Part I
Logistic Business
Transportation, Process to manufactures & 3 keys
Shipper needs to ship product or goods by using Carrier to Receiver
3rd Party Logistics Provider / Service
Shipper Receiver
Type of 3PLs
Asset-Based Non-Asset-Based
Revenue 100% 100%
COGS 80 – 85% 70 - 74%
Gross Profit Margin 15 – 20% 26 – 30%
Asset-Based: Owned its own fleet of transportation vehicles i.e. truck, airplanes, railroads and ocean freighters
Non-Asset-Based: without any of their own physical assets.
Freight Transportation
Multiple shipments: air, water, truck, and rail
· Truck segment: Ryder, Penske, and Emery Freight to small owner-operated trucking firm
· In competition: smaller firms developed specialty service or served niche markets
· Large firms expanded into multiple modes of transport and provide service across a wide range
· All shipper demanded Goals be transported safety& timely fashion
· Price importance all companies (especially large, automakers) want to reduce cost of delivery to customer
· Big 3 automaker (Ford, GM, Daimler Chrysler) looking to better management of supply chain (the series of transaction & interaction between suppliers, buyers, and intermediaries) to minimize costs while improving quality
· All parties – manufacturers, 3PLs, suppliers – could participate in EDI (electronic data interchange)
NLM Overview
National Logistics Management is the only North American Third Party Logistics provider to specialize solely in premium freight for manufacturing industries, including automotive manufacturers. It is non-asset based and has a unique business model that employs its proprietary software to utilize the Internet to determine optimal shipping modes; export shipments to its vast carrier base including ground, air freight, and air charter; receive bids back form its carrier network; evaluate the lowest bids and carrier quality ratings; and coordinate shipments based on best price and carrier quality ratings all within a 30-minute window.
Company profile
Founded in 1991
Over 1.3 Million shipments successfully managed.
Network in North America:
200+ Assembly and Manufacturing Plants
6,800+ Suppliers and 300+ Ground, Air Freight, and Air Charter Carriers
Financial Information
• 1999 Revenues: $ 7.3million No debt
• Total share: $ 825 million (10% MKT Share)
• Employee: 111
– 65 in Detroit, Michigan Office
– 36 Logistic coordinators & Supervisors
– 7 Audit Team
– 1 Marketing & Business Development
– 2 IT Team
Business Model
Business to Business
NLM to Big 3 automaker (Ford, GM, Daimler Chrysler)
NLM manages the return of containers to over 130 suppliers throughout North America.
The returnable container program is part of an industry-wide greening strategy to reduce landfill use and decrease production-source pollution.
Suppliers ship their products to the plant in returnable, reusable plastic containers. Most containers are returned to the suppliers within a 12-24 hour period. NLM determines release quantities and ship frequencies for containers and monitors supplier inventories.
For AutoZone’s Supply chain to be Successful, the company must understand all the components of it. That will go long way when implanting the strategies and concept into the chain. Distribution is the most crucial factor in the supply chain. It determines how and when the product to get the customers. Flourishing Chain will utilize every factor that impact its distribution channel and exploit all the technology to make the distribution more active and proficient in allowing customers to acquire their parts in an opportune moment.
At the core of the boom that was the “roaring 20’s” was the automobile. The primary boom industry of the period, the automobile industry employed one of every 14 manufacturing workers and spawned a plethora of ancillary industries. Industries and companies needed to provide the materials of automobile production boomed in support of the industry. Steel, plastics, rubber and glass manufacturing ballooned to support the growth in automobile sales, which grew from 5 million in 1920 to 26 million in 1929. Oil exploration grew in response to the need for petroleum, not only for gasoline but for production of other products which had a petroleum basis. Construction of new roads, manufacturing plants, and homes were born of the markets created by the rise in availability of the automobile to the masses. And smaller but no less important ancillary businesses like gas stations, auto repair shops, upholstery shops, and even consumer stores, in more remote areas away from the major cities, were the direct result of the automobile industry and its far reaching impact and influence on the economy of the time. And the mobility that transportation would provide would spur other impacts and influences and continue to feed the boom that was the 19...
There is no refuting that the railroad companies transformed business operations and encouraged industrial expansion. The raw materials required for construction of the transcontinental railroad directly resulted in the expansion of the steel, lumber and stone industries. (Gillon p.652) The railroad stimulated growth in manufacturing and agriculture providing an efficient manner to ship raw materials and products throughout the country. Which in turn, increased consumerism and introduced t...
"Railroads were the first big business, the first magnet for the great financial markets, and the first industry to develop a large-scale management bureaucracy. The railroads opened the western half of the nation to economic development, connected raw materials to factories and retailers, and in so doing created an interconnected national market. At the same time the railroads were themselves gigantic consumers of iron, steel, lumber, and other capital goods". (Tindall, Shi)
In the 1960s through the 1970s, companies realized strong engineering, design, and manufacturing functions were strong market strategy keys to create and capture customer loyalty. As the demand for new products rose in the 1980s, these market requirements were to increase their flexibility and responsiveness to adapt existing products and processes or to develop new ones in order to meet customer needs. As manufacturing improved in the 1990s, managers began noticing material and service inputs involving suppliers and their major impact on an organization’s ability to meet customer needs. As a result of these changes, organizations now find that it difficult to manage their own organizations. First, they must be involved in the management of their network of all upstream firms that provide directly or indirectly, as well as the network of downstream firms, which are responsible for delivery and market service of the product to the end customer. In order to succeed, managers have to realize that they cannot do it alone and they must work together on a daily basis with the whole organizations in their supply chains. Because supply chain management involves all functions within an organization, managers need to know what a supply chain is, why it is important, and the impact of supply chain management on the success and profitability of their organization. Today, Wal-Mart topped the list of the America’s biggest companies on the Fortune 500 list, “with sales of almost $345 billion — more than a quarter of a trillion dollars” (Forbs). Wal-Mart’s supply chain management is becoming recognized as a core competitive strategy.
UPS and FedEx are the leading parcel carriers in the U.S. FedEx has significantly expanded their capability to compete with UPS’s dominant ground delivery service. UPS has continued its strong marketing efforts in overnight and deferred air services. Both of these carriers have introduced information systems, which include user-friendly Internet interfaces. The carriers have also expanded logistical services and improved integration with customer supply chains.
Zanjirani F., Rezapour, S. & Kardar, L. (2011) Logistics operations and management concepts and models, 1st ed. London ; Elsevier.
Commercial ventures: complete reach of mining and extractive businesses processing coal, oil, gas, chemicals, and metals; all manifestations of machine building from moving factories to elite airplane and space vehicles; guard ...
Ford Motor Company Supply Chain Strategy. Background In 1913, Henry Ford revolutionized product manufacturing by introducing the first assembly line to the automotive industry. Ford’s hallmark of achievement proved to be a key achievement for the motor company as the low cost of the Model T attracted a broader, new range of prospective car-owners. However, after many decades of success, customers have become harder to find.
Iyer, Ananth Roy, Vasher 2009 ‘Toyota’s Supply Chain Management: A Strategic Approach to Toyota's Renowned System’ McGraw Hill Professional
Supply chain management has been defined as that process that involves the management of information, materials, and all the finances that are handled within and across the entire supply chain process (Christopher, 2016). The management is usually done through out the entire supply chain management from that moment when the suppliers are involved through all the manufacturing activities, different distribution activities, and the way that the products are served to the final product consumer (Turban, et al., 2002). The process also includes all the activities that different organizations offers to their customers as after sale services for purposes perfecting their services and products towards their highly valued customers (Christopher,
It has become apparent the effects of globalization has changed the marketplace so much in the past few decades that a much faster response is demanded from producers and their supply chain. This is done by effective supply chain management, which is the integration of key business processes acrosss the supply chain within organisiations. The objective of this is to create a system of best value for the entire supply chain including the consumer. In recent years, many firms have realised the importance of the optimization and streamlining of the supply chain management processes, it has since become the focus for many firms.
Logistics is the designing and managing of a system in order to control the flow of material throughout a corporation. This is a very important part of an international company because of geographical barriers. Logistics of an international company includes movement of raw materials, coordinating flows into and out of different countries, choices of transportation, cost of the transportation, packaging the product for shipment, storing the product, and managing the entire process. The concept of logistics is fairly new in the business world. The theoretical development was not used until 1966. Since then, many business practices have evolved and logistics currently costs between 10 and 25 percent of the total cost of an international purchase.
‘Supply chain management integrates supply and demand management within and across companies. It encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, thir- party service providers, and customers’. (Web: Council for Supply Chain Management Pr...
Throughout history, getting things (and people) where they need to go has been a pretty basic need. The Romans needed to move stone to build their aqueducts; the nobles wanted luxury spices and silks brought to them from far off lands; ancient cities needed to move vegetables and grains from the farms, to storage, and then to the cities to feed the populace. Transportation has always been one of the backbones of every great civilization, without the ability to move goods long distances, your 'culture' was only the distance you could go conveniently to get what was necessary for survival that you could not produce. The industry boomed during the railroading system and hasn't slowed since. First, there were ships and horse-drawn carriages, then cars, now huge 40 ton trucks and jumbo air-liners.