Logistic and Supply Chain Management Assignment

Logistic and Supply Chain Management Assignment

Logistic and Supply Chain Management Assignment

Introduction

Logistic management is basically an element of supply chain management which facilitates the organisation to meet the demands and expectations of the customers with the help of planning, monitoring, control and execution of the activities effectively and store the relevant information and goods to the actual destination. The logistic activities largely assist the organisations to reduce the expenditures and improve the customer services to the desired levels.  Transportation is been considered to be the most important aspect related to the delivery of the goods and services from one place and another and thus requires making effective choices for the mode of transportation in any of the organisation. The present report is basically generated with the purpose to gain an enhanced understanding of the logistics and its related aspects. It would be focusing on the case of a leading industrial power generator supplier facing failure in delivering the equipment to the clients. It would be focusing on various aspects faced while arranging the mode of transportations along with the issues faced during it. The report would even identify the documents being required for the shipments of the good and services and ensure a systematic delivery of the same.

Logistic and Supply Chain Management Assignment

Consideration of Transportation

The transportation system is required for the delivery of the generator and load bank to Samsung Heavy Industry in Santos Basin. In order to satisfy the customers, it is necessary to determine the cost and time along with the effort to serve the contract.

The transportation mode

To transport the cargo from different locations to a Santos Basin, it is required to choose an authorized airline cargo service. The airline and aircraft must be well maintained according to demands. The selection of Volga-Dnepr Airlines is recommended as the transportation mode in an organization. The airline is the member of the IATA (International Air Transport Association) and TIACA (The International Air Cargo Association). The organization has authority to maintain all airline operations including the training of staff and maintenance of the aircraft with international airline operations. The services of the organization to offer the maintenance are approved by the aviation authorities of United Kingdom, Canada and the United States. Volga-Dnepr Airlines offer a unique choice to accomplish all the demands with airline services as shown below:

1. The organization offers the pieces of equipment on the ground to load or release the goods. The support is effective to handle the various kinds of goods and loads with airlines (Wen.et.al.2010).?
2. The required permits are given to transport the cargo to airport or from the airport so that customers need not to worry about the permissions at checking posts.
3. The shipments are prepared according to the nature of the products so that cargos can be loaded with effective packing and delivery without damage and lost.
4. The management of the Volga-Dnepr Airlines is supportive to suggest the recommendations and practices to load the cargo for effective transportation.
5. The insurance and customer relations are given proper focus and handled with assistance.
6. The organization also has contracts with other organizations for the airline services with the small aircrafts so that competitive advantages can be achieved with reduced cost.

The Ruslan freighter aircraft is well known for its capability to ship the heavy and oversize cargo packets. The aircraft has special arrangements to load the cargo from the wheels and does not demand any kind of equipment. The wheels are capable to lead the containers those can be shipped into large size cabins (Allen.et.al.2010). The aircraft is capable to send the heavy cargo of about 120-kilotons to a remote location with its high flight range. The organization also can review the choice of Boeing 747-200F/300F as it was designed with increased engine power and capabilities to land with the heavy load in it. These features in Boeing are useful to carry the large size and heavy cargos to the extreme remote destination in the world. The Boeing has inbuilt cranes to handle the cargo up to three tons in weight whereas the four monorails motors have the capability to pull 30 tons.  The features make it different from the traditional aircrafts.

Plan for the loading

To ship the generator and load bank to the remote location within the decided time, it is necessary to make a plan to enhance the certainty of success. The team members meet at an airport with the required cargo package. The management of Volga-Dnepr Airlines validates the customer identification and assists them in technical specifications. The loading aircraft needs to carry the weight of 60 tons for the distance of 9,500 km (Richardson.et.al.2011). The aircraft has the speed of the 925km/h with payload so that following information has been collected to deliver the payload at the time.

Source location

Destination

Distance

Time

Remark

Singapore

Dubai

5,900 km

6 hours 23 min

Loading and refuelling time is extra to count 

Dubai

South Africa

7,700 km

10 hours 20 min

Includes two hours of refuel process

South Africa

Rio

6,100 km

6 hours 35 min

Unload and reload time is extra

Rio

Santos Basin

250 km

9 hours 5 min

With load and unload time.

Santos basin is 9 hours and 20 min away from the Rio with 250 km. the time is greater in comparison of flights because the rest of work will be done with domestic lorries and load movers. Duta services are selected as the movers for the cargo as the services use the set of three vessels plying between the Singapore and Batam. The Volga-Dnepr Airlines use the tours twice daily to hip the cargo packets and one tour is made through the sailing per day to ensure the delivery of cargo packets by tug and barge methods. The Duta agency is about 15 knots away and has the distance of 30 km from the Batam in which expected the time of 1 hour and 5 minutes are assumed. Also, the time is required to load and unload the cargo on a destination (Wu, 2016).

Singapore to Dubai

There is the requirement of the agreement to make the visit in Bahrain, Kuwait, Qatar, Saudi Arabia, Oman and the United Arab Emirates along with Singapore. The agreement is known as GSFTA which ties GCC countries and Singapore. Singapore has the FTA with GCC to make the transportation and tours effectively.  The second is signed by the Singapore country as Singapore-Jordan FTA to connect with Middle East countries but there is no FTA for Brazil for transportation services. FTA is an agreement in which the organization of airlines and aircraft provides the services, maintenance and insurance to the customers. It also has the coverage of extra cost along with airport charges and fuel fees (Wensveen, 2016).

ACMI is one the biggest lease provider in the UK in the airline industry. ACMI lease is used with the role of the charter so that shipper and carrier can contract on the safe channel. The charter helps to utilize the capability of the aircraft to load the cargo and carrier has the security with the funds and rights. ACMI charters are used to ship the bulk commodities like the fertilizers, grains and other heavy products.

Scheduled airfreight services for staff member

Charter aircrafts are used to accomplish the requirements of the shippers for the specific product and cargo delivery. It is used in emergencies and conditions when the traditional ships are not capable to handle the large and heavy cargos in their aircrafts. Charter aircraft has no schedules due to its specific demands and usages. The special usages and capabilities make it a project cargo. The traditional planes are limited for the weight and size of the cargo and not preferred to ship the heavier cargos than their capabilities. The cost of shipment to send it to the remote location is calculated with two methods (Ball.et.al.2010). The first is dedicated to analyzing the weight of the cargo items and the second method is used according to the volume occupied by the cargo. Additions to it, the cargos are not placed directly into the aircraft as the containers are used to make the load and unload easier. The containers are the metallic boxes at the height of 20 feet and 40 feet whereas the length and width are equal to 8 feet. There are two containers to load into aircraft. 

The formula to calculate the charges is cm3/6000 = total chargeable weight. There is the total weight of 60000 kg or 60 tons.

The load bank capacity= 20 feet x 28316.84 cm3 = 566,337cm3
The volume of the generator= 40ft x 28316.84 cm3 = 1,132,673 cm3
Total Volume in aircraft = 566,337 cm3 + 1,132,673 cm3 = 1,699,010cm3
Now the organization needs to calculate the chargeable weight.
Total Chargeable weight = 1,699,010 cm3/6000 = 283.16 kg

Gross weight of 60tons will be charged for the rare destinations lacking the scheduled airline services. The containers are filled according to their full capacity. The full container load (FCL) has reached and utilized the capacity of hosting container. The bulk sized cargos are placed outside of the container but the rest of normal containers are placed normally inside the aircraft. The ship is directed to lease the cargo in Santos Basin (Morrison and Winston, 2010).

Tramp services are used to ship the cargos on the demand basis from one port to another and have no specific routine as general air craft’s have. Addition to it, the term cargo deadweight tonnages is the actual weight capacity of the aircraft after subtracting the weight of bunker and other ship materials. There is the list of the following charges with airline organization:

Small arbitrary charges for cleaning (ARB)
The charges for the bunker and fuel adjustment (BAF or FAF surcharge)
Currency adjustment charges for the various countries in route (CAF)
The charges of container to container yards (CY/CY)
The cargo moving charges from container freight stations to container yard (CFS/CY)
The terminal handling charges for cargo (THC)

The distribution is done with the help of local distributer in country where the cargo is shipped. Normally, the distributer purchases the cargo items from the exporter and determine own prices on them to earn the benefits. In this manner, there are two kinds of invoices are managed (Ramberg, 2011). One invoice is issues between the exporter and distributer in importing country. Another invoice is issued by the distributers to customers so that customer assumes it as a local sale. The invoices are used for the warranty or guarantee purpose on each sale and buy.

Incoterms

Incoterms are used to define the international commercial terms so that buying and purchasing trades can be made easier to understand in different countries. It is helping the traders to understand the international contracts and terms of business management. Incoterms are used to deliver the products in time which means that it is the responsibility of the seller to deliver the product on the chosen organization with proper transportation and risk handling. The buyer is only paying to make the delivery on the time and on the chosen destination for products. DAP (Delivery at Place) is concern under the DAP Incoterms rules. For that the buyer and seller from different countries make an agreement to deliver the product and services on the predetermined location (Malfliet, 2011). The agreement also defines their agreed nature on the route of the transportation for products and services. The exporter is responsible to pay the charges to the international voyage along with the charges of the transportation and customs in the importer city for the carriers and movers to reach the target destination. The all the charges are pay from the side of exporter to transit the product at destination city. This is the responsibility of the exporter to deliver the products and services with required quality and on specific destination and it includes the mode of transportations (Bergami, 2013). This is the example of the Incoterms in New Zealand:

DAP· 97 Brisbane Street, Sydenham 8024,
New Zealand, Incoterms® 2015

Insurance

Insurance is required to cover the loss during the transportation and delays of product delivery. The insurance agents are liable to assist in the processing of the products and the strategies related to risk management in transportation. The agent in international transportation offers the coverage of the loss overseas. The insurance agent has various policies to offer the coverage. Coverage A is related to domestic transportation whereas coverage B is related to internal transportation. The plan B is named perils because it has only coverage for the specific kind of loss and damage. It covers the following risks:

1. The fire and lightning hazards are covered in this broad form of insurance. It handles the insurance in case of fire and lightning damage to products and vehicle during the transportation (Metrass-Mendes and de Neufville, 2010).

2. Windstorm or hail related insurance cannot be claimed if there is no damage to the exterior of the vehicle or storing building. The funds for products are only given on the basis of the exterior damage to the container.

3. The broad form of insurance offers the coverage for the explosion, civil commotions, aircrafts and other vehicles. The damage to the aircrafts during the transit of delivery.

4. The policy is also designed to cover the loss of theft and smoke generated damages. However, the loss and damage due to weather instability are lots covered as part of insurance.

With the nature of the transportation, it is recommended to choose the policy B as it has effective and optimum coverage for the risks and issues during transit of cargos to a destination. Policy B is good to handle the risk and to offer the maximum returns in case of hazards.

Addition to it, the coverage with policy A is known as open policy or insurance. It is the effective choice if the transportation is made on the regular trades and channels. The coverage is provided for any kind of loss and damage to the material to that insurance is made. In the coverage, the organization has full risk management with the aircraft and shipments during the transportations. Although, the insurance also has no coverage for the loss and damage during the wars, civil conflicts and governmental issues (McGovern, 2016). The coverage A of the Institute Marine Cargo Clauses offers all the benefits those are required for the services. The coverage is identical in different countries.

References

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McGovern, E., 2016. International trade regulation (Vol. 2). Globefield Press.

Metrass-Mendes, A. and de Neufville, R., 2010, July. Air transportation policy for small communities: lessons from the US experience. In 14th ATRS World Conference Proceedings, Oporto, Portugal.

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