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  • 1. International Transport Systems (M06)
    • Organisation of this unit
    Semester 1, 2008 J.Fei AMC
    • Part one
    • Transport economics
    • – Module 2
    • Transport modes
    • – Module 3
    • Transport Terminals
    • – Module 4
    • Part three
    • International transport market
    • – Module 8
    • Transport marketing and public relations
    • – Module 9
    An overview – Module 1
    • Part two
    • Global transport system
    • – Module 5
    • Transport and logistics
    • – Module 6
    • Transport and IT
    • – Module 7
    • Part four
    • Transport development
    • – Module 10
    • Current issues
    • – Module 11
    • Transport policy and regulation
    • – Module 12
  • 2. International Transport Systems (M06)
    • Learning objectives
      • Discuss the concept of logistics and explain the need for logistics in the distribution system
      • Explain the need for integration of the links in the logistics chain
      • Explain the difference between logistics and supply chain management
      • Discuss logistics in the global scale
      • Explain the role of transport in the logistics chain
    Semester 1, 2008 J.Fei AMC
  • 3. International Transport Systems (M06)
    • Transport and logistics
      • Feature of logistics
        • Definitions:
        • Logistics for an organisation
        • Typical logistics network – physical distribution
        • Logistics and supply chain management
      • Transport as part of a distribution system
        • JIT
        • Third party logistics (3PL)
        • Integrated logistics and transport
        • The role of transport in logistics
    Semester 1, 2008 J.Fei AMC
  • 4. International Transport Systems (M06)
    • Transport and logistics
      • Feature of logistics
        • Definitions:
        • a) the entire process of materials and products moving into, through, and out of a firm.
        • b) the process of anticipating customer needs and wants; acquiring the capital, materials, people, technologies, and information necessary to meet those needs and wants; optimising the goods- or service-producing network to fulfil customer requests; and utilising the network to fulfil customer requests in a timely way.
        • c) the management of supply chain in commerce and industry. Logistics management has three constituent elements; namely, procurement logistics, production logistics and distribution logistics.
    Semester 1, 2008 J.Fei AMC
  • 5. International Transport Systems (M06)
      • Feature of logistics
        • Logistics for an organisation:
    Semester 1, 2008 J.Fei AMC Inventories of raw materials Inventories of finished products Procurement Distribution Internal transport External flow of goods that must be organised and monitored
  • 6. International Transport Systems (M06)
      • Feature of logistics
        • Logistics for an organisation:
    Semester 1, 2008 J.Fei AMC
  • 7. International Transport Systems (M06)
      • Feature of logistics
        • Logistics for an organisation:
        • The relationship between the supplier and the demander:
        • Four flows between the two nodes
    Semester 1, 2008 J.Fei AMC
  • 8. International Transport Systems (M06)
      • Feature of logistics
        • Logistics for an organisation:
        • The relationship between the supplier and the demander:
        • The transaction flow
    Semester 1, 2008 J.Fei AMC
  • 9. International Transport Systems (M06)
      • Feature of logistics
        • Typical logistics network – physical distribution
    Semester 1, 2008 J.Fei AMC
  • 10. International Transport Systems (M06)
      • Feature of logistics
        • Logistics and supply chain management
        • Logistics is responsible for managing the physical flow of products including transport and warehousing, and information flow.
        • Supply chain management integrates product, information and cash flows among organisations from the point of origin to the point of consumption, with the goal of maximising customer satisfaction and minimising costs
        • Logistics management is part of supply chain management.
    Semester 1, 2008 J.Fei AMC
  • 11. International Transport Systems (M06)
      • Transport as part of a distribution system
        • JIT (Just-In-Time): to reduce costs and risks associated with storage of materials by timing the system such that the materials arrive at a facility just as they are needed in a process. This requires intricate and efficient timing of shipment.
        • Integrated logistics: the integration of following activities:
          • Production
          • Packaging
          • Handling
          • Managing inventory
          • Warehousing
          • Transport
          • Integrated logistics is characterised by the consolidation of goods in larger and fewer locations throughout the trade system. Costs can be reduced by the reduction of stock expenses and lead times. Handling costs are reduced by the use of modern equipment and automated facilities.
    Semester 1, 2008 J.Fei AMC
  • 12. International Transport Systems (M06)
      • Transport as part of a distribution system
        • Third party logistics (3PL)
        • Depending on the level of outsourcing (transactional, tactical, and strategic), a 3PL performs activities such as:
          • Pick and pack
          • Warehousing
          • Distribution
          • Tracking and tracing
          • And :
          • Provides integrated IT system to facilitate free information flow and create supply chain visibility
          • Becomes partners in supply chain management
    Semester 1, 2008 J.Fei AMC
  • 13. International Transport Systems (M06)
      • Transport as part of a distribution system
        • Why use 3PL?
          • To save time: free up resources to focus on firm’s core competency
          • To do it better: use other’s expertise and achieve economies of scale
          • To share responsibilities: keep stores and customers properly stocked, deliver orders in a perfect manner
          • To re-engineer distribution network: logistics outsourcing can be a quick way to re-engineer distribution networks to meet global market demands and gain a competitive edge.
    Semester 1, 2008 J.Fei AMC
  • 14. International Transport Systems (M06)
      • Transport as part of a distribution system
        • Integrated logistics and transport
        • Integrated logistics potentially creates higher transport demands. Why?
        • Hub and spoke system!
        • Goods often do not move from the supplier to the demander by the shortest possible route. They go via a terminal – seaport, airport, road or rail terminal – to be reloaded with goods from other regions for distribution.
    Semester 1, 2008 J.Fei AMC
  • 15. International Transport Systems (M06)
      • Transport as part of a distribution system
        • Integrated logistics management
          • Four factors shaped the development of integrated logistics distribution
          • Scientific management: (advanced production technology + increased marketing costs + distribution cost: 10-30% of total costs)
          • Data processing technology: automated inventory control was realised. Computers allowed data to be entered once and reused for various purposes including order tracking, production scheduling, shipping, invoicing, and analysis.
          • Customer satisfaction: get the product to the customer at the right time in the right quantity and with the right logistical support.
          • Profit: profit leverage available from reduced logistics costs.
    Semester 1, 2008 J.Fei AMC
  • 16. International Transport Systems (M06)
      • Transport as part of a distribution system
        • Integrated logistics concept
    Semester 1, 2008 J.Fei AMC Vendor Customer Physical distribution Operations Procurement 30% 40% 30% Stage 2 Stage 3 Stage 1
  • 17. International Transport Systems (M06)
      • Transport as part of a distribution system
        • Integrated logistics concept
          • Stage 1 Physical distribution: integration of finished goods transport, warehousing, inventory management, customer service (balance between costs and service)
          • Stage 2 Internal linkages: join two or all three of the internal material flow loops so that 60% to 100% of the firm’s total inventory could be better managed, (elimination of buffer inventories between two loops, e.g. JIT)
          • Stage 3 External linkages: search for efficiencies in relationship with vendors, customers, and third parties. Development of Electronic Data Interchange (EDI), Just-in-time (JIT), and Distribution Requirements Planning (DRP).
    Semester 1, 2008 J.Fei AMC
  • 18. International Transport Systems (M06)
      • Transport as part of a distribution system
        • The role of transport in logistics
        • The mismatch between the place of production and demand due to labour specialisation, mass production and scale economies, creates the need for transport. Transport is the physical thread connecting the company’s geographically dispersed operations. It adds value to the company by creating time and place utility.
          • Time compression: faster transit time minimises pipeline inventories; time saved in delivery frees up time in other areas of the logistics chain; maximising inventory velocity (how many times inventory turns per year, or the average number of days of inventory on hand) and reducing dwell-time (average number of days inventory sits idle in the pipeline).
    Semester 1, 2008 J.Fei AMC
  • 19. International Transport Systems (M06)
      • Transport as part of a distribution system
        • The role of transport in logistics
          • Reliability: reliable and consistent delivery, absence of shipment loss and damage.
          • Standardisation of processes, practices, and policies reduces risk, time and labour costs.
          • JIT delivery and information support
          • Flexibility: for special nonrecurring, non-standard, or emergency situations, altered shipment plans or rush shipment can be provided.
          • Customisation: provision of customised services, e.g. carrier-managed inventory reordering, labelling etc.
          • * The performance of transport is a major determinant of the efficiency of the whole logistic/supply chain and eventually determines the competitiveness of the organisations within the chain.
    Semester 1, 2008 J.Fei AMC