SCM Chapter 7: Domestic & Global Logistics

Study Notes

Domestic and Global Logistics

Logistics plays a crucial role in delivering time and place utility, ensuring products reach consumers when and where they are needed.
Defined as the process of planning, implementing, and controlling the transportation and storage of goods from point of origin to point of consumption.

Modes of Transportation

Motor Carriers (Trucks):
- Most flexible mode, suitable for short-to-medium hauls.
- Includes less-than-truckload (LTL) and truck-load (TL) carriers.
- General freight carriers transport the majority of goods, while specialized carriers handle specific items such as petroleum or building materials.
Rail Carriers:
- Ideal for long distances and heavy or bulky shipments.
- Slower and less flexible, utilizing a trailer-on-flatcar (TOFC) service.
- High-speed trains are an emerging trend in rail transportation.
Air Carriers:
- Fast but expensive, handling a small portion of total freight.
- Best for light, high-value goods over long distances.
- Limited geographic coverage; freight-only airlines manage a significant portion of air cargo.
Water Carriers:
- Inexpensive but slow; includes various forms like inland waterway and deep-sea transportation.
- Used for heavy, bulky, and low-value materials, such as coal and grain.
- Efficient when combined with truck deliveries for door-to-door service.
Pipeline Carriers:
- Limited in the variety of materials they can transport, primarily liquids and gases like oil and natural gas.
- Low maintenance requirements once operational.
Intermodal Transportation:
- Combines multiple transportation modes for efficiency.
- Frequently uses trailer-on-flatcar (TOFC) and container-on-flatcar (COFC) services.
- Facilitates door-to-door delivery for international shipments.

Warehousing & Distribution

Importance of Warehousing:
- Enables storage of purchases, work in progress (WIP), and finished goods.
- Aids in performing break bulk and assessment services for faster deliveries.
Types of Warehouses:
- Private Warehouses: Owned by companies for their own distribution needs.
- Public Warehouses: Offer storage space and services to various businesses.
Cold Chains:
- Specialized logistics for temperature-sensitive products, ensuring safe transport from origin to consumer.
Crossdocking:
- Process of receiving goods, breaking them down, repackaging, and distributing them efficiently.

Third Party Logistics (3PL)

Significant for small businesses; provide comprehensive logistics services and expertise.
Facilitate efficient global logistics operations, allowing businesses to focus on core activities.

Global Logistics Intermediaries

Customs Brokers: Assist in navigating customs regulations and documentation for international shipments.
International Freight Forwarders: Coordinate logistics and transportation for global shipping.
Trading Companies: Facilitate international trade processes, providing additional logistical support.

Description

Understand the roles of domestic and global logistics in providing time and place utility to customers. Learn about the importance of logistics in transportation and storage of goods and compare modes of transportation.