University Of Finance & Administration LOGISTICS SYSTEMS [ NA_LS ]

University Of Finance & Administration

LOGISTICS SYSTEMS[NA_LS]

Jiri Amler, [email protected]

2.

LECTURE FRAMEWORK

ENGLISH programme (winter term 2013)

Transport logistics – activities related to tangible and intangible operations Logistic technologies, its selection and exploitability Supplying Warehousing Related information systems Lean Management principles in logistics Within consultation: practical discussions on topical economical issues

INTERNATIONAL BUSINESS [B_IB] LOGISTICS SYSTEMS [NA_LS]

3.

LITERATURE

Alan Rushton, Phil Croucher, Peter BakerThe Handbook of Logistics and DistributionKogan Page Ltd., London 2010ISBN: 0-74974669-2

Andre Langevin, Diane RiopelLogistics System: Design and OptimizationSpringer Science+Business Media, New York, 2010ISBN: 0-38724971-0

Martin ChristopherLogistics and Suply Chain Management3-rd Edition, Pearson education Ltd., London, 2005ISBN-13: 978-0-273-68176-2


4.

Corporate Logistics

Systemic Division:

Manufacturing logistics – inbound, procurement, storing, component flow, warehousing, distribution

Transport logistics – tangible and intangible operation


5.

Transportation as a Logistics Process

Focus: fulfillment of customer´s needs and expectations

Requirements: highest possible flexibility preference on economical performance

Concerns:the above mentioned concerns both, goods and services, especially the transport services


6.

Content of Transport Logistics

Content of Transport Logistics is:

an application of logistic attitude towards organization and management of the supply (goods or services) movements through the transport network from the sender to the final consumer


7.

Meaning of Transport Logistics

Transport logistics is the second most important part of the corporate logistics, after the manufacturing logistics

Specific segment of the transport logistics is a freight forwarding logistics


8.

Complex Logistic Process in Transport

Activities related to the tangible (material) operations - transportation, storing, selection/sorting, dispatch, consolidation and deconsolidation of loads

Activities related to intangible(non-material) operations – freight forwarding, trading, financial, customs clearance and insurance

Services related to previous – supportive, informational, consulting, social


9.

Requirements to Freight Transporters

Logistics put narrow-specified and relatively heavy requirement on transporters:

Capacity flexibility and specialization in services provided

Combination capability among various transport systems

Speed and flexibility of services

Multi-purpose utilization of accessible transport systems and devices


10.

Logistics Implementation

Logistics seem to be the last opportunity for company to acquire the competitive advantage and increase the effectivity.

The competitive advantage could be acquired only through beating the European standard.


COST / SERVICE LEADER

COST / PRODUCTIVITY ADVANTAGE

capacity utilizationasset turn

low inventorylow wastage

VALUE ADVANTAGEtailored service

distribition chanel strtgreliability

responsivenessinformationflexilbility

11.

Ten Commandments

I. Focus on customersII. Integrate log. systemIII. Tight log. with strategyIV. Make log. chain flexibleV. Create information systemVI. Make strategic alliancesVII. Quantificate, measure, countVIII. Use log. controllingIX. Follow the financial relationsX. Educate the staff


12.

Tangible Logistic Operations

The goods and materials are transported according to customized logistics technologies

Logistic chains often utilize principles of manipulability (possibility to move and stowe the goods), using always the same type of technical tools.

Criteria: amount of supply, volume/weight, size of load unit, regularity of flow, season, demand, product life cycle


13.

Selection of Transport/Storage Tools

The key issue - thorough and relevant choice of manipulation, transport and storage equipment

All mentioned equipment shall be in concert with particular types of loading and manipulation units for operations being carried out throughout the logistic chain.

Examples: palets, cage-rollers, big-bags, IBC-containers.


14.

Logistics Technologies

Complex:

Just-in-time (vs. Just-in-case) Hub&Spoke Kanban House-to-house Quick Response (QR) Efficient Customer Response (EQR) Intermodal (combined) transport

+ classical (group), telematic (EDI, RFID) and virtual (simulation, visualization)


15.

Just-in-Time

Objective: zero inventory, ultimate quality Way: ultimate cooperation and coordination between

supplier and customer Inventory become obsolete (redundant)

Characteristics: Quality control – TQM, ISO Regular reliable delivery Nearshoring Cooperation on methods of value stream mapping

analysis


16.

JIT – Customer Value

Lower purchase price

Elimination of fixed costs in storage, warehouse staff,

energy consumption

Lower capital allocation in inventory

Savings from significantly faster reaction of management

to eventual drawbacks or errors


17.

JIT – Main Objectives

Compression of non-value adding operations (Ishikawa) Effectivity and efficiency rise Decrease of total cost Shortening of customer´s order cycle time


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18.

Customer´s Order Cycle

Time from receipt of order to physical supply dispatch

Consists of time for procurement, production and

distribution


Procurement Production Distribution

Logistic Lead Time

Customers order cycle time

Order fulfilmentLead-Time Gap

19.

Total Costs & EOQ

Total cost = purchase costs + ordering costs + holding costs

Q= order quantity Q´= optimal order quantity D= annual demand quantity of the product P= purchase cost per unit S= fixed cost per order (not per unit, typically cost of ordering and shipping and handling. This is not the cost of goods) H= annual holding cost per unit (also carriing or storage cost)

Economic Order Quantity


20.

Hub & Spoke

Regional economic activities in region are center-bound, where the small loads are consolidated or re-consolidated

The delivery of smaller loads is done by the flexible road transport within the inner attraction radius

while

The key transport between regional hubs is carried out by capacity transport.

Good influence on demography, environmentally positive Key usage in courrier services


21.

Kanban

Developed by Toyota Motor Co. 1950-1960s The method of supplying parts and materials into the production in the moment of neccessity – supply timing

KANBAN = card, tag. The production line is devided into separate work places with strictly defined operations – selling / buying points

Mutual sales of tags – the seller is a buyer at the same time „Sale“ of defined material or semiproducts neccesary for further

operation Byuer sends tag-order to his supplier Supplier sends required volume of goods in full quality with tag-

delivery note Both are not allowed to create stock, time and quality pressure

eliminates failure and enables continual control


22.

Kanban

Kanban system is suitable for repeating and high-volume production of the same products with long life cycle

The method is based on:

design of self-managed regulatory units and sectors

the strategic and operation management is still allocated to the HQ


23.

House to House

The oldest sytem, based on providing the full transport services on one single transport document

In CZ – most often by road or rail, or eventually combination of both

Today, few company have own sidetrack (rail), therefore the load is delivered by combination of vehicles


24.

Quick Response

Used in retail sector for store replenishment

The main subjects – producer and retailer (short chain)

Utilization of combination of EDI and bar-code within all chain links

Benefit:

inventory reductionavioding lack of availability of goodsmanipulation operation reduction lead-time 24-48 hours


25.

Efficient Customer Response

Upgrade of QR, designed for food&drink retail

The main subjects – producer with his supplier and wholesaler & retailer (long chain)

Utilization of full automated product identification, of EDI and bar-code within all chain links + electronic monetary exchange and real-time banking data

Benefit:

inventory reductionavioding lack of availability of goodsmanipulation operation reduction lead-time 24-48 hours


26.

Efficient Customer Response

Supportive strategies:

Supply chain management strtg – to stabilize flows of goods with minimum inventory volumes

Product groupage strtg – to stabilize adequate logistic infrastructure and process management

New product introduction strtg

Sale promotion actions – done exactly where they can target and hit the max. possible auditory


27.

Intermodal Transport

Main carriage : rail inland waterway sea (reefer) local pickup and delivery by road

air cargo – occassional usage due to cost

Main device: containers or interchangable carriage units (trailer)goods is being transported in one unit while means of transport change in sequence


28.

Intermodal Transport

Loading units : palets containers interchangable trailer conventional trailer on railway carriage complete truck on railway carriage combirail - trailer on rail undercarriage

Main benefit: combination of ways without re-loading the goods globaly unified and standardized ITU (Intl. transport unit)


29.

Accompanied Intermodal Transport

Complete truck on railway carriage :

Ro-La High investment exposure Economy on 200 – 400 km route Low noise and emission exposure Driver rests


30.

Non-Accompanied Intermodal Transport

Containers and interchangable trailers :

Easy re-load and trans-shippment Benefit – broad network of terminals and depots Economy on > 500 km route, night mode Any carriage is aplicable

Con: high infrastructure, hardware and organization

investments


31.

Warehousing

Important part of logistics system providing storage of the

goods in place of origin

Abridging the space between place of origin and place of

consumption

Cross over space and time


32.

Functions of Warehousing

1. Movement of goods/materials

Receiving Transfer / stowage Reserve storage Order picking Sortation Collation and added value services Marshalling and dispatch


33.


2. Storage of goods

Time definite – reserve storage for replenishment Mid-term – bumper reserves

peak-season goods product modification speculation specific business terms


34.


3. Transfer of information

Real-time analysis of volumes

real inventory in-transit status of goods inventory allocation inbound / outbound orders customer orders storage size


35.

Electronic Data Interchange

Transfer of related documents (order advise, packing

list) between the IT systems of concerned companies

Replacement of mail, fax etc.

Condition: standardized form of docs Compatibility of IT networks


36.

Intangible Logistics Operations

Freight forwarding (spedition) – core of logistics

Integrating element among supplier, consumer and transport carrier (shipper)

Process of transport operation organization, management and coordination

Ensuring the goods will be delivered OTIF


37.

Spedition

Ruled by legal norms – Commercial Codex, Civil Codex, Trade Licence and Road Traffic Act

International legal system and Interest associations

Basic binding document – forwarding contract


38.

Thank you for your attention

LOGISTICS SYSTEMS [NA_LS]

Documents

University Of Finance & Administration LOGISTICS SYSTEMS [ NA_LS ]