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the warehouse. It is typically proportional to warehouse size (capacity) but in a nonlinear way.
3. 25_________. These represent inventory holding costs, which are proportional to average positive inventory levels.
Thus, estimating the warehouse handling costs is fairly easy, whereas estimating the other two 26) ________is quite difficult. To see this difference, suppose that during the entire year 1000 units of product are required by a particular customer. These 1000 units are not required to flow through the warehouse at the same time, so the average inventory level likely will be 27) _________lower than 1000 units. Thus, when constructing the data for the DSS (28) ________), we need to convert these annual flows into actual inventory amounts over time. Similarly, 29) ________ and average inventory associated with this product tell us nothing about how much space is needed for the product in the warehouse. This is true because the amount of space that the warehouse needs is proportional 30)_______ , not annual flow or average inventory.
6.Continue reading the text about distribution systems and fill in the gaps with missing prepositions.
with in(3) up for(2) at(4) from to by within |
of |
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Cross-docking is a strategy that Wal-Mart made famous. In this system, warehouses function as inventory coordination points rather than as inventory storage points. ___ typical cross-docking systems, goods arrive ___warehouses ____the manufacturer, are transferred ___vehicles serving the retailers, and are delivered to the retailers as rapidly as possible. Goods spend very little time___ storage ____ the warehouse—often less than 12 hours. This system limits inventory costs and decreases lead times____ decreasing storage time.
Of course, cross-docking systems require a significant start-up investment and
are very difficult to manage: |
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centers, |
retailers, |
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information |
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cross-docking system to work. |
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necessitating |
the |
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information.
4. Cross-docking strategies are effective only ____ large distribution systems in which a large number of vehicles are delivering and picking
____ goods ____ the cross-dock facilities ____ any one time. In such systems, there is enough volume every day to allow shipments of fully loaded trucks from the suppliers to the warehouses. Since these systems typically include many retailers, demand is sufficient such that items that arrive at the cross-docking facilities can be delivered immediately to the retail outlets ____ full truckload quantities.
7.Translate the following from Russian into English.
1.Под интермодальной перевозкой понимается система доставки грузов несколькими видами транспорта по единому перевозочному документу с их перегрузкой в пунктах перевалки с одного вида транспорта на другой без участия грузовладельца.
2.Комбинированная перевозка – смешанная перевозка, выполняемая без перегрузки груза. В этом случае груз перевозится на всём пути следования в одном и том же контейнере, съемном кузове.
3.Мультимодальная (трансмодальная) перевозка – это перевозка, при которой лицо, организующее её, несёт ответственность на всём пути следования, независимо от количества принимающих участие видов транспорта при оформлении единого перевозочного документа.
4.Кросс-докинг – это логистическая операция внутри цепочки поставок, при которой отгрузка товара на склад и его последующая доставка получателю согласованы по времени таким образом, чтобы исключить хранение товара на складе. В результате партия продукции доставляется от поставщика (производителя) продавцу за максимально короткий срок. В обычном понимании – это услуга по «перетарке», перегрузке товара из большетонных машин в менее тоннажные с минимальным хранением на складе или вообще без него, причём услуги экспедирования и доставки обычно тоже включены. Операция «кросс-докинг» в зависимости от требований и пожеланий заказчика может включать комплектование, переупаковку и маркировку груза. Кроме того, компании, предлагающие «кросс-докинг», предоставляют услуги «индивидуального хранения», «складского хранения» и любых других предложений, по логистике, сервису и складу.
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8. Read the case and answer the questions.
In 1979, Kmart was one of the leading companies in the retail industry, with 1891 stores and average revenues per store of $7.25 million. At that time, Wal-Mart was a small niche retailer in the South with only 229 stores and average revenues about half those of Kmart stores. In 10 years, Wal-Mart had transformed itself; in 1992 it had the highest sales per square foot and the highest inventory turnover and operating profit of any discount retailer. Today Wal-Mart is the largest and highest-profit retailer in the world. In fact, sales for year ending Jan. 2003 were $244.5 billion, and it is also the largest employer in the US. How did Wal-Mart do it? The starting point was a relentless focus on satisfying customer needs; Wal-Mart's goal was simply to provide customers with access to goods when and where they want them and to develop cost structures that enable competitive pricing. The key to achieving this goal was to make the way the company replenishes inventory the centerpiece of its strategy. This was done by using a logistics technique known as cross-docking. In this strategy, goods are continuously delivered to Wal-Mart's warehouses, from where they are dispatched to stores without ever sitting in inventory. This strategy reduced Wal-Mart's cost of sales significantly and made it possible to offer everyday low prices to their customers.
1.How did Wall Mart transform itself?
2.If the cross-docking strategy works so well for Wal-Mart, shouldn't all companies use the same strategy?
II.Watch the video “Supply chain: 3 key things” and do exercises. Words to remember:
agile – быстрый, подвижный, динамичный
big-ticket item – товар с очень высокой стартовой ценой buzz word – модное словцо; у всех на слуху
CPFR (Collaborative Planning, Forecasting and Replenishment) –
совместное планирование, прогнозирование и пополнение запасов
CRM (Customer Relationship Management) – управление взаимодействием с клиентами
emergency delivery – срочная доставка
equation – уравненовешенность, сбалансированность
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exponentially – в геометрической прогрессии glitch – сбой в работе
inbound cost – затраты входящих грузопотоков
KPI (Key Performance Indicators) – ключевые показатели деятельности lean – работающий с минимальными затратами
stock keeping unit – единица учёта запасов; единица складского хранения stock out – «нет в наличии»
utilization – эффективное использование
1.While watching the video, answer the following questions.
1.What are the 3 things a CEO needs to know about logistics management?
2.What do you need to understand about your customer service needs?
3.What could you be losing money on?
4.What cost do many companies focus on?
5.What other questions may give you a few ideas on where to look to improve your supply chain?
2.Watch the video again and fill in the gaps with the missing words given above.
with a negative margin |
to provide the right product free delivery |
to |
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keep an eye on glitches |
service requirements |
customer behaviors |
buzz |
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stock outs |
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key performance indicators |
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revenue side |
geographic location |
inbound costs to gain a competitive |
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cost side of the equation |
emergency deliveries stock keeping |
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units |
end-to-end |
average cost per order |
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For those who don’t know much about supply chain or logistics management, I would like to highlight 3 key areas 1) __________ . I often call these my 3 things a
CEO needs to know about supply chain. But first, let’s understand why a company supply chain is so important. A recent study focused on identifying the impact of supply chain 2) _______ on over 800 companies over a 9-year period. These were things like shipping delays, production delays, 3) ________ and the like. The average fall in share hold values was 8% or $190 mln.
How could that happen you might well ask? Well, sadly within many businesses the 4) __________ being used often don’t tell the whole story. So, let’s move on to the 3 things. These are:
1. Is our supply chain efficient?
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2.What does our supply chain really cost our business?
3.Where can we improve our supply chain 5)_________ and improve the bottom line?
Simple questions I know but many businesses don’t know the answer, so be prepared to ask them or may be it’s you who need to have the answers ready.
So question 1: Is you supply chain efficient? Many people think they might need more 6) _________ such as lean, agile, CRM, CPFR, collaboration, more IT systems, and sure these may be needed but a lot can be achieved by getting the right people focused on the right processes. Quite simply your supply chain needs
7)_________ at the right service at the right cost. Quality is a given. You really need to understand your customer service needs are not all the same. Most companies over service some customers and underservice others, so your customer
8)________ need to be identified and measured. We also need to make sure that the customer service offer is realistic, because as we all know in most businesses once the customer service performance reaches 90% or 95%, service cost increases
9)________. So, getting customer service right is really about understanding your different customer needs, the needs of your products and services 10) _________
how they’re delivered and the underlined cost drivers.
If you hear some of these types of comments in your business, get worried. These are real examples. All customers get 2 deliveries per day. Why? I’m sure they don’t all need it or want it. We deliver to the North on Monday, the West on
Tuesday, the South on Wednesday, the East on Thursday and on Friday we do 11)
_________. Just don’t have an emergency on Monday, that’s all I’d say. Only accounts that spend over $1000 per annum get free delivery. But if anyone complains about poor service, we give them 12) ________.
Ok, question 2. What does our supply chain cost? You probably know highlevel numbers but you could be losing money on certain mixes of customer product and 13) ________. Or certain processes may have much higher than expected cost. Costs can be measured in terms of supply chain cost as a percentage of sales or cost per order, per pallet or carton. And costs need to be visible as total supply chain costs, 14) _________ and storage costs.
As an example, I have a customer, who is a distributor. They have 10000 15)
________ and lots of small orders. They found 30% of their orders leave the warehouse 16) _________. That’s just taking sales minus costs and warehouse