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International Supply Chain Management summary
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This summary contains chapters 5, 6, and 10. This is necessary for the end term exam.
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ISCM YEAR 1 BLOCK 2 SUMMARY CHAPTERS 5, 6, 10
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Samenvatting Guide to Supply Chain Management - International Supply Chain Management 1 (1000IS1_22)
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Summary for International Supply Chain Management HvA final endterm exam, chapters 5,6, 10
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5 Guide to Deliver in Supply Chain ManagementAlso described as distribution management – is an integrated part of the end-to-end
supply
chain. Companies constantly try to optimise their distribution network: the main aim
is to
reduce the number of warehouses in their network.
Key trade-off in our deliver setup = balancing cost and service aspects.
The deliver function is influenced by a number of factors, such as:
Global economy Challenge for the deliver function is to find solutions that follow
the needs of global economy, shifting from national > multi- country sourcing
strategies.
Political decisions new roads, airports, rail links and seaports are often undertaken
by national government
Advanced technology Mobile telecommunications and satellites are few
technologies that have already revolutionised transportation and warehousing
Environmental requirements Number of environmentally friendly innovations in the
transport industry
Network trade-offs
Number of warehouses increases, the associated deliver cost also increases
because of three cost components:
Facility cost (the company have to pay the warehouse running cost: electricity,
Insurance, or labour)
Inventory costs (increases with every warehouse carrying additional amounts of
safety stock.
Primary transport costs (add warehouse > Primary transport decreases. Keep
adding distribution facilities; warehouse become smaller, in the cost curve goes up
(increase)
COST CURVE
Facility Location decisions
CENTRE OF GRAVITY = COG
This method gives you the optimum location of
your warehouse or distribution centre.
Other mathematical factors:
Cost of commercial property in that location
Availability of skilled labour
Time to build or occupy the site
Accessibility of government grant or subsidy
Proximity of road, rail, water, and air
networks.
Deliver components
3 components of deliver within supply chain management:
Transport Management: Moving around products in trucks, ships, planes, and
trains.
Variables in transport management include: speeds, reliability, security,
quality, environment,
and cost.
AIR:
3 options for transporting good by air:
Cargo operators
, Bulk of global airfreight takes place using this transport. Specialised in Cargo.
Courier operators
Carry goods in parcel format. TNT express, UPS, FEDERAL EXPRESS. Own
aircrafts.
Niche operators
Neither offered by cargo nor courier operators. Run often by military-related
agencies. Such as heavy equipment, tanks.
ROAD
Offers ‘door to door’ transport flexibility.
PRIMARY TRANSPORT
Large and generally used in upstream supply chains. Takes raw materials or
finished products
from airports, rail terminals, and warehouses to a distribution centre.
SECONDARY TRANSPORT
Picks up customer orders from the distribution centre and delivers them to the
customer.
Example: Smaller trucks, cans, or motorcycles.
RAIL
Rail transport is that transport routes are limited to faced track and terminal
facilities, it can
provide “piggyback” services, such as:
Trailer on Flat Car (TOFC)
Driver drops loaded trailer to the rail dock > placed on a flat rail car >
transported to destinations
Container on Flat Car (COFC)
The same as above, involves a container that comes from a sea terminal or
road depot.
Water
Water transport encompasses the following main activities:
Tankers: carrying products like oil and liquid natural Gas (LNG)
Container vessels: carrying standard and refrigerated containers
Inland waterways: boats and barges using canal and river networks
Pipeline
Hundreds of thousands of kilometres of pipeline carry oil and gas “invisibly”
every day or our world’s energy consumption.
Only products with certain specifications – liquid, gas or powder can be
pushed under pressure and in large volumes through
pipelines.
The initial infrastructure investments in pipelines are
very high and can have important social and political
consequences.
Intermodal Operations
Describes the transport of goods using two or more
different transport modes. When these goods cross
international boundaries on their journey to customer, 6
factors become important.
Warehouse Management
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