1. Chapter 9 Delivery ©McGraw-Hill Education. All rights reserved.

2. Key Questions Addressed in Chapter 9 How can we assure on-time delivery at lowest total cost? What mode(s) of transportation should be selected for delivery? Which supplier(s) should be selected for delivery?

3. Logistics Definition The management of inventory in motion and at rest “…that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin to the point of consumption in order to meet customers’ requirements.” -- Council of Supply Chain Management Professionals (CSCMP)

4. Logistics Costs Three cost categories: – Transportation (the bulk of the costs) – Inventory carrying costs – Administrative costs

5. Delivery Decision Components of the delivery decision: (1) What mode of transportation is most appropriate for a specific order? (2) What carrier is the best? (3) Which supplier offers the best value?

6. The Selection of the FOB Point Determines Four Things 1.Who pays the carrier 2.When legal title to goods being shipped passes to the buyer 3.Who is responsible for preparing and pursuing claims with the carrier 4.Who routes the freight Since deregulation of the transport sector, purchasers are increasingly taking control of transport arrangements as a means of controlling costs ©McGraw-Hill Education. All rights reserved. 6

7. Elements of a Transportation and Logistics Strategy Value analysis of alternatives Price analysis Opportunities for freight consolidation Analysis and evaluation of suppliers Reassessment of use of different transport modes Closers relationship with selected carriers Cost analysis and reductions Outsourcing, third-party logistics, contracting out Safety considerations Environmental factors ©McGraw-Hill Education. All rights reserved. 7

8. Delivery Options for Services Modes (means of a service gaining mobility): – people, equipment, and radio frequency waves Carriers (means of service conveyance): – different service categories, e.g., law firms are carriers of legal expertise, janitorial firms are carriers of cleaning expertise, and phone companies are carriers for information transmission Suppliers (companies providing a specific service): – Verizon, AT&T, and Sprint provide telecommunications services ©McGraw-Hill Education. All rights reserved. 8