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The movements of raw materials to your manufacturing site or the movement of goods from your site, suppliers, terminals, or other locations to your customers.
What it is: Freight and shipping issues (logistics) are the processes needed to move products to and from your facilities and to your customers.
What it does: Logistics constitute a significant cost to your business. They must be managed to create a competitive advantage and to avoid creating a competitive disadvantage in your market.
How it is used: Logistics are used to receive necessary raw materials and supplies at your company sites and to move products from your company to your customers.
Where: Primarily logistics can be broken down into inbound logistics and outbound logistics.
Inbound logistics bring raw materials and supplies to your manufacturing sites, offices or terminals, and warehouses.
Products can be delivered to your locations by ship, rail, truck, car, mail, air, etc.
In general, costs of shipping are lowest for the shipping process with the largest capacity (ships, then rail, then truck, etc.)
Larger shipping capacity carriers require larger shipment sizes, so if your product shipping quantity needs are small, you will need to ship through the higher cost, smaller capacity shipping options.
Just-in-time shipping (receiving inventory only as it is needed and not carrying any in stock inventory) will keep the inventory at your location smaller, but close coordination with your supplier and marketing departments will be necessary to avoid raw material outages at your plants.
Outbound logistics send products from your manufacturing facilities to your customers or terminals.
You should manage the shipping to your customers and arrange shipping with the most economical method.
You can utilize a third-party logistics company to handle all of the shipping arrangements.
If another company makes your products, you can arrange for them to supply your customers directly.
Some retailers, like Amazon, will inventory your products at their warehouses or arrange for the products to ship directly from your warehouses or your suppliers’ warehouses.
3PL companies (third-party logistics companies) can manage the consolidation of your freight to reduce the costs of warehousing and shipping.
Why: There are many issues with logistics that can thrill or terrify your customers and can greatly increase or decrease your revenues and profits.
Where it shouldn't be used: If you are a small supplier, a 3PL (third-party logistics supplier) is often better than trying to manage your own logistics.
Any restrictions: None
Warnings: Trying to manage your own logistics when you do not have the resources to do a good job could end up costing you far more than outsourcing.
A transportation management system has several elements. Technopedia gives the following description: Transportation Management System.
What is a transportation management system (TMS)?
A transportation management system (TMS) is part of supply chain management (SCM), centered on transportation logistics. A TMS enables interactions between an order management system (OMS) and distribution center (DC) or a warehouse.
TMS handles four important operations of transport management:
Planning: Defines the best transportation strategies based on specified parameters, which would be of higher or lower importance as per the user policy. This includes transportation expenditure, minimum stops possible to guarantee the quality, shorter lead time, flows regrouping coefficient, etc.
Transportation execution: Enables the transportation plan execution. This includes carrier-rate approval, carrier sending, electronic data interchange (EDI), etc.
Transportation follow-up: Follows up with any administrative or physical operations regarding transportation. This includes event-by-event transportation traceability, receipt editing, customs clearance, and invoicing, as well as reserving documents, transport alerts delivery, etc.
Measurement: Includes or should include a strategic key performance indicator (KPI) report functionality for transportation.
Standard TMS software modules consist of the following:
Load optimization
Route planning and optimization
Delivery
Freight audit, payment, etc.
Yard administration
Advanced shipping
Order visibility
Carrier administration
TMSs are intended to reach the goals below:
Minimize expenditures by more effective route planning, load optimization, carrier combination, and model selection.
Enhanced accountability with exposure to the transportation chain.
Better flexibility to make modifications in delivery plans.
Realization of important supply chain execution demands.
PowerPoint presentation to review philosophy and elements of the logistics plan.
This content is provided to you freely by Ensign College.
Access it online or download it at https://ensign.edtechbooks.org/projectbased_internships/freight_shipping_issues.
