globalization, logistics and intermodalism
Post on 20-May-2015
3.010 Views
Preview:
TRANSCRIPT
Globalization and Globalization and TransportationTransportation
Production Networks, Production Networks, Logistics, Intermodalism and Logistics, Intermodalism and Supply Chain ManagementSupply Chain Management
GlobalizationGlobalization
Refers to increasing geographical scale of Refers to increasing geographical scale of economic, social and political interactionseconomic, social and political interactions
Examples: international trade, mobility of Examples: international trade, mobility of capital, tourism, expanding media deliverycapital, tourism, expanding media delivery
Also changing patterns of institutional Also changing patterns of institutional organization and structural shifts in world organization and structural shifts in world economic order economic order
Most conspicuous are expanding MNCs, Most conspicuous are expanding MNCs, regional trade alliances, and roles of NGOsregional trade alliances, and roles of NGOs
Globalization and MNCsGlobalization and MNCs Global level corporate opportunities are Global level corporate opportunities are
reinforced by reinforced by privatizationprivatization and and deregulationderegulation of public controlsof public controls
Combined with technological developments Combined with technological developments these changes facilitate these changes facilitate structural structural adjustmentsadjustments that alter networks of goods that alter networks of goods and services production and distributionand services production and distribution
Allow exploitation of Allow exploitation of international division of international division of laborlabor
MNCs and global city regions are dominant MNCs and global city regions are dominant
Transport and GlobalizationTransport and Globalization
Too often transport in globalization is Too often transport in globalization is ‘invisible’‘invisible’
But transport is central and functions as But transport is central and functions as an an enabling mechanismenabling mechanism and and space space adjusting technologyadjusting technology (SATs) which (SATs) which integrates production and distribution integrates production and distribution pointspoints
SATs such as transport produce flows SATs such as transport produce flows linking places, not goods in placeslinking places, not goods in places
Globalization and TransportGlobalization and Transport Transport, and especially freight, services have Transport, and especially freight, services have
become more critical in order for firms to become more critical in order for firms to competecompete
Accommodating new technologies, new markets Accommodating new technologies, new markets and new organizational structures requires and new organizational structures requires change- both from providers and consumers change- both from providers and consumers whether individuals or firmswhether individuals or firms
Need for greater efficiencies has made urgent Need for greater efficiencies has made urgent the need for a more “seamless” transport marketthe need for a more “seamless” transport market
““Seamlessness” suggests an environment in Seamlessness” suggests an environment in which neither national nor modal boundaries which neither national nor modal boundaries neither delay movements nor hinder choice of neither delay movements nor hinder choice of efficient route/mode combination efficient route/mode combination
Driving Factors in Search for SeamlessnessDriving Factors in Search for Seamlessness 1/ Competitive pressures require goods and services 1/ Competitive pressures require goods and services
producing firms to manage almost simultaneously producing firms to manage almost simultaneously multiple inter-organizational info and material flowsmultiple inter-organizational info and material flows
2/ Externalization of production trend is heightened- 2/ Externalization of production trend is heightened- seeking efficiency in managing flow from source to seeking efficiency in managing flow from source to consumerconsumer
3/ Logistics and supply chain management depend 3/ Logistics and supply chain management depend upon ways in which separate modal systems are upon ways in which separate modal systems are joined: containerization, load centers, hub/feeder joined: containerization, load centers, hub/feeder networksnetworks
4/ Role of real time in global operations has been 4/ Role of real time in global operations has been heightened: JIT, time based competitionheightened: JIT, time based competition
5/ Rise of e-commerce has huge consequences for 5/ Rise of e-commerce has huge consequences for transport system and logisticstransport system and logistics
Obstacles to a Seamless WorldObstacles to a Seamless World
Enhancement of goods flow has been Enhancement of goods flow has been empowered by liberalization, intermodalism empowered by liberalization, intermodalism and new technologies in logistics but and new technologies in logistics but contradictory forces also existcontradictory forces also exist
““Choiceless churning”-inability of concerned Choiceless churning”-inability of concerned social and political forces to confront social and political forces to confront challengeschallenges
Extending appropriate entry and exit Extending appropriate entry and exit approaches from national to regional and approaches from national to regional and international levels may be a major issueinternational levels may be a major issue
What policy research is required in this light?What policy research is required in this light?
Transport Demand Responses to Transport Demand Responses to GlobalizationGlobalization
Longer and more customized transport Longer and more customized transport linkageslinkages
Sensitivity to timing of connections, Sensitivity to timing of connections, arrivals, and departuresarrivals, and departures
Speed of movements and transactionsSpeed of movements and transactions Expanded reliance on e-communications Expanded reliance on e-communications
and e-commerceand e-commerce Holding together Global Production Holding together Global Production
Networks (GPNs)Networks (GPNs)
Trends in Global RestructuringTrends in Global Restructuring Above demand sensitive logistical Above demand sensitive logistical
concerns are consistent with many trendsconcerns are consistent with many trends Reliance on out-sourcingReliance on out-sourcing Customized production runsCustomized production runs Flexibility in resource access Flexibility in resource access Just-in-time management of production Just-in-time management of production
and distribution processesand distribution processes Zero inventoryZero inventory Opportunities for Opportunities for economies of scopeeconomies of scope
Globalization and Transport Globalization and Transport VulnerabilityVulnerability
High levels of auto and oil dependence High levels of auto and oil dependence expose transport to risks of boycott and expose transport to risks of boycott and embargoesembargoes
Global solutions to environmental problems Global solutions to environmental problems (air pollution and global warming) expose (air pollution and global warming) expose transport and their dependent economies transport and their dependent economies
Transport serves as vehicle for intensifying Transport serves as vehicle for intensifying mass consumption but more info based mass consumption but more info based goods and service (goods and service (dematerializationdematerialization) ) mean transport inputs to various goods mean transport inputs to various goods might be reducedmight be reduced
LogisticsLogistics
Freight transport is both an industry and Freight transport is both an industry and core input in manufacturing processcore input in manufacturing process
Must understand how raw, semi-finished Must understand how raw, semi-finished and final commodities are moved to and final commodities are moved to serve businessesserve businesses
Changes in technology, markets, Changes in technology, markets, institutional structures, and management institutional structures, and management theory have led to new ways of tying theory have led to new ways of tying transport into production processtransport into production process
Evolution of LogisticsEvolution of Logistics
Initially a military activity concerned with Initially a military activity concerned with moving men and munitions to battlefrontsmoving men and munitions to battlefronts
Now logistics has integral role in firm Now logistics has integral role in firm operationsoperations
Ability to move goods quickly, safely and Ability to move goods quickly, safely and economically are vital to firm’s economically are vital to firm’s profitability and the global economyprofitability and the global economy
Why new emphasis? Competitiveness of Why new emphasis? Competitiveness of firms, technology, deregulation, firms, technology, deregulation, packaging packaging
Aspects of Logistics in the EconomyAspects of Logistics in the Economy Two aspects: logistics management and Two aspects: logistics management and
logistics providerslogistics providers Logistics management in manufacturing and Logistics management in manufacturing and
distribution organizationsdistribution organizations Logistics organizations providing services to Logistics organizations providing services to
manufacturing and distribution firmsmanufacturing and distribution firms Growth of Growth of integratorsintegrators—(firms that both fly —(firms that both fly
the cargo between airports and handle the cargo between airports and handle ground pick up from and delivery to ground pick up from and delivery to customers) UPS, FedEx, DHLcustomers) UPS, FedEx, DHL
Growth of Growth of 3PLs-third party logistics providers 3PLs-third party logistics providers
Transportation and the Supply Transportation and the Supply and Distribution Chainand Distribution Chain
ActivitySupply Distribution
Transport Transport
Supplier Customer
Responsibility for design, optimization & management of operation with customized information systems
Multi-service, integrated solutions with specific information systems
Traditional transportation, freight forwarding & storage
SupplySupplyChainChain
ManagementManagement
IntegratedIntegratedLogisticsLogistics
Traditional Freight ForwardingTraditional Freight Forwarding
The Difference Among Supply Chain Management, Integrated Logistics, and Traditional Freight Forwarding
Source: Geologistics, Singapore
Traditional Freight Forwarding
ShipperForwarder 1
Origin
Airport Airline
Destination
Airport ConsigneeForwarder 2
Pickup &
Trucking
Forwarder secures
space from airline.
Trucking &
Delivery
Customs clearance
(often by a separate firm)
Forwarders relay information about shipment to/from shipper and consignee.
Air Freight-Linked Integrated Logistics Services
Shipper
Forwarder
Origin
Airport
Airline
Destination
Airport Consignee
Forwarder
Shipper 1
Shipper 2
Shipper 3
Forwarder’s
Warehouse Consignee
Forwarder
Vendor Managed Inventory
Merge-in-Transit
Shipper
Forwarder
Origin
Airport
Airline
Destination
Airport Consignee
Forwarder
ShipperForwarder’s
Warehouse
Consignee 1
Distribution Hub
Pick & Pack
Testing & Assembly
Postponement
Multiple products/
components
Consignee 2
Consignee 3
Air Freight-Linked Integrated Logistics Services
Supply Chain Management (SCM)Supply Chain Management (SCM)
Firms now compete not as entities but Firms now compete not as entities but rather as supply chainsrather as supply chains
Definition: a business strategy to improve Definition: a business strategy to improve shareholder and customer value by shareholder and customer value by optimizing the flow of products, services optimizing the flow of products, services and related information from source to and related information from source to customer customer
Generally management of multiple Generally management of multiple relationships across the suppliers, relationships across the suppliers, producers and distributorsproducers and distributors
Push and Pull Supply ChainsPush and Pull Supply Chains
Porter’s value chain-system shows how Porter’s value chain-system shows how firms construct value by gathering profits firms construct value by gathering profits at various points in the production chainat various points in the production chain
Push chain- costs are transmitted up the Push chain- costs are transmitted up the chain determined by selling price at chain determined by selling price at preceding level-cost plus approachpreceding level-cost plus approach
Pull chain- place downward pressure on Pull chain- place downward pressure on suppliers who determine profits from suppliers who determine profits from their input coststheir input costs
Global Production Chains and Global Production Chains and NetworksNetworks
Production Chain: Materials > Procurement Production Chain: Materials > Procurement > Transformation > Marketing and Sales > Transformation > Marketing and Sales >Distribution > Service>Distribution > Service
DefinitionDefinition: transactionally linked sequence : transactionally linked sequence of functions where each stage adds value of functions where each stage adds value to the process of goods and services to the process of goods and services productionproduction
Two aspects important: coordination and Two aspects important: coordination and regulation and geographical configurationregulation and geographical configuration
Production chains may be very localized Production chains may be very localized but increasingly are global in scale to take but increasingly are global in scale to take advantage of international division of labor advantage of international division of labor
KIA Auto Parts FlowKIA Auto Parts Flow Assembled in S Korea KIA Sorrento clear Assembled in S Korea KIA Sorrento clear
example of global supply chainexample of global supply chain Uses 30K parts from all around worldUses 30K parts from all around world Parts shipped from places as diverse as Parts shipped from places as diverse as
Wales and Mexico—but very riskyWales and Mexico—but very risky War in Iraq and piracy in Malacca StraitsWar in Iraq and piracy in Malacca Straits Demonstrate surprising adaptability due to Demonstrate surprising adaptability due to
advance planning, multiple sourcing of advance planning, multiple sourcing of parts and ability to shift routes on short parts and ability to shift routes on short noticenotice
KIA Auto Parts FlowKIA Auto Parts Flow Communicates regularly with suppliers-at Communicates regularly with suppliers-at
least once a weekleast once a week Order several months in advanceOrder several months in advance If necessary use air freight instead of sea If necessary use air freight instead of sea
freightfreight Greater demand forced KIA to air freight Greater demand forced KIA to air freight
airbags from Swedish company which makes airbags from Swedish company which makes them in the U.S.them in the U.S.
Greater expense of trans-Pacific flight better Greater expense of trans-Pacific flight better than slowing down production linethan slowing down production line
IntermodalismIntermodalism
One of most dynamic sectors of One of most dynamic sectors of transport industrytransport industry
Common meaning: flow of goods Common meaning: flow of goods involving more than one transport modeinvolving more than one transport mode
Mutimodal transport- involve several Mutimodal transport- involve several different modesdifferent modes
Intermodal transport-Intermodal transport- flow of cargos flow of cargos from shipper to consignee involving from shipper to consignee involving single cargo unit across at least two single cargo unit across at least two different modes using a single through different modes using a single through rate rate
Intermodal Transport GoalsIntermodal Transport Goals Goal to remove barriers to flows Goal to remove barriers to flows
inherent in traditional systemsinherent in traditional systems Includes technical limits of Includes technical limits of
transferring freight between transferring freight between competitors and organizational and competitors and organizational and legal constraints imposed by separate legal constraints imposed by separate rates and billsrates and bills
Attempt to achieve seamlessness Attempt to achieve seamlessness where relative advantages of each where relative advantages of each mode are capturedmode are captured
Elements of Intermodal TransportElements of Intermodal Transport
Transferability of a unit Transferability of a unit load- largely load- largely technological problemtechnological problem
Provision of door to door Provision of door to door service- requires service- requires organizational control organizational control that may face regulatory that may face regulatory restrictionsrestrictions
Transferability has been Transferability has been achieved through achieved through containerization- boxes containerization- boxes of standard dimensionsof standard dimensions
First Intermodal RevolutionFirst Intermodal Revolution
Several attempts to integrate transport Several attempts to integrate transport modes- modes-
““Piggyback” or trailer on flatcar (TOFC)Piggyback” or trailer on flatcar (TOFC) Early success limited by rate restrictions, poor Early success limited by rate restrictions, poor
reliability and low profitabilityreliability and low profitability Containerization was the revolutionary Containerization was the revolutionary
breakthroughbreakthrough Transfer of cargo can be mechanical by crane Transfer of cargo can be mechanical by crane
and safety and security is improvedand safety and security is improved Fast loading and unloading reduces port Fast loading and unloading reduces port
congestioncongestion Growth has occurred through conversion of Growth has occurred through conversion of
cargo from traditional break of bulk and the cargo from traditional break of bulk and the growth of world trade growth of world trade
Impacts of Containerization on ShipsImpacts of Containerization on Ships
First generation vessels- WWII liquid First generation vessels- WWII liquid bulk tankersbulk tankers
Second generation – late 1960s Second generation – late 1960s larger ships (2000 TEUs) capable of larger ships (2000 TEUs) capable of stacking 10 lines of containers stacking 10 lines of containers appearedappeared
Third generation- 1980s size and fuel Third generation- 1980s size and fuel efficiency- up to 4000 TEUsefficiency- up to 4000 TEUs
Fourth generation- 6-8000 TEU shipsFourth generation- 6-8000 TEU ships
Impacts of Containerization on Impacts of Containerization on ShippingShipping
1. Effects on shipping services and routing1. Effects on shipping services and routing Goal to maximize number of voyages and Goal to maximize number of voyages and
minimize port stays- a. use fleet as efficiently as minimize port stays- a. use fleet as efficiently as possiblepossible
Container services are liner services with regularly Container services are liner services with regularly schedules arrivals and departuresschedules arrivals and departures
Service frequency is important in designing Service frequency is important in designing networks – b. generate cargo and market sharenetworks – b. generate cargo and market share
Selection of port of call is strongly influenced by Selection of port of call is strongly influenced by cargo availability cargo availability
2. Effects on structure and organization of 2. Effects on structure and organization of industryindustry
Development of alliances has been commonDevelopment of alliances has been common
Impacts of Containerization on Impacts of Containerization on
PortsPorts Huge investments in machines to lift Huge investments in machines to lift
and move containersand move containers Provision of new berths for large shipsProvision of new berths for large ships Extensive storage space required until Extensive storage space required until
land modes can receive cargoland modes can receive cargo Larger demand for adequate port sites Larger demand for adequate port sites
and old terminals have been and old terminals have been abandonedabandoned
Elimination of labor has provoked Elimination of labor has provoked resistance to containerization resistance to containerization
Second Intermodal RevolutionSecond Intermodal Revolution
By early 1990s first intermodal revolution had By early 1990s first intermodal revolution had maturedmatured
Global assault on regulatory restrictions- Global assault on regulatory restrictions- liberalization removing control over rates and liberalization removing control over rates and permitting multimodal ownershippermitting multimodal ownership
Information technology assisting in problems Information technology assisting in problems of documentation, security and safetyof documentation, security and safety
New revolution characterized by “through New revolution characterized by “through transport” concept- organization of trade is transport” concept- organization of trade is “door to door” and attempt to integrate “door to door” and attempt to integrate various modes into production and various modes into production and consumption systemsconsumption systems
Implies landward links where rail and highway Implies landward links where rail and highway play major rolesplay major roles
top related