1. Transportation and Commercial Geography
Concept 1
Transportation and Commercial Geography

2. Commercial and Transport Geography
Sphere of Transactions
Commercial Geography
Transactions
Movements
Transport Geography
Sphere of Circulation

3. Commercialization of Transportation
Market Potential
Number of providers
Integrated demand
Standardization and integration
Market Size
Expansion and interconnection
Introduction (isolation / proprietary)

4. Transport Costs and Transport Networks
Concept 2
Transport Costs and Transport Networks

5. Components of Transport Cost
Transaction Costs A
Friction of Space B
Shipment

6. Different Friction of Space Functions1 2
Zone Change
Costs
Costs
Fixed Costs
Distance
Distance 3 4
Transshipment Costs
Costs
Costs
Distance
Distance

7. FOB and CIF Transport Costs
Freight-on-Board
Costs
Cost-Insurance-Freight }
Production Costs
Distance

8. Zonal Freight Rates I II III IV Real transport cost Flat zonal rateD1
Flat zonal rate
Costs D2 I II
III IV
Distance

9. Network Structures Centralized Decentralized Distributed
Source: Adapted from U. Blum and L. Dudley (2001) Report of the 109 round table on transport economics, Transport and Economic Development, European Conference of Transport Ministers,
Centralized
Decentralized
Distributed

10. Transport Structures Node Feeder Hub / Interface Link Flow Corridor
Distribution
Various transport structures can be identified.
Corridors. Represent infrastructures supporting modal flows of freight, people or information. They are generally concentrated along a communication axis and almost exclusively linear.
Interfaces. They act as compulsory passages for various flows. An intermodal function is often performed.
Thresholds. Organize the direction of flows along a corridor and can be considered as consolidation and distribution points.
Warehousing
Financial / Insurance
Retail / Wholesale

11. Centrifugal and Centripetal Networks
Networks tend to have two major spatial effects on flows, which are centrifugal and centripetal.

12. Transport Hub
Point-to-Point
Hub-and-Spoke
Hub

13. Impacts of Integration Processes on Networks and Flows
Before Integration
After Integration
International border
Network
Flows

14. Transport Rates and Network Structure
Low
Average
High

15. The Spatial Dimension of Transportation Networks
Concept 3
The Spatial Dimension of Transportation Networks

16. Topology of a Network Link Node Unidirectional link
Bi-directional link
Entry and exit
Link
Exit
Entry
Node

17. Types of Network Topology
Mesh
Hub-and-Spoke
Linear
Tree

18. Network Geometry and Number of Links
For each node to be linked to another node
For all the nodes to be linked together
Even number of nodes
Odd number of nodes
For each node to be linked to all other nodes
Number of possible combinations
A network is a set of nodes (places) linked by vertex (paths between places). The graph is the symbolic representation of a network. We can define a few attributes identifying networks.
For a node to be linked to another node n/2 vertexes are necessary for an even number of nodes and (n+1)/2 vertexes for an odd number.
For all nodes to be linked, n-1 vertexes are necessary.
For all nodes to be linked to every other nodes n(n-1)/2 vertexes are necessary.
With the number of nodes, it is possible to find the number of possible combinations: 2n(n-1)/2.
A graph with two dimensions is a planar graph (road networks).
A graph with three dimensions is a non-planar graph (air networks).

19. Topology and Network Connectivity
Average Path Length B D
Minimum Network
Fully Connected Network
B or C
Source: Adapted from William Black (2000) “An Unpopular Essay on Transportation”, Douglas Fleming lecture, Presented at the meeting of the Association of American Geographers, Pittsburgh, Pennsylvania. D
Geographic Barrier
Network Length

20. A Typology of Transportation Networks - I
Abstraction level
Relative position
Concrete
Abstract
Orientation and extent
Number of arcs and nodes
The above figure represents various sets of criteria that can be used to classify transportation networks.
625 km2
S-E
arcs = 6
nodes = 7
500 km2
N-E

21. A Typology of Transportation Networks - II
Mode
Distance, road type and control of
the vehicle
Max= 100 km/hr
Maritime
Max= 60 km/hr
highway
Secondary road
Road
125 km
90 km
Type of traffic
Volume and direction
Continuous
3500 t/hr
8000 t/hr
Divided

22. A Typology of Transportation Networks - III
Load and capacity
Type of correspondence
Non- hierarchical
Hierarchical
95%
65%
800 t/hr
1500 t/hr
Pattern
Change (dynamics)
Linear t
t + 1
Random
Uniform

23. Mode of Territorial Occupation by Transport Networks
Overlap
Rail
Air corridor
“No service”
Road
Cellular coverage
Maritime corridor
Clearly defined
Vaguely defined
Without definition

24. Network Strategies to Service a Set of LocationsB C D E F

25. Absolute and Relative Distance in a Network
10 km
30 minutes

26. Transportation Supply and Demand
Concept 4
Transportation Supply and Demand

27. Transport Supply and Demand
Aij i j
Modal Supply
Intermodal
Supply
Tij i j
Expressed Demand
Potential Demand

28. Major Supply Variables for Transportation Modes
Road
Rail
Air
Maritime
Lanes
Width
Speed limit
Tracks
Grade
Corridors
Canals
Locks
Routes
Parking
Yards
Transshipment
Runways
Dockways
Docks
Transshipment
Terminals
Speed
Passengers
Tonnage
Speed
Passengers
Tonnage
Speed
Passengers
Tonnage
Speed
Tonnage
Vehicles
Atmospheric Conditions

29. Impacts of Modal Competition and Intermodal Capacity on Transport Supply1 C
C = T(A) + T(B)
T(A)
Modal Competition
Traffic
Mode A
Mode B
T(B)
Assignment 2
C(A)
C(B)
Capacity
Intermodal Capacity
T(AB) = C(B)
Terminal A
Terminal B

30. Classic Transport Demand / Supply Function
Cost
Demand
Supply D S1 S2
Equilibrium C1 C2 T1 T2
Traffic

31. Transport Elasticity by Activity
100%
Emergency
Commuting
Major Purchase
Special Event
Traffic
Source: Adapted from Victoria Transport Policy Institute (2002) Transportation Elasticities,
Social Activities
Recreation 0%
Cost

32. Transport Supply, Demand and Travel Time
Transport supply (A)
Traffic
Transport Demand (T)
Morning
peak
Afternoon
peak
Travel time
T>A
T<A
Time of the Day

33. Basic Transport and Logistics Course

34. Definition Materials Management:
The grouping of functions that support the complete cycle of material flow, from the purchase of and internal control of production material , to the planning and control of work-in-progress (Chase et al, 1998)

35. Definition (cont’d) Physical Distribution management
…the efficient movement of finished product from the end of the production line to the consumer, and in some cases includes the movement of raw materials from the source of supply to the beginning of the production line. These activities include freight transportation, warehousing, material handling, protective packaging, inventory control, plant and warehouse site selection, order processing, marketing forecasting and customer service. (National Council of Physical Distribution Management)

36. Definition (cont’d) Logistics Management:
The process of strategically managing the procurement, movement and storage of materials, parts and finished inventory (and the related information flows) through the organization and its marketing channels in such a way that current and future profitability are maximized through the cost-effective fulfillment of (customer) orders (Christopher, 2008)

37. Definition (cont’d) Supply chain management
A supply chain is a network of connected and interdependent organizations mutually and co-operatively working together to control, manage and improve the flow of materials and information from suppliers to end users (Aitken, 1998)
SCM is the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole (Christopher, 2008)

38. A schematic relationship among material managements, physical distribution and logistics

39. Development of logistics & sc management
First phase:
Late 19th century to the early 1960s
Secondary importance to sales and marketing, production
Little strategic impact outside of daily operations
Logistics functions were decentralized and split among marketing, manufacturing or finance

40. Development of logistics & sc management (cont’d)
Second phase:
1970s
Becoming aware of the operational and cost deficiencies of the decentralized system
Centralizing logistics functions into a single management system
Constructing logistical activities to achieve optimal total cost for the whole system (TDC)

41. Development of logistics & sc management (cont’d)
Third phase:
1980s
A concerted attempt by companies to move away from a passive approach (cost oriented) to another where logistics was conceived as providing internal enterprise strategic advantage (customer oriented)
More functions were being integrated to explore a continuous source of unassailable strategic competency
2017/4/14

42. Development of logistics & sc management (cont’d)
Fourth phase: SCM comes into play
1990s
From being a source of internal competitive advantage to a source of external advantage
To accelerate the cycle time of inventory and information along the chain
To optimize the linkages between internal functions and supply partners

43. Development of logistics & sc management (cont’d)
Fourth phase: SCM comes into play
1990s
To consecutively network the competencies of intersecting supply channels of focused around:
the creation of shared marketplace and competitive visions
Co-evolutionary alliances providing breakthrough in products and services

44. Elements of logistics Storage, warehousing and materials handling
Number, locations, size, layout and operations
Transport
Functions, modes, types of delivery, load planning and route scheduling
Inventory
Functions, what, when and how much to order / reorder and stock
Information technology and control
Systems, procedure
Others
Order processing, procurement, maintenance, contracting

45. Warehousing Functions Storage Movement Temporary
Permanent:seasonal production, erratic demand, conditioning, speculation, bulk purchase et al, strategic reserve
Movement
Receiving, transfer, picking, shipping, cross dock, merge-in-transit

46. Warehousing (cont’d) Warehouse layout For what:
quality control, quarantine, pallet and trolley storage and repair, returned goods, waste disposal, battery charging, maintenance, fuel supply, services, offices. Amenities, security and special data link / communications lines
Spare for expansion, plant area

47. Warehousing (cont’d) Warehouse layout
Principles to follow for layout design:
Load unitization
Use of space: 40% (25% to have, 15% to maintain)
Movement minimization: 42% of manpower in picking activity
Control
Safety, security and environment
Total cost minimization

48. Warehousing (cont’d) Warehouse layout Types of layout:
“U” flow: goods in and out at the same end of warehouse
Through flow: goods in at one end and goods out at the other end
Adjacent flow: goods in at one side and goods out at the adjacent side

49. Warehousing (cont’d)

50. Warehousing (cont’d) Picking method
Order picking: one order or a small number of orders is picked on each picking circuit
Batch picking or summary picking: quantity of orders is summarized and picked simultaneously during 1 picking circuit
Zone picking: each order is split in different picking zone and subsequent collation may be required

51. Warehousing (cont’d) What is the role a warehouse / DC in e-commerce?
Let’s look at this new era.

52. What’s the new era? Globalization: Why: Impact on logistics
Economically: lower cost of production, large market
Politically: WTO, OECD, NAFTA, MERCOSUR, ASEAN
Technologically: Transport, IT, communication
Impact on logistics
Greater distance
Conflicting infrastructure
Different standards and regulations
Cultures and (trusting) relationships over the chain
Here the term logistics is defined as …. And are used inter with scm

53. What’s the new era? Technology IT Communications: 2.4Ghz, bluetooth
Use of defense technology
GPS/Local Positioning System
Here the term logistics is defined as …. And are used inter with scm

54. What’s the new era? Some hard-earned lessons: Causes: Botched orders
High stock out rates
Late deliveries
Causes:
No integrated end-to end solution
Handoffs between all the different functions
Here the term logistics is defined as …. And are used inter with scm

55. What’s the new era? Customer demand
Ever-changing less brand loyalty and shorter product life-cycle
Volatile demand forecasting almost impossible
End result: agile logistics structure to put the end-customer in your focus
Here the term logistics is defined as …. And are used inter with scm

56. Requirements on logistics
Quality and cost effectiveness (lean) are taken for granted
Ever-shortening lead time And ever-increasing customer service level are the norm
A direct channel which requires a short cycle time, no min. order size constraint, customized products
Meaning much more orders w/ fewer lines in smaller qty.

57. Impact of e-commerce on logistics
50% web-retailers losing on every package shipped (0.65 mil packages/day in 1999, expected to reach 4.6 mils packages in 2003 by Forrester Research)
Higher picking costs: many picks before of more smaller orders (trad. 43% of distribution cost is for picking)
More frequent deliveries: short & shorter lead time
Decentralize Centralize Decentralize amazon.com (DCs in US & UK), webvan (1 DC to cover 40 sq.m), Sameday.com (9 centres to cover 40% of US population in same day & 80% next day)
Cash on delivery delivery men to take on the role of cashier (m-POS)
Customer service representation
3PL, 4PL
Here the term e-commerce is general and is used inter-changeably with m-com
Cycle time (24hr to 6 by tom.com in HKG, 6 hrs to 2 at Greater London)

58. Warehouse (cont’d) Therefore, roles of a warehouse can be:
An assortment centre
A light manufacturing plant
A point to do merge-in-transit
A transit point for reverse logistics
A configuration centre
Other value adding services such as labelling, pre-retailing etc

59. Third-party logistics
Supply chain
Customer
Carrier / Logistics Service Provider

60. What is third-party logistics?
Definition 1:
»... involves outsourcing logistics activities that have traditionally been performed within an organization. The functions performed by the third-party can encompass the entire logistics process or, more commonly, selected activities within that process« (Lieb & Randall, 1996) .

61. What is third-party logistics?
Definition 2:
»Activities carried out by a logistics service provider on behalf of a shipper and consisting of at least management and execution of transportation and warehousing (if warehousing is part of the process)« (Berglund et al., 1999).

62. What is third-party logistics?
Definition 3:
»A long-term formal or informal relationship between a shipper and a logistics provider to render all or a considerable number of logistics activities for the shipper. The shipper and the logistics provider see themselves as long-term partners in these arrangements. Although these alliances may start with a narrow range of activities, there is a potential for a much broader set of value-added services, including simple fabrication, assemblies, repackaging, and supply chain integration« (Bagchi & Virum, 1998a, b).

63. Relationships between shippers and logistics service providers
Degree of
integration
Fourth-party
logistics (4PL)
Third-party
logistics (3PL)
Outsourcing of
transport &
warehouse
Market
transactions
Degree of asset specificity

64. Typology of third-party logistics providers
Three waves of entrants into the third-party logistics market
traditional market-based solutions
asset-based logistics providers
network logistics providers
skill-based logistics providers (information-based)

65. Typology of third-party logistics providers
Physical
services
Asset-based logistics
providers
Warehousing
Inventory management
Postponed
manufacturing
Information-based
logistics providers
Management
consultancy
Information services
Financial services
SCM
IT Solutions
Traditional transport
and forwarding
companies
Transport
Warehousing
Customs clearance
Network logistics
providers
Express shipments
Track and Trace
Electronic proof-of-
delivery
-JIT deliveries
Management
services

66. What is being outsourced?

67. Forces behind third-party logistics
Supply chain activities become more complex, expensive and capital intensive
Benefits of outsourcing
Conversion of fixed costs to variable costs
Economics of scale and scope
A leaner organization
Faster access to new markets and distribution channels
Reconfiguration of European logistics systems

68. Forces behind third-party logistics
Some empirical evidence of why firms do it:

69. Forces behind third-party logistics
Some empirical evidence of what firms have achieved:

70. Developing a third-party logistics partnership
Outsourcing decisions are both difficult and stressful
Stages of developing a 3PL relationship
establishing objectives and selection criteria
evaluating and selecting a third-party logistics provider
making a contract between the partners implementing the partnership
making continuous improvements
renegotiating

71. Obstacles in logistics outsourcing
Turning over an internal logistics function to an external third-party provider involves risk.
Potential risk of loss of control over the flow of products and materials
3PL might go out of business or be taken over by another company with inferior services or geographic coverage
Interorganizational cooperation itself presents inherent difficulties in the compatibility of corporate cultures, data systems and the level of employee knowledge and skills

72. Obstacles in logistics outsourcing
Some empirical evidence for areas that need to be improved:

73. Operations Management a Sustainable perspective

74. Five challenges for operations managers
Globalization
Social responsibility
Environmental responsibility
Operations Managers
Knowledge management
Technology

75. Operations strategies have an ethical dimension
Product/service design - customer safety, recyclability of
materials, energy consumption.
Network design - employment implications and environmental
impact of location.
Layout of facilities - staff safety, disabled customer access.
Process technology - staff safety, waste and product disposal,
noise pollution, fumes and emissions.
Job design - workplace stress, unsocial working hours.
Capacity planning and control - employment policies.
Inventory planning and control - price manipulation.

76. EMAS, Environmental Management and Audit Scheme
Management Systems
EMAS, Environmental Management and Audit Scheme
ISO 14000

77. Life cycle analysis
Full explanation
link

78. Life Cycle Analysis (LCA)
Method for investigating the impact of a product and its associate processes throughout its life cycle and disposal
An Environmental and Financial assessment of viability
Portfolio analysis
Competitive analysis

79. INFORMATION RESOURCE MANGEMENT
INFORMATION AS AN INPUT TO MANAGEMENT DECISIONS
TECHNOOGY OFFERS AN INFRASTRUCTURE THAT CREATES NEW WAYS OF DOING BUSINESS
CHANGES IN THE WAY GOODS ARE PURCHASED, THE REP TRAVELLING THE ROAD, HOME SHOPPING, MANAGEMENT OF THE HOME, ENERGY ETC.(DISCUSS)

80. INFORMATION RESOURCE MANAGEMENT
DESIGN AND SPECIFICATION
WHAT INFORMATION
WHAT INFORMATION IS ACCESABLE
WHAT CAN BE EFFECTIVELY USED

81. INFORMATION RESOURCE MANAGEMENT
THREE KEY MANAGERIAL ACTIVITIES
STRATEGIC PLANNING( GOALS, STRATEGIES AND POLICIES)
MANAGEMENT CONTROL (IMPLEMENTATION OF STRATEGIES)
OPERATIONAL CONTROL (EFFICIENT AND EFFECTIVE PERFORMANCE OF INDIVIDUAL TASKS)

82. INFORMATION RESOURCE MANAGEMENT
PLANNING SYSTEMS
SALES(PROFITS/EARNINGS) FORCASTING, OPERATING PLANS, CAPACITY PLANNING, NEW LEGISLATION SCENARIOS
CONTROL SYSTEMS
EMISSIONS AND ENERGY ANALYSIS, BUDGETRY CONTROL, MANAGEMENT ACCOUNTING, INVENTORY MANAGEMENT
OPERATIONAL SYSTEMS
ORDER-ENTRY PROCESSING, TRACKING WASTE DOCUMENTATION, TRANSPORT SCHEDULING.

83. INFORMATION RESOURCE MANAGEMENT
SOURCES OF INFORMATION
INTERNAL
EMISSIONS
ENERGY
WASTE
RECYCLING
LEGISLATIVE COMPLIANCE
RESEARCH AND DEVELOPMENT
PRODUCTS
EXPERTISE
SKILL
SYSTEMS

84. INFORMATION RESOURCE MANAGEMENT
SOURCES OF INFORMATION
EXTERNAL
LEGISLATION
GLOBAL AGREEMENTS
MARKET DEVELOPMENTS
COMPETITIVE ACTIVITY
SCIENCE AND TECHNOLOGY
PRESSURE GROUP ACTIVITY