logistics
the art and science of obtaining, producing and distributive material and product in the proper place and in the proper quantities
international logistics
managing the art and science of obtaining, producing and distributive material and product in the proper place and in the proper quantity when the movement is on a global scale
third party logistics
an outside company used to among all or part of another compass logistics functions
truck, ship, plane, train, pipeline
transport modes
plane, truck, train, ship
most to least expensive transport modes
cross docking
large shipments are broken down into small shipments for local delivery in an area (minimizes inventory in the warehouse)
hub and spoke systems
the sole purpose of the warehouse (hub) is sorting goods to consolidation areas, where each area is designed for shipment to a specific location (hobby airport spoke ex. )
cross docking and hub & spoke system
warehouse activities
facility location issues
proximity to customers
business climate
total costs
infrastructure
quality of labor
suppliers
other facilities
free trade zones
political risk
government barriers
trade blocs
environmental regulation
host community
competitive advantage
proximity to customers
makes rapid delivery easier (demand)
business climate
can include presence of similar sized businesses, businesses in the same industry and other foreign companies (tariffs, taxes, presence of foreign companies)
total costs
proximity to customers + business climate; objective is to minimize overall cost-serving customer and getting goods in
infrastructure
adequate road, rail, air and sea transportation along with energy and telecommunication
quality of labor
educational and skill levels must match needs; stat feeds high demand people in town and dallas
suppliers
proximity of important _____ supports lean production; firms pay attention to these people-eing very close is important aka being near a manufacturing plant
other facilities
location of other facilities can influence a location decision
free trade zones
a closed facility into which foreign goods can be brought without being subject to the normal customer requirements
political risk
risks in both the country of location and host country influence the decision (becoming a large problem with mexico and now huge in SE asia)
government barriers
barriers in many countries are being removed; huge political risk if there is a risk you will be kicked out; anywhere from domestic to local to country to national
trade blocs
firms locate within a block to take advantage of new markets or lower total costs
environmental regulation
these affect a certainty induct sty in a given location and must be included in the decision (California has a recycling tax)
host community
host communities interest is part of the evaluation process
competitive advantage
the location should provide the company with a competitive advantage
plant location methods
factor rating system, linear programming, centroid method
factor rating system
most widely used; list of factors is developed; range of possible points is assigned to each factor, the sums of assigned points for each site are computed, site with the most points is selected (fuel, power reliability and availability and water supply
linear programming
seeks to minimize costs of shipping n units to m destination or it seeks to maximize profit of shipping n units to m destinations
centroid method
only used in the simplest form, aka single facility used for locating single facilities that considers existing facilities, the distances between them and the values of goods to be shipped between them; assumes inbound and outbound costs are equal; does n
service facility location
talking about dealing face to face with customer; typical much smaller and going up more often; these are far more common than new factories and warehouses; less expensive, multiple sites close to customers' location decision closely tied to the market se
linear regression
develops a model that maxes long term profitability based on competitive variables and demand generator variables; does not just flow through; can have ranges
demographic and physical
factors affecting service location
demographic
employment, income, population
physical
accessibility, traffic etc.
linear regression model
shoes that a specific model can be obtained from the requirements of service orgs and used to identify the most impertinent features in site selection
dependent
profitability
independent
chosen parameter aka demographic, graphic etc.