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JB Hunt Sales Training

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by

Heather Dail

on 20 January 2015

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Transcript of JB Hunt Sales Training

SUPPLY CHAIN MANAGEMENT
SCM is the process that begins with the acquisition of raw materials and ends with the delivery of the finished product to the end user. SCM encompasses the physical, financial and information networks that are involved in the movement of materials, funds and related information through the full logistics process.

Components in Total Cost (TC) equation
* Ordering Cost
* Demand
* Holding Cost
Service Level
Cost per unit
Transit Time
* Lead Time
* Economic Order Quantity (EOQ)
* Safety Stock
Lead time is the amount of time between when a process starts and when it is completed.
ECONOMIC ORDER QUANTITY
Order quantity of inventory that minimizes the total cost of inventory management. This optimizes the cost structure and buying quantities.


EOQ
= (2*Demand*Order Cost)
(Holding Cost Rate*Per Unit Cost)
SAFETY STOCK
Safety Stock
is additional inventory that is kept to reduce the
risk of a stock out due to uncertainty in supply, lead time and demand
Goal:
to ensure product availability when there is demand for the item.
Factors:
Fluctuating customer demand
Forecast accuracy
Variation in lead time
Impacts of Safety Stock:
High holding cost (could be less expensive than the cost of losing a customer)
Phantom inventory
Expiration
Companies try to minimize the level of safety stock to reduce inventory costs
Increased collaboration with suppliers
Improve forecast accuracy
Technology (ERP system)
Production planning module
Forecasts
Operation plans
SUPPLY CHAIN TAKE AWAYS
Three modes of transportation:
Less than Truckload (LTL)
Truckload (TL)
Intermodal

Trade off between LTL, TL, and Intermodal:
Decrease
Lead Time Uncertainty =
Decrease
in Safety Stock

Now let's calculate...
ALL DONE
JB Hunt Sales Training
Learn More About Supply Chain Management
LEAD TIME
COMPONENTS OF TOTAL COST EQUATION
ORDERING COST
DEMAND
HOLDING COST
*Starred items will be detailed
Demand
describes a consumers willingness and ability to pay a specific price for a good or service.







There is a standard deviation or variance in the average demand that will effect the total cost that can't be easily determined.
Types of Lead Time
The time between when the finished product leaves the warehouse and arrives at the final destination
The time it takes from when the product is ordered to when the customer receives the finished product.
The time between when production for a product is started and completed.
Uncertainty in Lead Time
How to Reduce Lead Time Uncertainties:

Increase safety stock to prevent stock outs

Weather
Changes in demand
Traffic
Congestion & capacity in DC
Shortage of raw materials
Technical challenges
Staffing issues

Intermodal:

Intermodal

is the movement of a load that uses at least two transportation modes. Intermodal transportation generates the highest revenue and largest profit within JB Hunt.
The cost associated with placing an order. This cost is computed by the amount of times an employee places an order.
Transfer
Truck Delivery
Rail Delivery
In transportation today...
Objective:
1. Understand which transportation mode is best for your customer
2. Build credibility as a trusted adviser
A trucking company that contracts an entire trailer-load to a single customer.
26 pallets = 1 truckload


Less than Truckload (LTL)
Truckload (TL)
Intermodal
3 Main Modes of Transportation
Less than Truckload
(LTL)
Truckload
(TL)
Intermodal
ADVANTAGES
DISADVANTAGES
LESS THAN TRUCKLOAD
Greater flexibility
Good for smaller shipments

Load
LESS THAN TRUCKLOAD
Greatest fixed costs
Products are unloaded/loaded multiple times
Longer wait time at DC
INTERMODAL

Slower than other modes
Longer lead times, which creates additional holding costs
Weather conflicts impact delivery
INTERMODAL

Flexible
More efficient
Environmentally friendly (Ex. fuel efficiency)
More affordable
More reliable on-time service
Greater capacity
TRUCKLOAD

Higher inventory costs
Bigger orders (Ex. commodities)

TRUCKLOAD
Less touches
Can create many opportunities
(dedicated, regional, and long-haul)
Greater flexibility (Ex. consumer demand)
Stock
Lot Size
Reorder Point
Delivery Point
Reorder
Point
Safety
Stock
Time
ORDER:
PRODUCTION:
TRANSPORTATION:
Daily Demand

The average quantity of a product or service companies forecast they are going to sell on any given day.
Annual Demand


The average quantity of a product or service companies forecast they are going to sell in a year.
Less Than Truckload:



Trucks from different suppliers meet at one central DC. The products are then sorted and shipped to their final destination. Maximum pallet load for LTL is 16.

Factors that Impact Holding Costs:

Perishables spoil
Merchandise becomes obsolete
Shrinkage
Cost of space, labor, equipment and direct expenses


The cost of holding inventory and protecting assets from damage. Companies try to minimize their holding costs.

Raw Materials
Consumer
Retailer
Distributor
Manufacturer
Supplier
Full transcript