Part I Logistic Business Transportation, Process to manufactures & 3 keys Shipper needs to ship product or goods by using Carrier to Receiver 3 rd Party Logistics Provider / Service Shipper Receiver Type of 3 PLs Asset-Based Non-Asset-Based Revenue 100% 100%COGS 80 – 85% 70 – 74%Gross Profit Margin 15 – 20% 26 – 30%Asset-Based: Owned its own fleet of transportation vehicles i. e. truck, airplanes, railroads and ocean freighters Non-Asset-Based: without any of their own physical assets. Freight Transportation Multiple shipments: air, water, truck, and rail.
Truck segment: Ryder, Penske, and Emery Freight to small owner-operated trucking firm. In competition: smaller firms developed specialty service or served niche markets. Large firms expanded into multiple modes of transport and provide service across a wide range. All shipper demanded Goals be transported safety& timely fashion. Price importance all companies (especially large, automakers) want to reduce cost of delivery to customer. Big 3 automaker (Ford, GM, Daimler Chrysler) looking to better management of supply chain (the series of transaction & interaction between suppliers, buyers, and intermediaries) to minimize costs while improving quality.
All parties – manufacturers, 3 PLs, suppliers – could participate in EDI (electronic data interchange) NLM Overview National Logistics Management is the only North American Third Party Logistics provider to specialize solely in premium freight for manufacturing industries, including automotive manufacturers. It is non-asset based and has a unique business model that employs its proprietary software to utilize the Internet to determine optimal shipping modes; export shipments to its vast carrier base including ground, air freight, and air charter; receive bids back form its carrier network; evaluate the lowest bids and carrier quality ratings; and coordinate shipments based on best price and carrier quality ratings all within a 30-minute window. Company profile Founded in 1991 Over 1. 3 Million shipments successfully managed. Network in North America: 200+ Assembly and Manufacturing Plants 6, 800+ Suppliers and 300+ Ground, Air Freight, and Air Charter Carriers Financial Information 1999 Revenues: $ 7.
The Research paper on Emerging Logistics Strategy
... air assets for multi-leg shipment continuity. More problematic were larger shipments requiring multiple third party logistics organizations in a series of freight ... of less-that-truck load (LTL) carriers, consolidate loads from multiple suppliers and/or plants, ... with logistics partners. Figure 1: Logistics service provider options While core asset-based logistics providers are critical to logistics ...
3 million No deb to Total share: $ 825 million (10% MKT Share) o Employee: 111- 65 in Detroit, Michigan Office- 36 Logistic coordinators & Supervisors- 7 Audit Team- 1 Marketing & Business Development- 2 IT Team Business Model Business to Business NLM to Big 3 automaker (Ford, GM, Daimler Chrysler) NLM manages the return of containers to over 130 suppliers throughout North America. The returnable container program is part of an industry-wide greening strategy to reduce landfill use and decrease production-source pollution. Suppliers ship their products to the plant in returnable, reusable plastic containers. Most containers are returned to the suppliers within a 12-24 hour period.
NLM determines release quantities and ship frequencies for containers and monitors supplier inventories. One measure of this program’s success is evident in the excellent air quality at the plant and the overall quality of the transmissions. Core Competencies 1. IT Infrastructure. Internet Based.
Unique EMS program. Carriers’ location tracking with Global Positioning System (GPS) 2. Knowledge Worker a. Strong Team.
Entrepreneurial Spirit 3. Reputation a. Based on Best Price & Carrier Quality. ~90% On-Time Delivery. Complete Client Satisfaction. Deadline-Driven Industry 4.
Alliance a. Strong connection with carriers b. Artisan & Top Flite Alliance Part II The Analysis 5 Forces Analysis 1 st Force: Supplier Power is ‘LOW’. Several carrier company. e-Auction system 2 nd Force: Buyer Power is ‘MODERATE’. Switching cost is high.
The Essay on Dansk Designs Ltd Products High Market
Dansk Designs Ltd. , founded in 1955, is a company that markets stainless steel flatware. The firm traditionally followed a strategy of differentiation. They produce high quality products for the "top of the table." Their goal was to reach a small market segment, which consisted of upper class, prestigious customers. Dansk Designs wanted to sell the concept of the Dansk brand, and believed their ...
Big in value and volume customer 3 rd Force: Barrier to Entry is ‘HIGH’. Niche Market. Strong relationship with customer 4 th Force: Threat of Substituted is ‘LOW’. Low direct competitor. Need expert to deal with a job. Switch cost is high 5 th Force: Industry Rivalry is ‘HIGH’.
PL market is growing significantly. Many players in market. Switch cost is high SWOT Analysis’S’s trength Factors. Internet based. Good reputation.
Unique EMS program. Monthly management report provided to customers. Timely tracking in every tasks. Qualified carriers selection.
Fast speed processing. Carriers’ location tracking with Global Positioning System. Focus on a special shipment with specialists. Strong connection with carriers. Deep understanding premium freight activities. Supplemental services providing.
Strong customer service team. No transportation asset’W’ Weakness Factors. No effective supplier compliance system. In sufficient IT team.
High staff turnover. No transportation asset’O’ Opportunities Factors. 3 PLs boom. No direct competitor.
Expand service to other automakers. Expand service to other market. Expand service to other area. Growth Economic in North America ‘T’ Threat Factors. Rely on 3 big automakers. Other internet based 3 PL invasion.
Increasing fuel price Part III Focus on Technology Will Internet Exchanges Replace Logistics Providers? Absolutely NOT, because. 3 PLs will continue to benefit from shipper outsourcing, which is driving 30% annual growth. Technology solves just one element of the SCM (Supply Chain Management) problem. Mixed impact on logistics providers. Some will be replaced by the Internet.
Smart companies will incorporate Internet technology instead of being eliminated by ITe-Auction Overview Electronic reverse auctions (e-Auctions) are an innovative procurement technique that use secured Internet-based technology. The sense of competition is heightened as suppliers compete in real time by bidding lower as the auction unfolds. e-Auctions offer efficient, open and transparent negotiations as part of a full procurement process. This means that the time needed to carry out competitive negotiations are reduced as it starts at or near the market price. e-Auctions may either be structured around lowest price or Most Economically Advantageous Tender (MEAT), and value for money efficiencies can be high – efficiency improvements in public sector contracts of 20-25% are not uncommon. They have proved particularly successful when used with requirements that have clearly defined specifications and where there is a vibrant market.
The Essay on Amazon Com Auction Bay Auctions Bids
The name "e Bay" (web) is synonymous with "online auctions." Founded in September 1995, the company qualifies as a genuine cultural and economic phenomenon (Bunnell, 2000, p. vii). The site can be credited with creating and defining an entire industry and has remained the dominant force in the online auction world, with anywhere from 70 to 90 percent of the person-to-person online auction market. ...
e-Auctions are being increasingly used in public and private sectors as standard practice, both in prime contracts and in securing value in the supply chain. Suppliers are also realizing the benefits of online bidding because of transparency and increased market awareness. This guidance is designed to help departments make the optimum use of the value for money opportunity offered by e-Auctions. e-Auctions’ Principles. e-Auctions are an appropriate tool in many competitive procurements. e-Auctions are not about price alone.
The contract needs to be of a value that will attract competition. e-Auctions require a clear and concise statement of requirements. Initial price proposals are needed. Commercial sensitivities must be respected e-Auctions Type 1. English Auctions 2. Dutch Auctions 3.
RFP English Auctions Most people who have ever attended or taken part in an auction have experience with English auctions. For those in the United States, these are the most common types of auctions and are generally the type that third-party auction sites most often use. While this type of auction may seem to be the most simplistic, it can be more complicated and may not always be the best choice for sellers. In an English auction, an item is placed up for bid and the seller generally sets a reserve price. The reserve price is the minimum selling price for the item and is generally not known to bidders. That does not mean that bidding will begin at the reserve price.
Sometimes these auctions begin below the reserve price and if that reserve price is not met, then the item is not sold and the transaction is not completed. After the reserve price is set, bidding begins at a price determined by the seller and increases in previously specified increments. With online auctions, either the seller or the auction site will set the length of time the auction will last. When the auction ends, the highest bidder is named the winner (if his bid is higher than the reserve price) and he pays his the price he bid. For example, a seller may have a used computer up for auction.
The Essay on Sealed Bids vs Competitive
Sealed bidding and Competitive Proposals have their advantages and disadvantages for private contractors. The government offers the opportunity to contractors to place their bids depending on the specifics of the job or the contract requirements then the government will choose the channel which they will send the solicitation through. For Sealed Bidding is an Invitation for Bids and for ...
He may set the reserve price at $100 and may start bidding at $50. Additionally, he decided to raise bids in $5 increments and to allow the auction to go on for 14 days. Bidder A bids $100, Bidder B bids $105, and Bidder C bids $150. Bidder A then places a second bid for $160 followed by a second bid from Bidder B for $175. When the bidding ends fourteen days later, Bidder B is the winner and he pays $175 for the used computer. English online auctions can also be further complicated by sniping and by proxy bidding.
Sniping is the practice of waiting until an auction is almost over and placing a higher bid. Generally, snipers have been watching the auction for a number of days but refrain from placing a bid because they do not want to drive up the price by expressing interest. Proxy bidding is the ability to set a maximum bid amount in order to continue bidding even when not present or taking an active part in the auction. For instance, Bidder A may place a maximum bid of $125 and a current bid of $100. Technically, this Bidder A has bid $100.
If another Bidder B places a bid of $115, then the Bidder A remains the high bidder but he his actual bid would go up to $120. If Bidder B placed a bid for $130, then Bidder A would be outbid and would have to place a new bid in order to continue participating in the auction. Sniping and proxy bidding add in the need for further strategy. Bidders who get into the auction early must try to determine the maximum price the item will reach and must keep in mind the possibility of losing out to a last minute sniper. Besides, these complications, English auctions are not always the best bet for sellers. The price for the item is usually increasing in small increments and the bidding is open so that everyone involved can see the current bids (not the maximum proxy bids, which are kept sealed).
The Essay on Price Ceilings & Floors
Price ceilings are usually government policies and limits that intend to save consumers from being charged too high a price. This generally means to limit and control how high a price for a product can go. If price ceilings are not present, the suppliers will set prices extremely high for necessities which then become too expensive to be affordable. Suppliers know that no matter what, the items ...
Consequently, bidders generally try to work hard to keep the prices lower so that they can purchase the item below its value. When this happens, the seller ends up earning less on the item than they may have realized if another type of auction logic was employed. On the other hand, English auctions have often caused bidders to become overly enthused by the activities and to bid even more than the value of the item. Paying more for an item than it’s value is known as the Winner’s Curse. The bidder’s desire to win the auction and / or to beat the competition is such a motivating factor in these instances that many bidders do go far beyond an item’s value. The end result, of course, is a greater profit for the seller.
However, sellers do not always benefit from the Winner’s Curse and other related phenomenon. In many cases they can receive better results by opting for a traditional Dutch auction, which uses a descending-price structure along with open bidding. Dutch Auction Typically, when people think of an auction, they think of either a numbers of bidders all competing and raising the price until one person wins and ends up paying the highest bid. The reality is that this is just one type of auction. For example, there are second price auctions in which the bids are sealed from all of the bidders and the winner actually pays the highest losing price.
Dutch auctions are another variation on what is considered a traditional auction. These Dutch auctions are so-named because they have been used for centuries in Holland as ways for produce and flower vendors to sell their goods. In more recent times, sellers of fish, credit, and a wide variety of other items have used this auction version to sell their products. In a Dutch auction, a seller offers up an item for bid at a very high price. The initial price is much higher than the item’s value usually and no seller expects to get that price for the item. Because bidders must know the amount of the bids, bids are not sealed as they are in some types of auctions.
The price is lowered in increments until a bidder chooses to accept the current price. He pays that price for the item as the winner. For example, if a business is auctioning off a used company car, the bidding may start at $15, 000. The bidders will wait as the price is lowered to $14, 000 to $13, 000 to $12, 000 to $11, 000 and to $10, 000. When the bidding reaches $10, 000, Bidder A decided to accept that price and he because he is the first bidder to do so, he is considered the winner and has to pay $10, 000 for the automobile.
The Essay on Price Elasticity of Demand of Newspapers
The price elasticity of demand measures the responsiveness of quantity demanded to a change in price. In other words, it measures by how much the quantity demanded will vary if there is a change in price. If a small decrease in the price of the product causes a huge increase in the quantity demanded, then the product is said to be price elastic. When the demand is price elastic, a fall in price ...
Like second price auctions, Dutch auctions can also be used quite easily for selling multiples of the same item. For instance, if the business was selling three cars, Bidder A may have purchased the first at $10, 000 but that wouldn’t stop the auction. The price would continue to decrease. So it might go down to $9, 000 then to $8, 000 and Bidder B might choose to accept that price, so he would pay $8, 000 for his car. Since one car is still available, the price continues to be lowered. At this point, the bidders would begin to get anxious since only one car is left.
Bidder C would wait until the price went down to $6, 000 and then he would make his move and would end up paying $6, 000 for the automobile. While the above example may make it seem like the seller could be losing money in a Dutch auction, the reality is that they generally make more than they would with a more traditional ascending-price auction. With an ascending-price auction, the bidders do raise the price but rarely will they raise above the item’s actual value. They have no reason to act fast because they know exactly when the auction will end, and they can always sneak in at the last second with a slightly higher bid. In a Dutch auction, however, bidders must act fast because they have no idea when the auction may be over.
So even though the price is being lowered instead of increased, bidders will end up paying at or even above the item’s value. One of the only problems with Dutch auctions has nothing to do with the auction logic itself but with a common area of confusion. The financial world and some third-party auction sites use the term “Dutch auction” when they refer to second price auctions. In truth, there is a huge difference between the two types of auctions. Second-price auctions are auctions in which the winners pays either the price of the lowest winning bidder or the price of the highest losing bidder. The confusion in the terms can be problematic for individuals interested in getting involved in either type of auction, so it is important to clarify which type of logic will be used before participating.
Depending on what individuals have to sell and how much money they hope to earn as a result of a successful auction, Dutch auctions can be an ideal alternative to more traditionally used approaches. The descending-price structure of these auctions increases competition among bidders and makes acting fast a necessity. Bidders just need to be sure that they are participating in a real Dutch auction, not a misnamed second price auction before getting started. oR FP (Request for Proposal) One buyer many potential sellers. The buyer places an item for bid (tender) on a request for quote (RFQ) system, potential suppliers bid on the job, with price reducing sequentially, and the lowest bid wins; used mainly in B 2 B e-commerce. Opportunities through B 2 B for Supply Chain Management (SCM).
Extend the supply-chain beyond company boundaries. Design “many-to-many” supply-chain interactions. Release excess inventory; Source hard to find items. Online auctions for non-strategic sourcing. Leverage global arbitrage Part Indecision Making Choice of Decision Spring 2000 Decision Organic Growth Venture Capital Partnership Sell Criteria Objective Launch New Market Leverage Infrastructure Leverage Infrastructure Risk Avoidance Management Detailed Management/ Teamwork Detailed Management/ Specialist Specialist Capital Private / Owner Gain access to Capital Gain access to Capital Get Cash Growth Slowly / Remain Expedition / Firm Expedition / Firm Focus Hi-tech (Niche) / Retail Hi-tech (Niche) / Retail Retail / Industry Where’s NLM? Objective: Launch New Market and Leverage Infrastructure Management: Detailed Management/ Teamwork and Specialist Capital: Gain access to Capital Growth: Expedition / Firm Focus: Hi-tech (Niche) / Retail The Decision VC Funding+ -Gain access to Less control Capital, Knowledge, Resources, The company keeps growing. NLM serves ‘major domestic automotive players’ in helping them handle premium freight, which is a shipment that has to be delivered in a hurry.
NLM is integrating global positional satellite technology in its carriers, and will allow manufacturers to go to the company’s Web site to track their shipments. NLM Business model is 3 PL non-asset Internet based. Taylor should invest in technology and employee, but outsourcing trucks or planes.
