INTERNATIONAL LOGISTICS

INTERNATIONAL LOGISTICS

The ideal logistics system for a given situation depends on process capabilities,
resource costs, and item, demand, and customer profiles. What is ideal is subject to change—
change that is sometimes slow and sometimes quite rapid. As processes improve, the
system design should change in an evolutionary manner. For example, faster requisition
wait times attained through velocity management (VM) enabled lower reorder points for
authorized stock age lists (ASLs), or, in some cases, a higher, more appropriate satisfaction
rate within the same storage constraints.

By contrast, the logistics system should change in a more revolutionary manner as
process improvements breach thresholds and as new capabilities are developed. This
happened, for example, when scheduled truck service in the continental United States
(CONUS) began providing deliveries with the same high speed and reliability provided by
premium air service while retaining lower truckload costs. It also happened in Operation
Iraqi Freedom (OIF), when use of pure pallets enabled direct delivery to widely distributed
aerial ports of debarkation in Iraq. Both of these changes significantly reduced distribution
times. Similarly, the ideal system design also may change gradually or in large steps as
resource costs or potential risks change. Enthusiasm about the role of distribution in an ideal
logistics system is understandable. Long-term trends toward better processes—resulting from
the adoption of Lean and VM-like approaches; lower transportation costs in all modes (30
to 60 percent lower from 1965 to 1990, depending on the mode); and information
capabilities that have dramatically increased and become less expensive—have led to
greater reliance on rapid distribution and dramatically reduced inventory requirements.

In fact, business inventories have been reduced 55 percent as a percentage of gross
domestic product from 1984 to 2003. However, in most situations, even with these trends, it
still continues to make sense to hold inventory at multiple points in the supply chain as part
of the ideal logistics system design. Where demand predictability, volumes, distribution
patterns, production horizons, and risk factors support it, maintaining very little inventory—
with distribution centers serving primarily as cross-docking operations—is a great approach,
but it is not a “one size fits all” situation. [“Cross docking” refers to the process of receiving
an item at a distribution center and shipping it out almost immediately without holding it in
storage. Maintaining an inventory in a warehouse is virtually eliminated.] More generally,
cross-docking activities are integrated with inventory-holding distribution centers (DCs) to
break down bulk shipments and consolidate them for movement to their final destinations.
A simple example in this context is the cross-docking found in supply support activities
(SSAs): An SSA cross-docks deliveries of nonstocked and out-of-stock items, sorting these
deliveries and issues from the SSA to provide one set of parts for each maintenance
customer. The SSA’s response-time advantage remains such that it continues to add value
for the SSA to hold in inventory items that drive readiness. Better response time, if it meets a
customer’s need, is one major reason to hold inventory at a location. Another potential
reason to hold inventory is to enable the utilization of lower cost but slower transportation
options while preserving fast response to final customers from the inventory location. But
this is advantageous only when the transportation savings outweigh the inventory costs;

that advantage depends on such factors as item weight and price, transportation rates, and
inventory holding costs. If an inventory location does not produce an advantage in response
time, does not lower total supply chain costs, or does not play an analytically supported role
in risk mitigation, then it should be considered for elimination. In the private sector, it seems
that recent transportation issues that have created occasional bottlenecks, variability in
service, and increased risk are causing a small shift back toward holding inventory. My
impression is that increasing customer service expectations also are contributing to this shift.
So, too, is off shoring, which creates longer and more variable transportation pipelines. [“Off
shoring” is the relocation of business processes to another country.] In other cases, recent
rises in transportation costs, combined with associated inventory costs, have interrupted
the longer term trend toward reducing inventory and are causing some rethinking of the
use of overseas production. This is an example of a threshold being crossed that triggers a
change in the supply chain design; higher off-shore labor costs plus higher overseas
transportation-induced inventory costs have changed some sourcing location decisions.

LOGISTICS FUNCTIONS:-

1. PICK UP FROM WHARF;

A wharf or quay ( /ˈkiː/, US also /ˈkeɪ/ or /ˈkweɪ/) is a structure on the shore of a
harbor where ships may dock to load and unload cargo or passengers. Such a
structure includes one or more berths (mooring locations), and may also include piers,
warehouses, or other facilities necessary for handling the ships.

A wharf commonly comprises a fixed platform, often on pilings. Commercial ports
may have warehouses that serve as interim storage areas, since the typical objective is
to unload and reload vessels as quickly as possible. Where capacity is sufficient a
single wharf with a single berth constructed along the land adjacent to the water is
normally used; where there is a need for more capacity multiple wharves, or perhaps
a single large wharf with multiple berths, will instead be constructed, sometimes
projecting into the water. A pier, raised over the water rather than within it, is
commonly used for cases where the weight or volume of cargos will be low.

Smaller and more modern wharves are sometimes built on flotation devices
(pontoons) to keep them at the same level to the ship even during changing tides.

2. UNLOAD CONTAINERS;

Caution should be taken when unloading shipping containers, never get under the
headers without stands in place, make sure forklift is in a good working condition
and is capable of lifting machines.2 people should unload shipping containers, 1 as a
spotter and 1 to operate the forklift.
Headers are stacked one on top of the other inside shipping container. A suitable area
should be chosen to unload the container, with plenty of room around all sides of the
shipping container and room to move and work on the headers.

When the container doors are first opened both machines should be visually
inspected
and Shelbourne Reynolds should be informed of any damage or missing parts
immediately. Photographs should be taken of any damage.
Headers are bolted through the shipping rollers and through the container floor on
both ends of the header. There are normally 4 bolts per roller.
Check that there are no objects underneath the headers to stop the rollers from
rolling.
Check both sides of the headers for enough clearance against shipping container
side
walls.

The headers may have to be pulled closer to the shipping container rear doors,
attach
a drag chain to the loop welded to the shipping roller and attach the other end of the
drag chain to a suitable place on the forklift. Headers should never be pulled closer
than 18” from rear doors.
Once the headers are close enough to the shipping container rear doors one end of
the
headers can be lifted up, blocks of wood should be put on the forklift tines to ensure
that the mast of the forklift cannot hit the end shield of the machines.
Caution should be taken when lifting the headers. The headers should only be
lifted high enough to get the shipping roller off the floor of the shipping
container.
The headers should then be pulled straight back out of the container, the spotter
should check both sides of the headers for clearance against the shipping container
walls. A jack can be put against the shipping roller and against the container wall
should the headers be crooked.

When the front roller is approximately 18” from the rear shipping container doors,
the
headers can be set down.
Caution should be taken when setting the headers down to ensure that the
forklift tines are level before backing forklift away from headers, and that the
forklift mast does not hit the end shield of the top machine.
The front (side still in container) side of the headers can then be lifted, the headers
should be picked up from the rear beside the rear gearbox and the forklift should be
positioned as close to the shipping container as possible, blocks of wood may need
to
be placed on the forklift tines to level the headers.

The headers can then be lifted just enough for the shipping roller to clear the shipping
container floor.
The driver of the shipping container can then be told to drive straight forward until
the shipping container clears the headers.
The headers can then be slowly lowered to the ground.

The holes in the shipping container need to be filled with wood dowels and the
shipping container needs to be swept out.
Both machines should be visually inspected and Shelbourne Reynolds should be
informed of any damage or missing parts immediately. Photographs should be taken
of any damage.
Headers should never be moved stacked up.

Un-stacking Headers
Caution should be taken when un-stacking headers, never get under the
headers
without stands in place, make sure forklift is in a good condition and is capable
of
lifting headers.
2 people should un-stack headers, 1 as a spotter and 1 to operate the forklift.
Drive forklift tines into lifting pockets on the top head, caution should be taken to
make sure that the forklift tines do not hit into the lower header.
There are 2 brackets on the LH side of the headers and 2 brackets on the RH side of
the headers that need to be unbolted.
6
Once the top header is clear of the bottom header the header stand plates can be
fitted.
Stands should be placed under the header while working with it in the air.
Make sure stand plates are bolted securely in place.

The bottom header can then be lifted onto the stands so the shipping rollers can be
removed.
The header stand brackets should be fitted as on the top header.
Both machines should be visually inspected and Shelbourne Reynolds should be
informed of any damage or missing parts immediately. Photographs should be taken
of
any damage.
Rollers, Stacking brackets and all hardware should be kept for possible collection
by
Shelbourne Reynolds.

3. COMPUTERIZED INVENTORY;
4. Efficiently tracking inventory is an imperative component to a small
business’ successful operation. By having up-to-date data regarding all
needed office supplies, raw manufacturing materials and merchandise for sale, an
organization will drastically increase its bottom line. In addition to the money saved
by not reordering unnecessary goods, an enterprise will be better positioned to
services customers quickly, as well as navigate any unexpected changes in business,
such as a supplier abruptly going out of business. Although many companies
maintain this information manually, there are benefits to using a computerized
inventory system.

5. Time Savings

6. As the old saying goes, “time is money.” The amount of time that can
be saved by a business is, perhaps, the biggest benefit of using a computerized
inventory system. A great example of this benefit is the retail industry. In cases
where a shop maintains all data manually, its manager must reconcile each sales
receipt with every piece of physical inventory. Depending on the size of the
establishment and how many different products are sold, this can be a daunting and
time consuming task. If that same store, however, used a computerized point of
sale, POS, system, the master inventory list would be updated electronically each
time a sale is made. The only thing a manager would have to do each day is print
out the report highlighting the inventory to be restocked.

7. Accuracy

8. An additional benefit of using a computerized inventory system is the accuracy it
ensures. Eighteenth century English poet Alexander Pope is often quoted as having
said, “To err is human.” When an inventory list is maintained by
hand, the margin of error widens with each update. If one mathematical calculation
is wrong or one typo is made, disaster may occur. For instance, if a clerk
accidentally adds a zero to the end of a purchase order, a business could potentially
end up paying for 10,000 units of merchandise as opposed to the 1,000 that is
actually needed.

9. Consistency

10. A small business operates most efficiently when its processes are executed in a
consistent manner. By using a computerized inventory system, a business owner
can ensures that all orders, reports and other documents relating to inventory are
uniform in their presentation, regardless of who has created them. This will allow
ease of reading. In addition, uniformity creates a professional appearance, which
can go a long way to impress associates, such as potential investors.

4. STORAGE;

BEFORE CONTAINER SHIPPING

For many thousands of years, mankind has shipped goods across the oceans, from one land to
another. Think of the great seafaring peoples; the Phoenicians, Egyptians, Greeks, Romans,
Portuguese, Spanish, British and many more. Sailing the world looking for new treasures,
they brought home and traded food, jewels and materials that their countrymen had never
seen before.

But the process was never easy. The loading
and unloading of individual goods in barrels,
sacks and wooden crates from land transport to
ship and back again on arrival was slow and
cumbersome. Nevertheless, this process,
referred to as break-bulk shipping was the only
known way to transport goods via ship up until
the second half of the 20th Century.

The loading and unloading of the ship was very labor intensive. A ship could easily spend
more time in port than at sea while dockworkers manhandled cargo into and out of tight
spaces below decks. There was also high risk of accident, loss and theft.

There were some basic systems in place to make the process more efficient, such as the use
of rope for bundling timber, sacks for carrying coffee beans, and pallets for stacking and
transporting bags or sacks. However, industrial and technological advances, such as the
spread of the railways in the 18th century, highlighted the inadequacies of the cargo shipping
system. The transfer of cargo from trains to ships and vice versa became a real problem.

Before the container shipping industry emerged, boxes of various types and sizes had often
been used in transporting cargo simply because they were the logical way to move things en
masse from one location to another. However, despite these developments, cargo handling
was almost as labor-intensive after World War II as it had been in the mid-1800s.

THE BIRTH OF "INTERMODALISM"

To realize intermodal cargo transport, all areas of the transport chain had to been integrated.
It was not simply a question of putting cargo in containers. The ships, port terminals, trucks
and trains had to been adapted to handle the containers.

The Containership

On 26 April 1956, Malcom McLean's converted
World War II tanker, the Ideal X, made its maiden
voyage from Port Newark to Houston in the USA.
It had a reinforced deck carrying 58 metal

container boxes as well as 15,000 tons of bulk petroleum. By the time the container ship
docked at the Port of Houston six days later the company was already taking orders to ship
goods back to Port Newark in containers. McLean's enterprise later became known as Sea-
Land Services, a company whose ships carried cargo-laden truck trailers between Northern
and Southern ports in the USA.

Other companies soon turned to this approach. Two years later, Matson Navigation
Company's ship Hawaiian Merchant began container shipping in the Pacific, carrying 20
containers from Alameda to Honolulu. In 1960, Matson Navigation Company completed
construction of the Hawaiian Citizen, the Pacific's first full container ship. Meanwhile, the
first ship specifically designed for transporting containers, Sea-Land's Gateway City, made
its maiden voyage on 4 October 1957 from Port Newark to Miami, starting a regular journey
between Port Newark, Miami, Houston and Tampa. It required only two gangs of
dockworkers to load and unload, and could move cargo at the rate of 264 tons an hour.
Shortly afterwards, the Santa Eliana, operated by Grace Line, became the first fully
containerized ship to enter foreign trade when she set sail for Venezuela in January 1960.

The Container

It was a logical next step that container sizes could be standardized so that they could be
most efficiently stacked and so that ships, trains, trucks and cranes at the port could be
specially fitted or built to a single size specification. This standardization would eventually
apply across the global industry.

As early as 1960, international groups already recognizing the potential of container shipping
began discussing what the standard container sizes should be. In 1961, the International
Organization for Standardization (ISO) set standard sizes. The two most important, and most
commonly used sizes even today, are the 20-foot and 40-foot lengths. The 20-foot container,
referred to as a Twenty-foot Equivalent Unit (TEU) became the industry standard reference
with cargo volume and vessel capacity now measured in TEUs. The 40-foot length container
- literally 2 TEUs - became known as the Forty-foot Equivalent Unit (FEU) and is the most
frequently used container today. Lean more about containers.

INDUSTRY GLOBALIZATION

On 23 April 1966, ten years after the first converted container ship sailed, Sea-Land’s
Fairland sailed from Port Elizabeth in the USA to Rotterdam in the Netherlands with 236
containers. This was the first international voyage of a container ship.

Meanwhile, during the rapid build-up to the Vietnam War, the US military was faced with
the logistical problem of getting supplies to troops. It had somehow to transport mass
supplies to a war zone in south-east Asia through a single under-developed port on the
Saigon River and a partially-functioning railway. The government turned to container
shipping as the most efficient option.

Container shipping began to prove its worth at an international level. From this point on the
industry began to grow to the point where it would quickly become the backbone of global
trade, even though few at the time would have made such bold predictions.

1968 and 1969 were the Baby Boomer years for container shipping. In 1968 alone, 18
container vessels were built, ten of them with a capacity of 1,000 TEUs which was large for
the time. In 1969, 25 ships were built and the size of the largest ships increased to
approaching 2,000 TEU. In 1972, the first container ships with a capacity of more than 3,000
TEU were completed by the Howaldtwerke Shipyard in Germany.

Now an entire industry had emerged, demanding unprecedented investment in vessels,
containers, terminals, offices and information technology to manage the complex logistics.

Throughout the 1970s and 1980s the container shipping industry grew exponentially. There
were now connections between Japan and the US west coast, and Europe and the US east
coast. The Europe–Asia route began to be serviced by consortia (a group of carriers sharing
space on ships) in the early 1970s as well as some independent services. By the end of the
decade, shipping between Europe, South East and Eastern Asia, South Africa, Australia/New
Zealand, North America and South America were all largely containerized. In 1973, US,
European and Asian containership operators were carrying 4 million TEUs all over the
world. By 1983, this would rise to 12 million TEUs by which time containers had also
arrived in the Middle East, the Indian sub-Continent, and East and West Africa.

The present-day industry is truly global and touches all our lives in ways we cannot
imagine. In fact, Marc Levinson, a noted economist, suggests that the container
and container shipping are largely responsible for the growth of global trade.
Read an excerpt from his book, The Box: How the Shipping Container Made the
World Smaller and the World Economy Bigger. Containerization or
containerisation (see spelling differences) is a system of freight transport based on
a range of steel intermodal containers (also "shipping containers", "ISO
containers" etc.). Towards standards

During containerization's first 20 years, many container sizes and corner fittings were used;
there were dozens of incompatible container systems in the U.S. alone. Among the biggest
operators, the Matson Navigation Company had a fleet of 24-foot (7.3 m) containers while
Sea-Land Service, Inc used 35-foot (11 m) containers. The standard sizes and fitting and
reinforcement norms that now exist evolved out of a series of compromises among
international shipping companies, European railroads, U.S. railroads, and U.S. trucking
companies. Four important ISO (International Organization for Standardization)
recommendations standardized containerization globally:[15]

• January 1968: R-668 defined the terminology, dimensions and ratings
• July 1968: R-790 defined the identification markings

• January 1970: R-1161 made recommendations about corner fittings

• October 1970: R-1897 set out the minimum internal dimensions of general purpose
freight containers

Container loading

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[edit] Full container load

A Full Container Load (FCL) is an ISO standard container that is loaded and unloaded under
the risk and account of one shipper and only one consignee, in practice it means that the
whole container is intended for one consignee. FCL container shipment attracts lower freight
rates than an equivalent weight of cargo in bulk. Ideally FCL means the container is loaded
to its allowable maximum weight or volume. In practice, the FCL in the ocean freight does
not always mean packing a container to its full payload or full capacity.

[edit] Less than container load

Less than container load (LCL) is a shipment that is not large enough to fill a standard cargo
container. The abbreviation LCL formerly applied to "Less than (railway) Car Load" for
quantities of material from different shippers or for delivery to different destinations which
might be carried in a single railway car for efficiency. LCL freight was often sorted and
redistributed into different railway cars at intermediate railway terminals en-route to the final
destination.[34]

Less Than Carload or Less Than Container Load is "a quantity of cargo less than that
required for the application of a carload rate. A quantity of cargo less than that fills the
visible or rated capacity of an inter-modal container." [citation needed] It can also be defined as "a
consignment of cargo which is inefficient to fill a shipping container. It is grouped with other
consignments for the same destination in a container at a container freight station".[35]

A system of transportation used in international trade, where various shippers pool their
boxed goods in the same container.[citation needed]

[edit] Issues

[edit] Additional fuel costs

A double stacked container train in Oklahoma, USA

Containerization increases the fuel costs and reduces the capacity of the transport as the
container itself, in addition to its contents, must be transported; stackable standardised
containers are usually heavier than packaging with less stringent requirements. For certain
bulk products this makes containerization unattractive. However, for most goods the
increased fuel costs and decreased transport efficiencies are as of 2011 more than offset by
the savings in handling costs. On railways the maximum weight of the container is far from
the railcar's maximum weight capacity, and the ratio of goods to railcar is much lower than in
a break-bulk situation. In some areas (mostly the USA, Canada and India) containers can be
carried double stacked by rail, but this is usually not possible in other rail systems.

[edit] Hazards

Containers have been used to smuggle contraband. The vast majority of containers are never
subjected to scrutiny due to the large number of containers in use. In recent years there have
been increased concerns that containers might be used to transport terrorists or terrorist
materials into a country undetected. The U.S. government has advanced the Container
Security Initiative (CSI), intended to ensure that high-risk cargo is examined or scanned,
preferably at the port of departure.

[edit] Empty containers

Containers are intended to be used constantly, being loaded with new cargo for a new
destination soon after having been emptied of previous cargo. This is not always possible,
and in some cases, the cost of transporting an empty container to a place where it can be used
is considered to be higher than the worth of the used container. Shipping lines and Container
Leasing Companies have become expert at repositioning empty containers from areas of low
or no demand, such as the US West Coast, to areas of high demand such as China.
Repositioning within the port hinterland has also been the focus of recent logistics
optimization work. However, damaged or retired containers may also be recycled in the form
of shipping container architecture, or the steel content salvaged. In the summer of 2010, a
world wide shortage of containers developed as shipping increased post-recession, while new
container production had largely ceased.[36]

[edit] Loss at sea

Containers occasionally fall from the ships, usually during storms; between 2,000 [37] and
10,000 containers are lost at sea each year. [38] For instance, on November 30, 2006, a
container washed ashore[39] on the Outer Banks of North Carolina USA, along with thousands
of bags of its cargo of Doritos Chips. Containers lost in rough waters are smashed by cargo
and waves and often sink quickly. [37] Although not all containers sink, they seldom float very
high out of the water, making them a shipping hazard that is difficult to detect. Freight from
lost containers has provided oceanographers with unexpected opportunities to track global
ocean currents, notably a cargo of Friendly Floatees.[40]

In 2007 the International Chamber of Shipping and the World Shipping Council began work
on a code of practice for container storage, including crew training on parametric rolling,
safer stacking, the marking of containers and security for above-deck cargo in heavy swell. [41]
[42]

In 2011, the MV Rena ran aground off the coast of New Zealand. As the ship listed, some
containers were lost, while others were held on board at a precarious angle.

[edit] Trade union challenges

Some of the biggest battles in the container revolution were waged in Washington, D.C.
Intermodal shipping got a huge boost in the early 1970s when carriers won permission to

quote combined rail-ocean rates. Later, non-vessel-operating common carriers won a long
court battle with a U.S. Supreme Court decision against contracts that attempted to require
that union labor be used for stuffing and stripping containers at off-pier locations.[43]

[edit] Other uses for containers

Shipping container architecture is the use of containers as the basis for housing and other
functional buildings for people, either as temporary or permanent housing, and either as a
main building or as a cabin or workshop. Containers can also be used as sheds or storage
areas in industry and commerce.

Containers are also beginning to be used to house computer data centers, although these are
normally specialized containers.

[edit] BBC tracking project

Main article: The Box (BBC container)

On September 5, 2008 the BBC embarked on a year-long project to study international trade
and globalization by tracking a shipping container on its journey around the world.[

Ocean Freight Container Specs
Standard Containers

STANDARD 20' (TEU)

Inside Length 19'4" 5.89m

Inside Width 7'8" 2.33m

Inside Height 7'10" 2.38m

Door Width 7'8" 2.33m

Door Height 7'6" 2.28m

Capacity 1,172ft3 33.18m3

Tare Weight 4,916lb 2,229kg

Max. Cargo 47,999lb 21,727kg

STANDARD 40'









HIGH CUBE 40'









Open Tops

OPEN TOP 20'









OPEN TOP 40'









Reefers

REEFER 20'









REEFER 40'









Flatbed Specs

Flat Racks

FLAT RACK 20'






FLAT RACK 40'






Flat Racks Collapsible

FLAT RACK COLLAPSIBLE 20'






FLAT RACK COLLAPSIBLE 40'






Platforms

PLATFORM 20'






PLATFORM 40'






Air Freight Container Specs
Main Deck Pallet

(Equivalent to IATA Type 2)

External Displacement 606ft3 / 17.16m3

Maximum Gross Weight 15,000lb / 6,804kg

Maximum External Dimensions (L x W x H) Contoured

125" x 96" x 96"

317cm x 244cm x 244cm

LD-7


External Displacement 379.9ft3 / 10m3



125" x 88" x 63"

317cm x 223cm x 160cm

P9A Lower Deck Pallet


External Displacement 242ft3 / 6.9m3



125" x 60" x 63"

317cm x 152cm x 160cm

LD-11


Internal Capacity 242ft3 / 6.9m3



125" x 60" x 64"

317cm x 162cm x 162cm

LD-8

(Equivalent to IATA Type 6A)

Internal Capacity 243ft3 / 6.9m3



96" x 60" x 64"

228cm x 152cm x 162cm

LD-4

(Equivalent to IATA Type 7A)

Internal Capacity 174ft3 / 5m3



96" x 60" x 64"

228cm x 152cm x 162cm

LD-3





61" x 60" x 64"

154cm x 152cm x 162cm

LD-2

(Equivalent to IATA Type 8D)




47" x 60" x 64"

119cm x 152cm x 162cm

Envirotainer Specs

Envirotainers use dry ice in an active cooling system to hold internal temperatures at one of
three settings: 0C (32F) / 5C (41F) / -20C (-4F) for 72-84 hours for the shipment of frozen or
perishable goods by air.

CLD (JYP Size)

• (L x W x H)
• 39.8" x 30" x 31.5"
• 101cm x 76cm x 80cm

RKU (LD-3 Size)

• (L x W x H)
• 78.7" x 60.4" x 63.8"
• 200cm x 153.5cm x 162cm

RAP (LD-9 Size)

• (L x W x H)
• 125" x 88" x 64"
• 317cm x 223cm x 162cm

5. ORDER PROCESSING;

Order processing is the term used to identify the collective tasks associated with fulfilling an
order for goods or services placed by a customer. The processing procedure begins with the
acceptance of the order from the customer, and is not considered complete until the customer
has received the products and determined that order has been delivered accurately and
completely. Companies often invest a great deal of time and effort in designing an efficient
order processing strategy, thus increasing the possibility of establishing a long-term working
relationship with its customers.
The actual approach to order processing will vary, depending on the complexity of the order,
and the type of products that are being ordered. In some cases, order processing can be
almost instantaneous. For example, if a buyer places an order for a software download or an
e-book, the order processing usually involves nothing more than the buyer rendering
payment for the product, the seller registering the sale and accepting the payment, and the
immediate delivery of the e-book or software by means of a download.

When physical goods are involved in order processing, a more complex approach is
commonly employed. Customers may place orders by submitting a written request, by phone,
or by using online order forms that are routed directly to the seller. Each order is then routed
to a distribution center, where the type and quantity of items requested by the customer are

collected and prepared for shipping. In order to facilitate this process, larger companies often
operate multiple distribution centers that are strategically located, allowing for the shipment
to be delivered to the customer as soon as possible.

Once the order is received, the customer completes the order processing by inspecting the
items that are delivered. If the items are in fact what the customer ordered, and are not
damaged in any way, then the order processing cycle is considered complete. Should the
received items be incorrect, or are damaged in any way, then the processing is not considered
complete until the issues are resolved.
Efficient and accurate order processing is essential to the success of any type of business. A
truly efficient system will require that orders must be verified with customers to ensure there
are no questions about what the customer wants. Once the order is verified, the items needed
to fill the order accurately must be collected in a timely fashion. After collecting the
necessary products, they must be packaged securely and delivered to the customer within the
time frame promised. Failure to efficiently manage any of these tasks increases the chances
of disappointing the customer, and thus losing any possibility of repeat business.

6. PICK AND PACK;

Pick and pack is a part of a complete supply chain management process that is commonly
used in, but not limited to, the retail distribution of goods. It entails processing small to large
quantities of product, often truck or train loads and disassembling them, picking the relevant
product for each destination and re-packaging with shipping label affixed and invoice
included. Usual service includes obtaining a fair rate of shipping from common as well as
expediting truck carriers.

Pick and Pack services are offered by many businesses that specialize in supply chain
management solutions. Business owners may not be aware that companies such as FedEx,[1]
UPS and Amazon.com[2] also offer pick and pack services for large scale projects.

Case picking is the gathering of full cartons or boxes of product. This is often done on a
pallet. In the consumer products industry, case picking large quantities of cartons is often an
entry level employee's task. There is, however, significant skill required to make a good
pallet load of product. Key requirements are that cartons not be damaged, they make good
use of the available cube (space) and be quick to assemble.

A full Pick and Pack Glossary[3] associated with the Pick and Pack industry can be found on
Pick and pack[4]

Warehouse management system products create pick paths to minimize the travel distance of
an order selector, but often neglect the need to maximize the use of cube, segregate products
that should not touch or minimize damage.

7. DISTRIBUTION;

Distribution is outbound logistics, from the end of the production line to the end user.
It includes activities associated with the movement of material, usually finished goods or
service parts, from the manufacturer to the customer. These activities encompass the
functions of transportation, warehousing, inventory control, material handling, order
administration, site and location analysis, industrial packaging, data processing, and the
communications network necessary for effective management. Distribution includes all
activities related to physical distribution as well as the return of goods to the manufacturer. In
many cases, this movement is made through one or more levels of field warehouses.
Logistics management activities typically include inbound and outbound transportation
management, fleet management, warehousing, materials handling, order fulfillment, logistics
network design, inventory management, supply/demand planning, and management of
services providers. To varying degrees, the logistics function also includes customer service,
sourcing and procurement, production planning and scheduling, packaging and assembly.

8. DELIVERY;

Product delivery is today a process of utmost importance. Having a comprehensive review
methodology for Product Delivery Processes (PDP) is very
beneficial to an engineering development activity in that it involves the entire product life
cycle
from product design to manufacturing to delivery. Herein, DfR has provided a guide into the
various phases and steps that should be elements of such a process. Doing so will provide
you
with a means to evaluate your processes, determine their effectiveness and efficiency and
benchmark them against current industry best practices and organizations.

This can be improved by the following steps-

1. Create a product delivery plan.
2. Follow the plan .
3. Then make sure the plan has been implemented properly as required.
4. Check for the delivery of the product or service by customer feedback.

Integrated Logistics:-

Integrated Logistics is defined as “ the process of anticipating customer needs and
wants; acquiring the capital, materials, people , technologies and information necessary to
meet those needs and wants; optimizing the goods-or-service-producing a network to fulfill
customer requests; and utilizing the network to fulfill customer request in a timely way.”

Integrated logistics is a service-oriented process. It incorporates actions that help
move the product from the raw material source to the final customer.

Integrated Logistics Management:-

The movement of raw materials and components to a manufacturing company must
be managed. So must the movement of finished goods from the manufacturing plant to
further processing, to the retail, or to the final consumer. The management of this movement
is called integrated logistics management.

Variables affecting the Evaluation and Growth of Integrated Logistic:-

Many variables affected the evaluation and growth of integrated logistic.

• The first was the growth of the consumer awareness and the marketing concept.
Product line expanded to meet the rising demand for more selections. This product

line expansion put great presser on distribution channels to move more products and
keep cost down, especially in transportation and inventory.
• A second factor was the introduction of the computer. Computer experts and
integrated logistic manager quickly found a multitude of computer application for
logistic. This application offered still greater efficiency in transportation routing and
scheduling, inventory control, warehouse layout and design, and every aspect of
integrated logistic. In fact computers allowed integrated logistic managed to modal
integrated logistic system and then analyze the effect of proposed change. This
application greatly advance the system’s approach
• The third variable leading to the growth of integrated logistics was the worldwide
economy in the 1970s and 1980s. Global recession and rising interest rates caused
many firms to refocus attention on reducing cost advantage; many firms were forced
to reevaluate overall transportation needs. Also, rising interest rates turned attention
to maintaining minimum inventory levels because of the cost of capital
• Globalization of business and the development of world trade blocks are a fourth
factor influencing the growth of integrated logistics. Integrated logistic can provide
firms with a cost advantage. Furthermore, trading blocks in Europe. Southeast Asia,
Asia, Africa and the Americans (European Union, association of Southeast Asian
nations and the Asian-pacific economic cooperation, southern African development
community, North American free trade agreement and now the free trade agreement
of the Americas) require integrated logistics to tie the participating countries into
single marketplaces.
• The final factor affecting integrated logistics is the growth of just-in-time
manufacturing (JIT), supply management, transportation, and electronic data
interchange (EDI) in the 1980s and 1990s. As manufacturers adopted total quality
management (TQM), JIT, and EDI, integrated logistics management has come to the
forefront. Effective TQM and JIT require optimizing the inbound and outbound
transportation and more efficient inventory management.

Operations involved in integrated logistics model:-

1. Inbound logistics: It is referred to as procurement or physical supply. It deals with the
relationship between the firm and its suppliers. It addresses the flow of materials from the
suppliers to the plant or into service operations.

2. Conversion / operations: It deals with the logistical relationship between and among the
facilities of the firm. It addresses how goods and materials move among workstations within
operations.

3. Outbound logistics: It is referred to as physical distribution. It is the logistical relationship
between the firm and its customers. It is the movement of s finished product out of the plant
to the final customer.

Each of these relationships is sustained by the execution of 5 primary logistics activities like
transportation, facility structure, inventory management, material handling and
communication / information. These activities are interwoven throughout the integrated
logistics system. Each is vital and is found at every stage.

• Transportation: it is necessary in outbound, inbound as well as conversion processes.
It deals with the movement of a product into, through, and out of the plant /
warehouse. It is the most expensive logistics activity, accounting for 50 % or more of
total logistics costs.
• Facility structure refers to the strategic placement of warehouses, service centre, and
plants throughout the supply chain. It includes the numbers and types of plants, their
locations and their operations.
• Inventory management refers to product buffers of raw materials, work in progress,
and finished goods in logistics pipelines.

If every activity worked perfectly, if there were no variation in transit time, no
variation in processing time, no loss or damage, no volume discounts for transportation, no
volume discount for products, and if firms could forecast demand accurately there would be
no need to store product

Logistics outsourcing:-

Logistics outsourcing involves a relationship between a company and an LSP which,
compared with basic logistics services, has more customized offerings, encompasses a broad
number of service activities, is characterized by a long-term orientation, and, thus, has a
rather strategic nature.

Body for Logistics:-

The Council of Supply Chain Management Professionals (CSCMP) is the leading
worldwide association of professionals in supply chain management. The CSCMP is a non-
profit association that provides leadership in the development, design and improvement in
occupations that deal with logistics and management of supply chains. Its main objective is
"To lead the evolving supply chain management profession by developing, advancing, and
disseminating supply chain knowledge and research". In 2004, the Council of Logistics
Management (CLM) changed its name to the Council of Supply Chain Management
Professionals (CSCMP), reflecting the holistic role that modern logistics professionals play.
The "Supply Chain Innovation Award competition" is part of CSCMP's annual global
conference which is attended by supply chain professions from many countries. The award
recognizes a supply chain team's innovation as demonstrated by quantifiable and sustainable
cost-savings, revenue-generating, or customer-satisfaction achievements. In 2009 CSCMP
released the second edition of their "Supply Chain Management Process Standards", a guide
to understanding the processes involved in supply chain activities, and for use in
benchmarking the minimum acceptable practices and best practices related to those activities.

CSCMP publishes the Journal of Business Logistics (JBL) which provides a forum for the
dissemination of original thoughts, research, and best practices within the logistics and
supply chain arenas. JBL is published by Wiley-Blackwell which is the international
scientific, technical, medical, and scholarly publishing business of John Wiley & Sons.

Types of Integrated Logistics:-

1. One Party Logistics:

• The Supplier.

A shipper can be;

• Someone who prepares goods for shipment, by packaging, labeling, and arranging for
transit, or who coordinates the transport of goods
• Shipping (fandom), someone who supports a fictional romantic relationship, usually
on the Internet.

Specialties of 1pl;

International transport, Express deliveries, Warehousing, Procurement

A Consignee;

In a contract of carriage, the consignee is the person to whom the shipment is to be
delivered to whether by land, sea or air. With One PL, -the name says it all – you only have
one party for all your logistic services. A true logistic purchasing organization, fit to meet
your standards. It does not matter if it is road transport, air or ship freight or dealing with
customs formalities – we’ll fix everything for you. Do you need a partner for storage and
distribution? Don’t look any further. That’s us! No other transport company is good at
everything. Every European region has its own specialists. A transportation company dealing
with the shipments of containers may not know anything about e.g. suspended transport.
OnePL has an extended network of specialists who just know about every kind of
transportation. For each and every order, we select the most excellent transportation company
to give you the best possible service. Because we are so large, we are able to offer this
service at excellent rates.

(E.g.):- The best example of One Party Logistics is a local supplier for raw materials for any
MNCs.

2. Two party Logistics:

A Second-party logistics provider (abbreviated 2PL) is an asset-based carrier, which
actually owns the means of transportation.

Second-party logistics providers are;

• shipping lines, which own, lease, or charter their ships,
• airlines, which own, lease, or charter their planes,

• truck companies, which own, or lease their trucks,

• barge companies, which own, lease, or charter their barge,

• rail companies, which own their trains,

• Warehouse owners.

Transportation industry;

In the transportation industry, the second-party logistics providers are segmented
between
different categories of transportation:

• sea freight, which regroups shipping lines and barge companies,
• air freight, which regroups the airlines, as well as the cargo helicopter companies,

• trucking, which regroups the truck companies and the van companies,

• railways, which regroups the rail companies,

• Warehousing and logistics.

(E.g.):- YRC Worldwide Inc. is the holding company for a portfolio of brands
including YRC, YRC Reimer, New Penn, USF Holland and USF Reddaway. YRC
Worldwide has a comprehensive network in North America with local, regional, national
and international capabilities. YRC Worldwide offers supply chain solutions for
heavyweight shipments and serves customers who ship industrial, commercial and retail
goods. The company is headquartered in Overland Park, Kansas.

• The company traces its history back to 1924 when A.J. Harrell of Oklahoma City
founded the Yellow Cab and Transit Company, a bus and taxi company that served
central Oklahoma. The company remained small until 1952, when an ownership
group led by George E. Powell Sr. bought the company. During this time, Yellow
helped pioneer the concept of consolidating small freight shipments into trailer loads.

Corporate headquarters in Overland Park, Kansas
• In 1968, the company name was changed from Yellow Transit Freight Lines to
Yellow Freight System Inc. During the deregulation of interstate trucking in the
1980s, Yellow Freight System embarked on a massive restructuring by creating new
distribution centers across the country to better serve customers. The company
changed its name to Yellow Corporation in 1992, when it created a parent company,
with Yellow Transportation, Inc. as its largest division.

Vintage Yellow Corp. Logo
• In December 2003 Yellow Corp. acquired Roadway Corp. for $1.05 billion, forming
Yellow Roadway Corporation. The merger more than doubled revenue; Yellow Corp.
posted a 2003 revenue of $3.07 billion, and Yellow Roadway Corp. had a 2004
revenue of $6.8 billion. These revenues continued to increase with the $1.5 billion
acquisition of USF Corp. to a high of $9.9 billion in 2006. These increases also saw
jumps in profit, which increased from $40 million in 2003 to $184 million in 2004 to
a high of $288 million in 2005. Yellow Roadway Corp. also made forays into the
international market, particularly China. In September 2005, the company purchased
half of Chinese freight-forwarding company JHJ International Transportation Co.
Ltd. and in August 2008, bought a 65 percent share of Chinese Shanghai Jiayu
Logistics Co.
• Possibly due to earlier manufacturing slowdowns, YRC reported a net loss of $976
million for its 2008 fiscal year. In 2009 it again reported a net loss of $622 million.
Towards the end of 2009, YRC narrowly averted having to file for bankruptcy
protection by successfully persuading its bondholders to exchange their $470 million
in bond notes for roughly 94% of the company’s shares. Concurrent with more recent
manufacturing sector growth and recovery, since the fourth quarter of 2009, YRC has
again been approaching a net positive balance sheet. Nonetheless its share price

declined in year 2010 more than 80%, raising in 2011 suspects of Death spiral
financing. In 2011, September the company completed a financial restructuring that
has essentially wiped out any shareholder equity.
• On March 1, 2009, Yellow Transportation and Roadway formally merged to create
YRC Worldwide.
• On December 15, 2011 YRC Worldwide sold a significant portion of Glen Moore
including the Carlisle, PA terminal to Celadon located in Indianapolis, IN

3. Third-party logistics:

A third-party logistics provider is a firm that provides service to its customers of
outsourced (or "third party") logistics services for part, or all of their supply chain
management functions. Third party logistics providers typically specialize in integrated
operation, warehousing and transportation services that can be scaled and customized to
customers' needs based on market conditions and the demands and delivery service
requirements for their products and materials. Often, these services go beyond logistics and
included value-added services related to the production or procurement of goods, i.e.,
services that integrate parts of the supply chain.

According to the Council of Supply Chain Management Professionals, 3PL is defined as "a
firm [that] provides multiple logistics services for use by customers. Preferably, these
services are integrated, or bundled together, by the provider. Among the services 3PLs
provide are transportation, warehousing, cross-docking, inventory management, packaging,
and freight forwarding."

Third-party logistics providers include freight forwarders, courier companies, as well as other
companies integrating & offering subcontracted logistics and transportation services.

Hertz and Alfredsson (2003) describe four categories of 3PL providers:

• Standard 3PL provider: this is the most basic form of a 3PL provider. They would
perform activities such as, pick and pack, warehousing, and distribution (business) –
the most basic functions of logistics. For a majority of these firms, the 3PL function is
not their main activity.
• Service developer: this type of 3PL provider will offer their customers advanced
value-added services such as: tracking and tracing, cross-docking, specific packaging,
or providing a unique security system. A solid IT foundation and a focus on
economies of scale and scope will enable this type of 3PL provider to perform these
types of tasks.
• The customer adapter: this type of 3PL provider comes in at the request of the
customer and essentially takes over complete control of the company's logistics
activities. The 3PL provider improves the logistics dramatically, but do not develop a
new service. The customer base for this type of 3PL provider is typically quite small.

• The customer developer: this is the highest level that a 3PL provider can attain with
respect to its processes and activities. This occurs when the 3PL provider integrates
itself with the customer and takes over their entire logistics function. These providers
will have few customers, but will perform extensive and detailed tasks for them.

Advancements in technology and the associated increases in supply chain visibility
and inter-company communications have given rise to a relatively new model for third-party
logistics operations – the “non-asset based logistics provider.” Non-asset based providers
perform functions such as consultation on packaging and transportation, freight quoting,
financial settlement, auditing, tracking, customer service and issue resolution. However, they
do not employ any truck drivers or warehouse personnel, and they don’t own any physical
freight distribution assets of their own – no trucks, no storage trailers, no pallets, and no
warehousing. A non-assets based provider consists of a team of domain experts with
accumulated freight industry expertise and information technology assets. They fill a role
similar to freight agents or brokers, but maintain a significantly greater degree of “hands on”
involvement in the transportation of products.

To be useful, providers must show their customers a benefit in financial and
operational terms by leveraging exceptional expertise and ability in the areas of operations,
negotiations, and customer service in a way that complements its customers' preexisting
physical assets.

On-demand transportation is a relatively new term coined by 3PL providers to
describe their brokerage, ad-hoc, and "flyer" service offerings. On-demand transportation has
become a mandatory capability for today's successful 3PL providers in offering client
specific solutions to supply chain needs.

These shipments do not usually move under the "lowest rate wins" scenario and can
be very profitable to the 3PL that wins the business. The cost quoted to customers for on-
demand services are based on specific circumstances and availability and can differ greatly
from normal "published" rates.

On-demand transportation is a niche that continues to grow and evolve within the
3PL industry.

Specific modes of transport that may be subject to the on-demand model include (but
are not limited to) the following:

• FTL, or Full Truck Load
• Hotshot (direct, exclusive courier)

• Next Flight Out, sometimes also referred to as Best Flight Out (commercial airline
shipping)
• International Expedited

3PL can also be 2PL at the same time in the following cases:

• when a shipping line owns a freight forwarder,
• when an airline owns a general sales agent (GSA),

• when a freight forwarder owns trucks or a warehouse,

• When a courier company owns planes.

4. Fourth-party logistics:

The concept of Fourth-Party Logistics (4PL) provider was first defined by Andersen
Consulting (Now Accenture) as an integrator that assembles the resources, capabilities and
technology of its own organization and other organizations to design, build, and run
comprehensive supply chain solutions. Whereas a third party logistics (3PL) service provider
targets a function, a 4PL targets management of the entire process. Some have described a
4PL as a general contractor who manages other 3PLs, truckers, forwarders, custom house
agents, and others, essentially taking responsibility of a complete process for the customer.

(E.g.):- Accenture plc. (NYSE: ACN) is a global management consulting, technology
services and outsourcing company headquartered in Dublin, Republic of Ireland. It is the
largest consulting firm in the world and is a Fortune Global 500 company. As of September
2011, the company had more than 244,000 employees across 120 countries. Accenture's
current clients include 96 of the Fortune Global 100 and more than three-quarters of the
Fortune Global 500. The international company was first incorporated in Bermuda in 2001.
Since September 1, 2009 the company has been incorporated in Ireland.

For the fiscal year ended August 31, 2011, the company generated net revenues of
US$25.55 billion. The operating profit of the company was $3.47 billion in FY2011, an
increase of 18.2% over FY2010. Its net profit was $2.58 billion in FY2011, an increase of
12% over FY2010.

Accenture is listed on the New York Stock Exchange and is a constituent of the S&P
500.

Accenture originated as the business and technology consulting division of
accounting firm Arthur Andersen. The division's origins are in a 1953 feasibility study for
General Electric. GE asked Arthur Andersen to automate payroll processing and
manufacturing at GE's Appliance Park facility near Louisville, Kentucky. Arthur Andersen
recommended installation of a UNIVAC I computer and printer, which resulted in the first
commercially owned computer installation in the United States in 1954. Joe Glickauf was
Arthur Andersen's project leader responsible for the payroll processing automation project.
Now considered to be the father of computer consulting, Glickauf headed Arthur Andersen's
Administrative Services division for 10 years.

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