• Bringing together small shipments, often from

different shippers
• Take advantage of economies of scale
– In-Vehicle: perform pickups from many shippers and
consolidate into larger shipments
– Out-of-Vehicle: Occurs at terminals; shipments to a
single customer are consolidated before shipping

Consolidation
1
• Transportation facility with one or more functions
– System Access (point where freight enters and leaves
the transportation system)
– Freight consolidation/distribution
– Mode transfer
– Vehicle transfer
– Storage and warehousing
– Fleet maintenance

Terminal
2
• Terminal where received items are transferred
directly from inbound to the outbound vehicles
• Storage occurs only for a short period, main
emphasis is on speedy transfer
• No long term storage facility provided
• Often owned and operated by large shippers
– Home Depot
– Hub Passenger Airports

Cross Dock
3
• Single, rigid, sealed, re-useable metal box of
standardized dimensions
• Merchandise is packed in container and
containers are shipped via trucks, rail, ships
• Usually 8 ft in width and height, can be 20 ft or
more in length
• Specialized containers for air cargo (smaller)

Container
4
• TEU (Twenty foot equivalent)
– how many containers can a port/vessel handle/hold
– a 40 ft long container measures 2 TEU
– e.g. Sovereign Maersk (launched in 1998) is one of the
largest cargo vessels (over 65,000 TEUs)
• FEU (Forty foot equivalent)

Container Units
5
• Measures of Freight Weight
– Short Ton (American) 2000 lbs
– Long Ton (English) 2240 lbs
– Metric Ton 1000 k.g.
• Hundredweight/CWT
– 100 lbs
• Deadweight
– How many long tons can a vessel hold
– Difference between how many tons of water a vessel displaces
when “light” and how many tons it displaces when submerged to
the “load line”

Units of Weight
6
• Quay Crane:
– Quay is a dock; large crane used to lift containers and load onto
ships
• Gantry Crane: moves on overhead rails
• RO-RO: “Roll on, roll off”
– a method of ocean cargo service using vessels with ramps where
wheeled vehicles can be loaded onto ships
• HI-LO: container yard jargon for forklifts
• LO-LO: “Lift on, lift off”
– Conventional ships, where quay cranes are used to load/unload
containers

Material Handling
7
Modes of Transportation
8
 Planning Data Decision E.g.
Horizon maker
Strategic Up to several Very imprecise Top Facility
years and management location, layout
incomplete
Tactical Up to a year Disaggregated Middle Tactical
data available management

Operational Days Precise data Lower Order picking,

available management vehicle
dispatching

Logistics Decisions
9
• Pipelines
• Rail
• Truck
• Water
• Air
• Space (?)

Modes of Transportation
10
• Pipelines
– liquid, gases, slurries
– high initial construction cost, but once installed
are very reliable
– average speed is slow (3-4 mph), but is
compensated by continuous 24/7 operation
– most pipelines are privately owned
– pipeline companies are classified as common
carriers

Modes of Transportation
11
• Rail
– Mass movement of goods
– Accessibility is a problem
– Cheaper, more efficient than trucks
– High fixed costs, low variable costs

Modes of Transportation
12
• Roadways
– Greatest accessibility
– Less capacity than rail
– lower initial investment, but more expensive
operation

Modes of Transportation
13
Vehicle logistics services include:

– Vehicle Transportation

– Marine Transportation (RO-RO)

– Ship Loading and Unloading

– Storage and Parking Lot Services

– Dealer Distributions

– Information Systems and Reporting

Vehicle Logistics
14
Special transportation services
are:

Inter-dealer transportation,

Fair exhibitions,

Sports competitions,

Collection vehicles

Vehicle Logistics
15
During the placement of
vehicles on to the ship;

Minimum parking distances,

Installation of the safety

equipment

should be realized.

Vehicle Logistics
16
Storage and Parking Lot Services:

- Transfer to addressed area,

- Transfer to the dispatch area,

- Transfer of the out of order

vehicles to the service area,

- Transfer from the service area to

the addressed area

Vehicle Logistics
17
• Water
– Mass movement of goods
– Excellent for long-haul transportation of low-
cost commodities
– Very high capacity
– Cheaper operation that rail and roadways

Modes of Transportation
18
• Air
– Fast
– Expensive
– Reliable (freight is less prone to damage)

Modes of Transportation
19
Mode Comparison Matrix
20
BTU-British thermal unit

Mode Comparison Matrix

21
It is a transport method that more than one
transport mode is used for the same transport
container.

The process can also be defined as a

transportation method where transport mode
changes for the same transport container or land
vehicle, but the goods themselves are not
handled during these changes.

Intermodal Transportation
22
In other words, it is a transport method that
integrates advantages of different transport
modes.

In intermodal transport, the aim is to achieve an

effective combination of cost, delivery time and
service quality.

Intermodal Transportation
23
• Using a container that can be transferred from
the vehicle of one mode to the vehicle of
another; and with the movement covered under
a single bill of lading
• COFC (Container on Flat Car)
– Piggy back traffic, shipping of containers on rail flat
cars
• TOFC (Trailer on Flat Car)
– Piggy back traffic, loading truck trailers onto rail flat car

Intermodal Transportation
24
Using standard transport units (like standard containers,
trailers or pallet).

The suitability of the transport units for loading, carriage and

unloading.

The compatibility of the technological, legal and

organizational parts of the process chain within the
transport system.

The goods inside the transportation container are not

handled

Features of Intermodal Transportation

25
Advantages of Land-Railway Intermodal
Transport
Guarentee of long-term fixed price

Secure shipping

Minimum interference by weather conditions and traffic

constraints

Easier border crossing

Cost and equipment supply advantage in high volume and

planned shippings

Features of Intermodal Transportation

26
• Cubed out
• Weighted out

Capacity Constrains
27
• Transportation rates are complex, and the
structures employed date back to the days
of regulation, when rate bureaus would
approve rates
• Rate structures deal with three factors
– Handling
– Weight
– Distance

Rate Structure
28
Value added services, such as quality
control, labeling, sorting, repacking, etc.
can be included in the logistics processes.

Value Added Services

29
Logistics Experience will be different from
one sector to another
Textiles
– speed and variety due to seasonality concerns
Retailing (FMCG)
– prevents stores from having empty shelves or shelves with overstocks
– Frozen storage and transportation
Health
– hygienic, have limited shelf life, require special storage conditions and
entertain high inventory risks
Automotive
– just in time (JIT), delivering parts from thousands of kilometers, special
packaging
Fuel and Petroleum Transportation
– very special tanker security systems

Logistics Experience
30
It is the combination of shipments from
multiple vendors in close geographic
proximity into one shipment received by
the customer,
normally done for a defined route on a recurring
basis.

Milk Run Distribution

31
Milk Run Distribution
32
Milk Run Distribution
33
• Ensuring the availability of the
– Right product
– Right quantity
– Right condition
– Right Place
– Right time
– Right customer
– Right cost

Seven 34R`s
• Emphasis on Quality and meeting customer
requirements
• Change – influence of large buyers such as
Wal-Mart
• Increasing sophistication of all buyer types
–industrial and consumer

Change in Logistics
35
• Logistics impacts and has relationship with
economy
• Cost of business logistics increasing
• Percentage of GDP decreasing
• Transportation largest percentage of
logistics costs (rising due to inventory
management practices)

Macro Perspective
36
• Logistics adds value to a product
• Place utility - moving goods to points where
demand exists
• Time utility - moving goods to points at a
specific time
• Allows for economic development and
specialization
• Affects land values due to increased
accessibility
Macro Perspective
37
• Interfaces with production in determining the
length of the production run
• Interfaces with marketing in selling the
product
– price - size, quantity
– product - dimensions, packaging
– promotion - inventory, channels
– customer service
• Relationship with all areas of a company

Micro Perspective
38
• Transportation - physical movement or
flow of goods
• Storage - inventory management and
warehousing
• Packaging - affected by product and
transportation
• Materials handling - movement in, from,
and within a warehouse

Logistics Activities
39
• Order fulfillment - completing customer
orders, affects lead time
• Forecasting - predicting inventory
necessary to fulfill customer demand
• Production planning - product necessary to
cover market
• Purchasing - procurement of supplies,
affects transportation

Logistics Activities
40
• Materials Management versus Physical
Distribution
– Balanced System
– Heavy Inbound
– Heavy Outbound
– Reverse Systems
• Cost centers
– Trade offs

Approaches to Analyzing Logistics Systems

41
• Nodes versus links
– nodes - points where goods stop for
processing
– links - transportation connecting nodes
• Logistics Channels - network of
intermediaries that contribute to efficient
flow of goods

Approaches to Analyzing Logistics Systems

42
• System - is a set of interacting elements,
variables, parts or objects that are
functionally related to one another and
that form a coherent group.
• Optimization –always the best alternative
(water transportation example)

Logistics and Systems Analysis

43
• Levels of optimality
– Delivery timeframes
• Functional relationships
– Interdepartmental cooperation
• Constraints

Logistics and Systems Analysis

44
• Short-Run/Static Analysis
– Look at short run situation and select the
system with the lowest overall cost.
• Long-Run/Dynamic Analysis
– Mathematically calculate the point of equality
between the two systems

Logistics and Systems Analysis

45
 • Competition via customer service
– Order Cycle
• shorter order cycle, less inventory required
– Substitution
• more substitutable product, higher customer service level
required
– Inventory Effect
• increase inventory, reduce cost of lost sales
– Transportation Effect
• increase transportation costs, reduce cost of lost sales

Factors Affecting the Cost and Importance of Logistics

46
 • Product factors
• Dollar Value - product value increases, cost of
warehousing, transportation and inventory
increases
• Density- higher the density, more efficient use of
warehouse and transportation space
• Damage -greater the risk of damage, higher the
transportation and warehousing cost
• Special Handling Requirements

Factors Affecting the Cost and Importance of Logistics

47
 • Spatial Relationships
• Distance Factor

Factors Affecting the Cost and Importance of Logistics

48
• Inbound
– Materials management
– Procurement
• Outbound
– Customer service
– Channels of distribution
• Focus on MM, Inventory management and
Procurement

Inbound vs. Outbound

49
• Integration
– Information needs to flow both directions for
effective coordination
• Definition
– “the planning and control of the flow of
materials that are a part of the inbound
logistics system”

Materials Management
50
• Importance
– Links members in the supply chain and assures
the quality of the suppliers
• Definition
– “act of buying goods and services for a firm or
the process of it”
– Activities are interfirm (org boundaries) and
intrafirm (functional boundaries)

Procurement
51
• Identify or reevaluate needs
– Specifications from external customers
• Define and evaluate user requirements
– Measurable criteria
• Decide whether to make or buy
• Identify the type of purchase
– Straight rebuy
– Modified Rebuy
– New buy

Procurement - Activities
52
• Conduct a market analysis
– Oligopoly/ monopoly markets etc.
• Identify all possible suppliers
– Simple as the yellow pages for small companies
• Prescreen all possible sources
– Demands vs. desires of users
• Evaluate the remaining supplier base
• Choose a supplier
– Mechanics of the relationship (T’s and C’s)

Procurement - Activities
53
• Receive delivery of the product or service
• Make a postpurchase performance
evaluation
– “control” activity
– Measure supplier performance against user
requirements

Procurement - Activities
54
• Determine the type of purchase
• Determine the necessary levels of investment
– Time and information of the firm
• Perform the procurement process
• Evaluate the effectiveness of the procurement
process
– Control step to determine:
• User needs met
• Was the investment necessary

Managing the Procurement Process

55
• Vendor Partners
– Competitive advantage of the company
– Customer satisfaction
– Reduced total number of suppliers
– TQM and JIT systems

Vendors
56
• Quality
– Life of product, ease of repairs
• Reliability
– Delivery and performance history and performance life
of the product
• Capability
– Production facilities, capacity and technical capability,
management, organizational capabilities and operating
controls
• Financial
– Must be stable or it affects supply chain

Vendor Selection Criteria

57
• Desirable Qualities
– Image or impression
– Training aids
• Vendor Location
– Fill rush orders, delivery dates
• Factor Importance
– Depends on the material being purchased

Vendor Selection Criteria

58
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RFID-Labor
59
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(Tür öffnet nur für implantierte Tags)

RFID-Cat
60
 mobiler RFID Reader mit integrierter Antenne

Temperaturlogger (semiaktiver Transponder

mit Temperatursensor)

Fertigungsverfahren
61
RFID Report 2008 - neue Prozesse
62
Kosten Nutzen
oTransponder o hohe Lese-und Schreibgeschwin-
oBasisstationen (inkl. Server) digkeit
oInstallation und Verkabelung o kein Sichtkontakt nötig
oSoftware o lageunabhängiger Zugriff
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nehmensinternen und –übergrei- prozessen durch Pulkerkennung
fenden Informationsnetzwerke o Erhöhung der Transparenz
physischer Material-und Güterflüsse
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Fertigungsverfahren
63
Durchführung von RFID Projekten
• Machbarkeitsstudien
• Projektkoordination
• Kosten/ Nutzen Analysen
• Prozessoptimierung mit RFID

Fertigungsverfahren
64
RFID Report 2008
65
Fertigungsverfahren
66
Objekte mit RFID
67
Amordisationszeit
68