Need a Rewrite on homework 5 logistics

Introduction

Each chapter of your textbook has a list of study questions. Check your understanding of the concepts by completing the selected study questions.

Requirements

· Each question response should be 50-100 words.

Due Date

· Submit by Sunday, 11:59 p.m., CST.

Homework Assignment Questions

· Chapter 10, Page 402,  Questions # 1, 2, 3, 4, 5

1.Discuss the role of distribution in the supply chain. Provide examples of how distribution operations can positively and negatively impact supply chain performance.

One of the key purpose of supply chain system is to move value from one point to another. This often is represented by moving goods and services. In doing so we often have single source of production and multiple destination. As a result, we need to optimize the routing process from the source to the destinations. Since the number of destinations are mostly larger than the number of sources, the role of distribution of the products/services become crucial to the overall creation value.

Let’s say products are manufactured in a facility and needs to be distributed across over 100 locations, then the product needs to be sent in bulk to a distribution center, which in turn categorizes and sorts the products into smaller shipments and distributes them to different warehouses and destinations. This is the advantage of the distribution. The disadvantage is that it requires additional effort to manage the distribution networks.

2. Compare and contrast the four primary functions of a DC: accumulation, sortation, allocation, and assortment.

Accumulation refers to the receipt and collection of the products in a distribution center. This is where the input for the DC takes place.

Sortation is the process of categorization and arrangement of the products so that their outgoing transportation become easier and streamlined.

Allocation is the process of dividing the products for different wholesalers, retailers and customers

Assorting is the process of increasing variety and quantity of products so that the products can be made available at the destinations by the DC.

3.Discuss the primary tradeoffs that must be made between distribution and logistics activities

Determining the number of facilities needed for a supply chain involves the evaluation of cost tradeoffs with other functional areas. As the number of warehouses increases, transportation cost and the cost of lost sales decline, though inventory and warehousing costs increase. Overall, total cost will generally decline. However, total costs begin to rise as increasing inventory and warehousing costs offset decreasing transportation costs and the cost of lost sales. Of course, the total cost curve and the range of warehouses it reflects will be different for each company. • Transportation costs—Consolidation of inbound freight into truckload quantities achieves lower transportation rates per hundredweight and reduced transportation costs. On the outbound side, increasing the number of warehouses brings the warehouses closer to the customer and market area, reducing both transportation distance and costs. • Cost of lost sales—an increase in the number of facilities improves customer proximity and inventory availability. This facilitates faster order cycle time and more complete orders. Fewer customers will be compelled to find substitute products or take their business to other suppliers, thus reducing defections and lost sales. • Warehousing costs—these costs increase because the total amount of space increases with a larger number of warehouses. For example, splitting a 200,000-square-foot facility in half will likely require two facilities of more than 100,000 square feet each. Office space, equipment storage, and other facilities have similar footprints in two facilities as in one, while aisles require a higher proportion of space in the two smaller warehouses. • Inventory costs—as discussed earlier, an increased number of stocking points increases the overall safety stock levels and inventory carrying costs in the supply chain. Moreover, as companies increase their number of warehouses, growing product lines will likely require more total space, even at the same sales volumes. Determining the number of facilities needed for a supply chain involves the evaluation of cost tradeoffs with other functional areas. As the number of warehouses increases, transportation cost and the cost of lost sales decline, though inventory and warehousing costs increase. Overall, total cost will generally decline. However, total costs begin to rise as increasing inventory and warehousing costs offset decreasing transportation costs and the cost of lost sales. Of course, the total cost curve and the range of warehouses it reflects will be different for each company. • Transportation costs—Consolidation of inbound freight into truckload quantities achieves lower transportation rates per hundredweight and reduced transportation costs. On the outbound side, increasing the number of warehouses brings the warehouses closer to the customer and market area, reducing both transportation distance and costs. • Cost of lost sales—an increase in the number of facilities improves customer proximity and inventory availability. This facilitates faster order cycle time and more complete orders. Fewer customers will be compelled to find substitute products or take their business to other suppliers, thus reducing defections and lost sales. • Warehousing costs—these costs increase because the total amount of space increases with a larger number of warehouses. For example, splitting a 200,000-square-foot facility in half will likely require two facilities of more than 100,000 square feet each. Office space, equipment storage, and other facilities have similar footprints in two facilities as in one, while aisles require a higher proportion of space in the two smaller warehouses. • Inventory costs—as discussed earlier, an increased number of stocking points increases the overall safety stock levels and inventory carrying costs in the supply chain. Moreover, as companies increase their number of warehouses, growing product lines will likely require more total space, even at the same sales volumes.

4. Describe the major challenges faced by distribution managers in the current environment

1.   Changing relationships: In recent years, many business relationships have become more integrated as both customers and suppliers are encouraged to combine their automated processes. Although tighter integration may be an advantage over rivals, it also needs less error tolerance, requiring reliable processes and well-trained support staff. 2.   Employee retention: Speaking of personnel, recruiting and maintaining qualified staff is one of the most challenging tasks for any business when relying on hard-to-find expertise for supply managers needing training and restructuring of the industry. For any particular job, fewer and fewer people have the skills and experience, so training and retaining your best employees has become mission-critical. 3.   Customer expectations: They claim the only constant is change and for the distribution managers this argument certainly holds true. They have seen their markets, products, and customers change almost overnight over the past several years. It's a challenge for them to meet these expectations from their customers. 4.   Demand variation: In today’s environment, demand varies constantly due to factors like new trends, new technologies, new features etc. And, that’s one of the biggest challenges for the distribution managers to handle meet these demand variation.

5. What are the primary capabilities, advantages, and disadvantages of direct distribution, DCs, and cross-docks?

direct distribution-Bypass distribution facilities to fulfill retail store requests from the primary production point. Avoids the need to build and operate distribution facilities, reduces inventory in the system, and compresses order cycle time. Better with truckload quantities. But it can be expensive to deliver small quantities to buyers (reduced transportation efficiencies), limited safety stock, and demand volume variability. Distribution Centers- can hold goods in anticipation of customer orders, provide a buffer of safety stock to protect against contingencies, and handle small quantity orders efficiently from transportation to fulfillment. Cross-Docks-provide a high velocity alternative to direct shipping at lower transport costs with product mixing capabilities

Chapter 11, Page 455,  Questions # 1, 2, 3, 5, 6

1. discuss the role of transportation in the supply chain. provide examples of how transportation can positively and negatively impact supply chain performance.

The function of transportation in the supply chain management are as per the following:

- Distance and time isolates the organization of association: It implies that the transportation interfaces the organization of association and permits the merchandise to stream between their offices.

- Transportation satisfies the demand of the supply chain by bridging the hole between the dealer and purchaser.

- Cost viable transportation increases the item quality by reducing the creation cost and capture economies of scale underway.

Transportation can positively influence the supply chain execution in the following manner:

- Supply chain cost can be diminished by minimizing the transportation cost.

Example: Supply chain cost includes the creation cost + transportation cost +order processing cost + conveyance cost. On the off chance that the creation cost is $16, transportation cost is $3, request processing cost is $1, and conveyance cost is $.50.

Hence, the absolute supply chain cost would be $20.5. On the off chance that there is a decrease in the transportation cost for example from $3 to $1.50, it would diminish the complete cost to $19.

Transportation can negatively influence the supply chain execution in the following manner:

- Cost successful dispersion may influence the items quality and there are high possibility for the items to get harmed during transportation.

2.Describe the major challenges faced by transportation managers in the current environment

There are a number of major challenges that are faced by the transportation managers in the current scenario. Some of them are as follows

1. The rising costing: Costing is a major issue that is currently faced by the transport managers. As the demand for developing sustainability is rising, the managers dealing with transportation are facing issues as cost of developing sustainability are high

2. Improved customer service: With the globalization of economies , the competition is also rising and the customers are becoming more demanding, this is increasing pressures on the transport managers to provide faster and efficient services

3. Environmental issues: The transport industry is facing increasing pressures from both government and the public to reduce their carbon footprints. This requires developing new innovative processes and procedures and developing sustainability in operations

4. Government regulations: The governments across the globe are imposing new rules and regulations on the transport industry regarding labor and environmental norms and this is creating a heavy burden in terms of costing and compliance

5. Technology: The technology is acting as a disruption in the industry and the managers have to upgrade themselves and their systems as per the new technologies

3.What are the primary capabilities, advantages, of each of the basic modes.

The five basic mode of transportation with their primary capabilities, advantages, and disadvantages can be summarised as follows:

Road Transportation: The primary capability of the road transportation as the carriers of the goods is to provide transportation by the means of domestic supply chain efforts. The transportation is available by the private fleet that is available to hire. The advantages of the road transportation are that it requires low start-up cost or fixed cost and the transport are available on a regional basis. Every region has their own road transport setup. The disadvantage associated with road transportation method is that there is high variable cost associated with the mode and having a regional set up increases the level of competition.

Rail Transportation: The rail transportation method is suitable for the long distance transportation of the raw material and the finished goods associated with the industries. There are high value goods containers with liquid and petroleum products that are transported using the rail method. The advantages of the rail transportation is that bulk quantities can be easily transported over long distance at minimal costs. However the mode of transportation is slow and there is very little option of customization with the freight.

Air Transportation: The air is a customized mode of transportation, ir transportation is a preferred mode when there are high value and low weight freight that needs to be transported. The mode is expensive and there are chances of loss in the transit. Air transportation also have advantages of being very reliable and the quick mode to transport goods.

Water mode of transportation: International transportation that requires large quantities to be moved from one place to the other uses the waterways as the means of transportation. The advantages of the mode is that it requires the least cost of transporting the goods as compared to the other modes and at the same time transfers the highest quantities of the good. The low cost transport goods internationally in large quantities the disadvantage with the mode is that it is slow.

Pipeline transportation: The spreading of the international boundaries of trade have diluted the absolute distance between them. Pipeline transportation uses high value equipment to be placed and the high volume of the good is easily transported over the places. However the high value of fixed asset that is required to be placed between the transporting place is a disadvantage. The pipeline requires monitoring and security also.

5. Discuss the primary considerations and issues that must be factored into modal and carrier selection

the primary consideration and issues that must be factored into modal and carrier selection are multiple planning activities that occurs before carrier and modal selection. it is who is will be responsible for managing the transportation functions within the business, what the terms of sale and payment will be used and how the goods will be transported from one place to another. modal selection is based on the relative strengths of each mode/intermodal option in terms of accessibility, transit5 times, reliability, product safety , cost and durability. Carrier selection focuses on the type of service required whether it is direct or in-direct, geographic coverage, service levels and carrier willingness to negotiate reasonable rates

6. Should the Internet be considered the sixth mode of transportation? Why or why not?

Internet is a medium of communication but cannot be considered as means of commutation. In transportation, there is a possibility of the physical movement of goods from one place to other but Internet can only facilitate the same but not actually undertake. Hence, it cannot be considered as sixth mode of transportation but a mode to aid the process of transportation.