Creating a Logistics Plan for International Transport and Warehousing of Goods
Strategic Logistics Management, Inc. (SLM) is a U.S.-based third party company whose primary business is to deliver logistics services. Currently, SLM manages several warehouses in Los Angeles and the New York/New Jersey area. SLM provides expertise in air and ocean shipping, customs clearance, forwarding, warehousing, and ground transportation. Over the past five years, SLM has built a successful logistics information system (LIS) that includes personnel, equipment, and technology. The decision-support systems included in the LIS are a transportation management system (TMS) and a warehouse management system (WMS).
SLM employs experienced personnel in the United States to handle a wide range of logistics activities and provide customized logistics solutions and services. The company is considering expanding their global operations to provide the same range of services in Australia, including:
Imports: A network of offices and trade connections to support import consolidation, provide warehousing of goods prior to customs clearance, and manage import documentation for customs formalities.
Door-to-door services: Cargo pickup from supplier locations and transportation of goods directly to the customer, as well as freight bookings with airlines and ocean lines to handle cargo exports from both the United States and Australia.
Exports: Handling of various types of cargo exports by ocean and by air, ensuring the timely movement of goods at the most competitive rates. Complete export documentation is provided.
SLM is working to secure two contracts in Australia that will go into effect next year. The first contract is with Greer Wire Company in Melbourne, Australia, to transport two million pounds of stainless steel brushfire mesh used in protecting homes in brushfire prone areas. This cargo will be shipped to Los Angeles, California. The stainless steel wire mesh is supplied in five-meter rolls with an outside diameter of 500 mm, and each roll weighs 50 kg.
The second contract is with Brooks Brothers, a clothing company located in New York City, for warehousing and transportation of clothing in various sizes of cardboard boxes that easily assemble in one unit load on a 48-inch by 40-inch pallet. The goods will be shipped from New York, New York, to Sydney, Australia. For the purpose of this assignment you can make reasonable assumptions about the weight of the boxes.
SLM will manage a rapid flow of goods to and from Australia. The proposed warehouses in Australia will be located in proximity to two large metropolitan areas, Sydney and Melbourne. In the first year of its operations in Australia, SLM plans to handle an average of 200 20-foot equivalent units (TEUs) of imports and exports between the United States and Australia every month.
You are a Logistics Manager at SLM. As part of the company’s goal to strengthen its competitiveness in the global marketplace, the CEO has asked you to design a logistics plan for the proposed warehouse operations in Australia and transportation of goods between Australia and the United States.
In your report (allowing for reasonable assumptions when necessary),
Select one of the two SLM contracts described above.
Analyze the product’s physical properties, volume, and quantities to determine if the product’s shipment size is small (150 to 500 pounds) or a larger (consolidated) shipment (at least one TEU).
Evaluate at least two modes of transportation that best support the organization’s supply chain for shipping the product from one country to another, door-to-door, in a multimodal shipment. Explain your reasoning.
Identify the type of warehouses that SLM should employ in Australia to ensure a rapid movement of goods. Recommend either public, private, or contract warehousing and explain how your recommendation supports SLM’s supply chain management.
List and describe the necessary commercial, banking, and shipping documents that comply with export and import procedures in the United States. These may include a commercial invoice, certificate of origin, shipper’s export declaration, shipper’s letter of instruction, bill of lading, freight bill, and letter of credit.
Determine the appropriate Incoterms® 2010 rule, depending on the shipment mode and buyers’ and sellers’ responsibilities.
Select a process (Lean, Six Sigma, Just-in-Time, or Kanban) and explain how the process can be implemented to ensure effective and efficient warehouse operations techniques are in place that support the company’s supply chain design.
List a minimum of four additional budget line items in the table below with a rationale to ensure smooth warehouse operations in Australia. Support your rationale by including various logistics activity measures, cost drivers, profit models, and the role of inventory and how they influence SLM’s financial outcomes.