Green Logistics

May 27, 2010

I read in a other blog about green logistics and I think that this topic is quite interesting. In this times it’s rather necessary to help our environtment to stay heathy.

What is Green Logistics?

Logistics is the integrated management of all the activities required to move products through the supply chain. For a typical product this supply chain extends from a raw material source through the production and distribution system to the point of consumption and the associated reverse logistics. The logistical activities comprise freight transport, storage, inventory management, materials handling and all the related information processing.

The main objective of logistics is to co-ordinate these activities in a way that meets customer requirements at minimum cost. In the past this cost has been defined in purely monetary terms. As concern for the environment rises, companies must take more account of the external costs of logistics associated mainly with climate change, air pollution, noise, vibration and accidents. The picture below shows elements which should be take in account when thinking about green logistics.

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Third party logistics

May 26, 2010


Third Party Logistics (3PL) is the function by which the owner of goods (The Client Company) outsources various elements of the supply chain to one 3 PL company that can perform the management function of the clients inbound freight, customs, warehousing, order fulfilment, distribution, and outbound freight to the clients customers.

These type of managing is rinsing and risin. In the following blog post from Martin Murray shows how strong it’s rising.
He also talka about how to find the fitting third party logistics company but I think that’s not so interesting.

Rise Of Third Party Logistics Providers

The growth of 3PL companies began back in the 1980’s when businesses began to look for new ways in which they could outsource logistics functions and concentrate on their core business. One company that has been associated with the 3PL revolution is FedEx. The company’s overnight delivery service changed the way in which business to business and business to customer transactions operated. This offered businesses the opportunity of using just-in-time techniques, which saved warehousing space and reduced overall costs. The introduction of efficient-consumer-response (ECR) techniques led to smaller and more efficient shipment sizes, which in turn further reduced costs.

As companies saw the benefits of outsourcing delivery and warehousing functions, the number of third party logistics companies began to rise offering an ever increasing number of services. The increasing numbers of 3PL’s inevitably led to increased competition between these firms, which led to greater savings for the companies who employed them. The last decade has seen the 3PL provider transitioning from a local or regional business to one that offers national or global coverage. In US, the 3PL market has been growing at a compound annual rate of 14.2 percent since 1996 and in 2006; 3PL’s in the United States reported $89.4 billion in gross revenue.

Whole blog post

Bullwhip Effect

May 26, 2010

Demand changes increases as one step up the supply chain away from the retail customer. Small changes in consumer demand can result in large variations in orders placed upstream. The network can oscillate in very large swings as each organization in the supply chain seeks to solve the problem from its own perspective. This phenomen si calles bullwhip effect.

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May 26, 2010

I don’t really know if this fit into this blog but I post it nevertheless because I think it’s a quite interesting approach to get a chleaner and saver working environment.

The 5s approach is a method which helps to organize the workplace in order to increase efficiency and eliminate waste. One of the main ideas 5S follows is the reduction of non value added activities (NVA) which are related to the 7 types of waste (Figure 7) mentioned before. [1] To achieve this aim a few steps have to be accomplished.

  • Seiri (sort): The contents of the workplace should be sorted and unnecessary item removed. Through this action gets the workplace clearer.
  • Seiton (straighten): The item necessary for the process should be placed or arranged in a way that an easy access and a clear identification are guaranteed.
  • Seiso (shine): All items and the workplace were cleaned. During that step gets the whole equipment and workplace inspected for defects.
  • Seiketsu (standardize): The creation of visual controls and guidelines ensure that the workplace is clean and organized.
  • Shitsuke (sustain): Training and discipline to assure the compliance with 5S.[2]

The benefits for a company which could be generated through the implementation of 5S are various.

  • The cleanliness of the workplace enhances the safety.
  • It improves the thinking and feeling about the products, the process and the company.
  • A proper showcase for eventual customers will be generated.
  • Increases the efficiency of each working step.[3]
  • The new created space could be used for future expansions

[1] T. T. Allen (2010), Introduction to Engineering Statistics and Lean Sigma: Statistical Quality Control and Design of Experiments and Systems, p. 125.

[2] M. Harry, P. S. Mann, O. C. De Hodgins (2009), The Practitioner’s Guide to Statistics and Lean Six Sigma for Process Improvements, p. 73.

[3] D. H. Stamatis (2002), Six Sigma and Beyond: The implementation process, p. 274.

Dell’s Supply Chain

May 13, 2010

Dell is well known as a producer of customize computers. That service seems to be quite cost intensive for dell. Especially for storage and inventory costs because every computer has different parts built in. Dell solved this problem with success. They have no inventory because they force the supplier to take the inventory and the related costs and risks.

Dells supply chain is quite simple because of the direct contact to the customer. This allows production on demand which means that Dell starts the production of a part not before an order is placed.

After the order is placed by the customer, Dell gives the purchasing order to the suppliers. They deliver the part every two hours to the manufacturing parts. The parts get introduced immediately into the production process.

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Fleet Management

April 14, 2010


Fleet management is the management of a fleet of vehicles, using certain tools, to improve operational efficiency and effectiveness. For the management of a fleet are a lot of technologies such as computer software, communications systems, and vehicle location technologies required. This leads to a more effective planning, scheduling and operations of transit vehicle fleets

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April 14, 2010

A few weeks ago we talked about different forecasting methods. In another subject we did some similar methods. We proofed our knowledge with an activity called “the Hard Rock case”. The results of this activity could you find here.

Extension Just in Time

April 7, 2010

While surfing around in the other Logistics-Blogs I found a really interesting topic. Johannes wrote in his Blog ( a post about Just in Time (JIT) production. After reading I had decided to extend his topic with quite similar production method.

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Is there a Relationship between cost, price and value?

March 11, 2010

The most of the people think these three words are similar. When you take a look at the definitions you will see that’s not right.

Costs are the amount of money you have to spend to produce your product.

The Price is the money you gain from you customers when you sell your product to them.

Value the worth of your product in the customer’s eyes.

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Why is the world Trade in manufacturers so much higher raised than the World GDP?

March 11, 2010

This question isn’t easy to answer. There are a lot of influencing factors which supported this effect. In the following mind map you see the main influencing factors.

Klick on the mind map to open!