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Discover Logistic from Production

Training file of DLP
by

HEINZ GUO

on 12 December 2012

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Transcript of Discover Logistic from Production

Discover Logistic from Production Logistic Basic Trainee: EXPECTATION AGENDA Day 1 Morning Day 2 Morning Day 1 Afternoon 1 Transport Mode 9:30 2 Logistic Organization 0 Introduce Lunch
time 1 The INCOTERMS 2 Bonded Logistic 1 Customs 2 KPI: Cost and
Lead time 3 Exercise & MCQ 14:00 9:30 SEA
AIR
ROAD
RAIL
PIPELINE
COMBINED TRANSPORT Transport Mode Compare Advantage SEA AIR ROAD RAIL Disadvantage Cost Speed Frequency Atteinable Volume Weight 20FT 40FT 40HQ 45HQ 29.73 Volume 90% 62.3 70 79.2 26.757 56.07 63 71.28 20t 25t 26t 26t Logistic Organization Consolidation Method CAC CAR CAR Warehouse Continental Supply Centre Regional Supply Centre CAC Anvers CAC EL Prat 80% of very good sale cargo
and very bad sale cargo is in
CAC. 20% of good sale product in CAR CAC HUAQIAO CAC + CAR CAR BEIJING Will design as CAC + CAR SEA AIR Local transport at origin : A Days International transport : B Days Local transport at destination:C Days ATD ATA Local transport at origin : A Days International transport : B Days Local transport at destination:C Days TOTAL TRANSPORTATION LEAD-TIME = A+B+C DAYS TRANSPORTATION LEAD-TIME LOGISTIC FLOW Physical Flow Supplier DPP’s
Consolidation
Platform Departure Port Arrival Port CAC CAR Store LCL LCL FCL Delivery by PCB Delivery by UE Operation Flow AS PART Supplier validate AS ETD - 15 PLSC check AS ES Work out
Shipping Schedule ETD - 14 Forwarder:
Send Booking
Order to IE/Supplier Prepare GOOD
Customs DOC and
Send to Forwarder
ON TIME Customs Declaration WH send
Delivery Notice
to Supplier Supplier handle over
as the Delivery Notice WH Loading DOCUMENT FLOW ETD - 13/12 ETD - 8 ETD - 7 ETD - 5 Physical Flow ETD:
Vessel departure Incoterms Definition It is a series of 11 rules that define,within the framework of an international agreement, the mutual duties of the buyer and the seller, entailed by the shipment of goods as regards risks, costs and documents.
These INCOTERMS are managed by the International Chamber of Commerce; they have been updated in 2010. FOB CIF DDP EXW THE COSTS AND RISKS - Pre-shipment (Risks and Costs)
-Loading on the main means of transport (Risks and Costs)
-Export Customs (Costs)
- Main Transport (Risks and Costs)
- Import Customs (Costs)
- Unloading of the main means of transport (Risks and Costs)
- Post-shipment (Risks and Costs) The risk transfer from seller to buyer when the seller has fulfilled his obligation to delivery the goods. But for different INCOTERMS the delivery can be fulfilled in different stage of transportation. Sometimes it is Physical delivery; sometime is Symbolic delivery. Pre-carriage MAIN TRANSPORT POST-CARRIAGE Group E – Departure
Ex-work or ex-factory (named place) ……
Under the "E"-term (EXW), The seller makes the goods available at his premises. The buyer is responsible for all charges. FCA: Free carrier (named place) FOB*: Free on board (named port of loading) CIF: Cost,Insurance and Freight DDP: Delivery duty paid
(named place of destination) Incoterm list E Term F Term C Term D Term EXW FCA FAS FOB CFR CIF CPT CIP DAP DAT DDP Departure Main Carriage
Unpaid Main Carriage
paid Arrival Incoterm Risk and Cost Role play game
One Buyer
One Seller
One export broker
One import broker
One carrier Buyer and seller will buy logistic service based on the case and you define a incoterm to arrange your trade.
And there will be some accidents, you need to define the responsibility as well. CASE STUDY 1. You buy goods from a supplier in Los Angeles but you don’t want to be involved in transport, insurance, export/import clearance. Your place of delivery is Vélizy ZI.
Which INCOTERM do you choose? DDP Vélizy ZI 2. An agreement provides for regular deliveries, by full trucks of chemicals from Santos in Brazil to your factory in Paris. Your supplier pays the transport to the final destination and the insurance. He does not want to pay the import customs formalities. CIF Paris 3. For an African art exhibition, you import from Senegal a big traditional pirogue. It travels from Dakar to Marseille.
You will pay sea freight and the insurance.
Which INCOTERM do you choose? FOB Dakar 4. You want to have at your site, located at Lyon-Vénissieux, a prototype made in Boston by an engineer who agrees but who does not want to be in charge of transport, insurance or clearance.
Which INCOTERM do you choose? EXW Boston 5. Under Incoterm of FOB who does what?
Look at the duties listed and decide who has the responsibility. S for Seller and B for buyer

Deliver goods on board
Provide an invoice, clean transport document
Pay container loading cost
Export license, any export tax, fees
Pay the trucking cost from platform to port of loading
Pay the main freight cost
Receive goods at named port of destination
Arrange for contract of Insurance and pay premium
Pay unloading costs not covered in the freight
Pay import duties of the cargo Deliver goods on board s
Provide an invoice, clean transport document s
Pay container loading cost s
Export license, any export tax, fees s
Pay the trucking cost from platform to port of loading s
Pay the main freight cost B
Receive goods at named port of destination B
Arrange for contract of Insurance and pay premium B
Pay unloading costs not covered in the freight B
Pay import duties of the cargo B INCOTERMS we are using For DMI: FOB Port of Departure

For DP Europe: FOB Port of Departure

For DP Asia (component flow):
CIF Port of Arrival / FOB Port of departure

For New country (Russia/Brazil): FOB Port of departure Key points to Remember Always negotiate a price with an INCOTERM
Agreed place with an INCOTERM otherwise void
Use the acronyms of the International Chamber of Commerce
Decathlon has its own insurance policy, so do not ask the seller to take out an insurance
Give a delivery date at the agreed place after the INCOTERM
Indicate with the unit price, the INCOTERM + agreed place when placing the order
If your are liable for part of the transport, you have to indicate the carrier ( International Transport Organiser)
INCOTERM beginning with an E or a F are outgoing INCOTERM and those beginning with a C or D are incoming INCOTERM Bonded Logistic The Customs Import Export What is Blue Book? ROLE OF CUSTOMS Customs are usually a major budget contributor, and sometimes the most important source of revenue for a country. Customs also have a unique observation position. They are at the crossroads between trade, the economy, fiscal and budget issues, crime interdiction, environmental preoccupations, and transport.
Customs have routine, non-judicial, access to sensitive commercial information. Customs keep records of movements, and the people who initiate them. All this can be used not only to secure revenue, but also to protect society.

Traditionally, Customs have three major roles:
 
To assess and collect revenue based on the characteristics of the goods
To protect the country and the society by preventing smuggling
To ensure that national legislation is applied to imported goods. The European Union (EU) is a political and economic union, located in Europe

27 MEMBER NATIONS
(As of 29 Aug 08)

France Belgium Netherlands United Kingdom Ireland Italy Luxemburg Germany Austria Portugal Spain Greece Finland Sweden Denmark Cyprus Malta Romania Estonia Hungary Lithunia Poland Slovakia Slovenia Czech Republic Latvia Bulgaria ASSOCIATED COUNTRIES
EFTA

PTOMA

MAGHREB

MARCHAK

CEEC

APE (Mauritius, Madagascar…) « WEALTHY » THIRD COUNTRIES : TW, USA, CHINA

« PRIVILEDGED » THIRD COUNTRIES: GENERALIZED SYSTEM OF PREFERENCES (GSP) 
Developing countries:
Thailande, Vietnam
Less advanced countries: Bangladesh, Laos CIF – Customs Information Form NO CIF
NO SHIPMENT CIF is like an ID card of a product.
It provides full information about a product. CIF is separated into 2 parts; 1st part includes full name, model code, product’s description, composition, and photo, the 2nd part contains customs-use details such as HS code, quota code, and import duty rate of each customs zone. The 1st part is to be filled by product engineer at least 4 weeks before the selection, then the second part by Customs team.

What information on a CIF?
- A reliable HS Code Depends on the product description, composition and the usage of the product
- The Customs duty Depends on the HS code and the origin of the product
- Export License, which needs to exchange to Import License when the product enters Europe In order to limit the importation
- Other necessary documents for importation What information needed for defining Customs duty?
- Description with photo
- The exact composition
- Sex and size
- The usage
- Model code
- Origin of component
- Place of production
- Production office KPI of Logistic: COST and Lead Time Lead Time WHAT IS POT, LOT, TOT, SOT AND DOT? POT: Production On-Time (responsibility of PL Flows)
= ability to transfer cargo to Export Supervisor on time, meaning the ability to respect the contractual DCO (TMS) date: prod log date.

LOT: Logistic On-Time (responsibility of Export Supervisor)
= ability to respect the committed lead-time from production cargo release till shipment -> ATD – prod log date compare to the committed lead-time.

TOT: Transport On-Time (responsibility of Import Supervisor)
= ability of Import Manager to respect the committed lead-time of international freight from FOB date till reception in CAC (customs clearance included)

SOT = POT + LOT
DOT = SOT + TOT Lead time definition DPP
Supplier CFS
Platform Pre-carriage MAIN TRANSPORT POST-CARRIAGE CSD CDD POT LOT SOT TOT DOT CAC CAR or Store DOT delay <= SOT delay + TOT delay
SOT delay <= POT delay + LOT delay Possible causes of POT DELAY
Component Delay (Development, Production, Capacity, Quality, import formality)
Finished Goods delay (Development, Production, Capacity, Quality)
GTD problem found at platform. Need to rework => missing vessel schedule. Possible causes of LOT DELAY
Export Customs Formality problem
Insufficient container or space on vessel for export
Container roll-over Possible causes of TOT DELAY
Import Customs Formality problem
Vessel arrive delay
Warehosue reception delay Exercise 1: If this order is 100% SOT
Order creation date : 1 May
Order validation date: 10 May
Cargo delivery at platform date : 03 Jul
Vessel departure date : 08 Jul
Contractual Delivery date : 10 Aug
TRF date : 11 Jul
International Lead time + Delivery Lead time: 32 days CSD=10 Aug – 32 =09 Jul
ATD-CSD=08 Jul – 09 Jul = 1 Day
So SOT on time CSD=10 Aug – 30 =13 Jul
ATD= 25 Jul + 7 Days = 1 Aug
ATD-CSD= 1 Aug – 13 Jul=19 days
So SOT Delay, but……DOT on time Transport Cost Different part of
Trasnport Cost Sea freight
BAF/ CAF T1(Transit Document)
B/L
Trucking Port to Warehouse
Logistics Service charge Transport cost at origin
= around 20% International Fret
= around 50% Transport cost at destination
= around 30% Cost Classification =>Local transportation:
Local truck cost, Loading/Unloading Charge
Platform Handling cost or CFS (Container Freight Station)
Export Custom clearance cost (EDI, CIQ, Inspection cost, Broker, Security…)
THC or ORC :Terminal Handling Charge or Original Receiving Charge
DOC:Document Charge (CO, B/L)
Harbor Charge,
=>International transportation
O/F:Ocean Freight
Fright Surcharge: BAF (Bunker Adjustment Factor) ,PSS(Peak Season Surcharge)
CAF (Currency Adjustment Factor)
=>Inland transportation
Custom clearance cost & Duty
Local truck cost, Loading/Unloading Charge
Platform Handling cost Cost analyze Local Logistics Costs 1 Logistics Service Recharge
Staff expenses
Building expenses
General expenses
2 Local Transport Cost Recharge
Local Trucking cost from Ex-work to Consolidation platform
Local Trucking cost from Consolidation platform to port of loading
THC
Customs Clearance
Document control fee (if any)
GTD control at platform fee (if any) Total expenses / expected volume shipped (CBM) = Logistics Service Recharge per Unit (CBM) Chargeable weight The charging unit is the value which is taken into account when invoicing transport and therefore it is the value that must be taken into account when calculating the cost price. It varies according to the mode of transport. The charging unit is the value which is taken into account when invoicing transport and therefore it is the value that must be taken into account when calculating the cost price. It varies according to the mode of transport. Customs Duty =>BASIS OF CALCULATION
CUSTOMS VALUE =VALUE WHEN ENTERING THE EUROPEAN COMMUNITY
CUSTOMS VALUE =COST AND FREIGHT VALUE
CUSTOMS VALUE = FOB PRICE + COST OF MAIN TRANSPORT+INSURANCE
=>METHOD OF CALCULATION OF CUSTOMS DUTIES
AMOUNT OF CUSTOMS DUTIES :
CUSTOMS VALUE * % OF CUSTOMS DUTIES Import duty= Import duty rate*(CUSTOMS VALUE)
VAT = VAT Rate* (customs value + import duty) The End THANK YOU! Chelsea Chou Ice Jeremy Dary Michelle Mike Method and tools(System)
Procedure
Transportation Leadtime / Mode
Cut off &shipping date for FCL/LCL to different destination. Free Alongside ship(named port of shipment) CFR:Carriage and Freight Carriage Paid To(named place
of destination) CIP: CARRIAGE AND INSURANCE PAID TO DAP (delivered at place) DAT: Delivered At Terminal (named port) Peng ZHANG Transportation,
Besides considering cost, which factors will decide the transportation we use ?

Flow operation,
1.What is the main character of Decathlon flow comparing with non-Decathlon flow?
2. How many kinds of Decathlon flow & what's the main difference ?

Incoterms,
Is there any rule or principle to update them every 10 years ?

Customs,
In Taiwan, custom need to do crosschecking by EDI according to the document provided from broker and platform.
Is the process same as in China ? What else function or service does custom provide in China ?

Logistic KPI,
How is KPI set and why we use these indicators as KPI ?

Others,
How to work with your service providers in China ? I would like to know how the logistic system at Decathlon works and how it connects to supply chain and its relationship with supply chain. It must be more practical and specific than theory. 1/ Logistic daily flow
2/ International sea leadtime / leadtime between EHD to ESD
3/ Air shipment flow Trucking empty container to consolidator
Forwarder fee
Consolidation fee
Trucking full container to harbor
Custom broker fee
B/L
Certificate of origin
Harbor fee
Terminal handling Charge WANG Lei
Full transcript