Global cases in logistics and supply chain management pdf

This edition features new and expanded discussion of contemporary topics including sustainability, supply chain vulnerability, and reverse logistics, and places greater emphasis on operations management.

Author : C. Donald J. It serves as a forum allowing the contributors--a range of acknowledged logistics-sector specialists--to discuss key logistics issues and share their authoritative views. Until recently, logistics was barely considered in long-term plans, but its strategic role is now recognised and lies at the heart of long-term plans in almost every business.

Reasons for this change include: communications and information technology offer new opportunities; world trade grows; competition forces operations to adopt new practices and become evermore efficient; and the concern for the environment increases.

Add to this the increased emphasis on consumer satisfaction, flexible operations and time compression, and it's clear that getting logistics right is important.

This 7th edition of Global Logistics, edited by Stephen Rinsler and Donald Waters, has been thoroughly revised and updated to reflect the latest trends, best practices, and cutting-edge thinking on global logistics.

It provides guidance on important topics, including agile supply chains, IT, sustainability and performance management, collaboration, outsourcing and humanitarian logistics. This edition of Global Logistics provides new chapters on supply chain trends and strategies, fulfilling customer needs, and supply chain vulnerability. There are also dedicated new chapters on China and Central and Eastern Europe to assess developments across the globe.

This edition serves as a forum for acknowledged sector specialists to discuss key logistics issues and share their authoritative views. The new edition introduces new contributors, including leading thinkers from international universities and businesses.

Global Logistics is an invaluable source of guidance and practical advice for students, managers and practitioners, who will find it an essential text that also includes online resources.

Online resources available include a student manual with key learning outcomes for each chapter. Author : Mason Harris Publisher: N. The activities in a supply chain involve the transformation of raw materials, natural resources and components into the finished product.

In special supply chains, the used products can re-enter the supply chain when the residual value is recyclable. There can be different types of supply chain models that address the upstream and downstream aspects of supply chain management. It includes the parameters of production flexibility, delivery and order fulfillment performance, inventory and asset turns, etc.

Supply chain logistics are two closely related aspects of any business. Logistics management is generally regarded as a sub-discipline of supply chain management. This book provides comprehensive insights into the field of logistics. Most of the topics introduced herein cover new techniques and the applications of supply chain management.

This book, with its detailed analyses and data, will prove immensely beneficial to professionals and students involved in this area at various levels. Author : Alan E. Overall this has introduced a new breed of management in a computer literate environment operating in a global infrastructure. Speed met the goal of reducing the time to transport goods from one port to the next, especially as distances became greater — say from London to Shanghai, or New York to Yokohama. Lower cost meant that actual sailing time lowered fuel consumption hence the shift from wind to steam, or coal to oil.

Further, a fully loaded ship traveling both ways, like jumbo jets today, reduces the overall capital costs of a plane or ship through high asset utilization. These trends issues are centre stage in the world of global transport, but with three differences. Bigger ships and planes are only part of the story.

Bigger transport vehicles now need an enormously sophisticated infrastructure, not only deep-water, ice-free ports, which might be an asset bestowed by nature, like Halifax or Singapore, or a contrived port through dredging, like New York. They also require complex and expensive machinery, such as heavy duty gantry cranes, automated container handling equipment, larger container storage yards in acreage and easy road access , and advanced software and information technologies for border security, customs clearance and container tracking.

Bigger ocean ships and aircraft also need complicated inter-modal linkages via roads, rail, local marine systems, and smaller vehicles to strengthen the hub-and-spoke system.

A hub-and-spoke system is an organizational innovation combining big and small vehicles, either at seaports or airports, to allow large carriers, with appropriate infrastructure, to be fed from small carriers, built around a judicious mixture of importers and exporters, shippers, finance and insurance and freight forwarders. Their collective task is to assure that goods move in a relatively straight line, around the world, on time, on cost, with minimum scheduling problems, delays, congestion, or outright financial losses.

The third issue bringing these elements together is the enormous advance on the management side, where global logistics replaces traditional scheduling tools to integrate what happens on one side of the world to what happens in the local neighborhood. None of this is new, of course.

The post office has been in this business for some years see Geddes, The difference today is how time is the ultimate competitive tool to reduce distance, scale, and cost per unit, calculated by managing lead times across all aspects of the supply chain. The central focus for international supply chains — for both public policy and for private sector firms — is the structure of the global shipping industry. The trends are unmistakable: scale and global reach. Scale now pervades all considerations: bigger ships, bigger ship owners, bigger and more complicated terminals, bigger port regions encompassing all aspects of inter-modal transport, and bigger and more extensive strategic alliances across each piece of the shipping value chain, and the corporate supply chain.

Shipping companies have always sought scale — witness bigger cruise ships, aircraft carriers, oil tankers, and container ships. As shown in Table 4, Trans- Pacific trade illustrates the dramatic changes in the world economy, represented by the growing integration of the Asian economies and their global trade expansion. Continued domestic investments in China, plus massive direct foreign investment, into state-of-the- art factories integrate Chinese supply chains with those of Asian companies, e.

Further, the data clearly illustrate the growing trend of shipping imbalances, partly reflecting seasonal imbalances but also the challenges posed by trade shipments. Consider the case of higher value goods like pharmaceuticals and machinery, shipped from North America to Asia by air, and dry goods from China and Asia shipped to North America in ocean containers.

These container flows increasingly come in larger ships, those above 4, and 5, TEU capacity, replacing smaller ships of 3, TEU or less. The move to new, large ships is dramatic. As of July 1, , the world fleet of container vessels includes 3, ships, with a total capacity 8.

The global order book of 1, ships involves 4. By end of , there will be 1, vessels each with a capacity of at least 6, TEU. These changes add to corporate supply chain complexity, because of the volatility in monthly shipments and annual forecasts for firms.

There are other challenges, such as ship owners, terminal operators, and strategic ports. Historically, this industry was highly cyclical, in part because of factors within the industry e. But external factors also influence the ship investment cycles, influenced by the price of energy, the transport of goods from emerging markets, and external financial shocks e. Asian financial crisis, Russian ruble crisis, Mexico peso crisis and in , the American financial crisis.

The merger of A. Further, despite the dominance of Maersk of Denmark as a significant leader in the industry, with ships with one million TEU capacity up from , TEU in , the top 10 container shipping firms account for Maersk, which operates the massive Emma Maersk, metres in length and requiring 50 feet of clearance to go under bridges, has new similar-sized P-ships ships on order, and operates its own terminals.

These developments allow the ship owners to manage volatility in global demand and provide line balancing between full ships and half empty ships on east-west Pacific voyages. Further, as bigger ships of 6, or more TEUs dominate the Asia-Europe and North-America routes, ships of smaller size, 3,, TEUs, operate on north-south routes into the spokes of hub-and-spoke port systems.

These changes now require the shipping companies to develop new forms of strategic alliances and cooperative agreements that reduce economic risk, such as agreements with in-shore transportation modes trucking firms and rail , logistics firms, freight forwarders, as well as with major customers like auto firms and national retailers.

But that strategy has its own drawbacks, even if portside bottlenecks were reduced. In fact, because there are so many ports and so many port calls in some 80 countries, terminal companies have become a new player in the shipping value chain, and they are increasingly helped by private equity capital.

Dubai Ports World alone has 29 container terminals and logistic operations in ports in 19 countries. Today, global capital, including the Sovereign Wealth Funds, are investing in port terminals, a reflection of a consolidation of the shipping industry and a projected assessment of global infrastructure requirements from the increase in container growth around the world. Canada and the United States stand in contrast to foreign ownership of terminals. In , the US Congress was strongly against investments from Dubai Ports in terminal facilities at leading American ports.

By contrast, in Canada, Macquarie Infrastructure Partners acquired Halterm Income Fund, listed on the Toronto Stock Exchange, and entered into a sale and purchase agreement to provide additional capital resources and global expertise to the Halifax terminal facility. The Macquarie group has made investments in container terminal operations on the West Coast of the U. In addition, the Macquarie group has a dedicated ports advisory team which can be called upon to assist in port development issues globally.

Halterm operates a container terminal and cargo handling facility located on a acre site in Halifax, which includes deep water berths and six ship-to-shore gantry cranes. The terminals were purchased from Orient Overseas International Ltd.

Container terminals are central to the fast turnaround times needed to take containers off ships to the inter-modal transport connections, both for on-dock or near-dock rail connections, or for road services e. Terminal operators are the middle ground between ocean transport and land transportation, and must adjust to the necessary workforce, equipment needs, and even repair services of containers, especially of refrigerated containers that may need cleaning or temperature maintenance.

As shown by Exhibit 7, outlining the staggering growth of US trade with China, the shipping industry at large forces countries and region to increase port capacity, and the quality of terminal operations to load and unload larger ships. Across the world, from emerging countries like Viet Nam, South Africa, or Turkey, the shipping companies are cultivating new strategic alliances, both to increase their scale of international operations and to obtain or maintain high returns on capital.

But the terminal operators, now backed with mobile international capital, can combine their international networks and information to negotiate deals with the inter-modal companies that transport goods inland to factories and retailers. Moreover, strong terminal operators also strengthen the Port Authorities against the shipping companies since they need inland inter-modal transport to reach the customer.

Many importers now demand fast turnarounds from the terminal companies, where North American productivity trails Asian ports. This weak link forces importers to work closely with the shipping firms and the Port Authorities to reduce waiting times in the global supply chain. Port authorities serve as more than the rental agent for an ocean-based real estate property.

They form the apex between the shipping companies from which they draw business around the world, and the terminal operators, from whom they receive rent.

Increasingly, they also serve the inland transport groups, like truckers and railways, and they are often asked to referee disputes. Usually, domestic ports do not compete against each other.

Vast increases in global trade, managing larger ships, and the need for a global outlook have turned Port Authorities into engines of economic growth and development for jobs and money. Increasingly, the management of Port Authorities has changed, because international competition forces them to become aggressive marketers of domestic advantages to global transportation companies and corporate clients.

Port Authorities vary considerably in autonomy and corporate governance, as shown by US — Canada contrasts, as shown in Exhibit 8. In some cases, like Hong Kong, Port Authorities are privately owned. In some countries like Canada, until legislative reforms in the late s, Port Authorities are agencies of the national minister of transport. In , after changes to the Canada Marine Act, there are now 17 separate Port Authorities, which directly and indirectly employ , people.

While many view Canadian ports as competitive with each other, the real competition is between US and Canadian ports, and increasingly, between global shipping lines that want to use fewer ports, continent by continent. From a global perspective, some Port Authorities are increasing their role as global gateways, not because of their size and throughput, but because some ports are severely land locked like most European ports , because of specific location challenges, where the public do not want the noise, congestion, and road bottlenecks like Long Beach.

Further challenges are the severe environmental problems garbage and unwanted goods, energy usage, noise , and pollution air and water quality, dangerous and contaminated goods , issues that are addressed below. Global Supply Chains and IT In the rapidly changing global transportation industry, dramatic trends are revolutionizing the management of global supply chains and its varying components. Information technology pervades all aspects now of complex operating systems, but some sectors have trailed state-of-the-art developments — transportation is one, hospitals are a second.

This position is changing rapidly. At the first level are the components of the transport system, for example the ships, terminals, trucks and the ports. As each component part becomes more complex, so to the inter-modal connections, which are now best seen as complicated networks requiring on-line communications tools that themselves form a network that is stretched across the continents, using satellite transmission, GPS, and sophisticated transmission devices, software, and barcodes.

Companies have to calculate two potentially competing systems: the management of low cost shipping across long distances, which mean a mix of ocean shipping for low cost per unit and inter-modal transport to meet just in time requirements for final deliveries. Increasingly large ships or aircraft for air cargo require new ground-to-air or ocean-to- land communications devices that provide information for the first mile and the last mile of the journey of a container or parcel.

The communications must stretch from the first mile, e. In the past, these communications tools were national or regional in scope, as trade focused on regions with geographic proximity, e. Low-cost manufacturing, growing country and regional concentration on national comparative advantage, technological sophistication, economic geography, and JIT manufacturing — these factors alone and in combination - have all changed the information logistics necessary for global trade.

Too often, domestic firms have pursued low-cost advantages of cheap labour in China or India, where the differences are , but often ignoring the enormous increases in transportation and logistics costs from low cost inland factories. In China and India, for examples, inland factories lack easy access to roads and inland water routes to move goods to deep-water ports. Transportation bottlenecks on roads, highways, railroads, plus complications in electricity supply, have increased the cost of logistics and transportation.

IT connectivity, depicted in Exhibit 8, illustrates how international supply chains form a complex, organizational network. Indeed, a major American trucking company has invested in China to serve as an inland road carrier for Chinese factories but also as a freight-forwarder for Chinese exporters.

Not only are supply chains impaired because of transportation bottlenecks, but tracking of goods through the supply chain through physical counting was equally flawed, because supply chains were not fully integrated around a global forecasting schedule.

When the US government imposed new pre-clearance conditions in the post environment for customs and security, as the US Treasury transferred its customs department to the new Department of Homeland Security, both importers and exporters had to re-examine their IT infrastructure. Both groups, the transportation companies, as well as the individual importing and exporting countries, now invest heavily in IT infrastructure — software, hardware, and new radio frequency systems, mobile phones and Blackberries.

On a global basis, this IT challenge is especially complex because there is no common standard architecture or IT platform. Increasingly, from China to the US, the system preference is wireless communications across all components of the transport value chain and across all elements of the supply chain, away from the tyranny of cables and copper-wire based systems common in advanced countries like Canada and the US, allowing newer entrants countries and companies to join new, standardized wireless networks.

An example of the profound changes taking place in global transport is the case of the CN North American rail network of 30, kilometers of track linking three coasts. In the past, over 1, workers at CN managed repairs and inspections, but were isolated from overall scheduling and tracking of its 4.

Performance across the system was measured in days. Global connectivity, as depicted in Exhibit 9, now is the state-of-the-art tool applied with best practice users, including in emerging markets like China and India. IT now revolutionizes what was a discrete, segmented and often incompatible data system.

New IT systems allow an online, integrated end-user functional model. New software systems illustrate the pent-up demand for IT investments to solve transportation bottlenecks, not only to contain costs like stock outs, fuel consumption, and shrinking order delivery times, but to deal with border security, enterprise resource planning ERP for inter-modal transport. Not surprisingly, there is a close correlation between the advanced OECD countries which engage in international trade Singapore ranks No.

These indicators, grouped as the Logistics Performance Index LPI , provide country performance benchmarks, on supply chain issues: logistics costs, customs procedures, infrastructure quality, tracking performance, timeliness including bottlenecks , and overall competence see www. For developing countries, in particular, the public policy challenge is to overcome the vicious cycle of government over- regulation, poor service quality, and under-investment in technology, infrastructure, and people.

These strategic issues impact worries about global warming, and specific problems of safety and security for certain types of cargo, such as human consumables like food. In certain ways, the airline and shipping industry have become the meat in the sandwich, caught between the growing demands of environmental lobbies, country by country, and the giant multinational manufacturers and retailers, which are addressing corporate sustainability issues for their customers.

Clearly, the unregulated nature of ocean shipping raises serious problems about environmental concerns. Exhibit 11 illustrates the potential issues, and these can be extended to dockside issues as well. In the past, sustainability issues have not been a strategic concern for both the airline and shipping industries.

Airlines, of course, are more visible to consumers who are voters and to politicians who must approve bigger airports, regulate noise pollution, and deal with traffic congestion. Shipping and ports are less visible to the public, but now face increased political pressures because of the visible effects on health — respiratory illnesses, cardiopulmonary disorders, and rising lung cancers, including among young people Kanter, The International Maritime Organization, a UN body, and the European Commission in Brussels have targeted new standards for emissions, especially for carbon dioxide, nitrogen oxide, and sulfur content of marine fuels.

Across the sea lanes of the world, cruise lines have disposed their garbage, raw sewage, and oily bilge water without regard to potential impacts on beaches, protected reefs, or marine life. Increasingly, through self-regulation and governmental environment action, new laws have forced cruise lines to prevent dumping of waste water three miles from shore fronts and 12 miles for untreated waste water. Shipbuilding technology, like that for autos and aerospace, now include pollution prevention equipment, including both energy-savings and noise-reduction technologies.

However, the public policy and corporate challenge is to deal with the presence of older fleets and inferior infrastructure. Marine highways consist of rivers, lakes, shore lines, and canals to move cargo using newly designed barges, partly to overcome road congestion, but also because marine transport leaves a low carbon footprint. For example, it has been estimated that a cargo barge equals forty foot containers, needing only 75 barrels of oil.

This volume equals double stacked rail cars, needing four times that amount of oil, or trucks requiring barrels of oil Department of Transport, In most countries, despite the environmental and cost advantages, marine highways must overcome the lethargy of vested interests, the need for shipbuilding changes in barge technology, and obstacles to local and regional planning agencies. However, the huge increase in the price of energy, and growing awareness of pollution impacts from conventional transportation modes, is forcing a fresh look at logistics issues, and the need for a better balance between past practice and new modes of transport, cleaner technologies, and environmental stakeholders.

Industry bodies, including the oil companies, are slowly pushing for new caps on marine fuel emissions and sulfur standards, and various shipping companies are advancing new techniques to cut fuel consumption, installing noise reduction equipment and insulation, testing sails on the high seas, and operating electricity connections for shore-based docking. At the other extreme, multinationals in the manufacturing and retail sectors are calculating the carbon footprint of products, from sourcing to customer purchases.

Products which are direct consumables for humans, from canned food to fresh produce, are now under direct scrutiny, just as products like electronics and toys.

Claude Comtois, a leading geographer and transportation expert, notes that environmentally sustainable transport now impacts companies and countries on such concrete issues as financial investments e. The impact is that sustainability is now global in scope, environmental regulations are real in number and strength, and corporate strategy requires real expertise and talent in environmental management Comtois, Exhibit 12 provides a framework of issues for green logistics management.

Conclusions: The Death of Distance Global logistics is changing the patterns of sourcing, transportation modes, supply chain management and indeed corporate strategy itself, as firms attempt to reposition their market domain in a world of global competition.

Around the world, production and location decisions may change, as firms wish to source production of parts and components closer to manufacturing and service functions. This impact is especially complicated for North American firms, because the continent has been the main source of inter-regional competition.

The rise of Asia, from Japan in the s to China and India today, forces a fresh look at global logistics, as the transportation tools themselves reposition global supply chains, requiring unprecedented integration across all elements of the value chain. Energy costs and currency fluctuations add an element of risk management, thus requiring closer integration of tasks from the Board to operating managers. Truly, the firm is only as strong as the weakest link. As more goods flow across borders, the composition of trade changes: bigger economies export more than small economies, the weight of goods to the value of goods changes i.

Global trade, regardless of country, is now accompanied by three related developments: technology, global logistics and finance. The three elements reinforce each other, because they constantly reduce cost per unit of output, and shorten the time to manage coordination. Export firms differ from domestic companies because the export market, even when many common features exist laws, language, distribution channels carries a higher risk premium: risk is a function of the differences in markets, not the similarities.

And companies must pay for this risk up front, although the risks may be mitigated later by higher payoffs profits once the lessons of the new market are learned.

Bigger ships and planes are only part of the strategic shift. Bigger transport vehicles now need an enormously sophisticated infrastructure, not only deep-water ports, which might be an asset bestowed by nature, like Halifax on the North American east coast, or a contrived port through dredging, like New York.

They also require complex and sophisticated machinery like heavy duty gantry cranes, automated container handling equipment, container storage yards, and sophisticated software and information technologies for security, customs clearance and container tracking. Bigger ocean ships and aircraft also need complicated inter-modal linkages via roads, rail, and smaller vehicles to strengthen the hub-and-spoke system. A hub-and-spoke system is another name for network systems.

Their collective task is to assure that goods move in a relatively straight line, around the world, on time, on cost, with minimum scheduling problems, delays or outright losses World Bank, Exhibit 13 Supply Chain Considerations: Cost Drivers and Service Cost Driver Strategic Issue Performance Result Inventory Adds to costs with low turnover High Product Variety Aids customer but adds to cost Tradeoff with client Availability Seasonal variation Necessary for retailers Transportation Function of distance, cost per pound Shipper wants choices Warehousing More difficult for perishables, stock out Time sensitive Information Increasing toward per unit RFID High IT infrastructure Response Time Higher costs with variety and distance Increasing Product Handling Costs increase with each delivery mode Prefer fewer modes What brings these elements together are new alliances and partnerships, and where senior management regularly visits and discusses the global changes to corporate supply chains.

No longer is the question of global logistics an operation planning tool for domestic advantage. What happens on one side of the world now affects what occurs in the local neighborhood.

To some, the world may be flat, a digital view promoted by Friedman But in global logistics, it is a very bumpy, complicated ride. The failure of so many domestic manufacturers and retailers too often illustrates that the back office tool of global logistics is downplayed by senior management and board room attention.

In this sense, best practice companies see the global world not as a challenge, but an immense opportunity. For the first time ever, companies have learned to link the immense talents of rich and poor countries in unprecedented ways. The new global linkages combining physical resources; data flows and digital communications and financial flows combine to integrate international economies, some more than others.

Response time should be a measure of customer need, not internal lead times. Air gateways not identified by airport name e. Hub And Spoke — a geographical term, copied from a bicycle wheel, where a central transportation hub airport or ocean port allows very big planes or ships to feed into in- coming cargo supply chains, as well as out-going supply chains, where size and density help to lower costs.

Just-In-Time JIT — a highly formal logistics process pioneered and perfected by Toyota Corporation, where parts and components from suppliers are delivered to a factory just as they are needed, thus reducing inventories and waste. More generally, JIT refers to logistical processes where time issues are central to the delivery of goods. Global Logistics — The procurement and physical movement of parts and components through the corporate supply chain, from suppliers to customers around the world.

Open Skies Air Agreement — bilateral air agreements between countries, e. Six Sigma — an analytic tool used to measure the defect rate out of a million units produced, and design a methodology to improve product quality. TEU — Twenty-Foot Equivalent Unit — a transportation term referring to container size, used to denote foot equivalent units, where a foot container typically employed in North America is two TEUs.

Atkinson, Richard D. Geddes, R. Giglo, Joseph M. Ircha, Michael C. Simon, Organizations New York, Wiley, McMillan, Charles J. Pietrobelli, Carlo and Roberta Rabellotti Eds. Roberta, Paul O. Stalk, George Jr. Takeuchi, Hirotaka, et al. Thompson, J. Vancouver: Westac, Wyld, David C. Ye, F.