1.

0 Content

No. Title Page

1.0 Content 2

2.0 Introduction 3

3.0 Task 1 4-7

4.0 Task 2 8-12

5.0 Task 3 13-16

6.0 Conclusion 17

7.0 References 18-19

8.0 Coursework 20-23

2.0 Introduction

When used in a business sense, logistics is the management of the flow of things

between the point of origin and the point of consumption in order to meet requirements

of customers or corporations. The resources managed in logistics can include physical

items such as food, materials, animals, equipment, and liquids, as well as abstract items,

such as time and information. The logistics of physical items usually involves the

integration of information flow, material handling, production, packaging, inventory,

transportation, and warehousing.

There is often confusion over the difference between logistics and supply chains.

It is now generally accepted that logistics refers to activities within one

company/organization related to the distribution of a product, whereas supply chain also

encompasses manufacturing and procurement and therefore has a much broader focus, as

it involves multiple enterprises, including suppliers, manufacturers, and retailers, working

together to meet a customer’s need for a product or service.

An operations manager who focuses on logistics will be concerned with issues

such as inventory management, purchasing, transportation, warehousing, and the

planning and organization of these activities. Logistics may have either an internal focus

(inbound logistics) or an external focus (outbound logistics).

Page 2 of 22
3.0 Task 1

(a) Discuss the importance of three components in a successful supply chain. What is the

role of ICT in this field?

Supply Chain Management (SCM) can be divided into three main areas:

purchasing, manufacturing, and transport. From end to end, this includes decisions about

which input materials to use, production quantities, inventory levels, distribution network

configuration, and transportation for both the input materials as well as for the finished

products. For one company, a warehouse near the shipping docs is imperative for

receiving goods from suppliers. For another company, a centralized location is a central

hub in the middle of the city, where deliveries are made promptly to any part of the city

and outlying communities. Warehousing ensures you can do this with "security stocking."

Having enough stock to handle the normal supply needs for this month and next month

means you can fulfill orders even if your suppliers are delayed or incoming inventories

are lost or damaged. Having one central warehouse that stores all your goods feeding your

distribution process will have you constantly in control of the stock available as well as

what is needed in the near future. This is called safety stocking, ensuring your business

doesn’t run into unexpected problems such as faulty stock or shipment delays.

One of the key improvements businesses can make in their supply chain

management is enhancing product tractability. Traceability takes transportation,

inventory and manufacturing into account while playing a role in overall cost. For a long-

Page 3 of 22
term customer satisfaction strategy focused around product packaging, a firm needs to

enhance their traceability and convey that improvement to the customer through

packaging and supply chain labeling. Furthermore, packaging options continue to evolve,

with new materials and labeling options available to increase customer engagement and

enhance the quality of the packaging overall. These too have an impact on the shopping

experience and ultimate sale of a product.

A responsive transportation network begins with end-to-end network visibility.

Visibility allows the business to centralize production operations to lower-cost areas

without impacting customer service levels, because any uncertainty within the network

can be monitored and appropriately managed to keep inventory levels as low as possible.

An economical transportation network actually begins with a shift in attitude. Businesses

are often trapped in the traditional view that transportation is a necessary evil – an

inevitable source of cost and risk. And who can blame them? Transport is by far the

largest component of the cost structure of a business’ logistics. According to sector

research (Chang, 1998), transport accounts for as much as 30% of the total cost of

logistics operations – almost as much as Warehousing and Inventory together!

Information is a key supply chain driver because it serves as the glue that allows

other drivers to work together with the goal of creating an integrated, coordinated supply

chain. IT infrastructure capabilities provides a competitive positioning of business

initiatives like cycle time reduction, implementation, implementing redesigned cross-

Page 4 of 22
functional processes. Several well know firms involved in supply chain relationship

through information technology. Three factors have strongly impacted this change in the

importance of information. First, satisfying in fact pleasing customer has become

something of a corporate obsession. Serving the customer in the best, most efficient and

effective manner has become critical. Second information is a crucial factor in the

managers' abilities to reduce inventory and human resource requirement to a competitive

level. Information flows plays a crucial role in strategic planning.

(b) What are the activities performed at operational level in logistics?

The major activities can be divided in three parts – pick-up from supplier, storage or

warehousing & distribution to end customer as per demand. The sub activities include in

the whole operations are: pick-up of the goods from supplier, packaging, transportation

via air, sea and road, customs clearance, delivery of the goods, warehousing, Quality

Control/ Quality Assurance, Sorting of the goods, inventory management, stock

replenishment, distribution of the stores and return shipment handling.

(c) How warehouse tracking system (WTS) will be helpful in warehouse transportation?

A warehouse management system (WMS) is software and processes that allow

organizations to control and administer warehouse operations from the time goods or

materials enter a warehouse until they move out. Operations in a warehouse include

inventory management, picking processes and auditing.

Page 5 of 22
 Implementing a WMS can help an organization reduce labor costs, improve

inventory accuracy, improve flexibility and responsiveness, decrease errors in picking

and shipping goods, and improve customer service. Modern warehouse management

systems operate with real-time data, allowing the organization to manage the most current

information on activities like orders, shipments, receipts and any movement of goods.

When inventory is managed correctly, warehouse space can be saved. In other

words, it enables accurate stocking, slotting and pulling of orders, giving companies the

opportunity gain higher-level insights into how much of each item is truly needed.

Therefore, they can reduce overstock and minimize understock simultaneously to save

space. The benefits of a warehouse management system (WMS) also promotes customer

satisfaction and service by reducing errors in the order fulfillment process. Also, the

system ensures customers receive undamaged products and promptly. Thus, the number

of customer complaints decreases and improves operations.

A WMS uses a database configured to support warehouse operations, containing

detail describing a variety of standard warehouse elements including: Individual stock

keeping units (SKUs) that are handled and stored, Warehouse storage location and

Expected labor productivity rates by function or activity.

Page 6 of 22
4.0 Task 2

(a) Why companies are turning to 3PLs in the warehouse and distribution space?

Third-party logistics providers are an excellent resource and an integral part of the

ultimate success of your growing business. A third-party logistics provider, also known

as a 3PL, acts as your logistics partner to manage the process of warehousing and shipping

product on your behalf.

Being more efficient in terms of time and money is a major benefit that 3PL

providers can offer to organizations. By not having to spend money on building

warehousing, hiring additional labor, facilitating transportation, and installing various

technologies, companies can reduce their costs drastically, while simultaneously freeing

up more time to focus on core business initiatives. 3PL’s often offer volume discounts on

shipping and shared warehousing facilities, which matters to your bottom line.

Third party logistics providers have a vast resource network available that

provides advantages over in-house supply chains. With access to a 3PL provider network,

supply chains can be expanded quickly, efficiently, and in a cost-effective manner. The

relationships that many 3PL providers have with those in their network can open up

opportunities for companies to receive volume discounts, lower overhead costs, and

timelier service.

One of the advantages of working with a 3PL provider is the ability to easily

position your supply chain in markets where you don’t have an established presence.

Page 7 of 22
Having access to distribution centers and warehouses in various regions allows

companies to grow in new areas by being able to ship goods efficiently to anywhere in

the world.

As with any business, ensuring the happiness of your customers is crucial to

success. Many in-house supply chains can become overwhelmed by the amount of work

they have to accomplish with limited resources. By partnering with a 3PL provider,

manufacturers can ensure the happiness of their customers by offering faster delivery

times and more accurate order fulfillment.

Depending on what your needs are, 3PL providers have the ability to scale space,

labor, and transportation based on the fluctuation of your inventory. Whether you’re

dealing with seasonal inventory or new product releases, 3PLs can help provide adequate

space and resources between your busy and slow times, giving you maximum amounts

of flexibility during any time of the year.

Whether your business is big or small, partnering up with a 3PL provider can offer

many management solutions for all types and sizes of companies. When many companies

examine their current logistics needs, they will often find that utilizing a third-party

provider will reduce their expenses and result in better customer service.

(b) There are 10 popular ways to save cost on transportation

The costs of operating a small car – including fuel, maintenance, and parking –

can exceed the food budget of many families. If you are not ready to give up an

Page 8 of 22
automobile completely, replace some of your trips with public transportation. Most

smaller communities offer scheduled bus services, while larger cities combine reliable

bus services, rapid light rail, and commuter rail systems that are inexpensive and

extensive. Many of the services provide space for passengers to load their bicycles for

shorter trips when they reach their destination.

Carpooling is especially practical where people regularly travel to and from the

same location. Even in situations where using a car is required, it doesn’t have to be your

car. Parents who pick up children at school can arrange to share trips with other parents.

Automobile insurance is one of the larger expenses of car ownership. Laws in most states

require that all drivers carry liability insurance to protect the public, and most lenders

require comprehensive and collision insurance until their loan is repaid.

Proper maintenance of your vehicle will ensure safe, reliable operation and slow

major declines in resale value. For example, regularly detailing – cleaning an automobile,

both inside and out, to restore a like-new appearance through attention to details – can

add hundreds, or even thousands of dollars to its value. Consider paying for fuel with

cash. Posted prices at many gasoline stations include an extra six to eight cents per gallon

when using a credit card. If not cash for purchases, use a gas credit card to earn valuable

cash back. Additionally, many gas stations associated with grocery store chains and

warehouse clubs offer discounted prices to members.

Page 9 of 22
 If a free route is available, consider whether the time and distance you might save

is really worth it, advises family travel veteran Meghan Khaitan. “Tolls can range from

10 cents to $4 in some parts of the country,” said Khaitan, inventor of MyBuckleMate

seat beat holders. “Set your GPS to avoid toll roads when mapping out your route.

Consider the cost of added gas to use non-toll roads, and decide which route is more

economical.”

If you know you’ll need to pay for parking at a special event, you can save time

and money by reserving a spot in advance through sites like SpotHero. In just one

example, a recent SpotHero search for parking near the Air and Space Museum in

Washington, D.C., offered a price range of $12 to $20 for nearby options. SpotHero also

allows users to search for deals on daily or monthly parking fees.

Working from home not only cuts your transportation costs, but it could save your

company money, too. According to August 2012 data from

GlobalWorkplaceAnalytics.com, a typical business would have saved $11,000 per person

per year if those who were able spent half their hours on the clock working from home.

“An excess 100 pounds in the trunk can reduce your fuel economy by 1 to 2

percent.”The money you stand to save varies according to the make and model of your

car. To calculate how much you can save by improving your car’s average miles per

gallon, you can visit FuelEconomy.gov.

Page 10 of 22
 Slowing down, limiting your acceleration and eliminating sharp stops can all help

you save money on gas, according to research from Edmunds. If your cruise speeds range

from 75 to 85 mph, and you constantly accelerate, change lanes and brake sharply, you

can improve your fuel economy by an average of 35 percent by driving with cruise control

set to 65 mph and calming down.

Page 11 of 22
5.0 Task 3

(a) What are the advantages of reverse logistics?

Reverse logistics is for all operations related to the reuse of products and materials.

It is "the process of moving goods from their typical final destination for the purpose of

capturing value, or proper disposal".

In the first instance, companies can retrieve defective equipment and parts which

are either salvaged or refurbished and thus reclaims value out of the defective parts.

Secondly, the packaging and defective materials are collected and recycled thereby

generating scrap value back for the company. Thirdly unsold and obsolete equipment are

collected back from the point of sale which encourages the distributors and stockists to

buy confidently stocks from the company knowing that he can always return unused

inventory and not stand to lose in the bargain. Distributors are more likely to be open to

stocking all fast moving as well as slow moving stocks.

Partnerships with suppliers will be strengthened as manufacturers develop waste

management strategies to keep materials in the supply chain. Resource managers will be

identifying opportunities to sell or dispose of unwanted byproducts to suppliers and

distributors for processing and re-entry into the supply chain.

On the other hand, while the process demands that the defective part be returned

in good condition, both users and retailers do not give enough attention to handling

defective parts. Statistics has shown that the defective parts are found to have suffered

Page 12 of 22
more transit damage and handling damage than the good part. A lack of understanding

that the defective part has value to the organization is noticed in few cases of the sales

staff of the organizations as well as retailers, who treat defectives as scrap. As one of the

India’s foremost specialists in reverse logistics for electronics retailers and manufacturers,

it’s our priority to get items back into the market, recovering maximum value. Should the

product be damaged or faulty, Nasci Ecology’s dedicated team of technicians repair and

refurbish each item.

(b) Discuss the major challenges in global logistics.

The era of one fits all type of service providing has ended. Nowadays, logistics

solutions must be tailored to each customer. Full transparency of orders, visibility from

raw material stage to final goods sale, and reverse logistics have almost become standard

for some commodity groups. With too many variables in global logistics and many

different parties getting involved, keeping above level of service might be challenging at

times.

It is a challenge to provide on time delivery in the logistics industry. In the case

of vessels, it takes months to discharge. Air cargo takes less time, but they are expensive.

There is a lack of infrastructure. Many terminals are trying to make room for large vessels.

This is causing congestion problems. If these infrastructure issues are not resolved fast,

we will continue to have congestion problems.

Page 13 of 22
 Overcapacity in ocean shipping and tightening capacity in domestic shipping in

the US are both affecting the logistics world in a different way. Various studies were

conducted by Drewry and Alphaliner. They found that freight rates are on continuous

pressure due to large vessel deliveries. Lack of demand and oversupply was one of the

biggest problems in the past few years. The three largest container carriers — Maersk,

MSC and CMA CGM — have on order capacity equal to 15.6 percent of their current

combined fleet; the next 18 largest carriers have orders equal to 19.8 percent of their

existing fleet.

Security is growing concern in logistics industry due to goods are being passed

from provider to provider. Shippers book the cargo with local truckers in origin, who

deliveries the cargo to local warehouse for handling. The warehouses then load the cargo

to trucks which deliver the containers to ports. When the shipment arrives to its final

destination, it has passed through seven or eight different sets of hands. Unless everyone

involved in this process does their due diligence, security becomes a problem.

(c) What are the important aspects of transportation and fleet management?

Fleet management involves a series of diverse tasks for businesses who rely on

transportation, aimed at controlling costs, productivity, efficiency and risks in vehicle

acquisition, fuel management, compliance and more. It covers the scope of many

industries from freight, to delivery, sales and service, oil & gas, and emergency services.

The important aspects of transportation and fleet management is transport acquisition,

Page 14 of 22
transport Planning, routing maintenance planning, fleet maintenance and scheduling, risk

management.

Companies who have been using Fleet Management agree that it generally allows

businesses using it to Acquire more control over drivers and vehicles. Less time spent on

predicting time of departure and arrival, getting hold of traffic updates and road

conditions improves productivity. It can save on fuel consumption and prevent delays on

deliveries. Apart from that, it can reduce road accidents, improve driving habits and

prevent dubious reporting. Next, fleet management prevent unauthorized use of vehicles

and track and recover lost vehicles. Customer get better service having real-time access

about the location of their assets. Lessen driver frustration while on the road, increasing

employee satisfaction all around. Last but not least, it also can reduce cost of insurance

and lessen maintenance costs.

Page 15 of 22
6.0 Conclusion

Logistics systems and transportation consist of interdependent relationships that

logistics management requires transportation to perform its day to day activities and

meanwhile, a good logistics system can efficiently improve transportation development

andtraffic environment. Since transportation contribute the highest cost among the related

elements in logistics systems, the improvement of transport efficiency can change the

overall performance of a logistics system. Transportation plays an important role in

logistics system and its activities appear in various sections of logistics processes.

Without the linking of transportation, a powerful logistics strategy cannot bring its

capacity into full play.

The review of logistics system in a broad sense might help to integrate the

advantages from different application cases to overcome their current demerits. Review

of transport systems provides a clear notion on transport applications in logistics activities.

Development of logistics will be still vigorous in the following decades and the logistics

concepts might be applied in more fields.

Page 16 of 22
7.0 References

1. https://courses.lumenlearning.com/suny-hccc-introbusiness/chapter/supply-chain-

management-and-logistics-2/

2. https://smallbusiness.chron.com/importance-warehousing-logistics-system-

74825.html

3. https://www.bridgewaterlogistics.co.za/the-effectiveness-of-warehousing-in-the-

supply-chain-process/

4. https://www.loftware.com/blog/packaging-plays-a-more-important-role-in-supply-

chain-management-than-realized/

5. https://eyefreight.com/the-role-of-transportation-in-supply-chain-management/

6.

https://www.academia.edu/15279484/The_Importance_of_Transportation_in_Supply_C

hain_Excellence

7. https://www.scribd.com/doc/52905109/ROLE-OF-Information-TECHNOLOGY-IN-

SUPPLY-CHAIN-MANAGEMENT-2

8. http://www.indianmba.com/Faculty_Column/FC461/fc461.html

9. http://www.supplychainforum.com/showthread.php/4437-Activities-performed-at-

operational-level-in-logistics

10. https://en.wikipedia.org/wiki/Warehouse_management_system

Page 17 of 22
11. https://www.fmicanada.com/logistics-freight-warehouse/why-companies-are-

turning-to-3pls/

12. https://www.moneycrashers.com/save-transportation-costs/

13. http://www.nascieco.com/reverse-logistics.html

14. http://www.baneasa-airport.com/5-major-problems-global-logistics-industry-facing/

15. https://specialties.bayt.com/en/specialties/q/383737/what-are-the-important-aspects-

of-transportation-and-fleet-management/

Page 18 of 22
8.0 Coursework

1. Please describe the time advantage.

The time advantage Time measures how long a customer has to wait in order to receive

a given product or service. Volkswagen calls this time the customer to customer lead

time: that is, the time it takes from the moment a customer places an order to the

moment that customer receives the car he or she specified. Such lead times can vary

from zero (the product is immediately available, such as goods on a supermarket shelf)

to months or years (such as the construction of a new building). Competing on time is

about survival of the fastest! Time can be used to win orders by companies who have

learned that some customers do not want to wait — and are prepared to pay a premium

to get what they want quickly. An example is Vision Express, which offers prescription

spectacles 'in about one hour'. Technicians machine lenses from blanks on the premises.

Staff are given incentives to maintain a 95 per cent service level against the one-hour

target. Vision Express has been successful in the marketplace by re-engineering the

supply chain so that parts and information can flow rapidly from one process to the

next. Compare this with other opticians in the high street, who must send customer

orders to a central factory. Under the 'remote factory' system, orders typically take about

10 days to process. An individual customer order is first dispatched to the factory. It

then has to join a queue with orders from all the other high street branches around the

country. Once the order has been processed, it must return to the branch that raised the

Page 19 of 22
order. While this may be cheaper to do (a central, highly productive factory serves all of

the branches), it takes much longer to process an order. The time advantage is variously

described as speed or responsiveness in practice. Speeding up supply chain processes

may help to improve freshness of the end product, or to reduce the risk of obsolete or

over-aged stock in the system. Time is an absolute measure, that is, it is not open to

interpretation like quality and cost. By following a product through a supply chain, we

can discover which processes add value and which add time and cost but no value.

2. Please describe FOUR options for crafting strategy.

Page 20 of 22
Figure 1.10 Four options for crafting strategy What are the implications for the way in

which supply chain strategy is approached in different organisations? Here is a brief

description of the four options:

 Evolve. 'Strategy' is not something that is formally undertaken at all. `Our strategy is

not to have a strategy' is a typical viewpoint. Operating decisions are taken in relation to

the needs of the moment, with financial goals as the main guiding principle.

 Classical. While financial goals are again the main guiding principle, these are

achieved through a formal planning process. This is called 'classical' because it is the

oldest and most influential option.

Page 21 of 22
 Accommodate. Here, decisions are back to the day-to-day mode, but financial

objectives are no longer the primary concern. Strategy is accommodated instead to the

realities of the focal firm and the markets in which it operates.

 Systemic. This option for strategy setting sees no conflict between the ends and

means of realising business goals. While goal setting takes place across all major

aspects of the business (including human resources, marketing and manufacturing

policies), these are linked to the means by which they will be achieved in practice.

Page 22 of 22