MT4001 Revision Notes - Supply Chain Management PDF

-movement oods storage , ↓ vement impot plannimaterials ng ta Lecture 1 – Intro to SCM 1. Define SS chain (SC) and SS chain management (SCM) - What is SC? is o All stage...

-movement oods storage , ↓ vement impot plannimaterials ng ta Lecture 1 – Intro to SCM 1. Define SS chain (SC) and SS chain management (SCM) - What is SC? is o All stages involved, directly or indirectly, in fulfilling customer request ▪ Include manufacturer, suppliers, transport providers, warehouses, retailers & customers o Include all activities associated with flow and transformation of goods from raw material stage to end user - What is SCM? (6)  o “ SCM encompasses the planning and management of all activities involved in sourcing and procurement, conversion and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners which can be suppliers, intermediaries, 3rd party service providers and customers 2. Discuss major supply chain risks CDGERRVPN (10) No. Risks Explanation 1. Poor supplier performance - Supplier financial health → reliable predictor of their performance (2) - Poor quality material = customer don’t buy= left with unsold materials=  inventory= affect CF 2. Demand planning - DD pattern change complexity -  complexity in terms of: o stock keeping units (SKUs) (6) o customer/ supplier locations o transportation req o regulations 3. Global labour shortage -  competition for skilled labour= companies insufficient resources to It build product or deliver a service on time = struggle to find skilss needed to effectively assess monitor and mitigate supplier risk 4. Rising inflation - High inflation= unpredictable price = more difficult to plan & manage 14 - CF effectively Price nego with suppliers could take longer time 5. Volatile global economy (3) - Post pandemic uncertainty = fearful of global recession  - Company  inventory to ensure steady production - Market contracts= company left with unsold inventories at peak of production cycles 6. Complex sanctions and - Firm need to know supplier ultimate regulations beneficial owner, director & shareholder to comply with sanctions 7. Geopolitical risk - Geopolitical event= wrecked havoc (2) in ss chain= firm need source for alternative suppliers 8. Reputational risk - Deficiencies in corporate ESG responsibiloty - responsible source= impt as ESG pressures grow 9. Natural disasters & climate - monsoon flood risk 10. Cyber risk - advance tech & comm. Systems= lead to collection & storage of vast amt of data - anyone with access to company network= risk - What other factor should be considered when making assesments? o Production capacity o Quality of packaging PORK o Quality of products o On time delivery  shelp t company andtep ins day toimproveaffectiveness 3. Explain the global ss chain forum (GCSF) model → come out every year for exam - Identify crucial business process in SCM PomspR No. Key biz process Explanation 1. Customer RS - “ provides structure for how RS with management customers are developed & maintained” - Identify key customer & customer group→ gender/age/income/spending 14) - Team work with key client to improve process & eliminate non value added activities - Performance report= measure profit of indiv customer= how to  profit with customer - Research & backoffice 2. Customer service - “represent company face to their management customer” - Face to face, operations, dealing with customer directly (3) - Provide single source of customer info such as product availability, shipping dates and order status - Real time info to customer (online/offline) 3. DD management - “balances customer requirements with ss chain capabilities” (3) - Forecast DD & synchronizing with productions, procurement &distribution  - Concern with developing and executing contingency plan when ops are disrupted (what ifs scenario) 4. Order fulfilment - “all activities needed to fulfil customer requirements & enable firm to meet customer request while minimizing total (3) - delivered cost” Integration of firm manufacturing, logistic & marketing plans - Firm should develop partnerships with key members of SC 5. Manufacturing flow - “deals with making the products and management establishing manufacturing flexibility to serve target markets” - Include ll activities needed to 14 obtain,implement & manage manufacturing flexibility in SC & move products through the plants o manufacturing flexibility→ switch when needed 6. Supplier RS - “provides structure for how RS with management suppliers are developed & maintained” - Firm should develop closr RS with small (3) - no. of key suppliers & maintain traditional, armlength RS with others  suppliers=  complications 7. Product development & - “ developing new products quickly & commercialization getting them to marketplace in an efficient (R&D) manner is major components of process” - Work closely with customer & supplier to (s) - devlop product & bring them to market Product life cycle shortens= right product must be developed & successfully launched in shorter time frame 8. Returns management - “activities associated with returns, reverse logistics within firm & across SC” -  4. Discuss key attributes of SCM CIILL No. Key attributes Explanation 1. Customer power - Greater access to info= become knowledgeable about indiv organization & products = customer have gained power (4) over buying decisions - SC need be fast & agile= emphasie speed & time = organization ability to respond to changes in DD in terms of volume & variety 2. Long term orientation - Focus on partnerships with SC participants ( suppliers, customers, intermediaries) (5) - Key characteristics of parternships o High interdependence o Shared info SHIM o Compatible goals o Mutual trust 3. Leveraging technology - Allow one SC party to have instantaneous visbility to same data as other parties in SC = opportunities for SC to be more (3) proactive = lower inventories & improve profitability - Real time info 4. Inventory control - Better control flow of inventory with fewer expensive inventory lumps - Bullwhip effect = variability in DD orders among SC participants = over order ut) o Small change in customer DD= bigger and bigger change in order as u move up SC= too much/ too little inventory at different stages - Smaller+ more frequent order + use of premium transport + elimination or consolidation of slower moving product =  inventory in SC 5. Interorganizational - “ coorperative, SC RS between collaboration manufacturing companies & their suppliers, business parterners or customers, developed to enhance overall business performance” 5. Summary - SC deal with 2 way info, product & financial flows - SC getting more complex with many countries involve in manufacturing process - SCM requires close coordination with channel members Lecture 2 – Key logistic activities & total cost concept 1. Understand the development of logistics from historical & modern perspectives - Historical logistics= used by generals to describe all procedures for army procurement (food, clothes) o Strategic planning= win war - Modern perspective 15) ↑ (4) o Logistics = range of activities related to production & distribution of goods for consumption ▪ Material management = activities related to production of parts & finished goods, packaging and recycling Derived DD for physical distribution → goods must be transported, stored & sold ▪ Physical distribution = activities related to making parts and finished good avail for consumption= transport &warehouse Induced DD on material management as distribution capabilities will shape production 2. Define logistics & logistics management - Logistics → “art & science of acquiring, storing & distributing materials & products in proper place & qty” (4) - Logistics management →” logistics management (LM) is that part of SCM that plans, implements & controls the efficient, effective forward and reverse flow and storage of goods, services, related info between the point of origin & 15) point of consumption in order to meet customer requirements o LM is subset of SCM  o Efficiency & effectiveness ▪ Efficiency = doing all activities in process using least possible resources ( labour, eqp,transport) ▪ Effectiveness= process must add value by either  revenue or  cost o Forward & reverse flow & storage ▪ Reverse logistics= more important with product defects & recalls ▪ Information flow & storage  crucial (cyber security) o Conforming to consumer requirements ▪ Focus of organization= satisfy end consumer= enhancing marketing effort of company & max profit ▪ Require understanding of consumer needs 3. Discuss key activities in the logistics channel - All types of organization (profit/ non profit) = have logistics= not confined to manufacturing operations only - Space logistics= moving materials & personnel to space stations are logistics capabilities  14 LEPT (4) zopyright Pirates work mostly , captain do impt task routinely on purpose No. Key activities Explanation 1. Customer service - “customer service standards set the level of output & degree of readiness to which the logistics system must respond” (4) - Logistic cost  in proportion to level of CS - Usually contented with 85% ~ O2DQ TIO 2. DD forecasting - “estimating product DD in future time period” 13) - Marketing forecast = based on promotions, pricing, competition - Manufacturing forecast = production requirements based on marketing sales DD forecast & current inventory level 3. Procurement - “refers to all related activities needed to (4) acquire raw materials, WIP & FG from outside organisations to support company’s operations” 4. Inventory management - “ stocks of goods that are maintained for variety of purposes → resale, support 17) manufacturing or assembling purposes” - Need consider cost:  o Cost of carrying product (storing) o Cost of ordering product (order from supplier) o Cost of being stock out 5. Transportation - “actual physical movement of management goods/people from one place to another” - Involve o Selection of different mode (3) (air,rail,water,truck) o Route schedule o Compliance of regulations with country where shipments are occurring o Selection of carriers 6. Warehousing - “store product between point of origin & management consumption & provides information to (3) management on status, condition & nature of items being stored” 7. Material handling - “ short movement of raw materials, WIP or FG within a plant or warehouse” - Everything inside warehouse/ (5) manufacturing plant - Involve o Equipment selection o Order picking procedures o Stock storage & retrieval 8. Packaging - “focus on protecting the product while its being shipped & store” - Include marketing and logistical (3) - dimensions Too much packaging =  cost, too less= damage to goods + customer dissatisfaction 9. Order management - “ management of activities that takes place between time customer place an order & time received by customer” (t) - Order cycle components: o Order transmittal o Order processing o Order picking & assembly o Order delivery 10. Reverse logistics - “ process of managing returned goods” - 3 critical factor o Why product are returned o How to optimize reverse logistics  o Whether reverse logistics should be managed internally or outsourced to 3rd party 4. Discuss the total cost concept in logistics - Aim: find lowest total cost that support customer service requirements o Reduce total logistic cost rather than focusing on each activity - 6 major cost covering key logistics activites COTWIL No. Major cost Explanation 1. Customer service - Key relationship between outbound logistics & level 4Ps o Place = DC decisions o Product = change in package design/size affect type of storage & material handling system o Price = cover production, marketing, distribution & admin cost o Promotion = availability of the advertised product with ongoing price campaigns 2. Transport cost - Depend on o Mode of transport o Volume & weight of shipment o Location of market o Domestic/ international transport o Ease/ difficulty of handling product 3. Warehouse cost - Determine size of warehouse: o Customer service level o Size of market o No. & size of products o Degree of automation in warehouse 4. Order processing/ - Cost= order processing, distribution information cost communications & forecasting DD - E.g. E bill of lading 5. Lot quantity cost - Minimum order qty - Cost = procurement & production quantities 6. Inventory carrying cost LIIS as enol o ng 5. Summary - SCM is the big picture of managing the entire flow of goods, while LM is a more specific part focused on transportation and storage.  Lecture 3 – Procurement Management 1. Define procurement - Each firm have different inbound logistic system ( type of raw material/input different) - What is procurement? o Responsible for acquiring all the materials needed by company o All related activities needed to get goods, services & other materials from suppliers into company ▪ E.g. source supplier, ask for quotation, negotiation o Procurement= sourcing & purchasing 2. Discuss the importance & aims of procurement - Importance 16) o Forms link between company in SC ▪ Act as mechanism for coordinating the flow of materials between customer & supplier ▪ Every point of SC= procurement pass information backwards & forwards o Essential function within every organization ▪ Every organization need SS of material ▪ Procurement carried out badly= materials do not arrive// wrong materials delivered at wrong qty & wrong time - Aim of procurement o Organize reliable & uninterrupted flow of material o Work closely with different department o Find good supplier + work closely with them & develop beneficial RS BOMB-FKW  o Buy right material & ensure acceptable quality o Negotiate good price & conditions o Keep stock low= better CF= consider inventory policies, investment, standards & ready made materials o Move materials quickly through SC o Be informed of price , new product & scarcities 3. Discuss the procurement process Steps Process Explanation 1 Needs analysis - Identify of re evaluate needs (what we need to buy) - Define & evaluate user requirements (what are product features?) 2 Make or buy decision - Make decision= company have to purchase inputs from outside suppliers no more pancake seriously piz plz  3 Purchase type - Type of purchase= determine amount of time needed for procurement process o Straight rebuy= same qty/type (3) o Modified rebuy= change in existing supplier/input o New buy= new requirements 4 Select - Conduct market analysis vendor/supplier - Identify all possible suppliers - Pre screen all possible sources - Evaluate remaining supplier base o Request for quotation (RFQ) o Formal tender process - Choose suppliers (single or multi sourcing) 5 Product or service delivery 6 Post purchase - Product delivered= supplier performance performance must be evaluated evaluation - Supplier performance not satisfying= corrective actions needed *need to see the additional handout on supplier selection criteria* - Advantage of single sourcing o Strong RS between customer & supplier o Commitment of all parties SLEEES o EOS & price discount with large order o Easier communication, reduce administration for regular order o Less variation in material & ss o Easier to keep confidential - Advantage of multi sourcing o Competition between supplier=  price o Less chance of disrupted supplies as can avoid by switching suppliers CADDLE o Deal more easily with varying DD o Access to wider knowlegd & info o Encourage innovation & improvement o Does not rely on trusting one external organization X 4. Identify the types of purchases - Direct = component for FG o Parts for laptop - Indirect = goods to support operations of firm  o Office supplies No. Types of purchases Explanation 1. Raw materials - Petrol/ coal/cotton 2. Semi finished products/ - Support company final production components o E.g. car manu= buy tires, car frames 3. Finished products - Require no major processing before resale to end customer - Organization may market under its own brand although produced by another manufacturer o E.g. NTUC tasty bites 4. Maintenance, repair & - Does not go directly into organization operating items (MRO) product - Essential for running business o Office & computer supplies 5. Product support items - Material required to pack & ship final products o Pallets, boxes, tapes, packaging material 6. Services - Data entry, 3rd party logistic 5. Discuss the benefits & challenges of e-procurement - E procurement = “electronic integration & management of all procurement activities including purchase request, authorization, ordering, delivery & payment between purchase & supplier - Benefits () o Automoate procurement process with standard procedures o  delivery time & shorten procurement cycle= centralize transaction tracking & simplified reporting =  human error o Access to larger selection of product & services o Lower operating cost ▪  paperwork ▪  sourcing time=  productivity ▪ Improve control over inventory & spending  o Redirect resources to higher value activities such as contract negotiations - Challenges o Compatibility = integrating software with other enterprise back end systems o Acceptance of new technology= training employee to use new software o Cybersecurity = susceptible to data being stolen 6. Discuss the importance of ethical sourcing - Ethical sourcing = “process of sourcing product in a sustainable & responsible way” o Always consider triple bottom line (people, planet, profit) - Importance of ethical sourcing o Huge global interest in ethical practices, relating to labour & environmental practices o Promote positive corporate image while building brand reputation o Consumer willing to pay for ethically produced goods o Legal & regulatory compliance 7. Summary - Procurement= essential activity along SC - Company  sourcing from all over world=  connectivity - Ethical sourcing= more impt as company focus on CSR  Lecture 4 – Warehousing Management 1. Explain the difference between warehouse (WH) & distribution centre (DC) - What is warehousing? → “that part of a firm logistic system that stores 14) products (raw materials, parts, good in process, FG) at and between point of origin & point of consumption, and provides information to management on the status, condition & nature of items being stored.” o Can be provided by either WH or DC o Factors determining number of WH ▪ Inventory cost WH=  inventory cost= when companies stock safety stock at every location ▪ WH cost WH=  WH cost= more space to be owned/leased ▪ Transportation costs WH=  transport cost as WH closer to customer & market area= distance  ▪ Cost of lost sales WH=  products & proximity =  cost of lost sales - Difference between WH & DC WH DC SS Driven (storage) DD driven (throughput) Inventory stored for weeks/months Stored for days/weeks Cargo ownership= supplier/producer Distributor/ customer Consolidation of cargo Consolidate/ deconsolidate/ sort cargo Limited add value Assembly, pack, light manufacturing Unforeseen DD Stable & predicted DD Inventory holding Fulfilling orders  2. Explain importance of warehouses in logistics system - Patterns of production & consumption do not match o WH = match different flow of production ▪ E.g. production of canned food fast but sales spread throughout the year o Seasonal sales ▪ E.g. chocolate produce closer to DD period - Larger quantities of goods purchased than consumed in short period o WH space needed to store extra product ▪ Anticipate shortage = buy more ▪ Seller selling product cheaper (EOS) = BUY MORE=  WH space needed 3. Discuss challenges of managing warehouses/DCs Challenges faced 1. Execute more smaller transactions due to e commerce= smaller qty 2. Handle & store more items due to e commerce 3. Provide more product & service customization 4. Offer more value added services (packaging) 5. Process more returns =  complexity 6. Receive and ship more international orders 7. Less time to process order=  error 8. Difficult to hire labour 9. More skilled IT person required to operate WH management system  10. Less margin error expected = need to be very accurate 4. Discuss uses & classifications of warehouses - Uses of WH No. Uses Explanation 1. Consolidation - WH receive good from plants A/B/C that are combined into a large single shipment to customer - Company sometime face less than truckload (LTL)=  shipping cost for long distances as compared to full truckload 2. Break bulk - Receive single large shipment from manufacturer & arrange delivery to multiple customer 3. Product mixing - Company stock up di erent product of a product line (e.g. item from di erent supplier) such as colours/size/design - Customer want product mixture - WH for product mixing= Multiple product line= e icient order filling o E.g. amazon = WH 4. Supply mixing - Consolidate raw material then send to plant -  transport cost from solidation - Widely use in JIT or materials requirements planning (MRP) system 5. Cross docking - Product from di erent supplier arrive inbound moved directly across to outbound to waiting trucks for movement to customers 6. Returned goods - More important with product recalls & defects centre - Driven by environmental legislation o Recovery of materials from electronic items, batteries -  internet shopping =  returned goods - Classification of WH No. Classification Explanation 1. Stage in the SS chain - Raw material WH = hold inventory near factories where timely support of production & assembly schedule is key 17) to success - WIP WH = near factory= serve as variation bu er between production schedule & DD - FG WH (plant) = hold large qty awaiting deployment to DC - Overflow WH = near plant FG WH= hold seasonal inventory & usually operate by 3rd party - Home delivery DC= deliver to home - Retail DC - Omni Channel DC= deliver to home + retail 2. Geographic area - Global/ regional/national/ local WH 3. Product type - Small parts/ frozen food/ hazard goods 4. Function - Inventory holding/ sorting (letters) 5. Ownership - Owned by user/ 3PL 6. Company usage - Dedicated for one company or share 7. Area/heigh/equipment - Manual  5. Discuss various types of warehouses No. Types Explanation 1. Public WH - Company with fluctuating DD/ seasonal need - No capital investment needed - No responsibility for labour - Rented on ST or LT (7) - O ers value added services (pick & pack, inventory management & transport) - Types of public WH o General merchandise WH= can store any product o Refrigerated WH = cold storage= frozen food, pharmaceutical 2. Private WH - Owned/ occupied on LT rental ( retail chain store) - Feasible when DD pattern stable (fluctuating 16) DD= insu icient/ excess storage space) - Can control over their storage needs - Drawbacks o  organization flexibility in responding to external environment o High fixed cost o Need high & steady DD volume 3. Bonded WH - “ place where imported dutiable items can be stored before customs taxes & duties are paid for” - 0 GST WH - Government/ privately owned o Government= public bonded= owned & operate by state = licensed by custom authorities to operate (5) o Private= store imported goods belonging to external client - 2 types: o Wet bond= wine, beers o Dry bond= other goods 4. Contract WH - “ LT mutually beneficial agreement which (3rd party) provide unique & specially tailor WH & logistics services exclusively to customer where vendor &  client share the risk associated with the operation” - Customer sign contract for specific period of time (5) - Cheaper than private WH o More ex than public o Private > contract > public - More value added activities ( dedicated team to handle customer need, reverse logistics) - O er same degree of control as private WH - Risk = sharing confidential customer information with WH operator 6. Understand warehouse operations X No. Functions Explanation 1. Movement - Most attention received= company focus on improving inventory turns & speeding orders from manufacturing to final delivery - Process of movement o Receiving = unload product from transport  Update WH inventory record  Inspect for damage  Verify product count o Transfer or put away  Physical movement of product into WH for storage  Movement to area for specialized services (consolidate)  Move to outbound shipment o Cross docking = bypass storage activity by transferring product directly from receiving dock to shipping dock o Shipping = check order to be shipped  Sort & package  Marked with info (origin, destination)  Adjust inventory 2. Storage - Temporary = basic inventory replenishment - Semi permanent= storage for excess o Safety/ bu er stock o Seasonal DD// erratic DD// fruits & meats// speculation or forward buying// qty discounts  o Products that require ageing (cheese & wine) 3. Information transfer - Information needed o Inventory level o Customer data o Inbound/ outbound shipments o Throughput level o Stock keeping location o Facility space utilization - Warehouse management system (WMS)= control various warehouse ops - Provide, store & report info to e iciently manage the flow of product 4. 7. Identify the types of racks & shelves used Types Photos Block stacking of pellets Mobile racking Adjustable pallet racking  Narrow aisle racking FIFO method LIFO method 8. Summary - Movement, storage & info transfer are primary WH ops - WH= meet variability in DD -  no. WH=  transport cost &  lost sales cost=  WH & inventory costs · Lecture 5 – Logistics services of shipping companies Introduction - SC integration = container liner shipping - Shipping company seeking “arm’s length” RS by o ering broad range of services  one o RS - Control port logistics & shipping services= match service formation & pricing in most e icient way - Shipper a ect shipping companies: o Shipper prefer to deal with fewer shipping company= influenced company to extend vertical reach of their services o DD for faster & reliable services= a ect design of shipping services  E.g. door to door o Shipper outsource logistics services= expand 3PL service - Merger & acquisition (M&A) = achieve EOS o Smaller company= acquired by larger ones=  cost & improve reliability & frequency of service (3) -- Horizontal integration= internal growth, M&A, on going evolution of alliances Vertical integration = shipping companies extending their services through internal growth & acquisitions in 3 main areas o Container terminals o Provision of intermodal services o Provision of logistics services 1. Explain how container shipping lines expanded their roles & services into logistics & SC - SC integration of liners o Maersk mainly European & APL US o Many container line chose to widen their role by o ering global logistics services  Non asset services = freight forwarding (middlemen which arrange logistic shipping on behalf of shipper, they don’t own the goods)= don’t need to own physical ships/WH=  dependence on investment intensive ops= lower cost & financial risk  One stop service = combine value added activities  Port terminal ops  Inland logistics = truck/rail  More control of end to end transportation solutions= faster & more reliable logistic services o Lead to emergence of integrators = specialized total logistics providers & contractors  Integrated transport system= di erent mode of transport like road, sea, rail = move cargo e iciently from one mode to another  Advantage = door to door basis to permit seamless shipper to consignee service o Green supply chain integration  Due to climate change  Provide green awareness to society & biz environment globally  Enhance green reputation - Liner companies & subsidiaries - termine t - Bank AP Moller Maersk example o Vertical Integration of logistics related subsidiaries =  revenue o Integrated company= more stability & more customer oriented logistic - Danske services o Major goal of liner company= overall optimization of SC (control whole -star air SC) and -shipy 2. Identify the di erent logistics activities provided by container shipping lines * - Container line logistic activities o Types of logistic services o ered o Specific industry focus  o Future development of logistics functions o Future development of logistics activity ~ 3. Strategic groupings for line company (NOT IN LO) - Tier 1 o Provide any logistic service, almost anywhere in world due to global (b) ops o Revenue > $3billion/ year o Acquire logistic companies in key markets + IT capabilities= rapid growth o E.g. APL, NYK Maersk - Tier 2 o Comprehensive logistic services focusing on major trading regions (4) (home region) o Revenue $1 billion ~ $3billion o E.g. Cosco, Kline - Tier 3 ut) o Provide minimal logistic services o Revenue < $1billion o Focus on ocean transport o E.g. CMA, Evergreen  4. Discuss what is 3rd party logistics (3PL) & 4th (4PL) - What is 3PL? = receiving, warehousing, packaging & shipping service o Order fulfillment services o “ external supplier who performs all or part of company logistics functions” o Divide into 5 categories  Transport based  WH based  Forwarder based (non asset)  Financial based (freight payment)  Information based (e markets) o Africk & calkins classification  Asset based providers ( WH, vehicles)  Non asset based = management skills & info)  Integrated service provider = asset + non asset o Advantages of 3PL No. Advantages Explanation 1. Cost savings - 3PL always improve e iciencies, cuts costs & add value to shipping company (3) - 3PL leverage collective order volumes & frequency to negotiate better rates with carriers - Expertise= save company from costly errors 2. Access to expertise - 3PL= necessary knowledge & experience in transport, documentation, import&export, custpm, international (2) compliance - Up to date with industry best practices & latest technology 3. Focus on core - Allow company to focus on main competencies capabilities instead of focusing on logistics side 4. Scalability - 3PL have necessary resources to respond to DD swiftly = flexibility & scalability = capacia t without added risk -  delays + smoother entry into new region= Allow biz to grow in region without barrier 5. Risk mitigation - 3PL plenty of experience in dealing with delays & damaged product 6. Resource network - 3PL have vast resource network= max e iciency film really ridiculous snap that Cheryl always  7. Customer satisfaction - Ensure timely pickup & drop o orders, qualified drivers= improve customer satisfaction RIBL No. Disadvantages 1. Loss of control Explanation - Entrusting 3PL to meet agreed upon service level agreements (SLA) - Sharing info with 3PL = biz feel vulnerable to data breach 2. IT complexity - 3PL & biz IT system need match= ST problem until integration between both parties 3. Business - Biz have specific needs (e.g. temperature understanding storage)= 3PL have too many customer= cannot give attention needed 4. Reverse logistics - Might not have real time info update on complexities returns - Level of goods returned can be higher than normal= delay in processing return & slow WH ops - 4PL = lead logistic providers (LLP) o “4PL is big umbrella under which comes transportation, WH & anything that is movng” o Planning & ops o Same role as 3PL but broader responsibility & accountability to help customer reach goals o 4PL works to:  Optimize transport ops  Coorindate suppliers  Integrate SC technologies  Synchronise inbound & outbound logistic flow  Model & manage distribution networks o Suitable for company with complex SC & geographically far reaching (Apple) o 4PL find most suitable supplier for biz o Allow biz to have peace of mind  5. Di erentiate between 3PL & 4PL 3PL 4PL ECAR Focus - Day to day ops - Take care of certain aspect of - - Optimise entire SC Act as sole point of contact in SC SC Relationship - Transaction - LT - Helps organize, lead, design & coordinate SC Assets - Owns many or all - Non asset based assets including - May own IT system trucks & WH - Focus on finding best suppliers & vendors at reduced costs Cost reductions - Help reduce -  cost of SC while logistics cost & improving performance boost e iciency Lecture 6 Lecture 7 Lecture 8 Lecture 9 Lecture 10 Lecture 11 Lecture 12