Incoterms are an important aspect in this research. When a freight forwarder is being asked from a shipper for a sea freight quote, there must an indication of the incoterms (such as ‘’Quote request FOB Brazil-Rotterdam). The incoterm provides the freight forwarder with an understanding of who will pay the invoice and for which part of forwarding services in the supply chain process.
Refresco Gerber intents to control its inbound logistics by controlling the terms of its purchasing raw materials. Therefore, there is a need for Refresco Gerber to look into the option of buying these raw materials under the terms that are more favorable to its expenses. In this case, an FOB (Free On Board) term seems to be the right option for the Company.
According to Cook et. al (2012), the major advantage of using an FOB term is that will give you control of the inbound supply chain. It will typically allow you better pricing, control of delivery scheduling and all compliance responsibilities. Based on their analysis for more than forty years on this subject, the authors further pointed out that the importer is always served better when they control the inbound and ‘’importer of record’’ responsibilities. The importer benefits by reducing overall logistic costs, managing compliance and security requirements, and maintaining control
…show more content…
Although, by selecting an FOB term we can organize the transport according to the needs that exists within Refresco Gerber and take full consideration about inventory carrying costs, transportation costs, customer service level costs, warehousing costs, lot quantity costs other relevant costs. In addition, with an FOB term the local charges in the country of origin of each raw material product will not be part of Refresco Gerber responsibility which means that problems such as complex paperwork or language difficulties will be
After having a very successful performance and getting second place on the first Littlefield simulation game we knew what we needed to do to win the second simulation game. We were very eager to outperform our competition and we almost did so, but ended up in second place again with a cash balance of $2,660,393.
The cost associated with the physical transfer of goods is an essential piece of information in the negotiation of an international trade transaction. To maintain a product’s competitiveness, the seller must make sure that his cost is as low as possible. However, in any particular supply chain, this cost is made up of a number of cost elements corresponding to services that enable physical linkages between supply chain members. These elements cannot always be clearly quantified beforehand.
VF also uses a “package sourcing” model in production where a single supplier is responsible for the entire garment, from raw material procurement to packaging and shipping finished goods to the market. “Package sourcing” has the benefit of low cost, as companies can choose between various suppliers all over the globe based on economic factors, such as labor and transportation costs, and trade quota or tariff considerations to get the cheapest price for finished goods. It also allows VF
First Destination Transportation (FDT), the movement of material from suppliers to the first military depot or direct to military customer, is about to change from FOB destination to FOB origin. Slated to begin with solicitations and awards in late October 2013, FDT requires the removal of transportation related cost from contractor bids. Contractors need only be concerned with quoting the associated costs of manufacturing their products. Products affected by the October roll out will be those labeled as Class IX consumables and some Class IV and VII materials to CONUS destinations. Supply Chains included in the FDT initiative are: Aviation, Land and Maritime, Construction and Equipment, and Industrial Hardware. Then you also have Second Destination Transportation (SDT). This is where the cost comes into play to ship Army Post Office mail, transportation of organizational equipment, permanent change of station, temporary duty cost, depot maintenance, and any cost that is not funded through FDT. Once these items, equipment, or other materials that have been contracted and sent to the first destination and the items need to be moved to another location SDT picks up that bill. (Defense Logistics Agency, 2014)
Patients who are uninsured or underinsured definitely benefit because they can potentially avoid crippling medical bills for the care they need. Insurance companies may also benefit due to not having to pay such large amounts for domestic
All the proposed tests are necessarily vague and only designed as guides, with definite mandatory subjects being determined only on a case by case approach. However, when a subject has been determined to be a mandatory one, it is agreed that it may be bargained to an impasse so long as the bargaining is in good faith. Whether the subject of dues check-off is a “condition of employment” under the Act and thus a mandatory subject of bargaining has often been before the National Labour Relations Board (NLRB) and the courts. The NLRB is given a great deal of flexibility in interpreting the Act in order to effectuate its policies as evidenced by congressional intent and the courts will normally interfere only if the Board abuses its discretionary
Packaging and labeling of products are other key essential parts of the Cooper Company logistics to provide satisfaction to their customers. Accurate packaging and labeling can have a direct impact on the Cooper Company logistical productivity and efficiency (Bowersox, D. J., Closs, D. J., Cooper, M. B., & Bowersox, J. C. p.251. 2013). The company’s packaging accounts differs for each channel this entail the retail accounts 80 percent of the packaging cost and Foodservice of 20 percent (Bowersox, D. J., Closs, D. J., Cooper, M. B., & Bowersox, J. C. p.465. 2013). “The retail channel requires “labeling” to accrue the company a 2,000,000 expense includes materials, labor, and depreciation of the machine.
Outsourcing the warehousing functions: In this option, all warehousing actions will be outsourced to Global Logistics (GL) and distribution will start from main warehouse at
A major drawback to the use of incoterms is that they are too many. This provides extreme challenge to shippers who sometime have multiple large volumes of freight to be transported. Even though it is incumbent on all stakeholders to know the appropriate incoterm that applies, and the level of risk and liability associated with them, mistakes are usually made.
Our approach was to facilitate the demand with respect to the market. We penetrated the market by building factory in Fardo and building warehouses to the respective regions, Caleopeia, Sorange, Entworpe, Tyran. Another component that we had to consider was finding the optimal cost to increase market share and increase our profit margin. Discussion on the logistics will be discussed thoroughly, which affected our decision points and our overall outcome. There are a few questions we needed to answer before we built a road map to our strategy i.e. figuring out where to build the factory and warehouse, estimate the demand of the four regions and Fargo region, should we change capacity, adjust ordering point with respect to quantity, and also
We are all aware about the importance of supply, manufacturing and operations chain for any business. It becomes even more important if we are crossing the borders and entering international marketplaces as we are
Another factor Service refers to fast processing of documents, bill of lading and prompt loading and movement of containers etc. It is rather difficult for customers to get better quality of service than getting competitive freight rates. In this world of technology every company is trying to adapt to new technology in their day to day businesses like e-processing of documents and fastest data entry to name a few. Maersk is so technologically advanced in this field that all its data processing is being done electronically by back office and customers are able to access all information relevant to shipment though dedicated space available on company website. Examples electronic processes are shipping bills, vessel certificates, freight invoices and bill of lading in encrypted format once the payment is done by customer either electronically or at Maersk local office. Companies like APL and MSC do have electronic processing systems but are not fully fledged and as a result much of the work is still being done manually.
Transport plays a critical role in the supply chain and according to Bhattacharya et al. (2014) it is becoming one of the key components of the whole supply chain valuation for many organizations. Transportation is the movement of good from one location to another. Supply chain is a network of individuals, organizations, activities, resources and technology that is involved in formation and sale of a product, which is from the delivery of source materials from the supplier to the manufacturer, through to the end user. Hopkins (2007) states that supply chain professionals look at whole business procedures, which is from raw materials to manufacturing, wholesaling and retailing. And by
Forward logistics (or conventional logistics) is the regular distribution channel followed by the manufactures from time immemorial. Forward logistics concentrates on the products (goods or services) reaching the consumer end and deals with the line of flow from the manufacturer’s end to the consumer’s end. It deals with the very essence of Supply Chain Management and logistical activities of an organization. It has a significant impact on the primary operations carried out, which act as the basic revenue generating aspect of a business. In this logistical system, the flow is a “one-to-many” type and the forecasting or traceability is quite simple.