INTERNATIONAL LOGISTICS The ideal logistics system for a given situation depends on process capabilities,resource costs, and item, demand, and customer profiles. What is ideal is subject to change—change that is sometimes slow and sometimes quite rapid. As processes improve, thesystem design should change in an evolutionary manner. For example, faster requisitionwait times attained through velocity management (VM) enabled lower reorder points forauthorized stock age lists (ASLs), or, in some cases, a higher, more appropriate satisfactionrate within the same storage constraints. By contrast, the logistics system should change in a more revolutionary manner asprocess improvements breach thresholds and as new capabilities are developed. Thishappened, for example, when scheduled truck service in the continental United States(CONUS) began providing deliveries with the same high speed and reliability provided bypremium air service while retaining lower truckload costs. It also happened in OperationIraqi Freedom (OIF), when use of pure pallets enabled direct delivery to widely distributedaerial ports of debarkation in Iraq. Both of these changes significantly reduced distributiontimes. Similarly, the ideal system design also may change gradually or in large steps asresource costs or potential risks change. Enthusiasm about the role of distribution in an ideallogistics system is understandable. Long-term trends toward better processes—resulting fromthe adoption of Lean and VM-like approaches; lower transportation costs in all modes (30to 60 percent lower from 1965 to 1990, depending on the mode); and informationcapabilities that have dramatically increased and become less expensive—have led togreater reliance on rapid distribution and dramatically reduced inventory requirements. In fact, business inventories have been reduced 55 percent as a percentage of grossdomestic product from 1984 to 2003. However, in most situations, even with these trends, itstill continues to make sense to hold inventory at multiple points in the supply chain as partof the ideal logistics system design. Where demand predictability, volumes, distributionpatterns, production horizons, and risk factors support it, maintaining very little inventory—with distribution centers serving primarily as cross-docking operations—is a great approach,but it is not a “one size fits all” situation. [“Cross docking” refers to the process of receivingan item at a distribution center and shipping it out almost immediately without holding it instorage. Maintaining an inventory in a warehouse is virtually eliminated.] More generally,cross-docking activities are integrated with inventory-holding distribution centers (DCs) tobreak down bulk shipments and consolidate them for movement to their final destinations.A simple example in this context is the cross-docking found in supply support activities(SSAs): An SSA cross-docks deliveries of nonstocked and out-of-stock items, sorting thesedeliveries and issues from the SSA to provide one set of parts for each maintenancecustomer. The SSA’s response-time advantage remains such that it continues to add valuefor the SSA to hold in inventory items that drive readiness. Better response time, if it meets acustomer’s need, is one major reason to hold inventory at a location. Another potentialreason to hold inventory is to enable the utilization of lower cost but slower transportationoptions while preserving fast response to final customers from the inventory location. Butthis is advantageous only when the transportation savings outweigh the inventory costs;
that advantage depends on such factors as item weight and price, transportation rates, andinventory holding costs. If an inventory location does not produce an advantage in responsetime, does not lower total supply chain costs, or does not play an analytically supported rolein risk mitigation, then it should be considered for elimination. In the private sector, it seemsthat recent transportation issues that have created occasional bottlenecks, variability inservice, and increased risk are causing a small shift back toward holding inventory. Myimpression is that increasing customer service expectations also are contributing to this shift.So, too, is off shoring, which creates longer and more variable transportation pipelines. [“Offshoring” is the relocation of business processes to another country.] In other cases, recentrises in transportation costs, combined with associated inventory costs, have interruptedthe longer term trend toward reducing inventory and are causing some rethinking of theuse of overseas production. This is an example of a threshold being crossed that triggers achange in the supply chain design; higher off-shore labor costs plus higher overseastransportation-induced inventory costs have changed some sourcing location decisions.LOGISTICS FUNCTIONS:- 1. PICK UP FROM WHARF; A wharf or quay ( /ˈkiː/, US also /ˈkeɪ/ or /ˈkweɪ/) is a structure on the shore of a harbor where ships may dock to load and unload cargo or passengers. Such a structure includes one or more berths (mooring locations), and may also include piers, warehouses, or other facilities necessary for handling the ships. A wharf commonly comprises a fixed platform, often on pilings. Commercial ports may have warehouses that serve as interim storage areas, since the typical objective is to unload and reload vessels as quickly as possible. Where capacity is sufficient a single wharf with a single berth constructed along the land adjacent to the water is normally used; where there is a need for more capacity multiple wharves, or perhaps a single large wharf with multiple berths, will instead be constructed, sometimes projecting into the water. A pier, raised over the water rather than within it, is commonly used for cases where the weight or volume of cargos will be low. Smaller and more modern wharves are sometimes built on flotation devices (pontoons) to keep them at the same level to the ship even during changing tides. 2. UNLOAD CONTAINERS; Caution should be taken when unloading shipping containers, never get under the headers without stands in place, make sure forklift is in a good working condition and is capable of lifting machines.2 people should unload shipping containers, 1 as a spotter and 1 to operate the forklift. Headers are stacked one on top of the other inside shipping container. A suitable area should be chosen to unload the container, with plenty of room around all sides of the shipping container and room to move and work on the headers.
When the container doors are first opened both machines should be visually inspected and Shelbourne Reynolds should be informed of any damage or missing parts immediately. Photographs should be taken of any damage. Headers are bolted through the shipping rollers and through the container floor on both ends of the header. There are normally 4 bolts per roller. Check that there are no objects underneath the headers to stop the rollers from rolling. Check both sides of the headers for enough clearance against shipping container side walls. The headers may have to be pulled closer to the shipping container rear doors, attacha drag chain to the loop welded to the shipping roller and attach the other end of the drag chain to a suitable place on the forklift. Headers should never be pulled closerthan 18” from rear doors. Once the headers are close enough to the shipping container rear doors one end of theheaders can be lifted up, blocks of wood should be put on the forklift tines to ensure that the mast of the forklift cannot hit the end shield of the machines. Caution should be taken when lifting the headers. The headers should only be lifted high enough to get the shipping roller off the floor of the shipping container. The headers should then be pulled straight back out of the container, the spotter should check both sides of the headers for clearance against the shipping container walls. A jack can be put against the shipping roller and against the container wall should the headers be crooked. When the front roller is approximately 18” from the rear shipping container doors, the headers can be set down. Caution should be taken when setting the headers down to ensure that the forklift tines are level before backing forklift away from headers, and that the forklift mast does not hit the end shield of the top machine. The front (side still in container) side of the headers can then be lifted, the headers should be picked up from the rear beside the rear gearbox and the forklift should be positioned as close to the shipping container as possible, blocks of wood may need to be placed on the forklift tines to level the headers.The headers can then be lifted just enough for the shipping roller to clear the shipping container floor. The driver of the shipping container can then be told to drive straight forward until the shipping container clears the headers. The headers can then be slowly lowered to the ground.
The holes in the shipping container need to be filled with wood dowels and the shipping container needs to be swept out. Both machines should be visually inspected and Shelbourne Reynolds should be informed of any damage or missing parts immediately. Photographs should be taken of any damage. Headers should never be moved stacked up. Un-stacking Headers Caution should be taken when un-stacking headers, never get under the headers without stands in place, make sure forklift is in a good condition and is capable of lifting headers. 2 people should un-stack headers, 1 as a spotter and 1 to operate the forklift. Drive forklift tines into lifting pockets on the top head, caution should be taken to make sure that the forklift tines do not hit into the lower header. There are 2 brackets on the LH side of the headers and 2 brackets on the RH side of the headers that need to be unbolted. 6 Once the top header is clear of the bottom header the header stand plates can be fitted. Stands should be placed under the header while working with it in the air. Make sure stand plates are bolted securely in place. The bottom header can then be lifted onto the stands so the shipping rollers can be removed. The header stand brackets should be fitted as on the top header. Both machines should be visually inspected and Shelbourne Reynolds should be informed of any damage or missing parts immediately. Photographs should be taken of any damage. Rollers, Stacking brackets and all hardware should be kept for possible collection by Shelbourne Reynolds.3. COMPUTERIZED INVENTORY;4. Efficiently tracking inventory is an imperative component to a small business’ successful operation. By having up-to-date data regarding all needed office supplies, raw manufacturing materials and merchandise for sale, an organization will drastically increase its bottom line. In addition to the money saved by not reordering unnecessary goods, an enterprise will be better positioned to services customers quickly, as well as navigate any unexpected changes in business, such as a supplier abruptly going out of business. Although many companies maintain this information manually, there are benefits to using a computerized inventory system.
5. Time Savings 6. As the old saying goes, “time is money.” The amount of time that can be saved by a business is, perhaps, the biggest benefit of using a computerized inventory system. A great example of this benefit is the retail industry. In cases where a shop maintains all data manually, its manager must reconcile each sales receipt with every piece of physical inventory. Depending on the size of the establishment and how many different products are sold, this can be a daunting and time consuming task. If that same store, however, used a computerized point of sale, POS, system, the master inventory list would be updated electronically each time a sale is made. The only thing a manager would have to do each day is print out the report highlighting the inventory to be restocked. 7. Accuracy 8. An additional benefit of using a computerized inventory system is the accuracy it ensures. Eighteenth century English poet Alexander Pope is often quoted as having said, “To err is human.” When an inventory list is maintained by hand, the margin of error widens with each update. If one mathematical calculation is wrong or one typo is made, disaster may occur. For instance, if a clerk accidentally adds a zero to the end of a purchase order, a business could potentially end up paying for 10,000 units of merchandise as opposed to the 1,000 that is actually needed. 9. Consistency 10. A small business operates most efficiently when its processes are executed in a consistent manner. By using a computerized inventory system, a business owner can ensures that all orders, reports and other documents relating to inventory are uniform in their presentation, regardless of who has created them. This will allow ease of reading. In addition, uniformity creates a professional appearance, which can go a long way to impress associates, such as potential investors.4. STORAGE;BEFORE CONTAINER SHIPPINGFor many thousands of years, mankind has shipped goods across the oceans, from one land toanother. Think of the great seafaring peoples; the Phoenicians, Egyptians, Greeks, Romans,Portuguese, Spanish, British and many more. Sailing the world looking for new treasures,they brought home and traded food, jewels and materials that their countrymen had neverseen before.
But the process was never easy. The loadingand unloading of individual goods in barrels,sacks and wooden crates from land transport toship and back again on arrival was slow andcumbersome. Nevertheless, this process,referred to as break-bulk shipping was the onlyknown way to transport goods via ship up untilthe second half of the 20th Century.The loading and unloading of the ship was very labor intensive. A ship could easily spendmore time in port than at sea while dockworkers manhandled cargo into and out of tightspaces below decks. There was also high risk of accident, loss and theft.There were some basic systems in place to make the process more efficient, such as the useof rope for bundling timber, sacks for carrying coffee beans, and pallets for stacking andtransporting bags or sacks. However, industrial and technological advances, such as thespread of the railways in the 18th century, highlighted the inadequacies of the cargo shippingsystem. The transfer of cargo from trains to ships and vice versa became a real problem.Before the container shipping industry emerged, boxes of various types and sizes had oftenbeen used in transporting cargo simply because they were the logical way to move things enmasse from one location to another. However, despite these developments, cargo handlingwas almost as labor-intensive after World War II as it had been in the mid-1800s.THE BIRTH OF "INTERMODALISM"To realize intermodal cargo transport, all areas of the transport chain had to been integrated.It was not simply a question of putting cargo in containers. The ships, port terminals, trucksand trains had to been adapted to handle the containers.The ContainershipOn 26 April 1956, Malcom McLeans convertedWorld War II tanker, the Ideal X, made its maidenvoyage from Port Newark to Houston in the USA.It had a reinforced deck carrying 58 metal
container boxes as well as 15,000 tons of bulk petroleum. By the time the container shipdocked at the Port of Houston six days later the company was already taking orders to shipgoods back to Port Newark in containers. McLeans enterprise later became known as Sea-Land Services, a company whose ships carried cargo-laden truck trailers between Northernand Southern ports in the USA.Other companies soon turned to this approach. Two years later, Matson NavigationCompanys ship Hawaiian Merchant began container shipping in the Pacific, carrying 20containers from Alameda to Honolulu. In 1960, Matson Navigation Company completedconstruction of the Hawaiian Citizen, the Pacifics first full container ship. Meanwhile, thefirst ship specifically designed for transporting containers, Sea-Lands Gateway City, madeits maiden voyage on 4 October 1957 from Port Newark to Miami, starting a regular journeybetween Port Newark, Miami, Houston and Tampa. It required only two gangs ofdockworkers to load and unload, and could move cargo at the rate of 264 tons an hour.Shortly afterwards, the Santa Eliana, operated by Grace Line, became the first fullycontainerized ship to enter foreign trade when she set sail for Venezuela in January 1960.The ContainerIt was a logical next step that container sizes could be standardized so that they could bemost efficiently stacked and so that ships, trains, trucks and cranes at the port could bespecially fitted or built to a single size specification. This standardization would eventuallyapply across the global industry.As early as 1960, international groups already recognizing the potential of container shippingbegan discussing what the standard container sizes should be. In 1961, the InternationalOrganization for Standardization (ISO) set standard sizes. The two most important, and mostcommonly used sizes even today, are the 20-foot and 40-foot lengths. The 20-foot container,referred to as a Twenty-foot Equivalent Unit (TEU) became the industry standard referencewith cargo volume and vessel capacity now measured in TEUs. The 40-foot length container- literally 2 TEUs - became known as the Forty-foot Equivalent Unit (FEU) and is the mostfrequently used container today. Lean more about containers.INDUSTRY GLOBALIZATION
On 23 April 1966, ten years after the first converted container ship sailed, Sea-Land’sFairland sailed from Port Elizabeth in the USA to Rotterdam in the Netherlands with 236containers. This was the first international voyage of a container ship.Meanwhile, during the rapid build-up to the Vietnam War, the US military was faced withthe logistical problem of getting supplies to troops. It had somehow to transport masssupplies to a war zone in south-east Asia through a single under-developed port on theSaigon River and a partially-functioning railway. The government turned to containershipping as the most efficient option.Container shipping began to prove its worth at an international level. From this point on theindustry began to grow to the point where it would quickly become the backbone of globaltrade, even though few at the time would have made such bold predictions.1968 and 1969 were the Baby Boomer years for container shipping. In 1968 alone, 18container vessels were built, ten of them with a capacity of 1,000 TEUs which was large forthe time. In 1969, 25 ships were built and the size of the largest ships increased toapproaching 2,000 TEU. In 1972, the first container ships with a capacity of more than 3,000TEU were completed by the Howaldtwerke Shipyard in Germany.Now an entire industry had emerged, demanding unprecedented investment in vessels,containers, terminals, offices and information technology to manage the complex logistics.Throughout the 1970s and 1980s the container shipping industry grew exponentially. Therewere now connections between Japan and the US west coast, and Europe and the US eastcoast. The Europe–Asia route began to be serviced by consortia (a group of carriers sharingspace on ships) in the early 1970s as well as some independent services. By the end of thedecade, shipping between Europe, South East and Eastern Asia, South Africa, Australia/NewZealand, North America and South America were all largely containerized. In 1973, US,European and Asian containership operators were carrying 4 million TEUs all over theworld. By 1983, this would rise to 12 million TEUs by which time containers had alsoarrived in the Middle East, the Indian sub-Continent, and East and West Africa.
The present-day industry is truly global and touches all our lives in ways we cannot imagine. In fact, Marc Levinson, a noted economist, suggests that the container and container shipping are largely responsible for the growth of global trade. Read an excerpt from his book, The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger. Containerization or containerisation (see spelling differences) is a system of freight transport based on a range of steel intermodal containers (also "shipping containers", "ISO containers" etc.). Towards standardsDuring containerizations first 20 years, many container sizes and corner fittings were used;there were dozens of incompatible container systems in the U.S. alone. Among the biggestoperators, the Matson Navigation Company had a fleet of 24-foot (7.3 m) containers whileSea-Land Service, Inc used 35-foot (11 m) containers. The standard sizes and fitting andreinforcement norms that now exist evolved out of a series of compromises amonginternational shipping companies, European railroads, U.S. railroads, and U.S. truckingcompanies. Four important ISO (International Organization for Standardization)recommendations standardized containerization globally: • January 1968: R-668 defined the terminology, dimensions and ratings • July 1968: R-790 defined the identification markings • January 1970: R-1161 made recommendations about corner fittings • October 1970: R-1897 set out the minimum internal dimensions of general purpose freight containersContainer loading This section has multiple issues. Please help improve it or discuss these issues on the talk page. • It needs additional citations for verification. Tagged since November 2011. • It may require copy editing for grammar, style, cohesion, tone, or spelling. Tagged since October 2011. Full container loadA Full Container Load (FCL) is an ISO standard container that is loaded and unloaded underthe risk and account of one shipper and only one consignee, in practice it means that thewhole container is intended for one consignee. FCL container shipment attracts lower freightrates than an equivalent weight of cargo in bulk. Ideally FCL means the container is loadedto its allowable maximum weight or volume. In practice, the FCL in the ocean freight doesnot always mean packing a container to its full payload or full capacity.
 Less than container loadLess than container load (LCL) is a shipment that is not large enough to fill a standard cargocontainer. The abbreviation LCL formerly applied to "Less than (railway) Car Load" forquantities of material from different shippers or for delivery to different destinations whichmight be carried in a single railway car for efficiency. LCL freight was often sorted andredistributed into different railway cars at intermediate railway terminals en-route to the finaldestination.Less Than Carload or Less Than Container Load is "a quantity of cargo less than thatrequired for the application of a carload rate. A quantity of cargo less than that fills thevisible or rated capacity of an inter-modal container."  It can also be defined as "aconsignment of cargo which is inefficient to fill a shipping container. It is grouped with otherconsignments for the same destination in a container at a container freight station".A system of transportation used in international trade, where various shippers pool theirboxed goods in the same container. Issues Additional fuel costsA double stacked container train in Oklahoma, USAContainerization increases the fuel costs and reduces the capacity of the transport as thecontainer itself, in addition to its contents, must be transported; stackable standardisedcontainers are usually heavier than packaging with less stringent requirements. For certainbulk products this makes containerization unattractive. However, for most goods theincreased fuel costs and decreased transport efficiencies are as of 2011 more than offset bythe savings in handling costs. On railways the maximum weight of the container is far fromthe railcars maximum weight capacity, and the ratio of goods to railcar is much lower than ina break-bulk situation. In some areas (mostly the USA, Canada and India) containers can becarried double stacked by rail, but this is usually not possible in other rail systems.
 HazardsContainers have been used to smuggle contraband. The vast majority of containers are neversubjected to scrutiny due to the large number of containers in use. In recent years there havebeen increased concerns that containers might be used to transport terrorists or terroristmaterials into a country undetected. The U.S. government has advanced the ContainerSecurity Initiative (CSI), intended to ensure that high-risk cargo is examined or scanned,preferably at the port of departure. Empty containersContainers are intended to be used constantly, being loaded with new cargo for a newdestination soon after having been emptied of previous cargo. This is not always possible,and in some cases, the cost of transporting an empty container to a place where it can be usedis considered to be higher than the worth of the used container. Shipping lines and ContainerLeasing Companies have become expert at repositioning empty containers from areas of lowor no demand, such as the US West Coast, to areas of high demand such as China.Repositioning within the port hinterland has also been the focus of recent logisticsoptimization work. However, damaged or retired containers may also be recycled in the formof shipping container architecture, or the steel content salvaged. In the summer of 2010, aworld wide shortage of containers developed as shipping increased post-recession, while newcontainer production had largely ceased. Loss at seaContainers occasionally fall from the ships, usually during storms; between 2,000  and10,000 containers are lost at sea each year.  For instance, on November 30, 2006, acontainer washed ashore on the Outer Banks of North Carolina USA, along with thousandsof bags of its cargo of Doritos Chips. Containers lost in rough waters are smashed by cargoand waves and often sink quickly.  Although not all containers sink, they seldom float veryhigh out of the water, making them a shipping hazard that is difficult to detect. Freight fromlost containers has provided oceanographers with unexpected opportunities to track globalocean currents, notably a cargo of Friendly Floatees.In 2007 the International Chamber of Shipping and the World Shipping Council began workon a code of practice for container storage, including crew training on parametric rolling,safer stacking, the marking of containers and security for above-deck cargo in heavy swell. In 2011, the MV Rena ran aground off the coast of New Zealand. As the ship listed, somecontainers were lost, while others were held on board at a precarious angle. Trade union challengesSome of the biggest battles in the container revolution were waged in Washington, D.C.Intermodal shipping got a huge boost in the early 1970s when carriers won permission to
quote combined rail-ocean rates. Later, non-vessel-operating common carriers won a longcourt battle with a U.S. Supreme Court decision against contracts that attempted to requirethat union labor be used for stuffing and stripping containers at off-pier locations. Other uses for containersShipping container architecture is the use of containers as the basis for housing and otherfunctional buildings for people, either as temporary or permanent housing, and either as amain building or as a cabin or workshop. Containers can also be used as sheds or storageareas in industry and commerce.Containers are also beginning to be used to house computer data centers, although these arenormally specialized containers. BBC tracking projectMain article: The Box (BBC container)On September 5, 2008 the BBC embarked on a year-long project to study international tradeand globalization by tracking a shipping container on its journey around the world.[Ocean Freight Container SpecsStandard ContainersSTANDARD 20 (TEU)Inside Length 194" 5.89mInside Width 78" 2.33mInside Height 710" 2.38mDoor Width 78" 2.33mDoor Height 76" 2.28mCapacity 1,172ft3 33.18m3Tare Weight 4,916lb 2,229kg
Inside Height 65" 1.95mTare Weight 12,783lb 5,798kgMax. Cargo 66,397lb 30,117kgAir Freight Container SpecsMain Deck Pallet(Equivalent to IATA Type 2)External Displacement 606ft3 / 17.16m3Maximum Gross Weight 15,000lb / 6,804kgMaximum External Dimensions (L x W x H) Contoured 125" x 96" x 96" 317cm x 244cm x 244cm
LD-7(Equivalent to IATA Type 5)External Displacement 379.9ft3 / 10m3Maximum Gross Weight 10,200lb / 4,672kgMaximum External Dimensions (L x W x H) Contoured 125" x 88" x 63" 317cm x 223cm x 160cmP9A Lower Deck Pallet(Equivalent to IATA Type 6)
External Displacement 242ft3 / 6.9m3Maximum Gross Weight 7,000lb / 3,175kgMaximum External Dimensions (L x W x H) Contoured 125" x 60" x 63" 317cm x 152cm x 160cmLD-11(Equivalent to IATA Type 6)Internal Capacity 242ft3 / 6.9m3Maximum Gross Weight 7,000lb / 3,176kgMaximum External Dimensions (L x W x H) Contoured
125" x 60" x 64" 317cm x 162cm x 162cmLD-8(Equivalent to IATA Type 6A)Internal Capacity 243ft3 / 6.9m3Maximum Gross Weight 5,400lb / 2,450kgMaximum External Dimensions (L x W x H) Contoured 96" x 60" x 64" 228cm x 152cm x 162cmLD-4(Equivalent to IATA Type 7A)Internal Capacity 174ft3 / 5m3
Maximum Gross Weight 5,400lb / 2,450kgMaximum External Dimensions (L x W x H) Contoured 96" x 60" x 64" 228cm x 152cm x 162cmLD-3(Equivalent to IATA Type 8)Internal Capacity 150ft3 / 4m3Maximum Gross Weight 3,500lb / 1,588kgMaximum External Dimensions (L x W x H) Contoured 61" x 60" x 64" 154cm x 152cm x 162cmLD-2
(Equivalent to IATA Type 8D)Internal Capacity 120ft3 / 3m3Maximum Gross Weight 2,700lb / 1,225kgMaximum External Dimensions (L x W x H) Contoured 47" x 60" x 64" 119cm x 152cm x 162cmEnvirotainer SpecsEnvirotainers use dry ice in an active cooling system to hold internal temperatures at one ofthree settings: 0C (32F) / 5C (41F) / -20C (-4F) for 72-84 hours for the shipment of frozen orperishable goods by air.CLD (JYP Size) • (L x W x H) • 39.8" x 30" x 31.5" • 101cm x 76cm x 80cm
RKU (LD-3 Size) • (L x W x H) • 78.7" x 60.4" x 63.8" • 200cm x 153.5cm x 162cmRAP (LD-9 Size) • (L x W x H) • 125" x 88" x 64" • 317cm x 223cm x 162cm5. ORDER PROCESSING;Order processing is the term used to identify the collective tasks associated with fulfilling anorder for goods or services placed by a customer. The processing procedure begins with theacceptance of the order from the customer, and is not considered complete until the customerhas received the products and determined that order has been delivered accurately andcompletely. Companies often invest a great deal of time and effort in designing an efficientorder processing strategy, thus increasing the possibility of establishing a long-term workingrelationship with its customers. The actual approach to order processing will vary, depending on the complexity of the order,and the type of products that are being ordered. In some cases, order processing can bealmost instantaneous. For example, if a buyer places an order for a software download or ane-book, the order processing usually involves nothing more than the buyer renderingpayment for the product, the seller registering the sale and accepting the payment, and theimmediate delivery of the e-book or software by means of a download.When physical goods are involved in order processing, a more complex approach iscommonly employed. Customers may place orders by submitting a written request, by phone,or by using online order forms that are routed directly to the seller. Each order is then routedto a distribution center, where the type and quantity of items requested by the customer are
collected and prepared for shipping. In order to facilitate this process, larger companies oftenoperate multiple distribution centers that are strategically located, allowing for the shipmentto be delivered to the customer as soon as possible.Once the order is received, the customer completes the order processing by inspecting theitems that are delivered. If the items are in fact what the customer ordered, and are notdamaged in any way, then the order processing cycle is considered complete. Should thereceived items be incorrect, or are damaged in any way, then the processing is not consideredcomplete until the issues are resolved.Efficient and accurate order processing is essential to the success of any type of business. Atruly efficient system will require that orders must be verified with customers to ensure thereare no questions about what the customer wants. Once the order is verified, the items neededto fill the order accurately must be collected in a timely fashion. After collecting thenecessary products, they must be packaged securely and delivered to the customer within thetime frame promised. Failure to efficiently manage any of these tasks increases the chancesof disappointing the customer, and thus losing any possibility of repeat business.6. PICK AND PACK;Pick and pack is a part of a complete supply chain management process that is commonlyused in, but not limited to, the retail distribution of goods. It entails processing small to largequantities of product, often truck or train loads and disassembling them, picking the relevantproduct for each destination and re-packaging with shipping label affixed and invoiceincluded. Usual service includes obtaining a fair rate of shipping from common as well asexpediting truck carriers.Pick and Pack services are offered by many businesses that specialize in supply chainmanagement solutions. Business owners may not be aware that companies such as FedEx,UPS and Amazon.com also offer pick and pack services for large scale projects.Case picking is the gathering of full cartons or boxes of product. This is often done on apallet. In the consumer products industry, case picking large quantities of cartons is often anentry level employees task. There is, however, significant skill required to make a goodpallet load of product. Key requirements are that cartons not be damaged, they make gooduse of the available cube (space) and be quick to assemble.A full Pick and Pack Glossary associated with the Pick and Pack industry can be found onPick and packWarehouse management system products create pick paths to minimize the travel distance ofan order selector, but often neglect the need to maximize the use of cube, segregate productsthat should not touch or minimize damage.
7. DISTRIBUTION; Distribution is outbound logistics, from the end of the production line to the end user.It includes activities associated with the movement of material, usually finished goods orservice parts, from the manufacturer to the customer. These activities encompass thefunctions of transportation, warehousing, inventory control, material handling, orderadministration, site and location analysis, industrial packaging, data processing, and thecommunications network necessary for effective management. Distribution includes allactivities related to physical distribution as well as the return of goods to the manufacturer. Inmany cases, this movement is made through one or more levels of field warehouses.Logistics management activities typically include inbound and outbound transportationmanagement, fleet management, warehousing, materials handling, order fulfillment, logisticsnetwork design, inventory management, supply/demand planning, and management ofservices providers. To varying degrees, the logistics function also includes customer service,sourcing and procurement, production planning and scheduling, packaging and assembly.8. DELIVERY;Product delivery is today a process of utmost importance. Having a comprehensive reviewmethodology for Product Delivery Processes (PDP) is verybeneficial to an engineering development activity in that it involves the entire product lifecyclefrom product design to manufacturing to delivery. Herein, DfR has provided a guide into thevarious phases and steps that should be elements of such a process. Doing so will provideyouwith a means to evaluate your processes, determine their effectiveness and efficiency andbenchmark them against current industry best practices and organizations.This can be improved by the following steps- 1. Create a product delivery plan. 2. Follow the plan . 3. Then make sure the plan has been implemented properly as required. 4. Check for the delivery of the product or service by customer feedback.
Integrated Logistics:- Integrated Logistics is defined as “ the process of anticipating customer needs andwants; acquiring the capital, materials, people , technologies and information necessary tomeet those needs and wants; optimizing the goods-or-service-producing a network to fulfillcustomer requests; and utilizing the network to fulfill customer request in a timely way.” Integrated logistics is a service-oriented process. It incorporates actions that helpmove the product from the raw material source to the final customer.Integrated Logistics Management:- The movement of raw materials and components to a manufacturing company mustbe managed. So must the movement of finished goods from the manufacturing plant tofurther processing, to the retail, or to the final consumer. The management of this movementis called integrated logistics management.Variables affecting the Evaluation and Growth of Integrated Logistic:- Many variables affected the evaluation and growth of integrated logistic. • The first was the growth of the consumer awareness and the marketing concept. Product line expanded to meet the rising demand for more selections. This product
line expansion put great presser on distribution channels to move more products and keep cost down, especially in transportation and inventory. • A second factor was the introduction of the computer. Computer experts and integrated logistic manager quickly found a multitude of computer application for logistic. This application offered still greater efficiency in transportation routing and scheduling, inventory control, warehouse layout and design, and every aspect of integrated logistic. In fact computers allowed integrated logistic managed to modal integrated logistic system and then analyze the effect of proposed change. This application greatly advance the system’s approach • The third variable leading to the growth of integrated logistics was the worldwide economy in the 1970s and 1980s. Global recession and rising interest rates caused many firms to refocus attention on reducing cost advantage; many firms were forced to reevaluate overall transportation needs. Also, rising interest rates turned attention to maintaining minimum inventory levels because of the cost of capital • Globalization of business and the development of world trade blocks are a fourth factor influencing the growth of integrated logistics. Integrated logistic can provide firms with a cost advantage. Furthermore, trading blocks in Europe. Southeast Asia, Asia, Africa and the Americans (European Union, association of Southeast Asian nations and the Asian-pacific economic cooperation, southern African development community, North American free trade agreement and now the free trade agreement of the Americas) require integrated logistics to tie the participating countries into single marketplaces. • The final factor affecting integrated logistics is the growth of just-in-time manufacturing (JIT), supply management, transportation, and electronic data interchange (EDI) in the 1980s and 1990s. As manufacturers adopted total quality management (TQM), JIT, and EDI, integrated logistics management has come to the forefront. Effective TQM and JIT require optimizing the inbound and outbound transportation and more efficient inventory management.Operations involved in integrated logistics model:-1. Inbound logistics: It is referred to as procurement or physical supply. It deals with therelationship between the firm and its suppliers. It addresses the flow of materials from thesuppliers to the plant or into service operations.2. Conversion / operations: It deals with the logistical relationship between and among thefacilities of the firm. It addresses how goods and materials move among workstations withinoperations.3. Outbound logistics: It is referred to as physical distribution. It is the logistical relationshipbetween the firm and its customers. It is the movement of s finished product out of the plantto the final customer.
Each of these relationships is sustained by the execution of 5 primary logistics activities liketransportation, facility structure, inventory management, material handling andcommunication / information. These activities are interwoven throughout the integratedlogistics system. Each is vital and is found at every stage. • Transportation: it is necessary in outbound, inbound as well as conversion processes. It deals with the movement of a product into, through, and out of the plant / warehouse. It is the most expensive logistics activity, accounting for 50 % or more of total logistics costs. • Facility structure refers to the strategic placement of warehouses, service centre, and plants throughout the supply chain. It includes the numbers and types of plants, their locations and their operations. • Inventory management refers to product buffers of raw materials, work in progress, and finished goods in logistics pipelines. If every activity worked perfectly, if there were no variation in transit time, novariation in processing time, no loss or damage, no volume discounts for transportation, novolume discount for products, and if firms could forecast demand accurately there would beno need to store productLogistics outsourcing:- Logistics outsourcing involves a relationship between a company and an LSP which,compared with basic logistics services, has more customized offerings, encompasses a broadnumber of service activities, is characterized by a long-term orientation, and, thus, has arather strategic nature.Body for Logistics:-The Council of Supply Chain Management Professionals (CSCMP) is the leadingworldwide association of professionals in supply chain management. The CSCMP is a non-profit association that provides leadership in the development, design and improvement inoccupations that deal with logistics and management of supply chains. Its main objective is"To lead the evolving supply chain management profession by developing, advancing, anddisseminating supply chain knowledge and research". In 2004, the Council of LogisticsManagement (CLM) changed its name to the Council of Supply Chain ManagementProfessionals (CSCMP), reflecting the holistic role that modern logistics professionals play.The "Supply Chain Innovation Award competition" is part of CSCMPs annual globalconference which is attended by supply chain professions from many countries. The awardrecognizes a supply chain teams innovation as demonstrated by quantifiable and sustainablecost-savings, revenue-generating, or customer-satisfaction achievements. In 2009 CSCMPreleased the second edition of their "Supply Chain Management Process Standards", a guideto understanding the processes involved in supply chain activities, and for use inbenchmarking the minimum acceptable practices and best practices related to those activities.
CSCMP publishes the Journal of Business Logistics (JBL) which provides a forum for thedissemination of original thoughts, research, and best practices within the logistics andsupply chain arenas. JBL is published by Wiley-Blackwell which is the internationalscientific, technical, medical, and scholarly publishing business of John Wiley & Sons.Types of Integrated Logistics:-1. One Party Logistics: • The Supplier.A shipper can be; • Someone who prepares goods for shipment, by packaging, labeling, and arranging for transit, or who coordinates the transport of goods • Shipping (fandom), someone who supports a fictional romantic relationship, usually on the Internet.Specialties of 1pl; International transport, Express deliveries, Warehousing, ProcurementA Consignee; In a contract of carriage, the consignee is the person to whom the shipment is to bedelivered to whether by land, sea or air. With One PL, -the name says it all – you only haveone party for all your logistic services. A true logistic purchasing organization, fit to meetyour standards. It does not matter if it is road transport, air or ship freight or dealing withcustoms formalities – we’ll fix everything for you. Do you need a partner for storage anddistribution? Don’t look any further. That’s us! No other transport company is good ateverything. Every European region has its own specialists. A transportation company dealingwith the shipments of containers may not know anything about e.g. suspended transport.OnePL has an extended network of specialists who just know about every kind oftransportation. For each and every order, we select the most excellent transportation companyto give you the best possible service. Because we are so large, we are able to offer thisservice at excellent rates.(E.g.):- The best example of One Party Logistics is a local supplier for raw materials for anyMNCs.2. Two party Logistics: A Second-party logistics provider (abbreviated 2PL) is an asset-based carrier, which actually owns the means of transportation. Second-party logistics providers are;
• shipping lines, which own, lease, or charter their ships, • airlines, which own, lease, or charter their planes, • truck companies, which own, or lease their trucks, • barge companies, which own, lease, or charter their barge, • rail companies, which own their trains, • Warehouse owners. Transportation industry; In the transportation industry, the second-party logistics providers are segmentedbetween different categories of transportation: • sea freight, which regroups shipping lines and barge companies, • air freight, which regroups the airlines, as well as the cargo helicopter companies, • trucking, which regroups the truck companies and the van companies, • railways, which regroups the rail companies, • Warehousing and logistics. (E.g.):- YRC Worldwide Inc. is the holding company for a portfolio of brands including YRC, YRC Reimer, New Penn, USF Holland and USF Reddaway. YRC Worldwide has a comprehensive network in North America with local, regional, national and international capabilities. YRC Worldwide offers supply chain solutions for heavyweight shipments and serves customers who ship industrial, commercial and retail goods. The company is headquartered in Overland Park, Kansas. • The company traces its history back to 1924 when A.J. Harrell of Oklahoma City founded the Yellow Cab and Transit Company, a bus and taxi company that served central Oklahoma. The company remained small until 1952, when an ownership group led by George E. Powell Sr. bought the company. During this time, Yellow helped pioneer the concept of consolidating small freight shipments into trailer loads.
Corporate headquarters in Overland Park, Kansas• In 1968, the company name was changed from Yellow Transit Freight Lines to Yellow Freight System Inc. During the deregulation of interstate trucking in the 1980s, Yellow Freight System embarked on a massive restructuring by creating new distribution centers across the country to better serve customers. The company changed its name to Yellow Corporation in 1992, when it created a parent company, with Yellow Transportation, Inc. as its largest division. Vintage Yellow Corp. Logo• In December 2003 Yellow Corp. acquired Roadway Corp. for $1.05 billion, forming Yellow Roadway Corporation. The merger more than doubled revenue; Yellow Corp. posted a 2003 revenue of $3.07 billion, and Yellow Roadway Corp. had a 2004 revenue of $6.8 billion. These revenues continued to increase with the $1.5 billion acquisition of USF Corp. to a high of $9.9 billion in 2006. These increases also saw jumps in profit, which increased from $40 million in 2003 to $184 million in 2004 to a high of $288 million in 2005. Yellow Roadway Corp. also made forays into the international market, particularly China. In September 2005, the company purchased half of Chinese freight-forwarding company JHJ International Transportation Co. Ltd. and in August 2008, bought a 65 percent share of Chinese Shanghai Jiayu Logistics Co.• Possibly due to earlier manufacturing slowdowns, YRC reported a net loss of $976 million for its 2008 fiscal year. In 2009 it again reported a net loss of $622 million. Towards the end of 2009, YRC narrowly averted having to file for bankruptcy protection by successfully persuading its bondholders to exchange their $470 million in bond notes for roughly 94% of the company’s shares. Concurrent with more recent manufacturing sector growth and recovery, since the fourth quarter of 2009, YRC has again been approaching a net positive balance sheet. Nonetheless its share price
declined in year 2010 more than 80%, raising in 2011 suspects of Death spiral financing. In 2011, September the company completed a financial restructuring that has essentially wiped out any shareholder equity. • On March 1, 2009, Yellow Transportation and Roadway formally merged to create YRC Worldwide. • On December 15, 2011 YRC Worldwide sold a significant portion of Glen Moore including the Carlisle, PA terminal to Celadon located in Indianapolis, IN 3. Third-party logistics: A third-party logistics provider is a firm that provides service to its customers ofoutsourced (or "third party") logistics services for part, or all of their supply chainmanagement functions. Third party logistics providers typically specialize in integratedoperation, warehousing and transportation services that can be scaled and customized tocustomers needs based on market conditions and the demands and delivery servicerequirements for their products and materials. Often, these services go beyond logistics andincluded value-added services related to the production or procurement of goods, i.e.,services that integrate parts of the supply chain.According to the Council of Supply Chain Management Professionals, 3PL is defined as "afirm [that] provides multiple logistics services for use by customers. Preferably, theseservices are integrated, or bundled together, by the provider. Among the services 3PLsprovide are transportation, warehousing, cross-docking, inventory management, packaging,and freight forwarding."Third-party logistics providers include freight forwarders, courier companies, as well as othercompanies integrating & offering subcontracted logistics and transportation services.Hertz and Alfredsson (2003) describe four categories of 3PL providers: • Standard 3PL provider: this is the most basic form of a 3PL provider. They would perform activities such as, pick and pack, warehousing, and distribution (business) – the most basic functions of logistics. For a majority of these firms, the 3PL function is not their main activity. • Service developer: this type of 3PL provider will offer their customers advanced value-added services such as: tracking and tracing, cross-docking, specific packaging, or providing a unique security system. A solid IT foundation and a focus on economies of scale and scope will enable this type of 3PL provider to perform these types of tasks. • The customer adapter: this type of 3PL provider comes in at the request of the customer and essentially takes over complete control of the companys logistics activities. The 3PL provider improves the logistics dramatically, but do not develop a new service. The customer base for this type of 3PL provider is typically quite small.
• The customer developer: this is the highest level that a 3PL provider can attain with respect to its processes and activities. This occurs when the 3PL provider integrates itself with the customer and takes over their entire logistics function. These providers will have few customers, but will perform extensive and detailed tasks for them. Advancements in technology and the associated increases in supply chain visibilityand inter-company communications have given rise to a relatively new model for third-partylogistics operations – the “non-asset based logistics provider.” Non-asset based providersperform functions such as consultation on packaging and transportation, freight quoting,financial settlement, auditing, tracking, customer service and issue resolution. However, theydo not employ any truck drivers or warehouse personnel, and they don’t own any physicalfreight distribution assets of their own – no trucks, no storage trailers, no pallets, and nowarehousing. A non-assets based provider consists of a team of domain experts withaccumulated freight industry expertise and information technology assets. They fill a rolesimilar to freight agents or brokers, but maintain a significantly greater degree of “hands on”involvement in the transportation of products. To be useful, providers must show their customers a benefit in financial andoperational terms by leveraging exceptional expertise and ability in the areas of operations,negotiations, and customer service in a way that complements its customers preexistingphysical assets. On-demand transportation is a relatively new term coined by 3PL providers todescribe their brokerage, ad-hoc, and "flyer" service offerings. On-demand transportation hasbecome a mandatory capability for todays successful 3PL providers in offering clientspecific solutions to supply chain needs. These shipments do not usually move under the "lowest rate wins" scenario and canbe very profitable to the 3PL that wins the business. The cost quoted to customers for on-demand services are based on specific circumstances and availability and can differ greatlyfrom normal "published" rates. On-demand transportation is a niche that continues to grow and evolve within the3PL industry. Specific modes of transport that may be subject to the on-demand model include (butare not limited to) the following: • FTL, or Full Truck Load • Hotshot (direct, exclusive courier) • Next Flight Out, sometimes also referred to as Best Flight Out (commercial airline shipping) • International Expedited 3PL can also be 2PL at the same time in the following cases:
• when a shipping line owns a freight forwarder, • when an airline owns a general sales agent (GSA), • when a freight forwarder owns trucks or a warehouse, • When a courier company owns planes. 4. Fourth-party logistics:The concept of Fourth-Party Logistics (4PL) provider was first defined by AndersenConsulting (Now Accenture) as an integrator that assembles the resources, capabilities andtechnology of its own organization and other organizations to design, build, and runcomprehensive supply chain solutions. Whereas a third party logistics (3PL) service providertargets a function, a 4PL targets management of the entire process. Some have described a4PL as a general contractor who manages other 3PLs, truckers, forwarders, custom houseagents, and others, essentially taking responsibility of a complete process for the customer.(E.g.):- Accenture plc. (NYSE: ACN) is a global management consulting, technologyservices and outsourcing company headquartered in Dublin, Republic of Ireland. It is thelargest consulting firm in the world and is a Fortune Global 500 company. As of September2011, the company had more than 244,000 employees across 120 countries. Accenturescurrent clients include 96 of the Fortune Global 100 and more than three-quarters of theFortune Global 500. The international company was first incorporated in Bermuda in 2001.Since September 1, 2009 the company has been incorporated in Ireland. For the fiscal year ended August 31, 2011, the company generated net revenues ofUS$25.55 billion. The operating profit of the company was $3.47 billion in FY2011, anincrease of 18.2% over FY2010. Its net profit was $2.58 billion in FY2011, an increase of12% over FY2010. Accenture is listed on the New York Stock Exchange and is a constituent of the S&P500. Accenture originated as the business and technology consulting division ofaccounting firm Arthur Andersen. The divisions origins are in a 1953 feasibility study forGeneral Electric. GE asked Arthur Andersen to automate payroll processing andmanufacturing at GEs Appliance Park facility near Louisville, Kentucky. Arthur Andersenrecommended installation of a UNIVAC I computer and printer, which resulted in the firstcommercially owned computer installation in the United States in 1954. Joe Glickauf wasArthur Andersens project leader responsible for the payroll processing automation project.Now considered to be the father of computer consulting, Glickauf headed Arthur AndersensAdministrative Services division for 10 years.