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handling costs. So, some simple questions to ask within your business might be: what’s our cost per pallet, per item, per case or whatever unit you use in terms of total supply chain cost. What’s our storage cost and our delivery cost. What’s our
17) ________ and does this vary much by product group or customer group? What are our stock turns?
Lastly, question 3. Where can we improve on supply chain? Let’s look at the 18)
_________ first. Can we improve our delivery in full on time? If our products are not on the shelf, we’ll generally lose a sale. Can we get our products to market faster, perhaps to extend their shelf life? Can we improve our service offer? In terms of the 19) ________, procurement and inventory management are big-ticket items. Many companies don’t buy over the total cost of view, particularly now with so much oversea sourcing. They just focus on cheaper unit cost not the 20)
________ total supply chain cost. And of course, warehousing and transport costs are an area to focus on.
So, to finish off, I suggest that 3 key things you need to know about your supply chain are:
1.Is our supply chain efficient?
2.What does our supply chain really cost our business?
3.Where can we improve our supply chain to gain competitive advantage and improve the bottom line?
As a start point, try asking some of these questions around your business. How do our products influence how we buy, manage and deliver them? How do our customers differ in their service needs? What do our customers really value that our supply chain can influence? And lastly, what 21) __________ can we influence to improve our supply chain costs and asset utilization. So, I hope that gives you a few ideas on where to look to improve your supply chain.
3. Summarize the information represented in the video.
Unit 2. Logistics process.
Words to remember:
Act of acceptance, Certificate of delivery (marine) – Акт приёмки грузов to adopt the requirements – принять требования
advances (technological) (pl) – технические достижения to align – согласовывать
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to ally – поддерживать, соединять assistance – помощь
to base around – базироваться вокруг to benchmark – сравнивать
cargo segregation – сортировка грузов to collate – сопоставлять
competitive edge – конкурентное преимущество
to cover contingencies – покрывать непредвиденные расходы crucial – крайне важный
deconsolidation of transportation units – расформирование грузовых транспортных единиц
demarcation – установление границ disruption – сбой, срыв
(via) depot – (через) склад
feasible – выполнимый, возможный flowchart – блок-схема
flow of cargo – грузопоток
freight handling – переработка грузов guise – облик
imperative – жизненно важный, обязательный inextricably – неразрывно
information processing – обработка информации to invoice – выставлять счёт
list of shipment – комплектация транспортных партий
“make-to-order” manufacturing process – производственный процесс
"производство на заказ" to map out – планировать to measure – измеряться
to meet customer’s needs – соответствовать потребностям клиента to monitor – контролировать
objective – цель obsolescence – устаревание outcome – результат
to overcome the problems – решить (преодолеть) проблемы
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partial delivery – частичная поставка peripheral – (n) переферийное оборудование
(adj) переферийный to pick the order – выбрать заказ
to pinpoint the relationships – точно определять отношения pre-allocated – предварительно распределенный
to ratchet up – углублять to scrap – списать в брак
seamless operation – сквозная работа to span functions – охватить функции
stock keeping units – единицы учёта запасов subsequent disposal – последующее размещение sufficient – достаточный
superfluous – лишний
to take account of smth – принимать что-либо во внимание trade-off – компромисс
to transcribe – расшифровать transshipment – перегрузка, перевалка
I. Read the texts and do exercises. Text 1. Logistics process.
One of the key elements of planning for logistics is concerned with the design of appropriate logistics processes. These processes are the methods used to ensure that the business operates effectively so that all the major objectives are achieved. The aim is for a streamlined operation that works across the various functional boundaries existing within any company. Thus, processes need to be supply-chain-oriented. One of the main problems with logistics processes is that they are very often tied in with a number of different functional elements of the business and so it is difficult for them to operate efficiently. The results of this are usually seen to be either additional costs within the logistics system or lower levels of customer service. In many operations, both of these effects occur.
The reason that the concept of logistics processes has been highlighted in recent years is a development of the move away from the functional view of logistics. Although functional excellence is important, the idea of trade-offs within logistics is now an accepted aspect of sound logistics planning. Some parts of an
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operation may sacrifice their efficiency to the greater good of the operation as a whole. Following on from this, there is the perspective of the supply chain where logistics is viewed not just across internal company functions but also across the broader expanse of different companies. The chief beneficiary of this has been the final customer. The aim of any supply chain is to ensure that cross-company and cross-supply-chain activities are directed at achieving customer satisfaction for the end user.
Unhappily this is not the case within many companies. Processes have generally been derived to enable each separate function within an organization to undertake its particular role, but they are not streamlined to act across all company functions as a united whole. Thus, an effective process should be designed as a seamless operation rather than as a series of different elements. The order fulfillment process provides a good example of a typical logistics process. The aim of order fulfillment should be to ensure that a customer's order is received, checked, selected and delivered according to the customer's requirements, with no disruption and with complete accuracy. The process within many companies does not always work like this!
Typical functional errors might be:
•incorrect transcription of the original order requirements;
•incorrect notification of availability;
•incorrect selection or picking of the order;
•damage to the goods;
•late delivery;
•delivery to an incorrect address;
•invoicing to the incorrect address.
It is usually quite easy to identify problems that occur within individual functions and then put into place control measures to overcome these problems. It can be much more difficult to identify problems that occur between functions. Firstly, there is usually an unclear line of demarcation between functions, which makes it no easy matter to determine that there is a problem, let alone what the problem is.
Secondly, it is very difficult to determine what the cause of the problem is – not least because of the associated 'blame' culture that often exists between functions, so that one will traditionally blame the other regardless of the true issues.
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To avoid problems such as these, some companies now seek to redesign their key logistics processes. There are three essential elements. Properly designed processes should aim specifically to satisfy customer demands and expectations. They should also be cross functional or indeed where possible they should be supply-chain-oriented. For most companies, the aim of achieving cross-functional processes is a big and sufficient challenge. Finally, they should be time-based in that they need to reflect the importance of time as a key element in the logistics offering.
What then are the key logistics processes? These will, as expected, vary between different companies, different sectors and different industries. Typical examples are:
•Order fulfillment is concerned with the ability to turn a customer's specified requirements into an actual delivered order. Thus, it embraces many of the traditional functions usually recognized as being a part of the logistics operation. It involves the information elements of receiving and documenting an order through to the physical means of selecting and delivering the goods. For some 'make-to-order' manufacturing operations, this will also have an impact on the production process itself. Some companies maintain the divide between the ordertaking component (which is information-based) and the order-delivery component (which is both information-based and physical).
•New product introduction is an area where many companies find they have problems. There are many logistics issues related to the introduction of new products into the marketplace. Very often existing, standard logistics structures and processes are insufficient to enable a satisfactory launch of a new product. One of the main problems is the inability to respond sufficiently quickly. Standard processes are designed to deal with known products. The consequence of introducing new products using existing processes is usually one of two possibilities. The first is that the product takes off very quickly and very well and there is insufficient ability in the supply chain to ratchet up supply to the required levels. The alternative is that demand is lower than initially expected and so there is an oversupply of stock, which eventually leads to products being sold off at discount rates or to obsolescence.
•New product development reflects the idea to design the product so that it can reach the market as quickly as possible from the initial design plan through to