Supply Chain and Logistics
Chapter 9 Key Terms
By the end of this chapter you should have an understanding of the following terms
and be able to explain their relationship to International Business
Term Explanation
(Use examples when appropriate)
Logistics consists of the acquisition,
Logistics transportation, and storage of materials from the
point of origin to the point of consumption.
Production logistics refers to logistics processes
Production within a company, usually a manufacturing
Logistics business.
responsible for ensuring a steady flow of
materials
and information through a network of computer
Business Logistics terminals, transportation links, and storage
facilities
that move raw and finished materials through all
parts of a business.
The supply chain is the sum of all activities
involved in moving raw materials, processed
Supply Chain goods, and finished products into an
organization, and moving the semi-processed or
finished goods out of the organization toward the
end consumer.
Supply chain management (SCM) is the
overseeing of information, materials, and
Supply Chain finances as the product moves through its
Management (SCM) supply chain, typically from supplier to
manufacturer, to wholesaler, retailer, and finally,
consumer.
Chapter 9 Vocabulary
when the company owns the whole supply chain,
or
significant portions of it, from acquisition of raw
Vertical Integration materials to retailing
method of expanding a company by acquiring
Horizontal competitors
integration
system that tracks retail sales by recording the
Point of sale code or stock number of each unit
terminal
When suppliers can make and/or ship materials
Just-in-time (JIT) that a factory or retailer needs quickly enough
inventory systems so that they arrive as they are required
outsourcing supplier co-ordination and
distribution functions to another company.
Third-party logistics
(3 PLs)
a financial guarantee, issued by the buyer’s
Letter of credit bank, that the buyer has sufficient collateral on
deposit to pay for the shipment
also referred to as sourcing or procurement,
Supplier consists of finding reliable sources for the
products and services a business needs
management
Chapter 9 Vocabulary
The strategic use of outside resources to
Outsourcing perform activities that were previously handled
internally by the company itself.
outsourcing to nearby countries
Nearsourcing
when a function that is normally outsourced is
handled internally by the company
Insourcing
transfers functions to a branch of the company
in another country
Offshoring
contracting to another business in the same
country
Inshoring
Deals with receiving goods that are sent to the
Inbound company
distribution
arranging the shipment of goods from the
Outbound company to its customers
distribution
Chapter 9 Vocabulary
Consumers are moving from traditional bricks-
and-mortar stores to e-commerce and mobile
Omnichannel shopping, but also going back and forth among
these channels. Customer focus is the
foundation of omnichannel.
A rare exception to this occurs if the goods are
to be shipped Ex Works (EXW), which means that
Ex Works (EXW) the buyer is responsible for carrier selection,
customs documents, and all charges.
the company hired to transport the goods
Carrier
A bill of lading is the official document that
indicates that the transportation company
Bill of Lading accepts the goods for shipment.
Many motorized carrier companies offer freight
Freight consolidation, where goods from different sellers
(shippers) are stored in a warehouse area
consolidation designated with the destination of the shipment.
Containerization is the utilization of standard-
sized reusable metal boxes to store and ship
Containerization freight.
International businesses are now using a new
Crowd-sourced method in the supply chain: on-demand, crowd-
sourced delivery
delivery
Chapter 9 Vocabulary
Optimization is the process of making the supply
chain highly efficient, connecting manufacturing
Optimization plants, suppliers, and customers.
Many companies are also archiving optimization
Single-window by reducing paper and connecting all aspects
through a single-window system—enabling
system international traders to submit regulatory
documents to a single location in order to
complete an international transaction.
Chapter 9 Vocabulary