GSC 5600 Final

– Inventory (safety stock) increases

– Decreases in asset turnover

– Lower operating performance levels

– Stock price declines of nearly 9%

Future freight movement event with a probability of occurrence and the potential for impacting supply chain performance

• - Proactive planning a route to avoid likely delays
• - Developing a planned response for replacement inventory in event of an accident
  

• (Business Continuity Planning)
• –The processes and procedures an organization puts in place to ensure that essential functions can continue during and after a disruption or disaster
• –Includes advance planning to develop readiness plans in event of a disruption

Commitment of Time, Expertise, Financial resources, Frequent revision, & Continuous improvement

• – Risk identification
• – Risk assessment - evaluate impact and place priorities on identified risks
• – Risk mgmt. strategies: Create plans for cost effective
• mitigation and management of risks
• – Risk review, monitoring, and updating

• - Brainstorming
• - Individual Interviews / Surveys
• - Historical Data

• - Product loss
• - Delivery delay
• - Product damage 
• - Supply chain interruption
• - Contamination 
• - Security breach

• –Should be consistent with overall supply chain and corporate strategies
• –Must focus on high priority risks
• –Should be cost-effective and time-effective

• - Protect U.S. ports and waterways from terrorists attack
• -Required Tankers and vessels to have security plans that are updated every 5 years
• - Vessel Tracking
• - All at risk ports must have security plans

• (Container Security Initiative)
• - Addresses terrorist threat to use maritime containers for delivering weapons

Improve international supply chain and U.S. border security through voluntary govornment / business cooperative relationships

• The U.S
• (Exports $1.3 trillion, Imports $2.1 trillion)

• Bi-Lateral: agreement between 2 countries
• Regional: agreement between 3 or more nations

• -Regional Trade agreement between U.S, Mexico, & Canada
• - Enhanced cross-border movement of goods/services

• - Define where responsibilities transfer from exporter to importer
• - Govern decision making authority for movement of the product
• - Establish when and where ownership and title of goods pass from exporter to importer
• - Clarifies which organization incurs delivery-related costs

• - If goods shipped are susceptible to damage
• - Carriers commonly deliver damaged or lost freight
• - If damaged shipments greatly impact the frieght owner

• - Ensures exporter is paid and importer receives goods as
• expected

• - Invoices
• - Transportation
• - Import
• -Export

• – Leverage transportation dollars by using a limited number of carriers
• – Build relationships with service providers
• – Monitor carrier performance, rates, and financial stability
• – Have contingency plan with back-up carriers

• - Direct origin-destination (one country to another country shipment), no interim stops-offs
• - Typically between bordering countries
• - Single mode of transport, typically motor carrier

• - Typically, shipment requires multiple modes, i.e. intermodal transportation
• - Multiple interim stops required to transfer freight between carriers or modes

• - Two or more modes used to move shipment from origin to destination
•   
  

• Pick Up: Truck => Truck or Rail => Truck
• Linehaul: Air => Ocean => Rail
• Delivery: Truck => Truck or rail => Truck

• - Containerized: freight loaded into containers
• - Transload: handled individually (Ocean, Rail, Pipeline)

- Movement from one seaport to another substituting rail for portion of ocean trip

• –Breakage
• –Moisture
• –Pilferage
• –Excess weight

• – Provides general guidelines for rate setting
• – Carriers not required to use guidelines, major carriers do not
• - Includes three types of rates: General cargo rates, class rates, commodity rates

Substituting external specialists for in-house capabilities

• (Third Party Logistic)
• - An external supplier that performs all or a part of a company’s logistics functions
• - Services: Inverntory management, warehousing,  financial, transportation

• -Transportation
• -Distribution
• -Forwarder
• -Financial
• -Information

• - 3PL maintains direct control over shipper’s freight
• - 3PL has ready access to capacity
• - Fewer organizations to work through to resolve problems

• - Freight Movement
• - Frieght Management
• - Intermediary Services
• - Specialty Services

• –Large quantity of freight moved as one shipment in bulk to central distribution point
•       -Competes with LTL services
•       - Faster transit time, Less handling, Lower rates

• 1. Perform Strategic Assesment
• 2. Descision to form Relationship
• 3. Evaluate alternatives
• 4. Select Partners
• 5. Structure Operating Model
• 6. Implementation and improvement

• - Used to transport people
• - Emergency freight shipments

- Used to move large volumes of low value products

False

• - Potential for improved service
• - Greater control
• (Risks: Ties up capitol, Seller bears risk, maintenance      responsibilities increased)

Increases

• - Trailer on Flatcar (TOFC)
• - Container on Flatcar (COFC)

The amount of Carbon Dioxide emmision you release

• - Motor Carriers: Very fuel intensive
• - Air Carriers: The Most fuel sensitive amongst all
• - Water Carriers: Relatively fuel efficient
• - Rail Carriers: Relatively fuel efficient
• - Pipeline carriers: Relatively fuel efficient