What is Piracy?
Any illegal act of violence, detention, or depredation committed by individuals for private ends against a private ship
In what year was the highest amount of Pirate attacks
- In 2010, with 445
- (decreased after 2011)
Where did the majority of Piracy attacks occur?
In the Indonesia / Thailand area
(Majority of "Attempted" attacks were around Saudi Arabia)
In 2013, how many total piracy attacks and hijackings have occurred Worldwide?
What are some factors that lead to the formation of "Somali Pirates"?
- -No effective central government since 1991
- -Starvation caused by a devastating drought
- -Money from hijacked vessels earns pirates money that they use to survive
Somali Pirate Facts:
- -They earn on average $4.8 Million per ship
- -3,000-5,000 pirates operating in Somali waters
- -1,000 have been captured and our in the legal process
What are some precautions to take to avoid being boarded by Somali Pirates?
- -Travel faster than 18 knots
- -Set up "Dummies" around rail
- -Use fencing/barbed wire around border
- -Install cameras
- -Put Danger Signs written in Somali
- -Water Cannons
- -Private Security
Which "Choke-point" has the most amount of oil traveling through it?
- The Strait of Hormuz
- -Contains 20% of oil traded worldwide
- -Contains 35% of the worlds seaborne oil shipments
- -On average, 14 tankers carrying 17 million barrels of crude oil pass through it
What is the International Ship and Port Facility Security (ISPS)?
- -Comprehensive set of measures to enhance the security of ships and port facilities
- -Developed in response to the perceived threats to ships and port after 9/11
What is the Customs - Trade Partnership Against Terrorism (C-TPAT)?
- -Voluntary supply chain security program led by U.S. Customs and Border Protection
- (10,275 participating companies)
What is the Container Security Initiative (CSI)?
- -Allows U.S. Customs & Border Protection, working with host governments, to examine
- high-risk cargo at foreign seaports, before they are loaded on board vessels to US
- (58 foreign ports participated. 85% of traffic heading to US)
What are some issues with X-Ray scanning at Ports?
- -The process would take too long
- (Process currently accounts for 4.1%. If expanded to 7%, it would cause delays of 70 hours)
What is the ISO 28000?
- -Certifiable standard for supply chain security
- -Internal compliance with objectives of a security management policy
- -External compliance with best practice benchmarks
- -ISO accreditation
What is a Logistic Service Provider (LSP) and what are some examples?
- -A 3rd party firm that handles logistic services for another company
- (Hauliers / trucking, Freight forwarders, Non-vessel-owning common carriers, Couriers, Integrators)
In what year was the Truck Tonnage the highest?
In 2005: 115.7
What is a "Freight Forwarder"?
- -Arrange transportation for freight, customs clearance, ship agents and some operate own vehicles and warehouses
- (Ex. DHL, Keuhne&Nagel, DB Schenker)
Who has the largest Ocean freight forwarding operation?
Keuhne & Nagel
What are Non-Vessel-Owning Common Carriers? (NVOCC)
- -Companies who consolidate smaller shipments from various consignees into full container loads
- -NVOCC takes responsibility for
What is a Courier?
- -Intercity or local delivery of parcels and documents (including express delivery services)
- -Handled by one person without using special equipment
What is an Integrator?
- Offer seamless end-to-end service: haulier to a freight forwarder to an airline while maintaining responsibility for the package the
- entire time
- (ex: FedEx, UPS)
Logistic Service Provider (LSP) vs. 3rd Party logistics (3PL)
- -All Companies that provide logistic services are LSP's
- -LSP's that provide multiple integrated logistic services are 3PL's
What are some examples of 3PL's
- -Inventory Management
- -Reverse Logistic management
What are benefits that were seen by 3PL's in 2009?
- -Reduced revenue and growth projections
- -Intensified price competition
- -Shortening of supply chains
- -Continued attention to environmental sustainability issues
What is a 4PL, and what are examples?
- -When a 3PL outsources certain activities to another 3PL
- (A lot of 3PL's are now offering 4PL solutions)
- (Ex. Accenture)
What is the "Bill of Lading" aka Airway bill?
- -Where the freight comes from,
- -What it comprises,
- -Where it is going,
- -How it is going to get there
Consolidated shipments vs. Individual Shipments
- -Consolidated shipments are covered by a single master airway bill
- -Individual shipments are covered by a house airway bill
What are International Commercial Terms (Incoterms)?
- -Series of pre-defined commercial terms
- published by the International Chamber of Commerce (ICC)
- -A series of three-letter trade terms related to common sales practices
What are Generalized Costs?
-Demand for transport is not simply dependent on financial costs but on overall opportunity costs
-3 components: Money cost, Time taken, Effects of loss
Procurement: Public Sector
- -Obligated to publish contracts,
- -Information must be generally available, -Consistent process,
- -Objective criteria must be applied, -Transparency is required for all aspects,
- -Due process is legislated,
- -Unsuccessful candidates can challenge
Procurement: Private Sector
- -No Obligations to publish contracts
- -Information is subject to internal policy
- -Criteria can evolve and change as needed
- -Customer has discretion about objectivity
- -Transparency is discretionary
- -No right to appeal challenges
What are some requirements of Sourcing Strategies?
- -Level of spending
- -Marketing maturity
- -Number of sources/suppliers
- -Potential for performance improvement
What is the "Pareto Rule"
80% of spending will be with 20% of suppliers
When will you have a "Bottleneck" Risk
- -High Risk, Low Value
- -Ex. New Technology
- (Needs to be managed carefully)
When will you have "Leverage" risk?
- -Low risk, Low Value
- -Ex. Office Supplies
- (Aggregate and consolidate spending)
When will you have "Strategic" risk?
- -High Risk, High Value
- -Ex. Precious Metals
- (Work strategically and collaborate)
When will you have "Tactical" Risk/
- -Low Risk, High Value
- -Ex. Steel
- (Increase sources & maintain competition)
What is the role of the buyer?
To create an appropriate level of competition to manage the level of risk and value that the business faces when sourcing or procuring goods
What are some Procurement techniques?
- -Request for Quotation (RFQ)
- -Formal Tender
What are the steps of the Procurement process?
What is the Purchase Price Variance (PPV)?
–A measure of the variance between the actual price paid versus the standard cost of the item
What is the University of Pennsylvania's Purchasing approach?
- -A Transparent, Top-Down approach
- -Focus on Cost containment and Strategic sourcing
What were some stages of procurement and how did they communicate?
-Millennium: B2B (Dialogue)
-Noughties: Networks (Open)
- -Today: Social networking
- (Everyone can talk to everyone)
What is "Cross-Docking"?
- -Bypasses the storage area in warehouses and distribution centers
- (Reduces cost, Improves service, for Fast freight)
What is a "Warehouse management System" (WMS)?
Manages information processes and material requirements transmitted from the management information system (such as ERP)
- -Picking solutions vary depending on freight volume, variety and throughput
- (Pick to Order, Batch picking, Pick to Zero, Zone Picking, & Wave Picking)