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GS 120 – iGlobalization: Moving The Things We Buy Professor: Dr. Jean-Paul Rodrigue Hofstra University, Department of Global Studies & Geography Topic.

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Presentation on theme: "GS 120 – iGlobalization: Moving The Things We Buy Professor: Dr. Jean-Paul Rodrigue Hofstra University, Department of Global Studies & Geography Topic."— Presentation transcript:

1 GS 120 – iGlobalization: Moving The Things We Buy Professor: Dr. Jean-Paul Rodrigue Hofstra University, Department of Global Studies & Geography Topic 6 – Logistics and Supply Chain Management A – The Role and Function of Logistics B – Value Chains C – Distribution Systems

2 A – The Role and Function of Logistics

3 Logistics Goals and Operations

4 Value-Added Functions and Differentiation of Supply Chains Value-Added FunctionsSupply Chain Differentiation Production Costs Location Time Control Logistics Costs Transit Time Reliability Risk

5 Taxonomy of Logistics Decisions LevelDescription Production structures Commercial decisions on outsourcing, offshoring and sub-contracting. Number, location and capacity of production units. Transport structures Choice of a freight network linking a company and its suppliers and customers. Choice of modes and terminals; the transport chain. Distribution structures Choice concerning the number, location and capacity of distribution centers. Frequency and timing of distribution (e.g. just-in-time). Logistics structures Usage of production, transport and distribution capabilities to fulfill short, medium and long term strategies (e.g. lower costs, gain market share, improve service efficiency, reduce response time, reduce environmental footprint). Usage of third party logistics providers.

6 Logistical Improvements, Manufacturing Sector, 1960s to 2010s

7 Worldwide Logistics Costs, 2002

8 From Push to Pull Logistics Supplier Manufacturer Customer Distributor Supplier Manufacturer Distributor Customer 3PL Returns / Recycling Point-of-sale data Freight flow Push Pull

9 Layers to Logistics Services Manufacturing, Retailing Transportation Logistics Supply chain management Cargo owners Carriers Logistics service providers Lead logistics providers & consultants Supply chain integration ActorsServices Service integration

10 Logistic Performance Index, 2010

11 B – Value Chains

12 The Commodity Chain (or Value Chain) Transport Chain Raw materials Manufacturing and assembly Distribution Bulk shippingUnit shipping High volumes Low frequency Low volumes High frequency LTL shipping Average volumes High frequency 1- Commodities3- Final Goods2- Intermediate Goods Attributable to climatic (agricultural products, forestry products) or geological (ores and fossil fuels) conditions. Transformation that confers added value. Metals, textiles, construction materials and parts used to make other goods. Goods shipped to large consumption markets. Flow and inventory management. Stages Market Flows Market

13 Commodity Chains and Added Value Commodity chain Added value Low High Manufacturing R&D Fabrication DistributionDesign Branding Marketing Sales / Service Concept Logistics

14 Product Life Cycle Sales Stage 1 Stage 2 Stage 3 MonopolyCompetition Research and development Maturity Decline First competitorsMass production Innovating firm Competitors Growth Stage 4 PromotionIdea Obsolescence

15 APL Logistics Freight Distribution Center, Shenzhen, PRC, December 2005

16 Container Waiting to be Loaded, APL DC - Shenzhen

17 Extended Distribution Center System of JVC Belgium

18 Palletization of Floor Loaded Shipments, Belgium

19 C – Distribution Systems

20 Types of Supply Chain Facilities Fabrication StorageDistribution Heavy manufacturing Light manufacturing Cold Chain Bulk warehouse Rack-supported warehouse Cross-docking Multitenant Regional warehouse Air cargo

21 Optimal Location and Throughput by Number of Freight Distribution Centers

22 Cross-Docking Distribution Center Suppliers Customers Receiving Shipping Sorting LTL Suppliers Customers FTL Cross-Docking DC Distribution Center Before Cross-Docking After Cross-Docking

23 Retail Logistics and E-commerce Retailer (In store inventory) Suppliers E-Retailer Customers Suppliers RDC Conventional Retail Logistics Travel to store Online purchases Store Deliveries E-commerce Retail Logistics Home Deliveries Parcel Delivery Company RDC Regional Distribution Center Order RDC

24 Order-Delivery Sequence of an Apple iPad Note: Path is approximate Order Fulfillment (Cycle time of 12 days 18hrs 08min) Order placed online 3hrs 34min Order processed 12 days 15hrs 34min Shipment notification Delivery (Lead time of 48hrs 11min) 2hrs 45min Shipment notification Shipment picked up 4hrs 23min Leaving local DC 7hrs 34min At Hong Kong hub 17hrs 04min At Anchorage hub 1hr 57min Cleared customs 1hr 22min Left Anchorage hub 6hrs 03min At Newark hub 4hrs 00min Left Newark hub 1hr 11min At local DC 2hrs 48min Delivered Consolidation (Shenzhen/HK)Transfer (Anchorage)Deconsolidation (NY Metro)

25 Logistic Activities and their Green Dimensions Consumers Producers Distributors CollectorsRecyclers Reverse Channel Suppliers Forward Channel Forward and Reverse Distribution

26 Packaging with Less Footprint

27 Operational Conditions of Cold Chain Logistics

28 Temperature Standards for the Cold Chain

29 Shelf Life of Selected Perishable Food Products ProductShelf Life (Days)Optimum Temperature (Celsius) Apples90-2400 Bananas7-2813.5 Bell Peppers21-357 Cabbage14-201 Eggs1801.1 Onions30-1801 Lettuce12-140.6 Fresh Meat (beef, lamb, pork, poultry) 14-65-2 Oranges21-907 Pears120-180-0.6 Potatoes30-5010 Seafood (shrimp, lobster, crab)120-360-17.8 Strawberries5-100.6 Tomatoes7-1412

30 Lettuce Shelf Life by Storage Temperature

31 Seaborne Reefer Trade, 2008

32 Reefer Stacking Area, Maher Terminal, Newark

33 Grocery Chain Cold Storage Facility, Regina

34 Subtropolis Distribution Center, Kansas City

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