Chapter 1: Intro to logistics and supply chain management

Question 1

Define Logistics Management

Answer 1

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

Question 2

1. Describe the Megatrend: Globalisation

Answer 2

Significant factor that changed business operations
Compression of time and distance; disappearance of traditional political boundaries

Question 3

2. Describe the Megatrend: The empowered consumer

Answer 3

-internet allows access to wealth of information
-world of choices: compares prices, services, quality with extreme accuracy
-demands competitive prices, customised product offerings
-increased service expectations

Question 4

3. Describe the Megatrend: Shift in global economic power

Answer 4

-BRICS countries became exporters of innovation, capital and talent
-New geographies and sources: lead to new/different competitor profiles > markets may lose influence and become less attractive for business

Question 5

4. Describe the Megatrend: Demographic shifts

Answer 5

-Resource scarcity, shifts in economic power and drastic changes in societal norms
-Young and growing population: larger workforces/markets for consumer goods
-Increase pressure to create jobs/may affect business models

Question 6

5. Describe the Megatrend: Rise in technology

Answer 6

-Changes dynamics of business
-Consumers/firms access to seemingly unlimited information at any time
-Creates opportunities for collaboration
-Major breakthroughs in disciplines: AI + created new industries

Question 7

6. Describe the Megatrend: COVID-19 pandemic

Answer 7

-Highly disruptive+ serious challenge to conventional thinking and practice in supply chains
-Difficult demand fulfilment+ emergency items dominated supply chains
-Developed suitable humanitarian supply chains: deal effectively with demand requirements for future similar events

Question 8

7. Describe the Megatrend: Climate change and resource scarcity

Answer 8

-Higher demand for water/electricity
-Extreme weather conditions and rising sea levels: farming, fishing and hunting impossible in some places
-Increased conflict and political tension to gain control over scarce resources

Question 9

1. Define logistics: Military logistics

Answer 9

~Right support- right place- right time
~Includes rations, ammunition, equipment, vehicles, spare parts, medical services

Question 10

2. Define logistics: Engineering logistics

Answer 10

~Integrated logistics support, system operation and support, maintenance management

Question 11

3. Define logistics: Business logistics

Answer 11

~Commercial environment, demand/supply of raw and finished good

Question 12

4. Define logistics: Production logistics

Answer 12

Logistics that occur in production environment between raw and finished products.

Question 13

5. Define logistics: Reverse logistics

Answer 13

Logistics that occur when loads are returned, disposal of packaging materials, obsolete products.

Question 14

6. Define logistics: Construction logistics

Answer 14

~Delivery of construction materials at right time to right place
~Ensure that development is never stagnant: new buildings, old ones demolished/replaced
~Logistics done on the road: stress on existing congested infrastructure

Question 15

7. Define logistics: City logistics

Answer 15

Logistics of moving freight from place of origin to destination in most cost-effective way

Question 16

8. Define logistics: Humanitarian logistics

Answer 16

Primary objective of humanitarian logistics activities is to alleviate the suffering of vulnerable people. (Requires specific responses)

Question 17

Describe Supply Chain Management

Answer 17

Set of inter- and intra-firm processes, produce and deliver goods/services to customers → central to survival of many firms in global business environments.

Question 18

What will determine the future of business?

Answer 18

Competition between effective supply chain rather than individual firms.

Question 19

True or False: firms do not exist in isolation.

Answer 19

True

Question 20

What is the difference between supply chain and logistics?

Answer 20

-Logistics never focus on interrelationships with upstream/downstream entities.
-Supply Chain integrate elements clearly beyond organisational borders

Question 21

True of False: Logistics adds value to the supply chain process?

Answer 21

True

Question 22

Describe what Third-Party logistics entails.

Answer 22

Management structure where a third party fulfils certain roles and responsibilities regarding the provision of logistics services between the supplier (first party) and the clients or customers (second party). Also known as contract logistics or outsourcing.

Question 23

Name the six types of 3PL service providers.

Answer 23

1. Transportation based
2. Warehouse and distribution based
3. Forwarder based
4. Shipper based
5. Finance based
6. Information based

Question 24

Explain the 3PL service provider: Transportation based

Answer 24

Offers transportation service and comprehensive set of other logistics offerings

Question 25

Explain the 3PL service provider: Warehouse and distribution based

Answer 25

Offers comprehensive warehousing services.

Question 26

Explain the 3PL service provider: Forwarder based

Answer 26

~Independent agent with forwarder roles ~Non-asset owners that provide wide range of logistics services.

Question 27

Explain the 3PL service provider: Shipper based

Answer 27

-Focuses on management of shipping process from beginning to end -Provides technology (transportation management system) -Gives information [freight data, matrix reports]

Question 28

Explain the 3PL service provider: Finance based

Answer 28

Provides freight payment and auditing, cost accounting and control, and tools for monitoring, booking, tracking, tracing and managing inventory.

Question 29

Explain the 3PL service provider: Information based

Answer 29

Significant growth/development of internet-based, business-to-business, electronic markets for transportation and logistics services.

Question 30

Define Fourth-Party Logistics

Answer 30

An integrator that assembles the resources, capabilities and technology of its own organisation and other organisations to design, build and run comprehensive supply chain solutions.

Question 31

How does 3PL differ from a 4PL in four main respects?

Answer 31

* 4PL sperate entity established as a joint venture or long term contract. * It acts as a single interface between the client and multiple logistic service providers. * All aspects of the client’s supply chain are managed by the 4PL organisation. * It is possible for a 3PL provider to form a 4PL organisation within its existing structure.

Question 32

What are 6 benefits of 4PL organisations?

Answer 32

1. addresses strategic failures or 3PL services with a single point of contact to manage all aspects of the client of supply chain. 2. addresses financial failures of 3PL services by releasing capital, through selling logistics assets to 4PL organisation on free market. 3. addresses operational failures of 3PL services because new entity allows creation of totally new culture. 4. realises opportunities by selling supply chain services to external clients. 5. retains corporate supply chain knowledge. 6. improves accountability.

Question 33

Name the five Primary activities according to Porter's Value Chain

Answer 33

1. Inbound logistics 2. Operations 3. Outbound logistics 4. Marketing and sales 5. Service

Question 34

Describe Porter's Value Chain Primary activity: Inbound logistics

Answer 34

Includes activities such as receiving, storing, listing and grouping inputs to the product. Also included are functions such as materials handling, warehousing, inventory management, transportation scheduling and managing suppliers.

Question 35

Describe Porter's Value Chain Primary activity: Operations

Answer 35

Includes machining, packaging, assembly, maintenance of equipment, testing, operational management and so on

Question 36

Describe Porter's Value Chain Primary activity: Outbound logistics

Answer 36

Refers to activities such as order processing, warehousing, scheduling transportation and distribution management.

Question 37

Describe Porter's Value Chain Primary activity: Marketing and Sales

Answer 37

Activities that make or convince buyers to purchase the company’s products. Included are advertising, promotion, selling, pricing, channel selection, retail management.

Question 38

Describe Porter's Value Chain Primary activity: Service

Answer 38

Has to do with maintaining the product after sale, thus guaranteeing quality and/or adding value in other ways such as through installation, training, servicing, providing spare parts and upgrading.

Question 39

Name the 4 Secondary activities according to Porter's Value Chain

Answer 39

1. Procurement 2. Technology development 3. Human resource management 4. Infrastructure

Question 40

Describe Porter's Value Chain Secondary activity: Procurement

Answer 40

Includes activities such as purchasing raw materials, servicing, supplies, negotiating contracts with suppliers, securing building leases.

Question 41

Describe Porter's Value Chain Secondary activity: Technology development

Answer 41

Includes activities such as R&D, product and/or process improvements, (re) design, developing new services.

Question 42

Describe Porter's Value Chain Secondary activity: HRM

Answer 42

Includes recruitment and education, as well as compensation, employee retention and other means to fully capitalize on human resources.

Question 43

Describe Porter's Value Chain Secondary activity: Infrastructure

Answer 43

Includes general management, planning procedures, finance, accounting, public affairs and quality management