Global Supply Chain and Logistics
| Website: | Hamburg Open Online University |
| Kurs: | MoGoLo - Mobility of Goods and Logistics Systems |
| Buch: | Global Supply Chain and Logistics |
| Gedruckt von: | Gast |
| Datum: | Dienstag, 26. November 2024, 00:07 |
Beschreibung
The topic “Global Supply Chain, Logistics and Sustainability” provides you with an overview of the topic cluster “Mobility of Goods and Logistics Systems” (MoGoLo) and its learning objectives. In all topics of this topic cluster we provide you with tools to understand and to design supply chains with as much sustainable standards in logistics as possible.
1. Introduction
This topic gives you a first insight into the topic of "Mobility of Goods and Logistics Systems" and its most important definitions. Besides that, you will get to know what you need to take into account while designing a supply chain. Because all kind of transport is having an environmental impact, we will show you, what measures can be taken to reduce this negative impact.
We as engineers understand "Transport Systems, Logistics and Supply Chain Strategies" as a system in one that needs to be handled by an integrated approach, in order
- to make the related functions and processes more efficient and more reliable, and
- also to reduce its impact on society or the environment
First, you will learn some basic definitions for understanding the topic cluster ”MoGoLo” better. Afterwards, the conceptual system model of transport and traffic will be introduced. As this system model is used to structure topics 3 – 7, it is presented in detail in topic 2. Based on this underlaying understanding you will learn how to design a supply chain and what needs to be taken into account while doing so. As all kind of transport is having an environmental impact, the last chapter of this topic will give you more information about the ecological dimension of goods movement and possible measures to reduce this impact.
A PC from around the world
As a short introduction, the following H5P-Element "A PC from around the world" (Kerkhoff 2004) shows the transport chains of different parts of a PC while the production and assembling processes before reaching its final selling point in the end.
The PC‘s transport balance sheet – TKT
- The diagram "A PC's transport balance sheet" (TKT) shows the sum of tonne kilometres transported of all parts and components as well as of the finished computer. In total all transport processes of the PC and all its parts amount to 510 TKT.
- Nearly 90 percent of the total TKT is covered by container vessels due to long distance transports and heavy goods.
The PC's transport balance sheet - CO2-equivalent
- The transport of the PC is emitting CO2.
- In total the PC has a “climate relevant backpack” from 46.2 kg of CO2 emissions.
- The diagram "A PC's transport balance sheet - CO2" shows that most of the climate relevant impacts result from the transport with airplanes.
- Compared to the previous figure, it is clear that the decision for one mode of transport from an economic point of view is different from an ecological one.
After learning, that for the production and delivery of a PC, a lot of different aspects (e.g. supply chain strategy, CO2 emissions, mode of transport) need to be considered, the following page will give you some basic definitions to understand the underlying processes better.
Literature
Literature
- Kerkhoff, C. (2004): Standortverflechtungen und Verkehrsaufkommen bei Herstellung und Vertrieb eines Personalcomputers. Unpublished Thesis TU Dortmund University. Own translation
2. Basic definitions
To better understand the topics in MoGoLo, this page will provide you with some basic definitions for logistic relevant terms.
Transport chain
The DIN 30781 defines transport chains generally as a “... series of technically or organisationally linked procedures, in which persons or goods are moved from source to destination. The transport chain is to be understood as a system.”
Thus, international transport chains can be termed as definable sections in corporate comprehensive logistic chains across foreign countries.
Logistics
“Logistics is the process of strategically managing the procurement, movement and storage of materials, parts and finished inventory (and the related information flows) through the organisation and its marketing channels in such a way that current and future profitability are maximised through the cost-effective fulfilment of orders.” (Christopher 1998)
The figure "Logistics management process" shows the whole process including the different stages of the logistics management process (suppliers, procurement, operations, distribution, customers).
Thus, international logistics is related to the management of procurement, production and/or distribution in foreign countries (Christopher 1998).
Third party logistics:
Third party logistics:
Coyle et al. (2003, p. 425) define a third-party logistics provider as „an external supplier that performs all or part of a company‘s functions.“
“Lead logistics provider” is used for a third-party logistics provider, who has a single interface between the client and multiple logistics service providers.
From company logistics to supply chain management
Company logistics was based on integrating the processes of all the actors involved, after standardizing operating technologies to a certain degree. With corporate logistics, operating technologies still played a fundamental role and the flow optimization was aimed at achieving a single pipeline.
In the Supply chain management (SCM) the entire process is divided into segments, with each actor having a specific function and the main effort, even at the technology level, is focused on integrating the procedures of all actors.
The transition from company logistics to SCM was driven by the increase of outsourcing (third party logistic).
According to the definition of Council of Supply Chain Management Professionals (CSCMP), logistics management is that part of supply chain management that
• plans,
• implements,
• and controls
the efficient, effective forward and reverses 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.
the efficient, effective forward and reverses 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.
CSCMP’s boundaries and relationships of logistics management
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 third-party logistics services providers.
To varying degrees, the logistics function also includes sourcing and procurement, production planning and scheduling, packaging and assembly, and customer service. It is involved in all levels of planning and execution: strategic, tactical and operational.
Logistics management is an integrating function, which coordinates and optimizes all logistics activities, as well as integrates logistics activities with other functions including marketing, sales manufacturing, finance, and information technology.
Now you know the most important definitions for logistics.
Now you know the most important definitions for logistics.
Literature
- Christopher, M.(1998): Logistics and Supply Chain Management 2.Ed. p. 4, 13
- Coyle, J.J.; Bardi, E.J.; Langley, J.C. (2003): The management of Business Logistics: A Supply Chain Perspective. Canada.
- Thomsom South-Western CSCMP (Council of Supply Chain Management Professionals) (2021): CSCMP Supply Chain Management Definitions and Glossary. URL: https://cscmp.org/CSCMP/Academia/SCMDefinitionsandGlossaryofTerms/CSCMP/Educate/SCMDefinitionsandGlossaryofTerms.aspx?hkey=60879588-f65f-4ab5-8c4b-6878815ef921 (last access: 29.06.2021)
2.1. Quiz - Basic definitions
In order to test, if you understood all the definitions above, you can examine yourself by answering the following questions:
3. Conceptual system model of transport and traffic
Now that you understood the definitions, this page introduces you to the conceptual system model of transport and traffic, which is shown in the figure "Conceptual system model" below.
As you have seen before, organizing the mobility of goods is quite complex and influenced by a lot of factors. Therefore, things need to be simplified. To reach this goal we use the ideas of system thinking and modelling. Models help to understand the elements and interrelations between these elements and the dynamic of the considered system. We use a conceptual system model of transport and traffic which was originally developed by Lars Sjoestedt (1996). This model was developed for the European Commission with the aim to enhance the understanding of the interconnections between the demand for transport, generated traffic and land use with impacts on the environment.
This system is activated by management decisions with regard to the strategy and structure of the supply chain. The way in which these decisions are taken is influenced by political and planning policies.
The topic "Conceptual System Model of Transport and Traffic" will provide you with more information about the conceptual system model of transport and traffic.
Literature
Literature
- Flämig, H.; Sjöstedt, L.; Hertel, C. (2002): Multimodal Transport: An Integrated Element for Last-Mile-Solutions? Proceedings, part 1; International Congress on Freight Transport Automation and Multimodality: Organisational and Technological Innovations
- Sjöstedt, L. (1996): A Theoretical Framework – from an Applied Engineering Perspective. In: Eurocase - Mobility, Transport and Traffic: in the perspective of growth, competitiveness, employment. Paris, France.
4. Design of the supply chain
On this page, you will learn, how to design a supply chain and what different aspects need to be considered in this complex process.
Consumers drive the whole system of goods movement as concerns the demand side.
We are (partly) responsible for the use of exhaustible resources and the impact on the environment.
But we cannot do without consumption either: we need something to eat and drink, some clothes to keep warm and some kind of housing.
Supply chains are needed to meet the demand for these goods and commodities. In these supply chains many different stakeholders with different expectations are involved. To realize the flow of goods from the point of origin to the point of destination, supply chains need transport vehicles as well as facilities for storage and handling.
- Typical vehicles for long distance transport are airplanes and seagoing vessels, for regional transport inland waterway vessels, trains and trucks.
- For the last mile delivery vans are common.
- The transshipment between the transport vessels takes place in logistic nodes, as ports, airports or other freight terminals.
How do logistics strategies influence the freight transport system?
The following figure "Competitive strategy of a company" shows, how the supply chain strategies, the steering schemes and the supply chain structure influence the competitive strategy of a company. All influencing parts are described in detail below. “The goal is to structure the drivers to achieve the desired level of responsiveness at the lowest possible cost, thus improving the supply chain surplus and the firm’s financial performance." (Chopra & Meindl, 2016, p. 56)
Supply chain strategies
The supply chain strategies of the companies are focussing on the balance between responsiveness and efficiency that results in strategic fit with the competitive strategy that matches the needs of the customer best (Chopra & Meindl 2016, p. 46, 56).
The combined impact of the drivers “facilities, inventory, transportation, information, sourcing and pricing” determine the grade of market responsiveness.
The supply chain structure is directly connected to a steering scheme: This means mainly: Is the company able to meet the market requirements in terms of quality and quantity, at the right time and the right place?
At the same time it is necessary to realise the highest physical efficiency of the (entire) supply chain to minimize their total cost.
Steering schemes
Regarding supply chain strategies, there are generally two targets for using the new steering principles of logistics and supply chain management (Chopra & Meindl, 2016, p. 56):
- the reduction of stocks throughout the supply chain and thereby, the reduction of the so-called "Bullwhip-Effect" (physical efficiency)
- avoiding out-of-stock-situations and associated opportunity costs (market responsiveness).
These targets can be achieved by generating minimal costs, considering storage costs, capital commitment costs and mobilizing economies of scale (Bowersox 2007, pp.12).
The central idea behind steering concepts is to reduce or even eliminate the total stock of product units within the supply chain at a certain time and to produce customer-oriented goods.
The process of steering is determined by two basic principles:
- the temporal adjustment of the value adding processes (time based) via flow-oriented or resource-based (functional) approaches;
- the nature of the order, further distinguished by push and pull steering modes.
Both two steering approaches tend to influence
- the magnitude of freight flows,
- its temporary urgency and
- patterns of spatial distribution of those activities required to cope with the demand.
Resource or flow oriented
The figure "Ressource and flow oriented steering approach" shows the differences between the two approaches.
- In the flow-oriented approach, steering is organized via the time that is required for certain tasks to be done. The central steering parameter is the lead time which has to be kept at a minimum.
- In the resource-oriented approach, steering is organized via the available capacities of resources and the time that is required for getting certain tasks done; these capacities can comprise e.g., machinery or staff capacity.
- In logistic transport systems, this approach is of importance for large logistics nodes, such as harbours, freight transport centers, goods distribution centers with major warehouses and consolidation outlets. They tend to be crucial for the functionality of these nodes. However, some specialized interfaces may only be suitable for meeting very specific demands.
- A standardized production system, which is found in the case of hubs of courier, express and postal (CEP) service providers, is adjusted to a consistent use of capacity with standardized shipment (dimensions, weight) and covers only forwarding (no storage or commissioning) and the function of consolidating transport.
Push- or pull-oriented
The figure "Push- and pull-principle" shows the two different steering approaches. Steering the supply chain by means of the type of order is closely connected to the point of time of the individual customer’s order, the so-called "Order Penetration Point" (Sharman 1984, p. 73).
At this point, the final product is individualized and in most cases its destination is known.
At this point, the final product is individualized and in most cases its destination is known.
In the case of mass products, the order penetration point is not used for steering purposes. Regarding customer-independent production, goods are being delivered out of the warehouse. The production follows the push-principle: it is forecast-based and will be steered by a plan outside the production system (Hopp & Spearman, 2001, p. 340).
In the case of customer specific products, i.e. in the ship building-industry, the customer is supplied directly, avoiding storage (contract manufacturing). In such pull-systems, the steering occurs via the status of the system itself (Hopp & Spearman, 2001, p. 340).
After deciding on the steering scheme, the company needs to decide, which kind of supply chain structure is the most useful in supporting your steering scheme.
Supply chain structure
Regarding goods flow systems, there are generally two groups: direct and indirect systems, which are shown in the figure "Supply chain structure".
Direct flow systems are characterized by two existing interfaces: one at the origin and one at the destination of a transport chain. Goods are transported directly from the sender to the recipient. There is no interruption within the supply chain.
In indirect flow systems the goods flow is interrupted by various trade levels, changing loading units or transport mediums in order to bundle shipments (consolidation) and thereby, increasing the efficiency of the system. Thus vehicles can be used to their full capacity. Additionally, more efficient means of transportation can be used. Concerning transport management, transport is either realized through direct transport or through grid patterns or so-called "Hub-and-Spoke" (HuB)-Systems. In grid patterns, handling points are exclusively connected by direct transport. In the case of general cargo, cooperation’s are often organized this way.
In indirect flow systems the goods flow is interrupted by various trade levels, changing loading units or transport mediums in order to bundle shipments (consolidation) and thereby, increasing the efficiency of the system. Thus vehicles can be used to their full capacity. Additionally, more efficient means of transportation can be used. Concerning transport management, transport is either realized through direct transport or through grid patterns or so-called "Hub-and-Spoke" (HuB)-Systems. In grid patterns, handling points are exclusively connected by direct transport. In the case of general cargo, cooperation’s are often organized this way.
The consolidated main transport flow between two hubs is indicated by the bold arrow in the figure on the right, while the small arrows symbolize consolidating or distributing transport on the so-called first and last mile.
Now you know how to design a supply chain.
Literature
- Bowersox, D.J.; Closs D. J.; Cooper M. B.; Bowerbox, J. C. (2007): Supply Chain Logistics Management. 2nd Edition. McGraw-Hill/Irwin, NY.
- Chopra, S.; Meindl, P. (2016): Supply chain management (3. ed., Pearson internat. ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
- Hopp, J. W.; Spearman, M. L. (2001): Factory Physics: Foundations of Manufacturing Management. 2nd Edition. McGraw-Hill/Irwin, NY
- Löwa, S.; Flämig, H. (2011): Integration of Logistics Strategies in Urban Transport Models In: Conference Proceedings of 4th METRANS „National Urban Freight Conference“, Long Beach, CA (USA)
- Pfohl, H.-C.(2004): Logistiksysteme - Betriebswirtschaftliche Grundlagen, Berlin, Heidelberg, New York, Springer-Verlag, 7. Auflage.
- Sharman, G. (1984): The rediscovery of logistics. Harvard Business Review 62(5)
4.1. Quiz - Impact of the supply chain
In order to examine, if you understood everything, you can test yourself by answering the following question:
5. Literature
Bowersox, D.J.; Closs D. J.; Cooper M. B.; Bowerbox, J. C. (2007): Supply Chain Logistics Management. 2nd Edition. McGraw-Hill/Irwin, NY.
Chopra, S.; Meindl, P. (2016): Supply chain management (3. ed., Pearson internat. ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
Christopher, M. (1998): Logistics and Supply Chain Management. 2.Ed.
Coyle, J.J.; Bardi, E.J.; Langley, J.C. (2003): The management of Business Logistics: A Supply Chain Perspective. Canada. Thomsom South-Western.
CSCMP (Council of Supply Chain Management Professionals) (2021): CSCMP Supply Chain Management Definitions and Glossary. URL: https://cscmp.org/CSCMP/Academia/SCM_Definitions_and_Glossary_of_Terms/CSCMP/Educate/SCM_Definitions_and_Glossary_of_Terms.aspx?hkey=60879588-f65f-4ab5-8c4b-6878815ef921 (last access: 29.06.2021).
Flämig, H. (2015): Logistik und Nachhaltigkeit.
In: Heidbrink, Ludger; Meyer, Nora; Reidel, Johannes; Schmidt, Imke
(Hrsg.): Corporate Social Responsibility in der Logistikbranche-
Anforderungen an eine nachhaltige Unternehmensführung. Berlin: E.
Schmidt, 2015. S. 25-44.
Hopp, J. W.; Spearman, M. L. (2001): Factory Physics: Foundations of Manufacturing Management. 2nd Edition. McGraw-Hill/Irwin, NY.
Kerkhoff, C. (2004): Standortverflechtungen und Verkehrsaufkommen bei Herstellung und Vertrieb eines Personalcomputers. Unpublished Thesis TU Dortmund University (Own translation).
Kolding, Eivind (2008): An Ocean Carrier’s View of Current Trends. 25th German Logistics Congress 2008. Berlin, 24.10.2008.
Löwa, S.; Flämig, H. (2011): Integration of Logistics Strategies in Urban Transport Models. In: Conference Proceedings of 4th METRANS „National Urban Freight Conference“, Long Beach, CA (USA).
Pfohl, H.-C.(2004 ): Logistiksysteme - Betriebswirtschaftliche Grundlagen. Berlin, Heidelberg, New York. Springer-Verlag, 7. Auflage.
Sharman, G. (1984): The rediscovery of logistics. Harvard Business Review 62(5), 71–80.
Sjöstedt, L. (1996): A
Theoretical Framework – from an Applied Engineering Perspective. In:
Eurocase - Mobility, Transport and Traffic: in the perspective of
growth, competitiveness, employment. Paris, France.