Logistics and supply chains

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1. Logistics Involves coordinating and organizing the flow of items

between their point of origin and the point at which they
are consumed

2. Supply chain The steps involved in getting products and services to the
end consumer

3. Supply chain op- The integration of all the business processes involved in
erations moving goods and services from the original suppliers,
through the suppliers that add value to the original goods
and services, to the end consumer

4. Flow of goods The movement of goods either forwards or backwards

along the supply chain

5. Major compo- - Forward and reverse flow of goods

nents of logistics - Storage of goods
- Services such as insurance
- Information services
- Packaging
- Inventory management

6. Forward and re- - The forward flow of goods involves the stages of gather-
verse flow of ing raw materials and supplies, making them into finished
goods packaged goods, then transporting and storing them on
their way to the consumer
- The reverse flow of goods involves moving items in the
opposite direction ( the consumer to the manufacturers)

7. Storage of goods Goods will usually be stored in central locations as part of

their journey forwards or backwards

8. Services such as Insurance and other distribution services provide cover for
insurance the goods during transit and storage

9. Information ser- Information will need to be managed and shared between

vices destinations

10. Packaging Packing goods in ways that make them easier to load and
transport
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11. Inventory man- - Inventory is a complete list of the stock a business holds
agement - Inventory management is all about organizing how stock
is stored and accessed, as well as decisions about how
much stock is held

12. Activities in- - Transformation of natural materials

volved in supply - Movement and storage of raw materials
chain operations - Processing of raw materials and components into fin-
ished goods
- Storage of work-in-progress and finished goods
- Delivering the finished product from point of origin to
point of destination

13. A chain of distri- Involves the following links to get the goods from their point
bution of origin to their final destination:
- The manufacturer
- The wholesaler
- The retailer
- The consumer

14. The manufactur- The firm that makes the goods

er

15. The wholesaler An intermediary that stores the goods and might also
perform other operations such as packaging and labeling

16. The retailer The business that sells the goods to the end consumer
through a range of outlets

17. The consumer The person who uses the end product

18. Links in the chain - Manufacturer -> Wholesaler -> Retailer -> Consumer
of distribution - Manufacturer -> Retailer -> Consumer
- Manufacturer -> Website -> Consumer
- Manufacturer -> Consumer

19. Traditional com- Focuses on the exchange of goods or services in person

merce

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20. E-commerce Buying and selling of goods electronically via the internet

21. Features of tradi- - Transactions are processed manually, by a person

tional commerce - Limited accessibility, to open hours
- Goods can be inspected physically before purchase
- The customer talks to a person face to face
- Goods are paid for with cash, cheque, debit or credit card
- Instant, as goods can be handed to the customer

22. Features of - Transactions are processed automatically, by a computer

e-commerce - Unlimited accessibility, available 24 hours a day, 7 days
a week, 365 days a year
- Goods cannot be inspected physically before purchase
- The customer interacts with a computer screen
- Goods are paid for with credit or debit card
- Takes time, as goods have to be delivered to the cus-
tomer

23. Multimodal - Involves two or more modes of transport, but the exporter
transport deals with a single carrier who is responsible for the whole
journey
- The goods are transported under a single contract

24. Intermodal trans- - The delivery of cargo using two or more modes of trans-
port port
- Each of the stages will involve a contract with a different
carrier

25. Modes of trans- - Air

port and their - Rail
suitability for dif- - Road
ferent goods - Marine (cruise and cargo)
- Pipeline
- Digital delivery

26. Advantages of air - The fastest way of moving goods over long distances
transport - Remote deliveries are possible
- A cheap way of carrying small, valuable items

27.
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Disadvantages of - The most expensive way of carrying goods, particularly
air transport bulky and heavy goods
- Fuel consumption is expensive

28. Advantages of - Not disrupted by traffic congestion

rail transport - Services are usually frequent
- Relatively fast over long distances
- A useful way of carrying heavy goods and bulk liquids

29. Disadvantages of - Tied to fixed routes and timetables

rail transport - Very expensive to install
- Slow when compared to air
- Can only be used over relatively flat terrain

30. Advantages of - Flexible in terms of routes and times

road transport - Door to door
- Easy loading and unloading
- An excellent way of carrying many types of goods to
retailers and end consumers

31. Disadvantages of - The weather can disrupt journeys

road transport - Expensive for long distances
- Traffic jams can cause delays

32. Advantages of - Enables the transport of heavy goods across seas and
marine transport oceans
- Very large loads can be carried
- Economical over large distances
- A very safe method of transport

33. Disadvantages of - Relatively slow over long distances

marine transport - Unfavorable weather can cause disruption
- Customs and excise restrictions mean goods might need
to be checked at several ports before reaching their final
destination

34. Advantages of An efficient way of transporting bulk liquids or gases

pipeline trans-
port

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35. Disadvantages of - Expensive to install
pipeline trans- - A relatively slow method of transport over long distances
port

36. Advantages of A fast method of transferring information and content

digital delivery

37. Disadvantages of Not appropriate for transferring physical goods

digital delivery

38. Types of trans- - Import license

port documents - Bill of lading
- Airway bill

39. Import license - A permit from the government body giving permission for
goods to be imported into a country
- Helps to control the import of certain items and to protect
home industries from foreign imports
- The requirement to have an import license can also help
protect health and the environment

40. Bill of lading - A document that needs to be signed by a carrier to form

a receipt for the goods it will be carrying
- Acts as a receipt from the carrier to the person consign-
ing the goods
- Sets out the details of the goods being carried and acts
as proof of shipment for customer purposes

41. Airway bill - The air-transport equivalent of a bill of lading

- Used for the transport of goods by air
- A receipt issued by an international airline and acts as
evidence of the contract of carriage
- Similar to a bill of lading, the airway bill will have a specific
reference number so that the consignment of goods can
be tracked

42. The role of trans- - Fast-track sourcing of commodities

port in marketing - Ensuring security of supply
- Cost reduction

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43. Fast-track sourc- - Transport makes it possible for goods to reach markets
ing of commodi- quickly
ties - For example, mass production of agricultural products
becomes possible when they can be transported to mar-
kets quickly and still remain fresh

44. Ensuring securi- - A well-organized transport system ensures a reliable and

ty of supply efficient supply of materials and goods
- Helps to ensure a smooth production process (for exam-
ple, time is not lost because a late delivery of raw materials
is holding up production)

45. Cost reduction - Fast and efficient transport helps to minimize the costs
of distribution and these reduced costs can be passed on
to the consumer
- Because of this, countries like Jamaica continue to build
transport hubs to drive national competitive advantage

46. Domestic trade Takes place within a country

47. Regional trade Takes place between a country and regional partners

48. Foreign trade Involves exchange beyond this regional grouping

49. Importance of - Within the Caribbean, road transport is key for domestic
transport in do- trade
mestic, regional - Regional trade is likely to involve transport by sea
and foreign trade - Foreign trade also relies heavily on sea transport but air
transport plays a vital role here too

50. Advantages of - Better quality of life

supply chain op- - New and innovative job opportunities
erations - Wealth creation

51. Better quality of People can enjoy more goods from a wider range of
life sources, giving more choice and variety, often at lower
prices

52. - Many new jobs are created through supply chain work,
such as jobs in organizing logistics or coordinating the
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New and innova- shipment of goods
tive job opportu- - Also scope for entrepreneurial openings such as setting
nities up small, specialist road haulage firms, or selling goods
through telemarketing and new online channels

53. Wealth creation Effective supply chains enable countries to become

wealthier, which in turn means that standards of living can
rise

54. Challenges of - Globalization

supply chain op- - Counterfeiting
erations - Product complexity
- Rapid product obsolescence
- Regulatory complexity
- Management blunders
- Changing market conditions
- Natural disasters/political instability

55. Globalization - Global supply chain management is concerned with

developing efficient global supply chains
- However, in many countries poor infrastructure and logis-
tics can weaken the effectiveness of global supply chains

56. Counterfeiting - The development of global trade has resulted in more

counterfeiting
- This refers to the false labelling of products and passing
off inferior products as if they are the real thing

57. Product com- - Many modern products are extremely complex, involving
plexity lots of components provided by many suppliers
- This means there is more potential for glitches along the
supply chain

58. Rapid product - Some products become dated far more quickly than in
obsolescence the past, as they are replaced by new products and new
manufacturing systems and approaches
- This means the supply chain needs to be regularly
rethought and redesigned

59.
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Regulatory com- - There are many regulations governing the movement of
plexity goods and these vary between countries
- Logistics planners need to be aware of these regulations,
particularly when it comes to international trade

60. Management Managers sometimes get the design or handling of the

blunders supply chain wrong

61. Changing market - The demand for a product frequently rises or falls
conditions - Failure to keep up with these changes in demand can
lead to an insufficient or excessive supply of product,
which is not cost-effective for the business

62. Natural disas- - Natural disasters can make it very difficult to manage the
ters/political in- supply chain in a smooth way
stability - The more stages in the supply chain, the greater the
scope of these problems
- Political instability also affects the supply chain, as a
change of government or a weak government can lead to
industrial unrest and civil disobedience

63. The impact of lo- - Efficient logistics

gistics and sup- - Well-managed logistics
ply chain opera- - Outsourcing
tions on the com-
petitiveness of
business

64. Efficient logistics - Can improve competitiveness

- Organizing the supply chain and logistics efficiently can
speed up the manufacture and delivery of goods and
reduce costs, thus allowing a business to compete better
with its rivals

65. Well-managed lo- - May help to give a business a competitive advantage,

gistics where it is able to produce and distribute a similar good at
a lower cost than rival goods

66. Outsourcing - Hiring a business outside a company to carry out ser-

vices or produce goods on behalf of the company
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- Make a business more competitive by allowing it to
concentrate on what it does best

67. Parties of out- - First party

sourcing - Second party
- Third party
- Fourth party

68. First party The business that outsources its activities

69. The second party The end user of a good or service (a customer)

70. The third party A business responsible for managing an aspect of the
supply chain

71. The fourth party A specialist logistics company that takes over most of the
logistics management

72. Problems en- - Delayed shipment

countered in dis- - Spoilage
tribution - Misdirection of goods
- Inadequate warehousing facilities
- Lack of proper security measures
- Industrial unrest
- Ineffective communication

73. Delayed ship- - Caused by poor weather conditions, breakdowns, miss-

ment ing paperwork, etc.
- Results in late delivery to customers

74. Spoilage - Caused by insufficient packaging, bad road conditions,

etc.
- Results in the goods being damaged

75. Misdirection of - Caused by poor labelling or inadequate paperwork

goods - Results in the goods being sent to the wrong location

76. Inadequate ware- - Caused by a lack of space and equipment, poor temper-
housing facilities ature control, etc.
- Results in the goods being damaged
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77. Lack of prop- - Caused by a lack of security personnel or cameras,

er security mea- facilities that are not locked overnight, etc.
sures - Results in goods being damaged or stolen

78. Industrial unrest - Caused by angry workers going on strike

- Results in the movement of goods being blocked

79. Ineffective com- - Caused by lost or inaccurate paperwork, unclear mes-

munication sages, etc.
- Results in the supply chain running less smoothly

80. Measures to miti- - Government intervention

gate problems in - Communication networks including use of the internet
distribution - Insurance
- Selecting the most appropriate channel of distribution
- Use handling services with a good reputation
- Careful labeling and documentation
- Avoiding holding large stocks
- Increasing security

81. Government in- The government of a country can invest in roads, ports,
tervention airports and other elements of the transport network, as
well as in the infrastructure for ICT communications

82. Communication Logistics providers and supply chain companies can in-
networks vest in more complex ICT systems that help to improve
including use of communication
the internet

83. Insurance Taking out insurance helps to provide cover against

spoilage and delays in the supply chain

84. Selecting the Companies should choose the best channel for distribut-
most appropriate ing a particular product
channel of distri-
bution

85. Use handling If a business uses the services of a distribution company

services with a that has a good reputation, the goods are more likely to
good reputation get to their destination on time and undamaged
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86. Careful labelling This helps to prevent goods from being misdirected or help
and documenta- up in the distribution process
tion

87. Avoiding holding Manufacturing and distributing only the parts and goods
large stocks that are needed avoids damage and unnecessary storage
costs

88. Increasing secu- Employing a security company and using security cam-
rity eras can help to reduce vandalism and theft

89. The impact of - Global positioning system (GPS)

information tech- - Geographic information system (GIS)
nology on logis- - Portnet
tics and supply - Telemarketing and e-commerce
chain operations - Global logistics providers
- Logistics hub

90. Global position- - An accurate way of finding directions, enabling drivers to

ing system (GPS) plan quicker transport routes
- GPS allows people to pinpoint their exact position using
satellites that orbit the earth

91. Geographic in- - Software that can be used for the geographical planning
formation sys- of logistics
tem (GIS) - Helps with the routing of vehicles and management of
logistics over a relatively large geographical area

92. Portnet An ICT system that supports the shipping community by

handling the booking, scheduling, tracking and documen-
tation of freight that is carried by international shippers

93. Telemarketing - The development of electronic communications has led

and e-commerce to new supply chain patterns, with goods being sold over
the telephone and via online websites
- These sales are then distributed by logistics and trans-
port providers who deliver the goods to customers' doors

94. Logistics hub

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- An area around a port of entry that focuses specifically
on logistics operations
- Countries seek to set up these hubs because they create
many jobs

95. Global logistics Companies that act as third parties, handling logistics
providers on the behalf of those wanting to send or receive goods
internationally

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