1.

Compare the concept of a modern supply chain with more traditional distribution
channels. Be specific regarding similarities and differences.

Although both of the modern supply chain and the traditional distribution channels have a
common objective of ensuring that the products are available to the customers when they need
them, they differ in concept when it comes to the scope of relationships, integration, type of
planning, drive, and primary objectives and management.

With modern supply chain, the logistics activities from traditional concept are being
extended with some additional activities of the organization that are coordinated and collaborated
through a strategic business processes using the innovative supply chain management software
and facility. This concept also considers transportation capacity and operational performance.

Sharing of information is essential in modern supply chain, since it creates a value chain
from raw materials to the end users, every department has a role to play to create an integration
process driven by consumer demands for the purpose of attaining higher profitability and broader
network.

The traditional distribution channels, however, have a very limited inbound and outbound
logistics in processing inventory. In this concept, the marketing, distribution, planning,
manufacturing, and the purchasing operates independently because of their different objectives
that later on create conflicts and confusions. These conflicts create delays that can cause inefficient
supply chain and unresponsive to customer needs. This concept is more on “push” strategy without
getting the feedbacks of costumers.

2. Explain the specific role the logistics play in supply chain operations. Describe and
interpret the logistics value proposition as regard to specific customer relationships and cost.

According to the Council of Logistics Management, “logistics is that part of the supply
chain process that plans, implements, and controls the efficient, effective forward and reverse
flow of storage of goods, services, and related information between the point of origin and the
point of consumption in order to meet customers’ requirements.”

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 Given the quote from CLM, logistics is responsible about the transfer or move of any goods
or services from one place to another. This activity is already a value proposition since this also
composes the company’s activity of ordering, inventory counting or recording, transportation,
warehousing and packaging. This part of the supply chain operation is essential because it hold the
link of the entire supply operation.

Another value preposition that logistics play in supply chain operation is the value in terms
of cost framework. This means competency and commitment of operations to meet the
requirements and expectations of specific and segmented consumer that may result to high
customer response with low spoilage and just enough inventory.

3. Evaluate the fundamental similarities and differences between procurement,

manufacturing, and customer relationship management performance cycles as they relate to
logistical control.

Procurement is an activity which supports the manufacturing process by getting or buying

the needed materials from vendors and suppliers at the lowest possible cost not sacrificing the
quality of the specified needed materials or services. This process is somewhat similar to customer
relationship management as it also involves relationships to suppliers for the company get the
service level the company wanted from the business partners for the delivery of the requests. The
difference is that, the number of suppliers involved in the procurement does not equate the number
of the customers the company has to serve.

Manufacturing is the efficient way of putting everything at the right time and on the right
track especially when it comes to production and assignment of personnel. The goal of this process
is to produce the products in a great quality, right quantity without spoilage and unnecessary
features not included in the customers’ specifications. The same as the procurement, this process
has all the needed steps to convert raw materials to a finished product based on customer required
specification. The difference is that, the identification whether the finished product has been made
previously or the product is just a first time made product.
Customer relationship management performance cycle is an activity involved in processing
and delivering the orders of customers. And since the main priority of every company is to deliver

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the finished goods to end-user on time, the company needs to provide every service available to
do just that. This is a service delivery that may include pre, during and after sales service to
customers. Usually the service being provided here aside from the physical goods are the
intangible services. For example, free delivery service or free repair services.

4. Explain the differences between transactional and relationship marketing. How do

these differences lead to increasing emphasis on logistical performance in supply chain
management?

The transactional and relationship marketing typically differs on the length of interaction
with the customers. The transactional is usually one-time or short-term transaction with the main
objective of getting the sales and secure more volume of transaction to different people not
considering the relationship that they may have. However, the relationship marketing is a strategy
that aims to build and establish a long-term (not one-time) relationship with clients for future sales
and referrals. This kind of marketing relationship strategy usually takes time but creates positive
result.

During the early weeks of discussion in Logistics management, this question was brought
up and if I were to choose between the two kinds of marketing, I already answered that the
relationship is the one that I will choose. The reason for this is that, relationship marketing can
give the company with loyal customers which will definitely give referrals as the company’s next
client.

And as suggested by Johnson and Selnes (2005), firms are increasingly adopting a supply
chain philosophy referred to as relationship marketing, in response to maturing markets,
globalization and greater competition. This approach to managing supply chain relationships views
customer relationships as key assets of the organization (Webster 1992; Day 2000), which allows
firms to maintain and increase sales among their most profitable customers (Zweibach 2005) and
to improve communications and better coordinate buyer-supplier relationships (Sweney 2005)

Relationship marketing may also lead to increase emphasis on logistical performance in

supply chain management because the company may tend to shorten the delivery time of the
products and service which will impress the customers. This kind of relationship to customer can

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also help the company in pinpointing customer concerns easily because the company has a sure
way of getting them for some feedbacks which can serve as a good marketing opportunity for the
company.

Having the relationship marketing, the company will care more on the quality control of the
products or the service because the company have to take care of the image that the clients already
perceived. With this relationship, the company will be forced to provide extra services of value-
added services to clients that will also make clients impressed with the company especially if the
company provides customization and good on-time logistics.

5. Justify how logistics performance is crucial to Just-In-Time (JIT).

The Just-In-Time methodology is a philosophy being used by some of the companies like
the Toyota car manufacturing. This philosophy usually focused on doing what is needed and
necessary with the right amount needed for the needed time. This also helps company to eliminate
waste and limit the inventory.

Logistics as part of the supply chain management involves the physical flows and deliver
goods across country boundaries at the right time, to the right locations, of the right quantities, and
with the right quality, according to (Kreng & Wang, 2005; Wong & Johansen, 2006; Wong et al.,
2005).

“JIT supply chain entails a highly efficient logistics system as the operational foundation”,
(Bagchi, 1988; Bagchi et al., 1987; Giunipero et al., 2005). “Specifically, transportation assumes
a much more important role in a JIT system than a conventional multi-echelon supply chain”,
(Schwarz & Weng, 1999).

With that said by authors, logistics greatly impacts the implementation of Just-In-Time or
JIT. The reason for it is because the company needs to identify the source of waste, do what are
necessary to increase in the production at a given time and lessen the time required for delivery.
Since logistics includes customer service, order processing, inventory management and

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transportation management, all of these are needed to perform the JIT philosophy. Without
logistics, JIT will not be that effective since JIT requires the whole processes.

6. Analyze how a minor change in demand at the retail level can significantly
impact supply chain variation at distributors, manufacturers, and suppliers. Discuss the
relationship between service level, uncertainty, safety stock, and order quantity.

Whenever we chain, we immediately think of links of linking of one process to another.

Even the minor change in demand can affect the supply chain in retail level. This change in demand
is part of supply chain risk that company try to avoid that is why they do careful planning and
forecasting.

The change in demand is also associated with the bullwhip effect, an event where there is a
fluctuation or unpredicted change in consumers or suppliers order that affects various phases of
production or logistics. When this happens, the inventory is being affected and companies tend to
re-forecast or adjust the scheduled production. Companies will have to adjust the service level of
raw materials and resources needed for the new production requirement. When the service level
changed, there will also be issues in time, cost adjustment, inventory and supply chain
management.

When the management failed to manage the change whether it’s an increase or decrease in,
negative actions may happen like margin erosion, orders in volume is much preferred because it
can give profit more than small orders. Disruption in physical product flow may occur. Worst is,
product quality may also suffer because of sudden demand change.

7. There are delivery modes such as Less Than Truckload (LTL) or Ground
Parcel which are more expensive than pound for pound than larger volumes modes such as
truckload and inter-modal. What do you think is/are the possible consolidation solutions and
strategies that will help achieve on-time distribution and delivery?

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 In today’s trend of consumerism, shippers are finding effective ways to perfect the speed
and accuracy of the product and service delivery to consumers at a lower cost. But finding the
right strategy to meet the delivery expectation always depends on the size of the package involved
in shipping along with the best consolidated shipping company that has experienced personnel that
can take care of the cargo and can make it reach its destination safe and not destroyed.

Companies may use the parcel shipping, less than Truck load (LTL) or the Truck Load
Shipping options, and to do that, it is recommend that a company must partner or make alliance
with companies offering freight consolidation services.

Shippers can choose from different consolidation services mode like air for shipping which
requires quick and short time delivery, this is the fastest mode, ocean for large goods and grounds
for small- or large-scale shipment requirements.

And with all the given shipping consolidation options, the most recommended option is the
shipping consolidation. In looking out for a third-party logistics company, it is better if the logistic
partner has an establishes consolidation hubs that collects all the goods for delivery to consumers.
In this kind of consolidation, small packages are consolidated to LTL shipments, and then to Truck
Load to maximize the capacity of shipping which charges lower transport cost.

Loading is much better with shipping consolidation and if not be compared to air freight,
this one is the next faster transport and usually do not need several touchpoints during the
consolidation process because of the hubs presence which also speeds the loading processes,
reducing fuel and improving schedule adherence resulting in scalability to meet changes in
demand, including seasonal fluctuations.
8. The five basic modes of transportation have been available for well over 50
years. Is this the way it will always be, or can you identify a sixth mode that may become
economically feasible in the foreseeable future? Explain and justify your answer.

Yes, the five basic modes of transportation will always be around, it will upgrade but it will
never change as long as there are need for it.

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 If I can identify a sixth mode of transportation, I can say yes. In contrast to the lesson I had
under logistics management this semester, this mode has been around for many years already but
it has always been categorized under land mode or maybe motor mode of transportation.

What I am talking about is the human or animal powered means of transportation, like that
of bicycles and carriages. Because of the environmental and traffic concerns, I think bicycle will
be another effective mode of transportation that I can say economically feasible in the foreseeable
future in delivering small packages or parcels that can move around the city uninterrupted by
traffic.

One example is the movie Premium Rush in 2012 starring Joseph Gordon-Levitt as Wilee,
a bike messenger in New York City who never minds the speeding cars, crazy drivers and millions
of pedestrians delivering packages using just bike without brakes.

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