Supply Chain and Logistics Fundamentals

Freight transportation specifically refers to the physical movement of goods from one point to another. While logistics is a broader term encompassing planning and management, freight transportation is the specific act of moving the cargo.

For a small package (15lb) requiring next-day delivery across the country, air transport is the only viable option. Rail and truckload are too slow for a 24-hour coast-to-coast requirement.

Air freight is characterized by high-value, low-weight goods. Because it is expensive, it is used for items where speed is critical, resulting in a high percentage of total value despite a low percentage of total weight.

Intermodal transportation involves the use of two or more different modes of transportation (such as rail and truck) to move a single shipment from origin to destination. This allows for efficiency by leveraging the strengths of each mode.

A ton-mile is a standard unit of measure in freight transportation, representing the movement of one ton of freight over one mile. It is used to calculate the productivity and cost of transportation services.

The three fundamental categories of transportation are water, land, and air. These encompass all specific modes like rail, truck, ship, and plane.

A freight broker acts as an intermediary between a shipper and a carrier. They arrange for the transportation of goods without owning the physical assets themselves.

Inventory records accuracy (IRA) is calculated by dividing the number of items that match the records by the total number of items checked, then multiplying by 100 to get a percentage.

Third-party logistics (3PL) providers allow companies to outsource logistics functions, enabling them to focus on their core competencies while leveraging the expertise and infrastructure of the 3PL provider.

Rail transportation is known for having the highest capacity for land-based freight. A single train can carry the equivalent of many truckloads, making it highly efficient for bulk goods.

Logistics is the part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption.

U.S. Customs and Border Protection (CBP) is the federal agency responsible for managing, controlling, and protecting the nation's borders at and between official ports of entry.

Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents in a standard electronic format between business partners.

Globalization of supply chains is driven by the removal of trade barriers (tariffs), the need to remain competitive through price, and the technological advancements that allow for real-time coordination across borders.

ABC analysis is an inventory management technique that divides inventory into three categories (A, B, and C) based on their importance, usually measured by annual consumption value.

The Maritime Administration (MARAD) is an agency within the U.S. Department of Transportation that deals with waterborne transportation, including the U.S. merchant marine.

The shift from logistics to supply chain management is generally recognized as occurring in the 2000s, as the focus expanded from internal movement to end-to-end integration.

Safety stock is extra inventory held to guard against uncertainty in supply or demand, ensuring that a company does not run out of stock during unexpected fluctuations.

The shift from logistics to supply chain management occurred primarily in the 2000s, when companies began taking a more holistic view of their entire value chain rather than just transportation and warehousing. This decade saw SCM emerge as a distinct strategic discipline.

The shift from logistics to supply chain management occurred primarily in the 2000s, when companies began taking a more holistic view of their entire value chain rather than just transportation and warehousing. This decade saw SCM emerge as a distinct strategic discipline.

During the 1990s, business philosophy shifted from isolated transportation and warehousing logistics toward a more integrated, strategic supply chain management approach involving all channel partners.

Inventory management involves tracking and controlling the various stages of goods, such as raw materials, work-in-progress, and finished products. These categories are central to managing stock levels.

BTO means Build to Order, a production strategy where products are manufactured only after customer orders are received, reducing inventory costs compared to building to stock.

In lean management, waste is defined as any activity that consumes resources but creates no value for the customer. This is a core concept in operational efficiency.