Unit 5

Unit 5

LOGISTICS

INTRODUCING NEW INFORMATION

Ex. 1. a) Read the text and find 2 or 3 sentences that express the main idea.

LOGISTICS

The interest in logistics in Russia today is immense and a lot of in­ terpretations of what logistics is have appeared in the last few years.

There are not so many schools or universities--in Russia where one can be trained to work as logistics manager though the market demand for these specialists is great.

Transport logistics is the art of organizing the transfer of cargo from origin to destination. Logistics is now a multi-billion dollar business and almost every company wants to have a stake in it.

Marine engineering companiesport authorities, and manufactur­ ers have joined shipping companies, freight forwarders and logistics op­ erators in providing a service which is referred to as LOGISTICS. Some offer no more than a warehouse to third parties while others provide ev­ erything—freight forwarding, warehousing, inventory management, stuff­ ing and unstufilng of containers, palletizing, packaging and product con­ figuration.

We all see the logistics industry changing fast. Western logistics-com­ panies have begun offering new services to totally new markets: Eastern Europe, Russia and Asia. New transport routes by air, rail, road and sea are constantly turning up. Mergers2, acquisitions3 and alliances4 in the

	marine engineering companies - судостроительные компании
2	merger - слияние
5	acquisition - поглощение

* alliance — объединение

Logistics

logistics industry mean that service chains are more comprehensive than ever before.

An up-to-date logistics operator is a company which has a big ware­ house and their own fleet of trucks shuttling containers back and forth between ports, railway hubs1 or airports and a logistics park. The com­ pany will offer consolidation, de-consolidation, customs clearance on their premises and other logistics services such as picking and packing, palletizing and re-labeling of goods.

Normally in logistics if you can be the first you have a large chance of taking the whole market.

b) Read the text and say if the statements below are true or false. Correct the false statements.

Market demand for logistics operators is great all over the world. Transport logistics has nothing to do with the carriage of goods. Very few companies invest in logistics now.

Inventory management and warehousing are the same. Acquisition is a forwarding firm.

A modem logistics operator is a company which transports dangerous goods.

Many new routes have appeared on the transport market lately.

Ex. 2. Look through the text again and say what you remember from the text about:

a)logistics companies;

b)changes in the logistics industry;

c)logistics in Russia.

DEVELOPING READING TECHNIQUES

Ex. 3. Listen to the text "Logistics" and follow it with your eyes.

Ex. 4. Listen to the text again and repeat it sentence by sentence.

Ex. 5. Read the text aloud, approximate time of reading is l.S min.

1 bub - центр, узел, пункт

Unit 5

LEARNING NEW WORDS

Ex. 6. a) Find the words in bold type and try to guess their meaning. Check up the translation of the words in the vocabulary (p. 128). Write them out in your vocabulary.

b) Write down all the words unknown to you in your vocabulary.

Ex. 7. Explain the meaning of the following phrases within the text:

1)comprehensive service chains

2)to offer palletizing

3)a logistic park

4)to be trained in warehouse management

5)to turn up constantly

6)picking and packing containers

Ex. 8. Match the verbs on the left with the noun phrases on the right and translate the expressions they make into Russian:

a) to transfer	1) a logistics operator
b) to refer to	2) containers forth and back
c) to shuttle	3) boxes and bags
d) to stuff	4) inventory management
e) to provide	5) port and warehouse
f) to offer	6) premises
g) to invest in	7) palletizing

Ex. 9. Fill in the gaps with the words given in the box.

packaging packed

containers damage

crates

labeled

label container

When a company exports goods abroad there are many problems it

must consider, e.g.

, transportation, insurance, payment. First

of all the goods must be

carefully in

to protect

them from

. The containers or

must be

clearly to show where they are going. The

may

contain.

also snow what the

Logistics	109
Ex. 10. Read the text and choose the right word.

The Advance Cargo Information System (ACIS) offers the oppor­ tunity of (exchanging, exchanged) information between various par­ ties (involving, involved) in transport and acts as a catalyst to the intro­ duction of both logistical chains and multi-modal logistics. It is a real time system (basing, based) on PC network and offers the opportunity for (improving, improved) resource planning, better equipment utili­ zation through the (improving, improved) supply of transport data to the users.

ACIS has 4 compartments, each (tracking, tracked) transport equipment and cargo on a mode: port, road, rail and lake. They in turn have main modules (performing, performed) different but (inter-relat­ ing, inter-related') functions, especially (referring, referred) to statis­ tics and performance indicators.

ACIS is (designing, designed) to change transportation culture by (promoting, promoted) "business partnership" between those (involv­ ing, involved2 ) with cargo transits. ACIS is necessary to provide infor­ mation on the progress of consignments so as to identify and cure the causes of delay and other problems.

Ex. 11. Check yourself. Give English equivalents of the following Russian word com­ binations:

1)обучаться на логиста

2)ссылаться на опыт компании в экспедировании грузов

3)перемещать контейнеры между портом и железнодорожной станцией

4)оказывать складские услуги

5)слияние и поглощение

6)перевозить груз от места происхождения до места назначе­ ния

7)обеспечивать упаковку и укладку в паллеты

8)рыночный спрос на специалистов в области логистики

9)осуществлять растаможивание груза на собственных складах

10)постоянно появляться на рынке

'to inter-relate —иметь взаимную связь

1 to involve — вовлекать

по

Unit 5

REVIEWING GRAMMAR

Complex Object

Ex. 12. Study the table given below paying attention to the form of the Complex Object.

Подлежащее	+ сказуемое	+		сложное дополнение
The providers	want			the manager
They	expect			him	to do smth.
He	considers			them
The operator	thinks			us
The providers	see			the manager
They	hear			him	do smth.
The operator	watches			them	doing smth.
He	notices			us
	make				do smth.
	let

Ex. 13. Read the following sentences paying attention to the usage of the Complex Object and translate them into Russian. Ш$Щ

1.1 want you to make a report at the conference.

2.We expect the company to give us a discount.

3.The carriers would like the cargo to be ready for dispatch tomor­ row.

4.The workers heard the truck arrive at the warehouse.

5.The president believes the contract to be signed next week.

6.The inspector finds the report to be incomplete.

7.The company allowed its customer to make the payment next week.

8.People watched the ship enter the port.

9.We all know him to be a reliable partner.

10.They'll make us sign the contract.

11.The driver watched the Customs Official looking through the dec­ laration.

Ex. 14. Make sentences using the Complex Object.

1. The manager...	to want	we	to arrange delivery of the car­
2. They...	to watch	they	go.
3. The president...	to expect	the distributor	to be in charge of the ship­
4. The workers...	to notice	the forwarder	ment
5. We...	to see	the partner	to conclude an agency agree­
		the truck	ment.
			to share responsibility for the
			losses.
			to discharge the vessel,
			to load the cargo on the truck,
			to record copies of invoices.

Ex. 15. Combine the sentences using the Complex Object if possible.

1.The production lines of multi-national corporations must be trans­ ferred to Asia and Latin America. The corporations want it.

2.Finished products should be delivered everywhere. People expect it.

3.The logistics operator was discussing the new tracking system with the customer. I heard it.

4.The largest freight forwarders of the country were trying to take the logistics market. We didn't want it.

5.The new crane was stuffing containers. A group of new employees watched it.

6.The new manager will be in charge of product configuration and pack­ aging. The general manager expects it.

7.Palletizing refers to logistics. I heard about it.

8.The cargo must be dispatched before the weekend. The manager ex­ pects it.

9.The problem of overtime should be solved as soon as possible. The loaders expect it.

10.The distributors provided very effective service. The manufacturers thought it was so.

Ex. 16. Translate the following sentences into English using the Complex Object if possible.

1.Они не предполагали, что расходы по складированию так велики.

2.Я слышал, что вы отвечаете за перегрузку.

3.Я слышал, как они обсуждали счет за разгрузку.

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4.Он не видел, как контейнеры передвигали.

5.Нам бы хотелось, чтобы вагон был загружен к 5 часам.

6.Вы считаете, что упаковка должна быть произведена за наш счет?

7.Я хочу, чтобы мы рассчитались сегодня.

8.Я полагаю, что такой важный момент не может быть упущен.

9.Они не ожидали, что мы столкнемся с большими трудностями в порту.

10.Он не заметил, как стрела сдвинулась с места.

Ex. 17. Put the verbs in the brackets in the correct form.

At present multi-national corporations (to transfer) their production lines to Asia and Latin America. They organize the delivery of compo­ nents to the manufacturing sites. They also (to arrange) shipment of the finished products to distribution centers therefore they (to have) a require­ ment for repackaging, re-labeling, resorting, inventory control. In short they (to need) logistics service. Today almost every other trucker, freight forwarder, storage company or short-sea carrier (to style) itself as a logis­ tics operator. Very effective service but only within very restricted market (can, to provide) by many of them but they (to be) not global. On the other end of the scale many large forwarders who (to operate) offices, freight handling systems and Information Technology networks (to try) to take the logistics market. The director of one small forwarder said that although his firm (can, to provide) warehousing and some other logistics services, it (to find) it difficult to compete with big logistics providers when a custom­ er (to require) complex logistics services. Since these big logistics compa­ nies (to be) also major forwarders or container liner operators the survival of the small or medium-size firms (can, to be) in doubt.

Ex. 18. Put in articles where necessary. Say what fully integrated service is and how it can be achieved.

flow1

of information is very important in

integration

of

transport with

other services such as

warehousing,

inventory management,

packing,

insurance, and

border documentation.

speed of transport operation depends on

speed of

transmitting

information.

logistics is too complex to be managed by

one party. To

provide

fully integrated service to

users

multi-modal op-

1 flow — поток

erators can join _ _^ distribution specialists and

other logistics pro­

viders.

new technological applications in

logistics are now being

used by

world biggest ports and

logistics service providers around

world.

goal is to improve

service level and guarantee that

goods delivered to final destinations are properly tracked1 and accounted for2.

Ex. 19. Fill in the gaps with prepositions where necessary.

1 Many transport companies provide their customers

effec­

tive services only

a restricted market.

2.

The trains started running

and forth between the port and

the railway hub.

3. Many logistics information systems are constantly turning

.

4.

We wanted them to show the Certificate

Origin.

5.

They referred

the telephone conversation we had had

2 days before.

6.

Our excellent reputation was

stake when we started a risky

business

customs clearance

our warehouse.

7. You can turn

the assistant manager

help

case

emergency.

8. What services can your company provide us

?

9. Our small firm has been operating

the market

a few months and we find it difficult to compete

special­

ized logistics companies.

10.

reference

the above we confirm the dis­

patch

the consignment

10th of May.

Ex. 20. Translate the following text into English. Say whether you would like to subscribe to the journal "Logistics".

Слово «логистика» прочно входит в лексикон российских пред­ принимателей, бизнесменов, экономистов из самых различных сфер деятельности. Сегодня его активно используют военные и даже по­ литики. Оно стало модным среди деловой молодежи. К сожалению, его значение далеко не все понимают однозначно. Издатели журнала взяли на себя нелегкие обязанности объединить на его страницах всех, кто в условиях рыночной экономики активно использует эту совре-

1 to track — отслеживать

1 to be accounted for - зд. быть оформленным, документированным

g-809

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менную науку об управлении и оптимизации материалопотоков и связанных с ними потоках информации и финансовых средств.

Главная задача нового издания — научить специалистов гово­ рить на одном «логистическом сленге», знакомить их с имеющимся отечественным и зарубежным опытом применения логистики в про­ изводстве, на транспорте и в торговле. С помощью этого издания мы надеемся помочь производителям складской, подъемно-транс­ портной, торговой техники и логистических услуг найти новых за­ казчиков, надежных партнеров в России и за рубежом.

{Предисловие к журналу «Логистика», 1998г., январь-март)

LEARNING ТО LISTEN AND ТО SPEAK

Ex. 21. Listen to the telephone conversation and say how the emergency lot will be dispatched: a) by truck to Munich; b) by sea to Kaliningrad; c) by truck to Kaliningrad.

Mr. Stock, manager of BNS, a big transport and logistics company, is talking to Mr. Borisov, a warehouse manager, about the urgent delivery of cargo to a German consignee.

BUSINESS ROUTINE

Borisov: BNS. Good morning.

Stock: Good morning. I'd like to speak to Mr. Borisov.

Borisov: Borisov's here. Is that you, Bob? Hello. I was just about to call you. It's about the emergency delivery to Munich we were talking about yesterday.

Stock: You mean the one they wanted delivered by the 23d?

Borisov: Yes. Right. We've got a fax about it this morning. Now they want us to dispatch it tomorrow. You know, we're a bit short-handed on the packing side. We've just all been working like slaves on that Chinese order and haven't got round to this lot yet.

Stock: Let's see. It's Friday tomorrow, isn't it? That makes it a bit hard.

Borisov: Look. What about offering the boys in dispatch a little overtime for the weekend. We can put the whole lot into one lorry and get it straight off to Kaliningrad. It'll be on the quayside by Monday morning then.

Logistics

H5

Stock: Yes, that's the answer. Why haven't I thought about it before? That's solved then.

Borisov: Well, I must be off now. I'm seeing Goodman and his people at 2.30... Bye.

Stock: O.K. Bye. Keep in touch.

Ex. 22. Listen to the dialogue again and say if the following sentences are true < false. Correct those which are false.

1.Mr. Borisov wanted Mr. Stock to send the truck to Kaliningrad.

2.They wanted the truck to be dispatched at 2.30.

3.The Chinese company sent a fax to Mr. Borisov about their order.

4.There were not enough loaders in the warehouse.

5.Mr. Borisov suggested that the warehouse people should be offered a little overtime.

6.Mr. Stock was having talks at 2.30.

Ex. 23. Say what you remember from the dialogue about:

a)business relations between Mr. Borisov and Mr. Stock and the business their company does;

b)the problem they had with the Munich order;

c)the Chinese order.

Ex. 24. Listen to the conversation and repeat it sentence by sentence.

Ex. 25. Rearrange the conversation.

Borisov: Look. What about offering the boys in dispatch a little overtime for the weekend. We can put the whole lot into one lorry and get it straight off to Kaliningrad. It'll be on the quayside by Mon­ day morning then.

Stock: You mean the one they wanted delivered by the 23d?

Borisov: Well, I must be off now. I'm seeing Goodman and his people at 2.30... Bye.

Stock: Let's see. Its Friday tomorrow, isn't it? That makes it a bit hard. Borisov: Yes. Right. They've sent us a fax about it this morning. Now they want us to dispatch it tomorrow. You know, we're a bit short-hand­ ed on the packing side. We've just all been working like slaves on

that Chinese order and haven't got round to this lot yet. Stock: Yes, that's the answer. Why haven't I thought about it befor

That's solved then.

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Borisov: Borisov's here. Is that you, Bob? Hello. I was just about to call you. It's about the emergency delivery to Munich we were talk­ ing about yesterday.

Stock: O.K. Bye. Keep in touch.

Ex. 26. Complete the conversation.

Stock: Good morning. I'd like to speak to Mr. Borisov.

Borisov:

Stock: Do you mean that urgent delivery we must send in three days?

Borisov:

Stock: Let's see. It's Friday tomorrow, isn't it? That makes it a bit hard. Saturday and Sunday are our days off.

Borisov:

Stock: Yes, that's the answer. Why haven't I thought about it before? That's solved then.

Ex. 27. Have a conversation with your partner using the information below.

You work for a small forwarding company. Your cargo has arrived at the warehouse with a two days' delay because of heavy snow. You want the truck to be unloaded as soon as possible.

Phone the warehouse manager and ask him if they can arrange unloading today. Offer him an overtime if necessary.

LEARNING TO WRITE

x. 28. You work for a big Russian logistics company in the Personnel Department. You have put an advertisement in The Inbound Logistics in search for a lo­ gistics manager for your subsidiary in Germany. The CV below was re­ ceived yesterday. Study it closely and ask your boss if he wants Albert Bleker to be invited for an interview.

APPLICATION FOR POSITION IN LOGISTICS IN RUSSIA

	Curriculum Vitae1
Name:	Albert Bleker
Address:	Hereweg 90,9725 A H , Groningen

I CV - Curriculum Vitae — краткие биографические данные, резюме

Logistics

E-mail address: Telephone number:

Date of birth: Nationality: Education

1988-1994

1994-2000

117

[e-mail] 050-5250172 (private) 0598-657329 (office)

20 November, 1976 Dutch

Higher General Education, "Kamerringh Onnes" in Groningen diploma-July 1989

College of Advanced Technology, "Vervoersacademie" in Venlo

field of study: Logistical Management diploma 2000

Knowledge of foreign languages

Excellent command of spoken/written English and German

Russian at the beginner's level

Plus

— Excellent knowledge of: PC/Word/Excel

Relevant working experience

December 2000 - Present

—Head of Logistics, Business Unit Warehousing, Veendam B.V.

As head of logistics I am responsible for execut­ ing all logistics activities at the office and in the warehouse (100,000 sq. m storage space)

Tasks:

—Managing of the Logistical Department staffed with 5 employees

—Drawing up reports for business unit manager and the Board

—Reporting and analyzing financial and quanti­ tative data concerning the Business Unit Ware­ housing

118

October 1999 -

December 2000

January —

September 2000

Unit 5

-Putting together the budget

-Supervising projects related to the outsourcing of logistical activities of our (new) clients

-Coaching trainees

-Staff employee at the Business Unit Warehous­ ing responsible for drawing up reports for the Business Unit Warehousing Manager

-Transport planner responsible for the most op­ timal performance of trucks and drivers

Ex. 29. Role-play an interview between Albert Bleker and the Personnel manager of a big Russian logistics company.

Ex. 30. You are looking for a job in the logistics department of a foreign firm. Send

a letter to Transport & Logistics Ltd. in reply to their advertisement in 77ie World Transport Journal and enclose your Curriculum Vitae. Use the CV above as a model.

Ex. 31. Read the dialogue and write the letter Mr. Zotov and Mr. Bobrov are dis­ cussing.

Mr. Zotov and Mr. Bobrov are members of the Board of a manufac­ turing company who have started exporting their products. Mr. Dronov is a manager of the bank who lent them money for the expansion. They are discussing Mr. Dronov's letter.

Zotov. What do you think of the letter? I think Dronov's going too far. Bobrov. Yes, I thought as much. They want us to merge with Rosmash.

An extremely successful company. Zotov: Did you know about this?

Bobrov: No, not really. When we started this export business I guessed Dronov might suggest something like this to protect bank invest­ ments in us.

Zotov. Or more likely to increase the bank's profit. Dronov has shown his true colors. And what infuriates1 me is that Rosmash want 50% control of our company.

utturiate - приводить в ярость

Logistics	119

Bobrov: Yes. And that means Rosmash would like their managing direc­ tor to keep an eye on us. But Dronov goes on... "You will benefit from being associated with Rosmash which has a wide interna­ tional network". We haven't done very badly so far but the prob­ lem is we are becoming heavily dependent on borrowing to fi­ nance expansion.

Zotov: But where can we get the money without losing control?

Bobrov: I don't know. Dronov's worried that we can't handle the expan­ sion by ourselves and thinks the bank's interest would be best served by linking up with a big company with a lot of marketing experience.

Zotov: And at the moment it could appear that the bank is in a strong position to dictate terms.

Bobrov: Absolutely.

Answer the following questions:

1.Why did the banksuggest that the company should merge with Rosmash?

2.What infuriated Mr. Zotov?

3.Was Mr. Dronov right suggesting the merger?

4.What do you remember from the conversation about the merger?

5.Who benefits from it?

Ex. 32. Role-play a telephone talk with Dronov, the bank manager. Tell him you have discussed his letter and in these circumstances have to agree to the merger with Rosmash, inform him of the letter you sent to him yesterday.

LEARNING TO READ AND TO ANALYSE

Ex. 33. Read and translate the following text. Speak about advantages and disad­ vantages of the Internet, LogiMan and other computer systems.

Swedish telecom giant Ericsson is a new customer to a new computer logistics information management system (LogiMan) which will revolu­ tionize supply chain management in Scandinavia's top manufacturing companies.

LogiMan process starts working when a shipper sends a consignment to a customer or even when a customer orders goods through the system.

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LogiMan works over the Internet and it can also accept fax reports where there is no Internet. All access1 to the system is restricted by pass word for total security.

After successful implementation1 with Ericsson, says the representa­ tive of the LogiMan, we are rolling the program out to the Scandinavian market place. We expect the system to be used by many of Scandinavia's largest manufacturers within a year. We will extend the product globally. There is no barrier to its use. LogiMan's main advantage is that it removes the need to manually check on shipments which run according to the plan. The system works on the basis that no news is good news, it throws us alerts3 when things go wrong. This means that users can concentrate only on the small percentage of the shipments which do go wrong.

LogiMan is also capable of linking4 with the user's existing logistics system.

Ex. 34. Read the text again and answer the questions.

1.Where was LogiMan developed?

2.What principle does it work on?

3.What do you think of its main advantage?

Ex. 35. Read the advertisement and say who it is intended for.

BEWESHIP

OFFERS COMPLETE LOGISTICAL SERVICE

BETWEEN EAST AND WEST

Beweship is one of the leading Finnish forwarders transporting to Russia, other CIS countries, the Baltic states, Europe and Overseas. We have daily connections to CIS countries and the Baltic states for groupage and full loads. Our modern customs terminal/offices with fa­ cilities over 3000 sq.m is in Vaalimaa in the Southeastern part of Fin­ land. It is the fastest growing border crossing point between Finland and Russia. Beweship offers you complete transit service, transporta­ tion, warehousing, including temperature-controlled and deep-freeze storage, forwarding and customs clearance. With our 40 years' experi­ ence we are able to handle your shipments safely anywhere in the world by road, sea and air.

access-доступ

1implementation - осуществление, реализация

throw smb. alerts - зд. подать сигнал настороженности

'bmi - соединять, связывать

Logistics	121
	All our services are ISO 9002 Quality certified.

BEWESHIP

Helsinki Finland tel. + 358-9-351 661 Fax. + 356-9-351 66 331

Turku Tempere vaalimaa Tallinn St. Petersburg Moscow

Ex. 36. Read the advertisement again and answer the following questions.

1.What services does the company offer?

2.Are they a big logistics firm?

3.Where is the fastest growing border crossing point?

4.How long have Beweship been operating on the transport market?

Ex. 37. You have a small warehouse and 5 trucks. Write an advertisement for the journal "Logistics" about your company.

Ex. 38. Read the text and say whether it is:

a)an advertisement

b)a passage from a textbook

c)an encyclopedia article

d)a newspaper article

KEEPING HOLD OF CUSTOMERS

A recent meeting of industry heads highlighted the need for logistics and marketing to work in synergy if customer satisfaction is to be guaran­ teed. If marketing creates the customer, then logistics keeps that custom­ er, according to marketing supremo Steve Cuthbert. Speaking at a meet­ ing organised by Key Communications to discuss the vital link between marketing and logistics, Mr. Cuthbert said: "It is about identifying the cus­ tomer's needs and anticipating1 customer preference and in order to de­ liver that, you need to have world class logistics. There was a time when marketing and logistics did not exist and business was simple, people made things and sold them — it was a case of'any colour as long as it is black'. In fact business should still be that simple, but as the world shrinks2, the sup­ ply chain has become longer and more complex". Harnessing3 that supply

1	anticipate — предвидеть
2	shrink — уменьшаться
1	harness — зд. использовать

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chain and harmonising it with other functions, such as marketing, was the real secret to a business success according to Dr. Ian Canadine. "Logistics is not an industry," said Mr. Canadine, but logistics services are an industry. Firms which still provide a personal touch and combine this with mass production are the most successful because they bring the quality of the craft approach with the advantages of the mass produced. Logistics is about changing perceptions and creating that personal touch.

Ex. 39. Read the text again and answer the questions.

1.Why do we need to have world class logistics now?

2.How do you account for "any color as long as it is black"?

3.What is the secret of good business?

4.What keeps hold of a customer? Why?

Ex. 40. Role-play an interview with Steve Cuthbert about the work of his company and his impressions of the meeting on marketing and logistics.

Ex. 41. Get ready to make a presentation at the Annual International Conference on Transport and Logistics to be held in St. Petersburg on the 3rd of June 200... Read the texts given below and decide what topic of your presentation will be. Make a plan of your presentation and prepare a report according to the plan.

INTRODUCING C H A N G E INTO T H E C H A I N

Last week we had two problems with our copier. The machine was not working properly and the supply of staples in the machine had run out. So we sent the supplier a fax stating the two problems. The next day a mechanic came to repair the machine. However, he didn't bring the staples. On the same morning the staples arrived by express service, but were the wrong staples. So we informed the supplier immediately and they promised us the right ones, to arrive next day! They did, again by express service. However they forgot to take back the wrong staples. Responding to our third fax, the supplier collected the staples by express service the third day.

Is this a once in a lifetime happening? No, of course not. It's happening every day. And for those of you wondering, our supplier is a wellknown worldwide operating enterprise with an image of being one of the leaders in supply chain management (SCM).

Logistics	123

In an era where we are talking about perfect customer satisfaction and perfect delivery, we are still making these kind of mistakes, every day and in every country on the globe.

And that while sometimes solutions are new to us. Today, most reefer vessels are equipped with sensors informing headquarters on a 20-minute interval by Immarsat satellite on all relevant cargo data, such as temperature control. Couldn't we use the same system for the copier? Couldn't we put a sensor on the internal stapler machine and on the most sensitive components of the copier? This way, the supplier not only can plan the service intervals better and forward the staples just in time, but above all, client satisfaction is maximised. And in business environment where client satisfaction (and thus ownership of the client) is becoming more and more crucial, having the tools to satisfy might prove commercially worthwhile to the company.

Maybe the sensors and the required related information infrastructure and system are still too expensive. But with a market where components such as sensors are becoming cheaper every day, we could arrive at a cost-effective situation sooner than many of us think. An effect of the sensor solution could for example be that a huge slice of work for express deliveries is deleted. In fact, such a small change could change the chain. This is supply chain management.

The sensor solution rightly puts the client at the centre of the universe. The question to answer next is which are the processes we have to put in place in order to fulfil the clients requirements and wishes. This is a company border-crossing question. It is also a question where one has to free oneself from current organization walls, company boundaries, ownership forms and even processes — we must remember that today's processes are, to a large extent, a relic of the industrial revolution. All of this is SCM .

Nice phrases, but what is all the fuss about? Well, let's at the first place acknowledge that there is a lot of fuss, of which a lot is supply-driven. Manufacturers, scientists, researchers and consultants all have a commercial reason to blow S C M up out of all proportion. And as the market is to a large extent unfamiliar with what it all potentially means to them, and for sure does not want to miss an opportunity to surpass (or keep up with) the competition, just buy the products and services.

Writing this I can already hear the response of some. Yes, but with SC M we can save up to 50% of our annual stock costs, we can reduce cycle-times by up to 80%, we can reduce time-to market with more than 35% and so forth. Maybe true on paper, but did you ever see it happen in

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practice? To some extent yes, but let's be honest. By the time a company could reach the full potential, the business environment has changed so much that it no longer is an issue. And should we pursue that total finite goal? Is it not more beneficial to adopt a quick money saver giving us 10% cost reduction than to pursue year after year the presented goal of 15% reduction?

SC M is in my view a solution, it's not a model for how to do things, and the term itself is meaningless. But its content does provide a view, an approach that surely does provide the elements to create new avenues of improvement. That, however, requires slashing boundaries in our mind, in our attitude, in our way of doing business, in providing information to others. It requires you to let loose any definition you unconsciously take for normal. It requires you to throw away most management books (as these are all based on past definitions and boundaries) and first of all it requires you to step away behind your desk in order to get another chain view on the processes you organize, execute and are part of.

LOGISTICS MANAGEMENT

One of the most important trends in manufacturing and trade is emphasis by many businesses on "Just-in-Time" (JIT) delivery. Increasingly, not only manufacturers, but also wholesalers, retailers and service providers are carefully scheduling deliveries so that parts or supplies arrive when needed.

The proliferation of JIT practices by manufacturers and retailers has led to smaller and more frequent shipments emphasizing reliability. One consequence of JIT has been additional freight transport demand, particularly upon highway systems. Shippers/agents requiring reliable delivery times for their JIT systems have not widely accepted rail intermodal, despite rail intermodal's generally perceived cost advantages on long-haul freight.

Companies providing Logistics Management services currently fit into one of four categories:

•Asset-Based Logistics Providers offer dedicated logistics through the use of their own assets, such as trucks, warehouses or both.

•AdministrativeBased Logistics Companies offer administrative management services for such things as freight billing, data management, and auditing.

•Integrated Logistics Providers own their own assets such as warehouses, and trucks and use these to satisfy a client's distribution re-

quirements. However, these companies also have arrangements with other vendors to provide whatever service or equipment might be required to meet a client's requirement.

•Management-Based Logistics Providers offer consulting services and data base management. They must contract separately for transportation and/or warehouses as they do not own their own.

The perspectives of the outside logistics manager and the transportation carrier are different. The logistics manager struggles with a requirement to deliver products to customers with ever increasing speed while cutting costs. The logistics manager decides which mode or carrier can best meet the delivery schedule. Cost is a secondary consideration in this decision. The transportation carrier competes with other carrier to provide the lowest rate. Once the mode operator is chosen on the basis of rate, the logistics manager will tolerate few, if any, service failures. Each executive interviewed indicated that low rates win the opportunity to move a company's freight. Schedule frequency, reliability, information flow and quality keep a company's freight returning to a carrier.

A growing number of companies are demanding global coverage from their transportation providers. They seek a partnership or alliance with a firm or firms that know or offer the best fares, and can handle routings and carriers for business travel to all areas of the world. Similarly, companies are establishing alliances with a firm or firms that can deliver freight to all the markets they serve either directly or through agreements with other carriers and modes. Some largest transportation carriers (e.g. CSX-SeaLand) first responded by mergers and diversification, but then expanded coverage with partnerships and alliances (SeaLand-Maersk).

NO OUTSOURCING WITHOUT CONFIDENCE

Spare parts logistics is among the gemstones in the field of logistics. The latest event of the Council of Logistics Management (CLM) was devoted to this topic: "The less products differ from each other, all the more frequently does after sales service determine whether a customer buys the product again or not." The spare parts business accounts for 50% to 70% of the turnover in industry and trade these days and can result in generous net profits up to 30%, a level hardly to be achieved in other business segments. Today's auto trade, for example, makes its profits from repairs and maintenance as well the supply and installation of spare parts as opposed to the sale of cars, where there is ruthless competition.