Outsourcing logistics functions to a third party supplier. Specialist 3PL providers can add value to your firm through decreased logistics costs and improved service offerings.
One lead logistics supplier coordinates other 3PL suppliers for the contracting firm. Essentially the 4PL firm manages the logistics service on behalf of the contracting customer. This can include the management of the freight forwarder, other 3PL’s, and freight firms. (Tony Hines)
Cross-Docking increases a products speed to market. Essentially products from different suppliers or origins are consolidated together and sent to the same destination. Goods are shipped at the earliest opportunity without going into long-term storage.
The exchange of electronic information between organisations within a supply chain.
These are enterprise wide systems such as SAP, Accumen, Oracle, and Management 2000 that integrate business-wide systems. This allows different areas of the firm to access a common database as well as other service providers (i.e. 3PL providers). (Tony Hines)
A JIT system delivers inventory in the most efficient possible time. Delivery is only made when the inventory is required, and so the consumer receives the stock immediately. JIT decreases storage costs and reduces lead times through the supply chain. (Tony Hines)
A process of moving products from the consumer back up the supply chain. This includes consumers returning goods, re works, repair, and warranty returns. This is a post transaction cost.
An identifiable line held in store. SKU’s are identified by a unique stock keeping code. An example of two different SKUs is a blue pen and a black pen. Although the pens are essentially the same product the two pens are considered to be two different SKUs.
Supply chain strategies should be targeted at consumer demand patterns to ensure capacity to plan, source, and deliver superior performance compared with competitors. A good strategy will coordinate and integrate supply chain activities to deliver enhanced customer value.