A delay in reaching a decision is a not a reflection of a Japanese person’s inefficiency.

At first I was a little taken aback by what I thought was criticism of the speed at which Japanese work, but as the second French businessman explained, “It is difficult to deny that the Japanese take time to reach a decision, however this is by no means a reflection of inefficiency. Rather, it has to do with a difference in the decision making process.”

He then went on to give an example. “Let’s say you have a financial budget of 500,000 yen. You are looking to request the work of an outside company and have two months to complete the task. Imagine that you have the option of considering four different companies. Company A estimates that it can complete the work in two months for 500,000 yen. Company B estimates 2.5 months at 480,000 yen. Company C estimates two months at 490,000 yen. Lastly, company D estimates over a course of a month and a half that it can complete the project for 50,000 yen.

“In the case of the French company, company A and B would be dismissed as possible contenders almost immediately, with only C and D remaining. However, from a Japanese perspective one would consider each company on their individual merits. Increase the budget by 500,000 yen or extend the work for an extra two weeks, are factors that would also enter into the consideration process. Ultimately, the priority lies with the company that provides the best service. Therefore for the Japanese, the entire decision making process takes considerably longer.”

Theoretically, calculating one’s budget and the completion period also takes time. The French therefore view paying too much attention to which company to use a waste of time. In other words, a French company treats the job at hand with great importance and upon reaching a decision is reticent to negotiate or return to a previous deliberation process. However, by looking back on their decisions and considering how it could affect the overall result, the Japanese demonstrate a clear focus on the end result rather than the decision-making process itself.

UNIT 17. Logistical Services

Lead in: types of logistical services

Vocabulary: key terms

Reading: third party logistics and challenges of air cargo

Grammar: adverbs, prepositions

Speaking: services

Translation: key terms

Case Study: decision-making in logistics

Writing: email, essay

Culture: doing business in Russia

 

Lead in

Read the two definitions of services and discuss them.

· Services are deeds, processes, and performances. (Valarie Zeithaml & Mary Jo Bitner)

· A service is a time-perishable, intangible experience performed for a customer acting in the role of a co-producer. (James Fitzsimmons)

Based on the two definitions of services try to give a definition to service firms.

Vocabulary

These are the terms for you to learn.

A. Make sentences with them.

B. Translate them.

1. FCL (full container load)	2. reusable transit equipment	3. customized services	4. tracker
5. 3PL (third-party logistics)	6. fleet of vehicles	7. tailor-made solution	8. trailer yard
9. HGV (heavy goods vehicle)	10. means of carriage	11. cost-effective services	12. waybill
13. DC (distribution center)	14. bypassing storage	15. to outsource	16. labeling
17. LCL (less than container load)	18. receipt at warehouse	19. comprehensive supply chain	20. bundling
21. EDI (electronic data interchange)	22. tracking and tracing	23. value-added services	24. recycling
25. VAS (value-added service)	26. reverse logistics	27. end-to-end solutions	28. shrink-wrapping
29. RFID (radio frequency identification)	30. order picking	31. forwarding	32. polybagging
33. ISO (International Standards Organization)	34. cross-docking	35. pick and pack	36. export packing and crating
37. GPS (Global Positioning System)	38. break-bulk	39. literature fulfillment	40. kitting
41. transshipment	42. load	43. returns processing	44. retailer

 

2. Match definitions 1-10 with terms a-j:

1. Entails processing small to large quantities of product, often truck or train loads and disassembling them, picking the relevant product for each destination and re-packaging with shipping label affixed and invoice included.	a)full container load
2. A document issued by a carrier giving details and instructions relating to the shipment of a consignment of goods. Typically it will show the names of the consignor and consignee.	b) HGV (heavy goods vehicle)
3. Complete support to fit your specific needs.	c)tracking and tracing
4. A firm that provides service to its customers of outsourced logistics services for part, or all of their supply chain management functions.	d) pick and pack
5. A process to change (waste) materials into new products to prevent waste of potentially useful materials, reduce the consumption of fresh raw materials, reduce energy usage, reduce air pollution and water pollution reducing the need for "conventional" waste disposal.	e)A waybill
6. A warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with products (goods) to be redistributed to retailers, to wholesalers, or directly to consumers.	f) Reverse logistics
7. Used to report the arrival or departure of the object and recording the identification of the object, the location where observed, the time, and the status.	g) A third-party logistics provider
8. It is the European Union term for any truck with a gross combination mass (GCM) of over 3,500 kilograms.	h) distribution center
9. Stands for all operations related to the reuse of products and materials. It is the process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information.	i) Recycling
10. A standard (twenty or forty-foot) container that is loaded and unloaded under the risk and account of the shipper or consignee.	j) End-to-end solution

 

Fill in the gaps.

1. T __ P __ L __ System is a process which targets a particular function in the management. It may be like warehousing, transportation, raw material provider, etc.

2. A practice in logistics of unloading materials from an incoming semi-trailer truck or railroad car and loading these materials directly into outbound trucks, trailers, or rail cars, with little or no storage in between is called c __ d __.

3. Typically w __ will show the names of the consignor and consignee, the point of origin of the consignment, its destination, and route.

4. In general, a f __ c __ load attracts lower freight rates than an equivalent weight of loose (break bulk) cargo.

5. The term b __ b __ derives from the extraction of a portion of the cargo of a ship or the beginning of the unloading process from the ship's holds. These goods may not be in shipping containers.

6. Organizations with high volumes of l __ f __ tend to use third part companies to do the job rather than do it in-house.

7. S __ w __ is a process of packaging an article by causing a thin plastic film to contract around it so as to cling tightly to its surface.

8. R __ is a key component of modern waste reduction and is the third component of the "Reduce, Reuse, Recycle" waste hierarchy.

9. One possible reason of t __ is to change the means of transport during the journey (for example from ship transport to road transport) and another reason is to combine small shipments into a large shipment (consolidation), dividing the large shipment at the other end (deconsolidation).

10. Third party logistics providers typically specialize in integrated operation, w__ and t __ services that can be scaled and customized to customers' needs based on market conditions and the demands and delivery service requirements for their products and materials.

 

Find the odd word.

1. Tractor lorry truck tracker

2. Transshipment rehandling transferring overburdening

3. Reworking recycling redesigning refining

4. forwarding traffic trucking loading

5. Supply equipment provision purchasing

6. Break- bulk off-load rework unpack

7. Kitting completing packaging cycling

8. Reusable returnable multitier multiturn

5. Substitute the underlined wrong terms with correct ones from exercises 1 and 2.

1. Reverse logistics is a process to change (waste) materials into new products to prevent waste of potentially useful materials.

2. Outsourcing is used to report the arrival or departure of the object and recording the identification of the object.

3. A warehouse or other specialized building, often with refrigeration or air conditioning is called a freight forwarder.

4. A standard (twenty or forty-foot) container that is loaded and unloaded under the risk and account of the shipper or consignee is known as HGV (heavy goods vehicle).

5. Standards for all operations related to the reuse of products and materials are called Reverse Logistics.

6. Order picking is a process of assembling a set of parts or materials.

7. Break bulk entails processing small to large quantities of product, often truck or train loads and disassembling them, picking the relevant product for each destination and re-packaging with shipping label affixed and invoice included.

8. A receipt at the warehouse is a document that accompanies goods shipped by an international courier to provide detailed information about the shipment and allow it to be tracked.

Reading 1 ^[64]

a. Answer the questions by scanning the text:

1. What are the advantages of using 3PL companies?
2. How should one properly select a 3PL company?
3. How would you title this text?

 

Third party logistics (3PL) companies are becoming an important part of today’s supply chain. These companies offer services that can allow businesses to outsource part of all of their supply chain management function. Many 3PL companies offer a wide range of services including; inbound freight, freight consolidation, warehousing, distribution, order fulfillment and outbound freight. The growth of 3PL companies has been driven by the need for businesses to become leaner, reducing assets and allowing focus on core business processes.

The growth of 3PL companies began back in the 1980’s when businesses began to look for new ways in which they could outsource logistics functions and concentrate on their core business. One company that has been associated with the 3PL revolution is FedEx. The company’s overnight delivery service changed the way in which business to business and business to customer transactions operated. This offered businesses the opportunity of using just-in-time techniques, which saved warehousing space and reduced overall costs. The introduction of efficient-consumer-response (ECR) techniques led to smaller and more efficient shipment sizes, which in turn further reduced costs.

As companies saw the benefits of outsourcing delivery and warehousing functions, the number of third party logistics companies began to rise offering an ever increasing number of services. The increasing numbers of 3PL’s inevitably led to increased competition between these firms, which led to greater savings for the companies who employed them. The last decade has seen the 3PL provider transitioning from a local or regional business to one that offers national or global coverage. In US, the 3PL market has been growing at a compound annual rate of 14.2 percent since 1996 and in 2006; 3PL’s in the United States reported $89.4 billion in gross revenue.

Deciding to a use a third party logistics company is a decision that depends on a variety of factors that differ from business to business. The decision to outsource certain business functions will depend on the company’s plans; future objectives, product lines, expansion, acquisitions, etc.

Once a decision has been made to outsource certain processes then a company will begin a search for the right 3PL that fits all their requirements at the best possible price. There are three types of Third Party Logistics Company that operate today: asset based, management based, integrated providers.

Asset based third party logistics companies use their own trucks, warehouses and personnel to operate their business. Management based companies provide the technological and managerial functions to operate the logistics functions of their clients, but do so using the assets of other companies and do not necessarily own any assets. The third category, Integrated Providers, can either be asset based or management based companies that supplement their services with whatever services are needed by their clients.

When selecting a 3PL, the request for information (RFI) or quotation (RFQ) should be as detailed as possible. The company that is selected should be able to fulfill all the logistics requirements and that can only be assured if every requirement is communicated to potential companies. The RFI should include a detailed description of the areas to be outsourced.

After the bids have been received by a company from the prospective 3PL’s, an evaluation would take place where a multi-discipline team will review each bid based on a pre-defined set of criteria. These will include some of the following.

· Does the 3PL provide the services required?

· Does the 3PL have the technology required to perform the tasks required?

· Does the company have the required warehouse space, dock capacity, warehouse personnel, etc.?

· Is the 3PL financially sound?

· Are the 3PL’s geographical locations suitable to cover the network?

· Does the 3PL have the flexibility to respond to changes?

· Are the 3PL’s environmental policies compatible?

· Are the costs of the services detailed enough for comparison to other bids?

· Are the customer references acceptable?

· Is the 3PL a good cultural fit?

The selection team will usually review each of the bids based on the criteria and give each bidder a score. Depending on the importance of each criteria, a weighting can be given which gives more importance for one or more criteria in the selection process. Once the selection team has evaluated the bids, management will often select the top two or three companies for site visits, face to face interviews and more detailed reviews of financial records. Once a company has been identified contract negotiations would follow before a final agreement could be reached.