Logistics: Supply Chain Management and International Transport

What is Logistics?

Is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics is the management of the flow of things between the point of origin and the point of consumption in order to meet requirements of customers or corporations.

Benefits of Supply Chains

When a business has an effective supply chain management, it has a CA in its industry that allows you to decrease the inherent risks when you are buying raw materials and selling products or services. The most important supply chain benefits are a higher efficiency rate, a decrease cost effects, increases output, increases your business profit level, boost cooperation lvl, no delays in processes and an enhanced supply chain network.

Supply Chain Visibility

SCV is the trackability or traceability of product orders and physical product shipments from the production source to their destination. This includes logistics activities and transport as well as the state of events and milestones that take place before and during transit. The objective of SCV is to enhance and empower the supply chain by making information easily accessible to each and every stakeholder, including customers. The integration of SCV tools or systems enables different supply chain divisions in an organization to acquire real-time and precise information regarding stock, orders and deliveries in their incoming and outgoing networks.

Supply Chain Velocity

High school physics introduces the concept of velocity, which is defined as speed with a direction. If we apply this simple definition to the supply chain, it means we are trying to achieve a high rate of speed while moving in a specific direction. Thus, velocity is not just about moving fast, its about moving fast with a specific purpose. But what sets this purpose or direction? It starts with the company business plan, which defines the means by which to achieve a certain lvl of profitability by capturing customers in specific markets with specific products and services. This business plan flows down to specific organizational plans that are then executed. These plans establish the direction component of velocity.

Supply Chain Variability

The term demand variability in supply chain is a measurement of how much variability can occur in the demand from customers. In other words, it is the variability between what is expected to happen and what really happens. There are several factors that contribute to demand variability in supply chain management. The complexity of the demand that may occur from customers, the variation in the demand among the worldwide organizations, missing to find out the details within Supply Chain Management, foreseeing and predicting the variables at the production unit and to customers, change in the Lead Times at the production unit and among customers, adding more suppliers and more subcontractors in the supply chain and adding smaller suppliers in the supply chain.

Supply Chain Vulnerability

It can be defined as an exposure to serious disturbance, arising from risks within the supply chain as well as risks external to the supply chain. Supply chain risk management aims to identify the areas of potential risk and implement appropriate actions to contain that risk. Examining the vulnerability of an organization's supply chain network can be used to identify such risks and weaknesses and produce mitigation strategies and corrective action plans as part of managing risk in procurement.

Ways of Reaching Foreign Markets

Depending upon your resources and tolerance for risk, you have numerous options to reach foreign markets. Exporting: it is relatively low-risk option that requires minimal investment. You can start exporting by hiring a middleman. Licensing and Franchising: with the exception of technology licensing, which is in widespread use, licensing is a tactic often used to enter foreign markets that may not be attractive otherwise, lower sales-potential markets that discourage imports and direct investments. More ways: contract manufacturing, joint ventures and strategic alliances, foreign direct investment, etc.

Container

A large standard size metal box into which cargo is packed for shipment aboard specially configured transport modes. It is designed to be moved with common handling equipment enabling high-speed intermodal transfers in economically large units between ships, railcars, truck chassis and barges using a minimum of labor. The container, therefore, serves as the load unit rather than the cargo contained therein.

Intermodalism

Involves the organization of a sequence of modes between an origin and destination, including the transfer between the modes. Its main goal is to connect transportation systems that could not be connected otherwise because they are not servicing the same markets areas due to their technical characteristics. However, each segment is subject to a separate ticket (for passengers) or contract (for freight) that must be negotiated.

Evolution of Intermodal Integration

1. Inventing intermodalism: The first significant intermodal innovation were pallets handled by forklifts. Even if the pallet is a simple device, it could not be invented until there was a mechanical mean to lift and move it Paradoxically, palletization benefit trucking and in the 1950s the trailer on flat services were adopted, permitting a preliminary integration of rail and truck services. 2. Setting intermodal standards: By the late 1950s, containerization triggered a series of innovation related to the more effective handling containerized cargo. The standardization of container sizes and latching systems in the late 1960s incited the construction of cellular containerships and the establishment of container on flat services. 3. Operationalizing intermodalism: The 1980s marked significant changes for intermodal transportation, particularly with the onset of rail deregulation, enabling railways to reorganize their services along more commercially driven imperatives. Long distance doublestack rail services were established, reachstackers and rubber-tired gantries were developed; new intermodal facilities emerged as satellite terminals, inland container depots, etc. 4. Massification and automation of intermodalism: by the late 1990s, ships larger than the standard Panamax design began to be introduced. By the 2000s, electronic bill of lading systems enabled a more effective handling of the crucial documentation related to intermodalism, enabling intermodal transportation to become increasingly multimodal. Also, the implementation of blockchain technologies shows the potential to substantially improve the transactional effectiveness of intermodal transportation.

Advantages of Containers in International and Hinterland Transport

1) Standard transport product: Standardization is a prevalent benefit of containerization as it conveys a ubiquity to access the distribution system and reduces the risks of capital investment in modes and terminals. 2) Flexibility of usage: A container can transport a wide variety of goods ranging from raw materials, manufactured goods, and cars to frozen products. 3) Economies of scale: container reduces transport costs considerably, about 20 times less. 4) Operational velocity: A modern container ship has a monthly capacity of 3-6 times more than a conventional cargo ship. This is attributable to gains in transshipment time as a crane can handle roughly 30 movements (loading/unloading) per hour. 5) Warehousing and security: The container limits damage risks because it is resistant to shocks and weather conditions. The container is its own warehouse.

Challenges of Containers

1. Site constraints: containerization implies a large consumption of terminal space. Conventional port areas are often not adequate for the location of container transshipment infrastructures, particularly because of draft issues as well as required space for terminal operations. 2. Infrastructure costs and staking: container handling infrastructures, such as gantry cranes, yard equipment, road and rail access, represent important investments for port authorities and load centers. 3. Thefts and losses: because of the freight anonymity a container confers. 4. Empty travel: Maritime shippers need containers to maintain their operations along the port networks that service. The same number of containers brought into a market must thus eventually be relocated, regardless if they are full or empty. 5. Illicit trade: By its confidential character, the container is a common instrument used in the illicit trade of counterfeit goods, drugs and weapons. At a global lvl, only 2-5% of all containers are manually inspected by customs.