2. Is Logistics the Same as Supply Chain Management?

 Logistics and Supply Chain Management (SCM) are sometimes used

interchangeably, but they are distinct.
 Logistics: Focuses on the operational aspects such as transportation,
warehousing, and inventory management.
 SCM: A broader, strategic concept encompassing logistics while also
involving procurement, supplier collaboration, and customer satisfaction.
 SCM is more prevalent as a term in the U.S., while logistics remains
dominant in Europe.

3. What is Supply Chain Management?

 SCM connects suppliers, customers, and partners to enhance efficiency

and create value for end-users.
 It is collaborative and involves strategic decisions that define the
operational framework for logistics.
 Supply chain managers oversee the flow of raw materials, ensure quality,
and manage relationships across multiple organizations to meet customer
requirements.

4. Common Elements of a Successful Supply Chain

1. Material Sourcing:
o Identifies suppliers and negotiates contracts to procure raw
materials.
2. Manufacturing:
o Converts raw materials into components or finished goods through
various production stages.
3. Assembly:
o Combines different components into final products ready for
customer use.
4. Sales:
o Introduces products to the market and ensures customer acquisition.
5. Delivery:
o Ensures timely and efficient transportation of goods to the final
destination.
5. What is Logistics?

 Logistics is a subset of SCM, responsible for the efficient movement,

storage, and flow of goods, services, and information.
 The Council of Supply Chain Management Professionals defines logistics
as ensuring products reach the customer at the right time, location,
quality, and price.
 Divided into two subcategories:
o Inbound Logistics: Activities related to sourcing, storing, and
transporting materials.
o Outbound Logistics: Activities related to delivering finished goods
to customers.

6. Logistics Organization Types

1. In-house Logistics:
o Managed internally by a company to reduce costs and maintain
control over operations.
2. Third-Party Logistics (3PL):
o External providers handle logistics activities like warehousing,
transportation, and freight forwarding.
3. Logistics Service Providers (LSP):
o Companies offering multiple logistics functions to support client
operations.
4. Reverse Logistics:
o Deals with returns, recycling, and reusing goods.
5. Warehouse Providers:
o External facilities used for storing goods before shipment.
6. Courier Shipping:
o Fast delivery services for parcels or documents, ensuring timely
transportation.

7. Key Differences Between Logistics and Supply Chain Management

 SCM focuses on competitive advantage through collaboration across the

supply chain.
 Logistics is more operational, aiming to meet specific customer
requirements.
 SCM includes planning, procurement, and broader business functions,
while logistics handles physical movement and storage.
8. How Management and Logistics Work Together in the Supply Chain

 Effective supply chain management requires integration with logistics to

align strategies and execution.
 Logistics ensures that the products and services flow seamlessly, fulfilling
the plans laid out by supply chain managers.

9. Logistics and the Supply Chain Go Hand-in-Hand

 Logistics is crucial for synchronizing supply chain activities and ensuring

efficiency across all touchpoints.
 Collaboration between product designers and logistics teams helps
optimize supply chain flows even before product launches.

10. Logistics’ Role in Business Growth

 Logistics significantly influences scalability and adaptability.

 Technological advancements like AI and machine learning help logistics
professionals optimize end-to-end supply chain operations.
 Proper logistics planning supports business expansion into new markets.

11. Advanced Logistics Operations

 Digitalization and automation streamline logistics processes, enhancing

visibility and control.
 Real-time tracking systems, wearable technology, and API integrations
improve decision-making and efficiency.
 These tools allow businesses to manage complex supply chains and
remain competitive.

12. Challenges of Supply Chain Logistics

 Key challenges include:

o Customer service expectations.
o Controlling costs while maintaining quality.
 o Effective risk management.
o Managing relationships with suppliers and partners.
o Attracting and retaining talent in logistics roles.
 Companies must balance flexibility with cost-effectiveness to thrive in
global markets.

13. How Customer Demands Affect Supply Chain Logistics

 Transparency is critical; customers want real-time updates on order

status, fulfillment, and delivery.
 Companies face challenges in meeting these demands without
comprehensive visibility into their supply chain processes.
 Logistics teams must adapt quickly to customer preferences and
expectations.

14. Benefits of Inventory Management in Supply Chain Logistics

 Effective inventory management reduces errors, delays, and costs.

 Practices like barcode tracking, asset tagging, and dynamic warehousing
enhance transparency and efficiency.
 Inventory management systems minimize human errors and improve
supply chain visibility, helping prevent disruptions.

15. Supply Chain Management vs. Logistics

 Logistics is the operational aspect focused on transportation,
warehousing, and inventory management.
 Supply Chain Management (SCM) is broader, including strategic
planning, procurement, and supplier/customer relationships.

16. Business-to-Business (B2B)

 Refers to transactions between two businesses, such as manufacturers
supplying goods to wholesalers.
 Usually involves bulk orders, long-term contracts, and higher order
volumes compared to B2C.
17. Business-to-Consumer (B2C)
 Refers to direct transactions between a business and an individual
customer.
 Often involves smaller orders, quicker delivery expectations, and
personalization (e.g., e-commerce).

18. Intermodal Transport

 The use of multiple modes of transportation (e.g., truck, rail, sea, air) to
move goods.
 It reduces costs, increases flexibility, and improves efficiency by
leveraging the strengths of each transport mode.

19. Reverse Logistics

 The process of managing the return of goods from consumers back to
sellers for reuse, recycling, or disposal.
 Examples: Product returns, warranty claims, or recycling programs.

20. General Agreement on Tariffs and Trade (GATT)

 An international trade agreement aimed at reducing tariffs and trade
barriers.
 Encourages global trade by standardizing customs practices and lowering
average tariff rates.

21. Consignor and Consignee

 Consignor: The entity shipping the goods.
 Consignee: The recipient of the shipment, who may be the end user or a
distributor.

22. Proof of Delivery (POD)

  A document confirming that the recipient has received the shipment in
good condition.
 Used for accountability and resolving disputes in logistics.

23. Bill of Lading (BOL)

 A legal document between the shipper and carrier detailing the goods
being transported.
 It includes information about the shipment, destination, and terms of
delivery.

24. Value-Added Tax (VAT)

 A tax applied at every stage of production or distribution where value is
added.
 Common in many countries to generate revenue through supply chain
transactions.

25. Load Tender

 The process of offering freight to carriers for transportation.
 Helps find the best price and availability for a shipment.

26. Unit Load Device (ULD)

 A container or pallet used to group cargo for air transport.
 Each ULD has a unique identification code to facilitate tracking.

27. Tare Weight vs. Gross Weight

 Tare Weight: Weight of an empty vehicle or container.
 Gross Weight: Total weight, including cargo, vehicle, or container.

28. Electronic Data Interchange (EDI)

  The electronic transfer of data between organizations (e.g., invoices,
purchase orders).
 Eliminates paperwork, reduces errors, and speeds up transactions.

29. Certificate of Origin

 A document indicating the country where a product was manufactured or
processed.
 Often required for customs clearance and determining tariffs.

30. Freight All Kinds (FAK)

 A shipping classification allowing mixed types of freight in one shipment.
 Simplifies pricing and reduces shipping costs for diverse goods.

31. Twenty-Foot Equivalent Unit (TEU)

 A standard measurement for shipping containers.
 A 20-foot container equals 1 TEU, used to calculate cargo capacity.

32. Container Yard

 A designated area for storing containers before or after transport.
 Used in ports, rail terminals, or distribution centers.

33. Less-than Truckload (LTL)

 Shipping method for small freight that doesn’t require a full truckload.
 Cost-effective for businesses shipping smaller quantities.

34. Freight Forwarder

 A company acting as an intermediary between shippers and carriers.
 They handle transportation, documentation, and customs clearance.
35. Advanced Shipment Notice (ASN)
 A pre-shipment notification sent by the shipper to the receiver.
 Includes details about the shipment, such as contents, tracking info, and
delivery time.

36. Chargeable Weight

 The weight used by carriers to calculate shipping costs, which can be
based on either actual weight or volumetric weight.

37. Third-Party Logistics (3PL)

 Companies that handle logistics services like warehousing, inventory
management, and transportation on behalf of another business.

38. Blanket Purchase Order (BPO)

 A long-term agreement where regular orders are placed under one
contract over a specified period.
 Streamlines procurement for repetitive needs.

39. Automated Broker Interface (ABI)

 A digital system used in customs processing to streamline documentation
and cargo clearance.
 Part of larger trade and customs management systems.

40. Deadhead
 Refers to a vehicle (e.g., a truck) traveling without cargo.
 Considered inefficient and costly in logistics operations.

41. Free on Board (FOB)

 A term defining liability during shipping:
 o FOB Origin: Buyer assumes liability once goods leave the seller’s
facility.
o FOB Destination: Seller retains liability until goods reach the
buyer.

42. Demurrage
 Fees charged when cargo remains at a port or terminal longer than the
agreed-upon time.
 Encourages efficient handling and storage.

43. Request for Proposal (RFP)

 A document issued by companies to solicit bids from logistics service
providers.
 Details project needs, timelines, and expectations.

44. Scalability
 The ability of a logistics system to handle varying levels of demand
efficiently.
 Key for businesses managing peak seasons or expansions.

45. Conclusion
Summarizes the significance of integrating logistics and SCM to create a
competitive advantage, with advanced technology playing a pivotal role in
modern operations.