SCM Mod 4 Study Guide
1. Logistics
a. Part of supply chain that plans, implements, and controls the efficient, 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
b. The branch of the supply chain responsible for developing the transportation
itinerary and finding the appropriate transportation and storage business partners to
successfully navigate the flow of materials from the point of origin to the final
destination
2. Transportation
a. Movement of goods (and services) from one location to another
b. The logistics function that is responsible for the effective and efficient movement of
goods from one location to another
3. Reverse Logistics
a. The management of products that flow backward in the supply chain (upstream),
away from the consumer and back in the direction of manufacturers
4. Order fulfillment
a. Delivering the right order (product and quantity), to the right place (location and
customer), at the right time, in the expected condition, with the appropriate
documentation
5. Cargo classifications
a. Bulk Cargo: Cargo that is loose and free flowing. Bulk cargo is not in any type of bag,
box, or packaging vessel. As such, bulk cargo is typically loaded and unloaded by
being pumped, scooped, shoveled, etc.
i. Free Flowing Cargo, Stored Loose…Loaded by Shovel, Pump, Bucket, or Scoop
ii. Examples: Coal, Rice, Grain, Raw Sugar, Oil, Sulfur
b. Break Bulk Cargo: Cargo that is packaged (box, bottle, can, etc.) and/or secured on a
pallet. This type of cargo can then be placed inside of a standardized container or a
truck trailer
i. General or Packaged Cargo…Often Containerized and Measured in TEU’s
ii. Examples: Bagged or boxed rice, canned goods, boxed electronics
c. Neo-Bulk Cargo: Typically, these are large items that do not quite fit into either the
bulk or break-bulk categories. This might include vehicles, logs, and livestock. Neo-
bulk items are typically not moved in standardized containers
i. Items with a mix of characteristics: Both Bulk and Break Bulk
ii. Examples: Automobiles, Logs, Steel, Cattle
6. Cube vs Weight
a. Cube represents the dimensional space (volume) inside of a container
b. Weight limit of a container communicates the maximum combined weight of the
cargo that can fit inside of that container
c. Cube – Amount of space in a container (or packaged) available for cargo, also
described as Cubic Capacity
d. Weight – The heaviness of the cargo
7. Intermodal
a. When cargo is moved from one vehicle or vessel to another or vessel without
directly handling the cargo
b. Seamless Multimodal shipment. No Need to Unload Container, Repackage Products.
One Container for entire trip
8. Planograms and planogram considerations
a. Planograms – Schematic drawing that illustrations product placement to maximize
use of shelf space and drive sales
9. Packaging
a. Consumer Related Reasons
i. Marketing and Promotion
ii. Provide Product Information – Weight, Volume…
iii. Legal Considerations – Warning labels, nutritional info, safety seals,
language…
b. Supply Chain Related Reasons
i. Provides Protection – Light, Thieves, Dust, Moisture, Impact
ii. Provides Support – Other products and/or boxes
iii. Preservation of Perishable Products – Longer shelf-life
iv. Facilities Movement/Handling
10. Types of packaging
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a. Primary Packaging – In contact with then end item (Plastic bag, Can, Bottle, Shrink
Wrap)
b. Secondary Packaging – Contains end item and primary packaging (Box, Case, Drum,
Shrink Wrap)
c. Tertiary Packaging – Contains several items which are in secondary packaging (Crate,
Pallet, Metal straps, Shrink wrap)
i. Cardboard Boxes, Wooden Crates, Plastic, Steel Straps, Pallets
11. Pallets
a. A platform upon which large amounts of cargo can be securely placed for easy
movement by a human-operated or automated forklift, pallet jack or reach truck
12. Shipping Labels
a. A label that is often attached to inventory (typically affixed to a box) that contains
information about the shipment
13. Standardized Containers – value of, dimensions of, considerations, types
a. Steel boxes that can be loaded with cargo
b. Standardize Sizes (Width x Height x Length)
c. Measured in TEU’s (Twenty Foot Equivalent Unit)
d. Standardized – Containers Sizes are standardized so loading equipment can be
standardized. Also, easier to plan pallet arrangement inside container when all
containers are nearly identical inside and out
14. TEU
a. 20 ft = 1 TEU
b. 40 ft = 2 TEU
15. Be able to calculate TEU’s
16. TL, LTL, CL, LCL
a. Freight Shipping Terminology
i. These can be used to classify the size of a shipment or the type of shipment
carrier
1. TL and CL – large shipments. Full Truckload and Full Container Load
2. LTL and LCL – Less than a Truck/Container Load, Smaller shipment that
cannot fill a Consolidation of multiple shipments required
17. 5 Modes of Transport
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a. Air, Road, Water, Rail, Pipeline (used only for liquids or items that can be shipped in a
slurry)
18. Pros and cons of each mode
a. Air
i. PROs
1. Speed is the obvious advantage – What does this give you?
a. Inventory, Shelf life, downtime, shrinkage
ii. CONs
1. Extremely expensive
2. Incompatible containers – Intermodal challenges
b. Road
i. PROs
1. Accessibility, Flexible (Any Product), Versatile (Any Place w/ Roads),
Reliable (On-Time Reliability Very High – 95%)
2. 2nd fastest mode of transport – Much Cheaper than Air
3. Vital to intermodalism
ii. CONs
1. Long Trips usually mean excessive regulations – Multiple states:
Multiple weight limits, driver and truck regulations
2. Cost – Vulnerable to increase in fuel prices, tolls, taxes, fees
3. Cost – One driver, one truck, insurance
4. LTL’s and LCL’s will usually make many stops
c. Rail
i. PROs
1. Total Cost – More affordable than road transport
2. Fuel Cost – Not as susceptible to increases in energy/fuel costs
3. Load – Ability to carry heavier loads than trucks (road weight limits)
4. Fewer in-transit regulations – Better for long distances
5. More capable in poor weather conditions
ii. CONs
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1. Damage – Susceptible to loss/damage due to in-transit vibrations
(about 3%)
2. On-time reliability – Very poor, 70% in a good year
3. Speed of shipment – Total trip’s average speed typically less than 30
mph
4. Access to infrastructure required – tracks, loading equipment
d. Water
i. PROs
1. Low Cost (vs. Air Transport)
a. High Cube cargo (Savings of money per mile)
b. High Weight cargo (Savings of money per cargo ton)
2. Transport almost any form of Cargo
a. Large (Volume) Shipments – 200 TEU’s
b. Heavy Shipments (High Density) – Steel
c. Bulk shipments easier to load and move – Oil, Grain…
d. Oversized and oddly shaped shipments – Cranes, Tunnels…
ii. CONs
1. Much Slower than Air – Increase in time, theft, required insurance
2. Port Capabilities – Safety, Handling, Warehousing
19. Types of intermodal railcar shipments – TOFC, COFC, Doublestacks
a. Trailer on a Flat Car (TOFC) – 2 railcars next to each other (piggyback)
i. A truck trailer is placed directly on a rail car
b. Container on a Flat Car (COFC) – 2 railcars on top of each other (doublestack)
i. Standardized containers are placed directly on a rail car
c. Doublestack
i. Two containers are stacked on top of each other on a single but specialized
railcar that can safely accommodate two containers while still allowing the
double-stacked containers to clear tunnels
20. Infrastructure
a. Refers to the physical structure within a region that is available for the movement
and distribution of goods through a supply chain
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b. Roads – Number of roads, size, and condition; connections between major and
minor cities
c. Bridges – Availability, size, condition
d. Rail – Availability for freight and/or passenger transport
e. Fuel and Energy – Availability, distribution network, reliability
f. Warehouses – Number of facilities, services offered, safety, reliability
g. Law Enforcement – Availability, concern for commerce, reliability
h. Availability of Skilled Employees – Competent and reliable workforce capable of
utilizing machines and technology required to facilitate logistics
i. Ocean Ports
j. Airports
k. Intermodal capabilities – Handling devices
l. Warehouses and distribution centers
m. Communication and Technology Network
n. Natural resource distribution
o. Utility and fuel network
p. Labor – Skill and/or education level
q. Legal Landscape – Legal Environment
i. Customs laws, Taxes, Environmental laws, Law enforcement
ii. Requirements – Certifications, Licenses
21. Warehouses and DCs
a. Warehousing – Provides Storage (UNCERTAINTY)
i. Warehouses are typically used to store inventory for long periods of time
(weeks, months, or even years). In a warehouse, storage is the primary
function. Items need to be kept safe and preserved for future use
ii. Inventories – Safety Stock, Anticipation Inv., Large and/or Expensive
Inventories
iii. Location Advantages – Closer to the Retailers, Customers, Shorter Lead Times
b. Distribution Center (DC) – Facilitates Movement (DATA DRIVEN)
i. Distribution Centers focus on efficiently getting items to retail and/or
wholesale outlets. DCs try to quickly get large shipments of a single good off
of a single truck and then get those goods ready for distribution to dozens of
downstream stores. The idea here is to have full trucks with large quantities
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of one (or a few goods) in-bound and then full trucks with small trucks with
small quantities of many different items outbound
ii. Break-up large shipments to create assorted full trucks
iii. LTL to TL – Consolidation, Lower Cost
22. Warehouse and DC services
a. Picking and Packing – Think Amazon.com. Certain facilities store items for online
retailers and then quickly pick, pack, and label a shipment before it is put on a truck
headed for a customer.
b. Assembly – Shipping pre-assembled tables or bicycles and then storing them in a
facility is not ideal
c. Postponement – Sometimes retailers offer customization opportunities
d. Quality Inspections – Items can be damaged in transport, during handling and even
while on the shelf
e. management of Packaging Materials – Boxes, pallets and other types of packaging
can be rather expensive
f. Disposal, Disassembly and/or Recycling of Unwanted or Defective Products – What
happens to items that are broken, returned, or unsold? Some facilities focus on
dealing with items that have little or no use
g. Repair or Refurbishing of Defective Product – If items can be repaired or re-sold,
some facilities will provide services to prepare those products for re-sale
h. Central Return Center – A facility that performs a number of reverse logistics
functions typically related to returned consumer products
i. Cross-Docking – Distribution of goods from an upstream supplier to a downstream
customer through a distribution center with minimal handling and storage times
typically less than 24 hours
j. Drop Shipment – A three-party system made up of a retailer, a manufacturer or
wholesaler, and consumer
k. Last Mile – In supply chain, the last mile typically refers to the portion of the supply
chain between the final inventory holding facility and the end consumer
23. Types of loads and shippers
a. Consider three different types of companies and three different types of shipments –
Amazon, Apple Custom Car Inc. (a small-scale importer of customized car parts)
b. Truckload (TL) Shippers – These types of shippers specialize in moving large amounts
of goods, enough to fill an entire truck
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c. Less-Than-Truckload (LTL) Shippers – If a company has a reasonable amount of goods
going to a single location, but not enough goods to fill an entire truck or container
they have an LTL shipment
d. Small Package Shippers – A small package typically refers to anything from an
envelope to a single packaged shipment of less than 150 pounds, although the upper
limit varies from one small package shipper to another (sometimes referred to as
small parcel shippers)
24. Ocean Carrier classifications
a. Bulk Carriers
i. Oil Tankers, Ore Carriers, LNG carriers
ii. Dry Bulk Carriers
b. Container Ships
i. Primarily carry breakbulk cargo
ii. Container Vessels, General Cargo Vessels
c. Neo-Bulk Ships
i. used to ship cargo like: Lumber, Vehicles, large Machinery, Metals
ii. Example: Roll On/Roll Off Carriers – RO/RO’s (Cars, Trailers, etc.)
25. Different types of distribution options – also be able to identify examples
a. Traditional distribution model
i. This has distribution, buffer stock, and full trucks
26. Cross-docking
a. Moves inventory more quickly
b. Modern distribution system takes advantage of real-time POS data
27. Drop shipment
28. Last Mile
29. Central Return Center
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