International Trans Exam #1

Front 1

What are the 4 utilities? What does each mean?

Back 1

1.) Possession
2.) Form
3.) Time
4.) Place
Possession: the value that comes from a customer being able to take possession of a product
Form: a product's being in a form that can be used by the customer and is of value to the customer
Time: getting the product to the customer when they need it
Place: getting the product to the destination where the customer wants it

Front 2

What are the 3 C's?

Back 2

1.) Communication
2.) Cooperation
3.) Collaboration

Front 3

What are the 3 things that brought logistics to the limelight?

Back 3

1.) Economic deregulation
2.) Technology
3.) Changes in consumer behavior

Front 4

Why did economic deregulation bring logistics to the limelight?

Back 4

There were reductions in economic regulation in the US airfreight, railroad, and trucking industries that allowed individual carriers flexibility in pricing and services. It provided companies with the ability to implement the tailored logistics approach, groups of customers with similar logistical needs and wants were provided with services similar to those needs and wants. The increased pricing flexibility allowed large buyers of transportation services to reduce their transportation costs by leveraging large amounts of freight with a limited number of carriers.

Front 5

What is the Staggers Rail Act of 1980?

Back 5

Lessened railroad economic legislation. Also deregulated rail payments to everyone knew what everyone else paid. People were able to negotiate confidential contracts and the ICC was no longer needed.

Front 6

What is the Motor Carriers Act of 1980?

Back 6

Pertained to trucks, permitted railroads and motor carriers to establish value rates (wherein the shipper agrees that a commodity is worth no more than so many dollars per hundred pounds in case a claim is filed, in return for a lower rate.

Front 7

Why did technology bring logistics to the limelight?

Back 7

Some of the most important technological advances have involved computer hardware and software in the sense that management of logistics involves a tremendous amount of data.

The internet has also proved to be powerful because it improves logistical effectiveness and efficiency. On the internet, people can check vendor price quotes and vendor negotiations.

Front 8

Why did changes in consumer behavior bring logistics to the limelight?

Back 8

Customers have different needs and wants so UPS and FedEx offer tons of ways for packages to be shipped and times for deliveries. Demands are also changing in regards to times stores are open which changed when loads can be dropped off. Customers' expectations are higher than ever and they expect a high level of performance and want things NOW.

Front 9

What is the systems approach to problem solving?

What are some implications?

Back 9

A company's objectives can be realized by recognizing the mutual interdependence of the major functional areas of the firm, such as marketing, production, finance, and logistics.

Implications: the goals and objectives of the major functional areas should be compatible with the company's goals and objectives. Everyone needs to sit down and go through processes to see how they affect other departments. Another implication, decisions made by one functional area need to consider the potential implications on other functional areas (marketing has more products, logistics has to keep track of these extra products)

Front 10

What is the total cost approach?

Back 10

It's used after the systems approach to problem solving. Managers use this approach to coordinate inbound logistics, materials management, and physical distribution in a cost-efficient manner. All activities in moving and storing products should be considered as a whole (their total cost), not individually. All relevant cost items are considered simultaneously when making a decision in order to find the lowest total cost that supports an organization's customer service requirements.

EXAMPLE: if a company uses expedited transportation, the company can reduce its inventory carrying costs and the cost of failing to serve certain customers. Though it costs more to expedite products, the total costs of logistics activities decrease without negatively affecting customer service.

Front 11

What are the 4 utilities? What does each mean?

Back 11

1.) Possession
2.) Form
3.) Time
4.) Place
Possession: the value that comes from a customer being able to take possession of a product
Form: a product's being in a form that can be used by the customer and is of value to the customer
Time: getting the product to the customer when they need it
Place: getting the product to the destination where the customer wants it

Front 12

What are the 3 C's?

Back 12

1.) Communication
2.) Cooperation
3.) Collaboration

Front 13

What are the 3 things that brought logistics to the limelight?

Back 13

1.) Economic deregulation
2.) Technology
3.) Changes in consumer behavior

Front 14

Why did economic deregulation bring logistics to the limelight?

Back 14

There were reductions in economic regulation in the US airfreight, railroad, and trucking industries that allowed individual carriers flexibility in pricing and services. It provided companies with the ability to implement the tailored logistics approach, groups of customers with similar logistical needs and wants were provided with services similar to those needs and wants. The increased pricing flexibility allowed large buyers of transportation services to reduce their transportation costs by leveraging large amounts of freight with a limited number of carriers.

Front 15

What is the Staggers Rail Act of 1980?

Back 15

Lessened railroad economic legislation. Also deregulated rail payments to everyone knew what everyone else paid. People were able to negotiate confidential contracts and the ICC was no longer needed.

Front 16

What is the Motor Carriers Act of 1980?

Back 16

Pertained to trucks, permitted railroads and motor carriers to establish value rates (wherein the shipper agrees that a commodity is worth no more than so many dollars per hundred pounds in case a claim is filed, in return for a lower rate.

Front 17

Why did technology bring logistics to the limelight?

Back 17

Some of the most important technological advances have involved computer hardware and software in the sense that management of logistics involves a tremendous amount of data.

The internet has also proved to be powerful because it improves logistical effectiveness and efficiency. On the internet, people can check vendor price quotes and vendor negotiations.

Front 18

Why did changes in consumer behavior bring logistics to the limelight?

Back 18

Customers have different needs and wants so UPS and FedEx offer tons of ways for packages to be shipped and times for deliveries. Demands are also changing in regards to times stores are open which changed when loads can be dropped off. Customers' expectations are higher than ever and they expect a high level of performance and want things NOW.

Front 19

What is the systems approach to problem solving?

What are some implications?

Back 19

A company's objectives can be realized by recognizing the mutual interdependence of the major functional areas of the firm, such as marketing, production, finance, and logistics.

Implications: the goals and objectives of the major functional areas should be compatible with the company's goals and objectives. Everyone needs to sit down and go through processes to see how they affect other departments. Another implication, decisions made by one functional area need to consider the potential implications on other functional areas (marketing has more products, logistics has to keep track of these extra products)

Front 20

What is the total cost approach?

Back 20

It's used after the systems approach to problem solving. Managers use this approach to coordinate inbound logistics, materials management, and physical distribution in a cost-efficient manner. All activities in moving and storing products should be considered as a whole (their total cost), not individually. All relevant cost items are considered simultaneously when making a decision in order to find the lowest total cost that supports an organization's customer service requirements.

EXAMPLE: if a company uses expedited transportation, the company can reduce its inventory carrying costs and the cost of failing to serve certain customers. Though it costs more to expedite products, the total costs of logistics activities decrease without negatively affecting customer service.

Front 21

What are 4 logistic department activities?

Back 21

1.) Customer service: keep existing customers happy, make sure the right person receives the right product, at the right place, at the right time, in the right condition, at the right cost
2.) Demand forecasting: efforts to estimate product demand in a future time period. The popularity of the supply chain concept has prompted increasing collaboration among supply chain partners. Such collaboration can enhance efficiency by reducing overall inventory levels in a supply chain
3.) Order management: the management of activities that take place between the time a customer places an order and the time it is received by the customer
4.) Product scheduling: refers to determining how much to produce and when to produce it. A key interface between production and logistics involves the quantity to be produced, with increasing tension between make-to-stock and make-to-order

Front 22

What is the difference between a generalist and a specialist?

Back 22

Generalist: logistician must understand the relationship between logistics and other corporate functions, both within and outside the firm.
Specialist: the logistician must understand the relationships between various logistics activities and must possess technical knowledge of the various activities.

Front 23

What is the SCOR model?

Back 23

SCOR = supply-chain operations reference
5 key processes: plan, source, make, deliver, return.

Front 24

What is supply chain management?

Back 24

Supply chain management: encompasses the planning and management of all activities involved in procurement, conversion, and all logistics management activities.

Front 25

What is the GSCF model?

Back 25

GSCF = global supply chain forum
8 key processes: customer relationship management, customer service management, demand management, order fulfillment, manufacturing flow management, supplier relationship management, product development and commercialization, and returns management.

Front 26

What is the difference between the SCOR model and the GSCF model?

Back 26

SCOR focuses on transactional activity and GSCF focuses on relationship management. While managers need to aim for transactional efficiency, cost minimization across the supply chain cannot be achieved without managing key relationships. Failure to recognize the importance of a relationship will limit supply chain efficiency. Some managers find that SCOR is a useful tool for identifying areas of improvement to achieve quick pay-back opportunities that satisfy top management's desire for cost reductions and asset efficiency. Identifying quick hits is possible because the SCOR framework involves functions that are more easily integrated. The GSCF framework is more strategic and focuses on increasing long-term shareholder value through cross-functional relationships with key members of the supply chain. Management has begun to recognize the importance of intangibles in the marketing of products and that to succeed, interactivity, connectivity and ongoing relationships are needed.

**The difference between the SCOR and GSCF approaches lies in the fact that SCOR addresses symptoms through tactics. The GSCF framework provides a strategic approach to address supply chain management processes incorporating the knowledge, expertise, and objectives of all functions.

Front 27

What are the 6 key attributes of supply chain management?

Back 27

1.) Customer Power- the customer should be part of the supply chain. The internet made the customer the most powerful link in the supply chain
2.) Long-term orientation- relationships or your involvement with each link of the supply chain, you should take a long term project
3.) Leverage technology - allows you and your customer to know everything about each other
4.) Enhanced communication across organizations - the ability to communicate through technology (not only within your organization but with your customers and suppliers)
5.) Inventory control - so you don't run out or have too much (don't want to deal with unneeded costs, the lower the inventory the better)
6.) Interorganizational collaboration - when you act as one

Front 28

What is the difference between a relational and transactional exchange?

Back 28

A relational exchange is characterized by trust, commitment, dependence, investment, and shared benefits (long-term). Transactional exchanges are basically: you give me something, I give you money, we both go on our way. There is no past or future to our buyer-seller relationship; it exists purely for the time it takes to perform this single transaction. (short-term)

Front 29

What is the difference between a 3PL and a 4PL?

Back 29

1. A 3PL is a company that you contract with to provide various services. These services are typically logistical in nature but VERY often include many other value added services such as packing, e-commerce support (manage your EDI), inventory management (dealing with your vendors), transportation, etc. In many instances 3PL's will manage an entire channel such as online sales, billing, etc. The services delivered are of course determined by your needs, their abilities and your budget.

2. A 4PL is an organization that manages one or more companies on your behalf, for example if you have 2+ 3PLs (maybe one on each coast) + a transportation company you may consider hiring a 4PL to manage all three

Front 30

What are the 4 general types of info systems?

Back 30

1.) Office automation
2.) General communication systems
3.) Management and executive reporting systems
4.) Decision support systems

Office automation: spread sheets, lets you do more
General communication systems: wireless communications, GPS, email
Management and executive reporting systems: what process do you have to report to management and you need to give info in graphs or pictures
Decision support systems: any program that allows you to make decisions, inventory control, customer service, transportation management systems, helps you make GREAT decisions

Front 31

What is EDI?

Back 31

EDI (electronic data interchange): the computer-to-computer transmission of business data in a structured format. Provides seamless transmission of data across companies and it can facilitate the integration of, and coordination between, supply chain participants. Firms with EDI have an advantage over supply chain arrangements.

Common uses: invoicing, purchase orders, pricing, advanced shipment notices, electronic funds transfer, and bill payment

Front 32

What is data mining?

Back 32

Data mining:
a technique that looks for patterns and relationships in relevant data, allows companies to lend order and meaning to their data. EX: frequent shopper cards give companies the opportunity to develop highly detailed profiles on individual customers

Front 33

What is the impact of logistic simulations?

Back 33

Simulation: involves a computer model that is a series of mathematical relationships. Simulation reliability is achieved by making the model as akin to the real world as possible.

Factors include: transport mode availability, transportation costs, location of vendors, warehouse locations, customer locations, customer service requirements, and plant locations.

Advantage: enables the firm to test the feasibility of proposed changes at relatively little expense. Prevents firms from experiencing public embarrassment of making a change that ends up bad.

Focuses: improve customer service, integrate inbound and outbound logistics functions

Front 34

What are the 5 modes of transportation?

Back 34

1.) Airfreight
2.) Motor carriers
3.) Pipelines
4.) Railroads
5.) Water

Front 35

Discuss the 5 modes of transportation.

Back 35

Airfreight: most expensive, most common are perishables, flowers, high priced goods, electronics, expensive mining equipment. Discourage bulky cargo and use dimensional weight.

Motor carriers: account for the majority of freight revenues. Major advantage is flexibility. Cost is lower than airfreight, but more costly than other modes of transportation.

Pipelines: no need for vehicle operators, one-way, virtually unaffected by weather, slowest form of transportation, goods must be liquid, costly to construct
Railroads: reliability affected by weather, inherently slow, have potential to transport many different kinds of products, lower-value higher-volume products, can carry coal and chemicals, as far as cost and speed they are in the middle.

Water: more water transportation in the US than any other country. Freight moves via oceangoing vessels between the mainland states and Alaska, Hawaii, and Puerto Rico. Lots of different types. A lot of water transportation is very unionized and shipping is very difficult, you need to know what you are doing.

Front 36

What is a domestic freight forwarder?

Back 36

Domestic freight forwarder: a business that will go out and solicit freight from smaller companies than present them to LTL truckload carriers. THey will buy space from the LTL carriers at a wholesale price then charge the small companies the retail price and the difference is their profit

Front 37

What is a land bridge?

Back 37

Land bridge: involves the use of surface transportation- usually rail- between the origin and destination port. (instead of re-routing to stay in the water)

Front 38

What is a shippers' association?

Back 38

Shippers' association: lots of small companies combine their freight going to mutual customers. Customers then can place multiple orders with multiple companies and the multiple companies can combine shipping costs. Major benefit: transportation cost savings for its customers

Front 39

What is the difference between a common carrier and a contract carrier?

Back 39

Common carrier: agrees to serve the general public and they assume 4 obligations: serve, deliver, charge reasonable rates, avoid discrimination in pricing and service

Contract carrier: offers a specialized service to customers on a contractual basis, and the contract specifies the compensation to be received, the services to be provided, and the type of equipment to be used. The contract carrier is under no obligation to render services to the general public.

Front 40

What are the advantages and disadvantages of private transportation?

Back 40

Advantages: exempt from economic regulation, operational control (shipments can move at a time convenient for the company), may be cost effective particularly in situations where the company can find backhaul traffic

Disadvantages: it can be quite costly, in part because of the capital expenditures that are necessary to own or lease the relevant vehicles, managerial costs are often ignored (private fleet requires a full-time manager)

Front 41

What are the 4 things that a transportation manager performs every day?

Back 41

1.) Rate negotiation
2.) Selection of the carriers to do business with
3.) Packaging consulting
4.) Decide what kind of equipment you need

Selection of carriers: do a thorough background check, check financials, check how many accidents they've had

Packaging consulting: consult with packaging engineering and let them know what kind of packages will be needed based on the transportation of the product

Front 42

What 3 items dictate rate classification?

Back 42

1.) What is the product
2.) The weight of the product and how much is being shipped
3.) Distance (how far is your freight moving? Based on origin and destination zip codes)

Front 43

What 4 factors are considered when you are negotiating rates?

Back 43

1.) Density
2.) Stowability
3.) Ease of handling
4.) Liability to damage or theft

Density: the more dense, the better the price, this is the primary factor for setting a product's classification

Stowability: how does it travel in the piece of equipment that is transporting it

Ease of handling: how easy is it to load/unload?

Liability to damage or theft: how susceptible is your freight to damage or theft? Most businesses are self-insured, damage can also pertain to perishability. Hardest thing to mitigate is concealed damage.

Front 44

What is TL and LTL?

Back 44

TL (truckload): freight is picked up in full trailer load, greater than 10,000 lbs, picked up at origin and taken all the way to destination.

LTL (less than truckload): 10,000 lbs or less, they go to various origins and pick of freight then separate it based on destination. (Drive around to 100 locations in LA to pick up goods, driver goes to SLC and a new driver picks it up, then driven to Denver to drop off and have a new driver drive, then to NYC)

Front 45

The most important document in FREIGHT is the Bill of Lading, what are the 2 functions it performs?

Back 45

BILL OF LADING
1.) Delivery receipt between seller/shipper and buyer, says that the buyer received the item(s) in good order
2.) It is a binding contract between the seller/shipper and the buyer that the seller/shipper labeled it correctly and says that their duties were filled to their fullest extent

Front 46

What is the difference between the Straight Bill of Lading and the Order Bill of Lading?

Back 46

Straight Bill of Lading: the shorter of the two, used as the standard, includes: shipper, customer, carrier, pieces, weight, rate, complete description of materials, ownerships of the goods is neither stated or implied

Order Bill of Lading: not as common but does the same thing as the straight except there is a dollar value added to the goods and the name of the consignee is not yet specified because the product is not yet sold

Front 47

What is the difference between demurrage and detention?

Back 47

Demurrage: penalty you incur if you keep a piece of equipment too long, because you are holding onto their equipment, instead of them using it for something else, you are holding it up. (railroads, pipelines, international shipping)

Detention: based on 2 hours of free time then they penalize you (motor carrier)

Front 48

What is the difference between diversion and re-consignment?

Back 48

Diversion: occurs when the shipper notifies the carrier, prior to the shipment's arrival in the destination city, of a change of destination (charge a fee)

Re-consignment: happens when the freight is delivered to the final destination and the company wants it delivered somewhere else. They charge new freight charges and re-consignment fees (usually less than diversion fees)

Front 49

What is "loss and damage to include concealed damage"?

Back 49

If at a later date, the consignee opens the package and finds that the product is damaged or missing, carriers are reluctant to pay concealed loss and damage claims for two reasons: if the package came through the shipment with no exterior damage, then there is a strong possibility that the product was improperly protected on the inside or the consignee's employees broke or stole the products

Front 50

What are the 5 procurement objectives?

Back 50

1.) Support the organization's financial goals
2.) Manage the purchasing process effectively and efficiently
3.) Manage the supplier
4.) Develop strong, long-term relationships
5.) Support operational requirements

Support financial goals: TPC (total production cost), major player in financial goals, if this is too high your net profit is low

Manage purchasing process: not easy, most important document in PURCHASING is PURCHASING ORDER, not a legal document, required to purchase stuff (only certain people should be able to use it)

Manage the supplier: do you have the right number of suppliers? Do you have the right suppliers to keep the competitive advantage? Are you buying things that you can have 2 or more vendors bidding on?

Develop relationships: puts predictability in your operations and financials, be sure of the company you choose, if you negotiate right it can be a good thing

Support operational requirements: have the info ready when they need it, but don't have too much

Front 51

What are the 5 things involved in the supplier selection and evaluation process?

Back 51

1.) Identify the need for supply
2.) Situation analysis
3.) Identify and evaluate potential suppliers
4.) Select the suppliers that you want and do an RFQ (request for quote)
5.) Make your final decision and evaluate it as you go through your partnership

Identify (who is using it, what will it be used for, does it line up with org goals?)

Situation (who made the decision and why?)

Identify (send out RFPs, request for proposals, and have multiple suppliers propose to you and then evaluate them)

Select (these are the final bidders, ask for RFQ, request for quote, ask them to give their best shot)

Final choice (was it a good choice, are they giving you what you need?)

Front 52

What is the global support development model? (7 things)

Back 52

1.) Planning
2.) Specification
3.) Evaluation
4.) Relationship management
5.) Transportation and holding costs
6.) Implementation
7.) Monitoring and improving

Front 53

What are the 4 different types of materials?

Back 53

1.) Excess or surplus (need to minimize)
2.) Obsolete (don't get in this situation because it's like throwing away money)
3.) Scrap (how much scrap will you have, throw it away or sell it?)
4.) Waste material (stuff you can't use, unfit)

Front 54

What is socially responsible purchasing? (5 things)

Back 54

1.) Diversity (doing business with different minorities, countries)
2.) The company you are doing business with, how is their human rights record?
3.) Does the company you are doing business with participate in local and civic operations?
4.) Safety (are the products given to you safe? Do they use safe processes?)
5.) Green (are they going green, trying to save the environment?

Front 55

Why do governments control international logistics?

Back 55

Ocean carriers and international airlines can operate as extensions of a nation’s economy, and most of the revenue they receive flows into that nation’s economy. To that nation, international carriage functions as an export with favorable effects on that nation’s economy. Some nations with very weak balance-of-payments positions issue an import license, or permit, on the condition that the goods move on a vessel of plane flying that nation’s flag, which mean it is importing only the goods, not the transportation service required to carry them. Many nations provide subsidies, train their own merchant marine officers, absorb portion of the costs of building commercial vessels, and engage in other activities to promote their own merchant fleets. Governments also support their own carriers through cargo preference rules, which require a certain percentage of traffic to move on a nation’s glad vessels.

Front 56

What are the 3 basic paperwork documents that suppliers should have?

Back 56

1.) Certificate of origin
2.) Commercial invoice
3.) Shippers export declaration

Certificate of origin: specifies the country(ies) in which a product is manufactured and can be required by governments for control purposes or by an exporter to verify the location of manufacture
Commercial invoice: similar in nature to a domestic bill of lading in the sense that a commercial invoice summarizes the entire transaction and contains (should contain) key information to include a description of the goods, the terms of sale and payment, the shipment quantity, the method of shipment, and so on.
-Indicates the transaction terms of the sale
-Full description of everything being shipped
-Invoice value
-Transportation, handling, and the packing cost
Shippers export declaration: contains relevant export transaction data such as the transportation mode(s), transaction participants, and description of what is being exported.
-Document than the exporting country requires to keep statistics on what is leaving their boarders
-Complete description of goods
-Numerical classification

Front 57

What is an international freight forwarder?

Back 57

International freight forwarder: specializes in handling either vessel shipments or air shipments, yet their functions are generally the same.
they have the expertise that allows them to prepare and process the documentation and perform related activities pertaining to international shipments

Front 58

What is a letter of credit and its purpose? (3 things)

Back 58

Letter of credit: issued by a bank and guarantees payment to a seller provided that the seller has complied with the applicable terms and conditions of the particular transaction
1.) guarantees payment if certain rules are followed
2.) dictates transportation mode
3.) dictates complete description of the goods

Front 59

What is an NVOCC and its purpose?

Back 59

NVOCC = non-vessel operating common carriers

It's a person or company that represents many steamship companies who sells their space, middle-man between the public and a steamship company, do not own any assets, have to be licensed by the FMC

Front 60

What are the 2 primary purposes for export packing?

Back 60

1.) Allow goods to move easily through customs
2.) Protect products in what almost always is a more difficult journey than they would experience if they were destined for domestic consignees

Front 61

Why can transportation be difficult between countries?

Back 61

When you go to a foreign country, you have to be careful about the equipment you use:
Roads are narrow, bridges and tunnels can be low, rail gauge size is not the same worldwide

Front 62

Why is inventory management difficult in the global marketplace?

Back 62

- becomes much more difficult because the length of time to move inventory is based on the transit time of your carriers
- the longer the transit time, the more safety stock you need to keep
- inefficient inventory management will cause stock outs, obsolesce, increased handing and storage cost

Front 63

What is the difference between the SCOR model and the GSCF model?

Back 63

The difference between the SCOR and GSCF approaches lies in the fact that SCOR addresses symptoms through tactics. The GSCF framework provides a strategic approach to address supply chain management processes incorporating the knowledge, expertise, and objectives of all functions.

Front 64

Name 2 incoterms and describe their impact on international procurement management.

Back 64

1.) (EXW) Exworks: the most basic transaction, the seller transfers all risk of loss and all responsibility for expenses to the buyer at the seller's loading dock. Goods are made available for pickup at the seller's factory or warehouse.

FAS (free alongside ship): seller arranges for delivery and assumes all risk up to the ocean carrier at a port. Freight costs up to alongside vessel, risk of loss, and costs of export clearance are borne by the seller.