D. Select 5 terms and describe in English what concepts they mean.

e. Translate the following words and word combinations:

cost saving measures	liaison
final customer	consumption
long-term planning	haulage
distribution manager	intermediary
supply chain	value added
third-party contractor	re-engineering
total cost	distribution
materials handling	fleet

F. Translate the italicized paragraph.

G. Complete the table with a suitable word form.

Verb	Noun	Adjective
To associate
	manager
To handle
	alliance
	integration
		distributive

H. Fill in the gaps consulting the text.

1. Distribution was broadly represented by the haulage __ and manufacturers' own-account __.

2. There was recognition of a relationship between the various functions, which enabled a __approach and total__ perspective to be used.

3. The decade also saw a change in the structure and control of the distribution __.

4. The supply chain concept thus recognizes that there may be several different organizations involved in getting a product to the __

5. These partnerships or __ should also include other intermediaries within the supply chain, such as third-party__.

Grammar

Gerund and Infinitive

Underline the correct form. The first sentence has been done for you.

1. Our clients can’t afford to miss /missing this opportunity.

2. I don’t want to risk to lose/losing any information by entering data in the wrong way.

3. He got used to give/to giving presentations every month.

4. She suggests to employ/employing another IT specialist.

5. I refuse to sign/signing the contract until I discuss the details with my boss.

6. It’s not worth to postpone/postponing the meeting with new suppliers.

7. He agreed to prepare/preparing some minutes before the next meeting.

8. Our partners decided to close down/closing down their office in Paris.

9. The project manager did not admit to take/taking a bribe.

10. I can’t help to think/thinking about profit maximization.

 

2. Complete the sentences with an - ing form or infinitive/ to + infinitive. Use your own ideas.

1. I can’t wait…

2. I’d better…

3. I can’t stand…

4. I am used…

5. I’d rather…

6. I don’t mind…

7. I tend…

8. I didn’t have much time, but I did manage…

9. I’m the sort of person who can’t resist…

10. I’m a very busy person and I really can’t afford…

3. Complete the sentences with the verbs in the box. Choose either the - ing form or to + infinitive. The first sentence has been done for you.

Make, lock, prepare, delay, unpack, implement, interrupt, damage, recruit, learn, deliver, lose, be, meet, send

1. I hope to be at the next meeting, but I’m not sure if I can make it.

2. I must have my keys somewhere. I can remember __ the office yesterday.

3. She offered __ the agenda for the meeting.

4. We saw them __ the goods and was no visible damage at that time.

5. I realized I had forgotten __ an email to my supervisor.

6. She has arranged __ without clients next week.

7. Our boss can’t stand people __ all the time.

8. Our partner admitted __ a mistake on the paperwork.

9. The logistics firm denies __the cargo.

10. Do you mind __ people with no work experience?

11. I tried __ accounting last year but I was hopeless.

12. Our suppliers guarantee __ the goods by the end of May.

13. Do you fancy __ the meeting until next week?

14. They need to take immediate action otherwise they risk __ their business.

15. The boss refuses __ these plans, he finds them too risky.

 

Reading 2

a. Before you read the text discuss the following questions. Then, scan the text for more information:

1. What do you think is logistics’ role in commercial planning?
2. Do you know any examples of successful implementation of logistics in a company?
3. Why is logistics becoming a top concern for executive directors?
4. What advantages does logistics provide to businesses and customers?
5. How are global markets different from local ones?
6. How does logistics help to win competitive advantage?

 

The Logistical Approach

Until recently, logistics was not perceived to have any strategic impact on the organisation. In conse­quence, it was not a top UK management concern. This perception of serious global com­petition and an accompanying accep­tance of total quality and "just in time" standards of performance. In­deed, logistics is arguably one of the top two or three likely business concerns.

Products that win in global mar­kets are often standardised, yet capable of being customised to meet local needs or requirements. An increasing number require compo­nents or raw materials that are sourced from a wide range of coun­tries. Some are also assembled in a number of offshore locations. The Singer sewing machine is a good case in point. Finished products take their body shells from the US, their motors from Brazil and their drive shafts from Italy. Most of their assembly takes place in Taiwan.

Equally important is the shorter life-cycles of many products that are distributed globally. Many hi-tech products have life-cycles of less than a year, as one technology replaces another and competition intensifies. The problem is made even greater because the time taken to get the product from the drawing board to the market place is actually increas­ing as customer needs become more sophisticated.

Situations are already arising where the life of a product on the market is less than the time it takes to undertake its design, manufacture and distribution. Set this against the standards imposed by just-in-time management and it is easy to see why top executives are now paying so much attention to the efficiency of the supply pipeline.

The sheer financial cost of getting logistics wrong is enough on its own to merit serious strategic concern. A recent survey by the Institute of Logistics and Distribution Manage­ment shows that if organisations take into account all costs associated with logistics - including not only transport and warehousing but inventory and other information-related expenses - then up to 15 per cent of sales revenue is regularly eaten up.

In competitive terms, this can be devastating. Car industry experts suggest that each car made by Nissan's new Tyneside plant will be produced for about £600 less than it would cost a British manufacturer to make. This cost advantage is not just due to more effective use of labour, but dramatically superior logistics. Nissan manages the total material flow from component source to the final car as a single entity. Throughput times, transport and distribution are greatly reduced. Yet the company's ability to serve its end market is not diminished. Nissan provides some pointers to the principles surrounding good logistics. The key factor is the way in which the "pipeline" from supplier to customer is managed and streamlined. Transit times and intermediate stock holding often lengthen supply pipelines unjustifiably, with further delays caused by excessive inventories, whether of components, work-in-progress or finished products.

Poor co-ordination of the supply chain usually goes hand in hand with organisational barriers, resulting in key participants only ever seeing their specific part of the flow. The problem is particularly bad in con­ventional functionally oriented organisations. "Territory" is jealously guarded. Little information is shared. Bottlenecks and excessive inventories are not easily spotted. Smooth flow of the product is frequently impeded.

By contrast, successful companies manage logistics as a continuous process, recognising that a decision taken in one part of the supply pipeline will have a direct impact further along the line. Organisational straitjackets are discarded in favour of structures that are more market-focused. Lead times are managed strategically through strict central controls that make the maximum use of emerging information tech­nology. The whole process is based on the principle that added-value is best achieved by ensuring a con­tinuous flow of materials or products rather than traditional notions of functional or departmental efficiency.

The choice and supervision of suppliers and contractors is another important priority. Close relationships and a carefully selected number of suppliers are favoured. Those with proven ability are treated as partners rather than potential adversaries. They are given a direct stake in the success of the product and are therefore more motivated to work with the organisation in eliminating barriers to their part of the pipeline.

The results speak for themselves. Good logistics is seen by retail group Sainsbury's for example, as an im­portant element in the company's outstanding recent growth. Like its direct competitors, the company retails a growing range of perishable foodstuffs that are subject to stringent "sell by" provisions. Distribution is governed by strict central controls. A national network of 22 distribution centres undertakes over 1,000 deliv­eries to individual stores every day, meeting 75,000 separate orders for a range of over 10,000 different products.

Computerised systems have been installed in 284 Sainsbury's stores, providing immediate information for ordering, stock control and space allocation. All stores are connected through a communications network to head office, which enables them to tap in directly to central corporate systems.

Angus Clark, Sainsbury's director of distribution and data control, comments that "central control of distribution is the key to our logistics management. Historically, we have always had our own depot network because of the critical need to get perishable goods with a short shelf-life to our network of stores in peak condition. But our increasing commitment to our own label means we can negotiate with suppliers and manufacturers on the basis that they only have to deliver to a few depots as opposed to hundreds of stores. Better control over our distribution now means that we can reduce deliveries to many stores from over 60 a day to less than 12."

Improved customer service and increases in profit margins are not the only advantages to emerge from Sainsbury's streamlined approach to logistics. By reducing the number of daily deliveries to its stores, the company is also playing its part in minimising traffic congestion - something that is good for its public image at a time when environmental concern is a public prerequisite.

Central control is once again the key. By introducing a centralised logistics function at Xerox's Aylesbury offices that controls the flow of materials throughout Western Europe, the company has, over a period of five years, increased service levels to engineers from 70 per cent to 96 per cent and reduced warehouse space and labour costs by 30 per cent.

The success of the European operation has encouraged the com­pany to extend the system worldwide. Hewitt has been given the respon­sibility for introducing it to the US, Canada and Latin America. "Using this approach, we hope to reduce our worldwide assets by $250m and distribution costs by up to $200m every year," he says. "These two achievements combined could improve our return from assets by as much as three percentage points annually." The fact that logistics has become a strategic function managed from the centre has had a radical effect on the package of services offered by distribution companies.

Mike Tarrant, managing director of National Carriers Contract Services, explains that dedicated client services are now the normality with most major companies. Specific teams of National Carrier staff often work exclusively for one client and become closely involved with that organisation's day-to-day supply pipeline. "Typically, we might spend up to £60,000 studying a potential client's needs," says Tarrant "This feasibility study usually takes into account not only the chain between production lines and distribution centres but also the sourcing and distribution of raw materials."

In summary, the pressure of doing business globally in the late 20th century is prompting companies to recognise the central role of logistics in commercial planning. Good logistics not only reduces transport, inventory, warehouse and labour costs but, by improving cust­omer service, enables organisations to gain competitive advantage in markets subject to rapid change.

The prizes in today's markets go to those companies capable of providing added-value in ever-shortening time scales. Delivery and distribution is a key facet. As Harvard Business School's Michael Porter recently commented: "Co-ordination of complex networks of company activities is becoming a prime source of competitive advantage. Today's game of global strategy seems to be increasingly a game of co-ordination - getting dispersed production facilities, R&D laboratories and marketing facilities really to work together."