveries by the
competent organizations of the State, to undertake specific import and export operations. The developed
system guarantees the technological and legal security of different documents upon the integration of a
digital signature and e-payment.
Benefits of Portnet
 Increasing the efficiency of the logistics chains of economic operators and public and private
service providers.
 Speeding up cross-border movement of exported and imported goods
 Providing an environment favorable to the competitiveness of economic operators with the
possibility to deliver just in time.
 Reducing uncertainty regarding timeframes and logistic costs.
  Improving business climate, good governance and increasing transparency in company-
administration relationships.
 Simplifying and speeding up procedures and formalities of the entry and withdrawal of goods.
 Improving the traceability of operations at any time, anticipation and planning capacities due to
the quality and good flow of information.
 Saving paper costs. ·
 Saving costs of transports and archiving documents. ·

Telemarketing, e-commerce
 Increasing transparency into all operations through the internet and mobile devices.
 Omni channel retailing, keeping customers involved in management decisions and reducing
downtime by using all the resources of the company to fill more orders.
 Enhanced reverse logistics, increasing customer service and giving warehouse managers a means
of handling returns regardless of their origin.
 Automated inventory systems, ensuring stock levels are appropriate, and self-optimizing slotting
systems that can tell warehouse managers what needs to be moved, as well as when and where.

Global logistics providers such as Fedex, DHL, and Amazon Logistics

Global logistic providers now allow for logistical services to be provided at a much lower cost than in
previous decades and encourages businesses to outsource their logistic needs to these global providers.
These firms have enhanced their technically capabilities and economies of scale to offer global logistical
services at competitive rates. They have also utilized efficient systems that would for large scale, complex
logistical task to be undertaken with relative ease.

Logistics Hub
A Logistics Centre is the hub of a specific area where all the activities relating to transport, logistics and
goods distribution – both for national and international transit – are carried out, on a commercial basis, by
various operators.

Logistics hubs, for example, Jamaica is a premier logistics node within the Americas set up to capitalize
on the trade and business opportunities that will emanate from the expansion of the Panama Canal.
With strategic investment and global partnerships, the Jamaica logistics hub will include:

 maritime and air cargo logistics hubs;

 strategic storage, handling and processing points for bulk commodities;
expansive special economic zones facilitating assembly, warehousing, sorting, distribution and other
value-added services, particularly for industries catering to time-sensitive and high-value cargo;
 aviation-related maintenance repair and overhaul, ship repair and dry-docking;
 a robust digital network to support efficient global value chain tracking and tracing as well as e-
commerce operations.