1.
How has IT changed the definition of “logistics”?
Old meaning:
Up until, 1980s, logistics was only the handling,
warehousing and transportation of goods.
New meaning:
- Combining the
functions of materials management and physical distribution
- Concerned with
inbound and outbound material flow (within companies and movement of
finished goods from dock-to-dock)
- Physical
transportation as well as the coordination and control of storage and
movement of parts and finished goods.
- Include
value-added activities (e.g. order processing, distribution centre
operations, inventory control, purchasing, production, customer and sales
services)
- Aggregation of
-
physical delivery of parcels
-
management and utilization of the flow of
information pertaining to the physical delivery (control over the movement of
goods)
- the ability to
share information between operations or departments within a company and
between organizations to generate operational efficiencies, reduce costs
and improve customer services
- To enable
businesses to redefine themselves and to re-engineer their selling and
supply-chains
- Information came
to replace inventory
- Just-in-time
inventory management helped to reduce costs and improve efficiency.
2. List the benefits of a virtual supply chain.
1. Build one-to-one relationships with their customers
·
Emergence of electronic data interchange (EDI)
and the Internet
·
can match supply to demand without wastage
-
To track back along the supply chain to the
point of raw materials
-
To identify points along the supply chain where
they could provide management services (e.g. transportation, order processing
and related distribution centre operations, fulfillment, inventory control,
purchasing, production, customer service, sales services)
·
To interconnect and distribute information to
all the players in a supply chain
·
To squeezing time and inventory out of the
system
·
By helping customers to redefine sources and
procurement strategies so as to link in with other parties in the supply chain
(e.g. raw materials suppliers) to increase profitability and reduce costs
·
By integrating services within the supply chain
of customers to generate increases in customer loyalty and customers’ switching
costs, thus raise the barriers to entry for competitors effectively
2. Keep
tracking on the packages
1. COSMOS (Trigger
alert when scheduled events, such as the arrival of a package, did not occur.)
·
All related files and databases were
automatically updated
·
Customers can get the information of pickup and delivery
of the order
·
The network computers linked over a global
Internet Protocol network
·
FedEx employees at any location at any time
could track a package through the various steps in the FedEx chain.
3. Improving
efficiency and control
·
PowerShip system
·
To provide the most active customers with
proprietary on-line services
·
To store frequently used addresses, label
printing, online package pick-up requests, package tracking
·
Provide
efficient gathering and dissemination of real-time data (Global Operations
Command Centre)
·
Online
service saved FedEx the cost of 200,000
customer service employees
3. Discuss the role of IT in FedEx’s Business Strategy.
Internal efficiency
·
Able to share information to increate
operational efficiencies and reduce costs
·
PowerShip programme improved efficiency and
control
·
COSMOS allows automatic updates of all relates
files and databases thus route planning and other processes can be speed up
·
·
·
Including storing of
frequently used addresses, label printing, on-line package pick-up requests, package
tracking.
·
All related files
and databases were automatically updated.
Global market
·
Able to share information between operations/
departments within a company and between organizations
·
External webpage in Cisco website increase
customers’ switching costs and thus raise the barriers to entry for competitors
External customer services
·
Able to share information to improve customer
services
-
Provided additional
services to the customer
-
Whenever new
information was entered into the system by FedEx or by customers through the
Internet
·
First to issue hand-held scanners to drivers
that alerted customers of when packages were picked or delivered
·
COSMOS allowed customer to keep track of all
packages handled by the company
-
Placing barcode on each parcel at the point of
pickup
-
Scanning the barcode at each stage of the
delivery
·
PowerShip systems provided additional services
to the customer
-
Storing of frequently used addresses
-
Label printing
-
Online package pickup requests
-
Package tracking
·
Helps build One-to-one relationships with
customers to increase loyalty
4. Discuss the virtual integration of supply chains without ownership.
Virtual integration is a new form of value chain
management.
Under such a system, the links of the value chain are brought together by
informal arrangements among suppliers and customers. Shipments of the
components that your firm needs can be easily arranged through the Internet or
a networked computer system. The same type of arrangement allows you to fully
serve your customers in ordering, services, or any other needs.
Eliminating inter-company boundaries,
replacing physical asset by information flow and integrating suppliers with
customers among the value chain by using information technology
In FedEx’s case
Gave away more than 100000 sets of PCs loaded with FedEx software
-
To link and log customers into FedEx’s ordering
and tracking systems
Parts Bank
-
Built a small warehouse on the end of its
sorting facilities
-
multiple-client warehouse
-
holding parts of some small companies with
warehousing problems
-
picked up the parts when the customers call up
and order the dispatch of parts
Cisco
-
developed an extranet that allowed its customers
to order FedEx services without leaving its website
COSMOS
-
centralized computer system
-
keep track of all packages handled by FedEx
-
data on package movement, pickup, invoicing and
delivery
EDI (electronic data interchange)
-
interconnect and distribute information to all
the players in a supply-chain
-
help redefine sources and procurement strategies
and link with other parties in the supply chain
-
Just-In-Time inventory management
-
Reduce costs and improve efficiency
PowerShip systems
-
storing of frequently used addresses
-
label printing
-
online package pickup requests
-
package tracking
Advantages of the virtual integration of supply chains
without ownership
1.
More efficient and easier to control the
movement of goods:
2.
Global Operations Command Centre systems-real
time data sharing for different parties within supply chain (customer,
distributors), trigger alerts for non-event tracking
3.
Accurate
4.
Raise entry barriers
5.
Updated Information
6.
Reduce cost through outsourcing non-core
activities
7.
Allow organization to focus on their core
competencies of product design, marketing and other advanced Technology
8.
Reduce cost: Reduce administrative costs,
payroll costs
5. What are the factors that put pressure on FedEx to consolidate its operations, while remaining customer-focused?
1.
competition
-
all major
transportation and delivery companies invested a lot in technology
-
UPS
-
Invested US$9 billion on IT
-
Formed 5 alliances to disseminate the logistics
software
-
DHL
-
Invest in handling systems, automation.
Facilities and computer technology
-
Dominated the UK market
-
TNT
-
Launched the world’s first global price checker
service on its website that allowed customers to calculate the price of sending
a consignment from one place to another anywhere in the world
-
QuickShipper, online access to TNT’s range of
distribution services from pricing to delivery
2.
internet market
-
the internet changed the basis for competition
for most businesses
-
low cost and diversity of applications made it
appealing and accessible
3.
e-tailing
-
The express transportation needs associated with
the growth in e-tailing (expected to reach US$7 billion in 2000) and
business-to-business EC (expected to reach US$327 billion by 2002) presented
enormous opportunities for companies
4.
rising fuel price
-
erode operating income
5.
Demand
for quality service by customers
-
Customers
always want more convenient service
-
High
quality with low costs is the best in their preference
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