My experience in the transport of goods management

This is my last blog and that is why I have decided to write about my professional experience in the logistics sector.

Last year I worked in a company dedicated to the manufacture in distribution brand and co-packing of beers, soft drinks and water. Among the clients of this company are Mercadona, Consum, LIDL, Carrefour … of which we have spoken during this course. I carried out my duties in the logistics department and, among other activities, I was in charge of managing part of the outbound transport from the factory.

Some of the tasks that involve the management of outbound transport is the planning of the load schedule in the facilities. To do so, I had to consider which client I was dealing with (because the quays are classified by clients), the destination and the time of delivery. However, sometimes there were problems in the production line and in the packaging that caused delays and entailed rescheduling the deliveries of the products. Also, on occasions, there were incidents related to transportation, such as punctures, traffic accidents, retentions or delays in the unloading. These situations that can not be anticipated in advance highlight the importance of a good planning.

Personally I have to say that at the beginning the idea of being responsible for the product to arrive correctly to the client scared me, but the knowledge of the existence of INCOTERM 2010 and the use of the Enterprise Resource Planning SAP system made it easier for me to work. The INCOTERM constituted a great discovery during the performance of this work.

The INCOTERM (International Commerce Terms) are terms of three letters that reflect, for both the seller and the buyer, the rules of voluntary acceptance of the conditions of delivery of the goods. Then, we can ask ourselves what the INCOTERM are for: they serve to regulate the expenses, regulate the norms of delivery of the merchandise, regulate the transfer of risks and facilitate the processing in the customs.

There are different types of INCOTERM, therefore, when choosing one, you must take into account the type of merchandise, the type of transport and who hires and pays it, who is obliged to pay for insurance, the place of delivery of the goods, who must pay the import and export customs obligations. As you can see there are many aspects that should be considered. That’s why I’m going to focus on the ones I used the most and that involved the from lower to higher obligation on the part of the seller. They are the following:

– Ex Works (EXW): this system represents few obligations for the seller, because it is limited to putting the goods at the disposal of the buyer in their premises and in a packaging appropriate to the type of transport. On the contrary, the buyer assumes the costs and risks inherent to the transport.

– Free Carrier (FCA): the seller loads the goods if the delivery is done in their premises. If it is to export the seller pays the tariffs. But it is the buyer who chooses the means of transport and the carrier. In this way, the transfer of expenses and risks occurs when the carrier takes charge of the merchandise.

– Free On Board (FOB): the seller places the goods at the disposal of the buyer at the port of embarkation and on board to the designated vessel and carries out the customs procedures if necessary. The buyer chooses the ship, takes care of freight and insurance costs, and assumes the expenses and risks for the loss or deterioration that the merchandise may suffer from its delivery.

– Delivered At Place (DAP): in this case the seller is responsible for the expenses. It closes a contract for the transport and unloading of the goods when arriving at the client. In this term the seller assumes the risks of transporting the goods until they reach their destination. The buyer pays the price of the goods as provided in the sales contract, after receiving it.

So, according to the modality chosen, I had to assign a loading and unloading schedule depending on the destination and the availability of docks (in EXW and FCA), or in addition, I had to contact transportation agencies, so I had to consider the costs to choose the appropriate transport (in DAP).

In the following drawing can be seen what I have explained, and also the others INCOTERMS.

I hope this blog has been of your interest.

Source: https://www.searates.com/reference/incoterms/

 

The supply chain behind the filling of the car tank

Everyone who has a car knows what means to have the fuel reserve light turned on … we have to replenish the fuel tank. But … what do we know about the supply chain that black gold follows? In this post I would like to describe in a general way the logistics required by the oil industry, since it is a sector that I am passionate about and in which I have had the luck to work in the oil refinery located in Castellón de la Plana.

The first thing I can say is that the oil industry is divided into three large sectors that keep the flow of fuel and materials constant.

The first sector is the exploration and extraction: UPSTREAM. This includes the search for potential underground and submarine deposits of crude oil and natural gas. The next step is the drilling of the exploratory wells to later drill and exploit the wells that carry the crude oil or natural gas to the surface.

Another sector is known as MIDSTREAM. This includes the transport and storage of crude oil before refining and processing it into fuels and elements that have become indispensable in our day-to-day life. Depending on the product and the distances, the transport options (to transfer the material to the refining center or to the port of embarkation for its export) can be through trucks or tank wagons, tankers or pipelines. After being driven to the plant it is stored in large tanks.

We all know that the storage of oil and natural gas is necessary to balance the fluctuations between supply and demand, and guarantee the supply of energy products in times of political and economic uncertainty.

The refining, commercialization and distribution of products derived from crude oil and natural gas constitutes the DOWNSTREAM. In the refineries, the crude undergoes a process of physical separation and then chemical processes to extract the different components that form it. The extracted derivates are fuels and petrochemicals. Thus, consumers receive products such as gasoline, kerosene, diesel, lubricants, asphalt, natural gas and liquefied gas, synthetic rubber, fertilizers, preservatives, packaging and plastics to make countless products that are part of our daily life (as pharmaceutical and orthoprosthetic products).

I can tell you that in Castellón, next to the refinery there is a petrochemical industry that uses as raw material materials obtained from the processing of oil in the BP refinery.

The following diagram is a summary of the value chain that the crude oil follows, from its extraction, transport and storage, to its refining and subsequent distribution.

Finally, comment that although the largest oil production is located in the Middle East, the largest refining capacity is located in Europe, Asia and North America, so the logistics involved in this sector is a real madness.

If you want to expand this information you can see the following video.

 

What distribution system is best for the farmer?

The cultivation and trade of citrus fruits, especially orange, is one of the bases of the economy of the Valencian community. This blog is not about the cultivation of the orange, but the different ways in which it is marketed. The management and logistics that is followed at each point of the chain, from the collection process to its manufacture, vary both the price of costs and the net margin that each agent obtains.

We can distinguish two main marketing channels: traditional and online sales. The process that is followed in both ways is different.

In the traditional channel, the farmer sells his production to a fruit and vegetable center that is responsible for collecting the fruit, transporting it to department stores where it is cleaned and sorted, packaged and stored until it is distributed to a wholesale market or directly to supermarkets and greengrocers. This process requires the professionalization of companies, and the participation of numerous operators that make the final price of the product more expensive.

The online sale follows a different logistics than the previous one. This system is based on the direct delivery of the product in 24 hours. After collection, oranges are distributed to families or to wholesalers in refrigerated transport.

As we see, these are two different management and marketing models. The first one stores the fruit in refrigerated chambers since the fruit is collected in advance at the right moment of maturation in order to supply the market, both nationally and internationally. The second collects the fruit of the field and commercializes it in the moment, transporting it to the domiciles in perfect state of maturation.

The following figures are a summary of the different channels of marketing of oranges:

I recommend you to see this video, which summarizes the process that follows the orange from its collection, its processing until its distribution to the customer (traditional channel).

 

 

 

 

 

 

 

 

Trying to find sense to the queues

This week has been San Jordi and in Barcelona the celebration of “the day of the book” brought together many people with the intention of buying roses and books to give away, and at the same time to meet many writers. It caught my attention to see that in front of the booths of some writers there were hardly any people to sign a book and, instead, in front of others there were long queues. The reason was clear, the long lines were in front of the most popular authors currently .The waiting time for these queues was more than one hour; but people endured them because the weather was good, the atmosphere was pleasant and they were distracted by seeing what was going on around them.

For me queuing is an ordeal because I consider it a waste of time. But queuing is part of our daily life. For this reason I consider that the management that a company makes its queues is an important factor to determine the satisfaction that the client has of that company. It’s about winning customers, not losing them. The changes in the structure of the queues that allow the customer to perceive that time passes faster, will undoubtedly favor a company to obtain more customers. With the implementation of basic and elementary actions, the queues can be reduced.

An elementary action consists in the placement of counters that must be strategic and proportional to the type of trade and the service it offers. Another key that speeds up the waiting time is to organize the queue in a single row where customers are placed in order of arrival to it and when the turn comes they will go to the box that is available (this system gives the user the feeling of which the tail progresses quickly). It is also interesting to implement a shift management system based on the service that is to be received and which causes employees to be more operational. It is also interesting to use devices to keep customers informed of the waiting time or divide it into different phases that keep them entertained. Another action that works in many places is the previous appointment, which allows distributing the waiting times. But there is no doubt that distractions are keys while queuing up. In order to do this, establishing an online merchandising along the queue, is the most effective way to distract the customer, while increasing sales: shelves with products labeled in large numbers, video screens … The waiting lines will be places of information and entertainment for customers.

As we have just seen, the process can be streamline, reduce times and costs, and increase profits. As the saying goes “time is money” because it is an increasingly valuable resource. Hence the need to effectively manage the queuing and waiting system.

I’m sure many of you will feel identified with this video.

Picking area: The importance of designing the best order picking system

Trying to understand the case “Papeleria DotCom” I have asked myself many basic questions.   The problem we had to solve this week was about picking. Before demoralizing me trying to solve the problem, I learned the meaning of this term, and I want to write about this.

In the logistics, warehousing and distribution of merchandise services of a company, picking is the process of selecting and collecting material from the warehouse efficiently and effectively. In other words, it consists of collecting the goods from the warehouse (stored in different locations), which must be used to prepare orders and transport them to the area where the customer will pick them up.

Given the exigency of consumers, the activity of picking is essential, while the customer wants a fast service, without errors and that preserves the quality of the product. For the advantages offered by this system it is clear that the preparation of orders consumes up to 2/3 of the operating cost. Therefore, it is important to analyze the procedure followed in the storage, studying the reason why orders are delayed, see the shortest routes for operators, place the goods according to the frequency in which they are requested and adjust them according to the demand. Without a doubt, reducing the impact of picking can mean becoming a competitive company in the market.

The biggest impact is on the preparation of orders. For this it is convenient to optimize the collection flow of the products, in an orderly manner and with the help of the use of technology. This will result in lower costs, faster order delivery and greater customer satisfaction.

In order to reduce the movement of workers and make the best use of space some equipments can be implemented, like the vertical carousel. This equipment is usually made up of a load-bearing structure in which the entry and exit of the goods are automated thanks to an extractor and lifting mechanism. Furthermore, the implementation of the carousel vertical is recommended for homogeneous loads, high quantity of references, and high complexity orders and and the main disadvantage of this system is that it is expensive and it needs reliable information systems.

So, maybe, this is not the best equipment for the case “papeleria Dotcom”, although this system is widely used in the pharmaceutical and electrical components industry.

This video has helped me to understand the basic operation of this equipment:

Undoubtedly, the issue of picking is very interesting, because it allows companys to apply different strategies as well as technologies depending on the warehouse and types of products.

Planning and storage for the World Half Marathon Valencia 2018

Despite the cold, wind and rain, the celebration of the World Half Marathon Championships Valencia 2018 held on March 24 was a success. Thousands of people took to the streets to give support to all the participants of this emotional event. I enjoyed watching the illusion with which 315 professional athletes and 14,000 popular runners ran. In total people from 87 countries.

The participation of thousands of people and the presence of thousands of spectators undoubtedly requires great logistics and planning.

Let’s review some fundamental aspects to start a marathon. First you have to choose a place, establishing a circuit as central as possible, and a date, according to the weather. Permits will be requested from the competent authority. An important aspect is that the marathon is accessible, this requires to study the market and propose realistic objectives. Next, a detailed budget of all costs must be prepared. Moreover, it is convenient and necessary to look for sponsors, both national and international, in exchange for advertising their products or brands.

It is essential to guarantee the safety of the participants and assistants. The day of the race will have civil liability insurance. Traffic must be controlled and there must be a health presence every 5 km of the route. The refreshment points will be located every 2.5 km with water, isotonic and from km 20 they must have gels and solid foods. But an essential organizational aspect is the management of the registrations of the runners; for this purpose, a platform can be hired to integrate the payment with full guarantee.

Finally, one aspect to consider is the storage of the products until the day of the event. The refreshments and foodstuffs, the gifts, running bib, etc … are stored without unpacking and are organized with the number of runners in mind. The boxes or packages in which the products are donated are taken advantage of, since these will be stored for a short time.

If you take a look at this link, you will see the good planning of the event:

https://www.iaafvalencia2018.com/competition/official-programme/

 

Logistics to the rescue

During the days of Fallas the city of Valencia has been filled with people. The continuous flow of people walking and visiting the Fallas has involved the purchase of food made in the stalls installed on the street. One consequence is that there are traces of food everywhere. All of us have done it. This observation has made me reflect if we always take advantage of the food that we have left over or food that we have bought but we will not use. Food is wasted in the production, distribution and consumption process.

This reflection has led me to think that managing the pantry and the fridge is simple, but  how are the products that volunteers, supermarkets, companies and institutions donate to Food Banks managed?

The operation and organization of a food bank is similar to a company, with different areas and a management team. It consists of an area of ​​supply and transport, warehouse, distribution, accounting, patronage, communication and direction. In general, the operation is as follows: firstly, the food that is obtained for free is collected, either through agreements with private companies, many of them agro-food and transport companies, and with public companies; also through food surpluses of the European Social Fund; donations from individuals  and subsidies from public institutions for the maintenance of infrastructures (warehouse, cold stores, wheelbarrows …). The surge in donated goods leaves food banks with many perishable items that must be quickly distributed before expiration. Furthermore, the product mix that they receive is unpredictable and changes from week to week. The challenge is to move the food, and minimize the wasted amounts. Logistics to the rescue!

All products are stored for a short period of time, selected and subjected to a sanitary control. Later they are distributed to specialized charitable centers and associations, that are responsible for delivering food to individuals according to their needs.

Despite all the donations, these banks are deficit because the demand has increased a lot. A logistical and legislative problem that arises, is that perishable products must be transported in cold stores and this can not always be achieved.

If you want to know more about Food banks don’t doubt to visit:

https://www.fesbal.org/

http://www.eurofoodbank.eu/

 

Foldable containers

Some days ago I read a news that surprised me pleasantly. A Valencian company with a high component of R&D, Navlandis Logistics Technologies, presented a revolutionary folding container, the Zbox, at the Port of Valencia. This company was born after a conversation between friends concerned about improving the environment. After discussing one of them the mountains of containers that are disabled in ports of merchandise, an engineer, Miguel Navalón, investigated that in the exporting areas there was always a need for containers and in the importing areas containers were piled up without giving them use because for the shipping companies it was expensive to return them empty; therefore an empty container is expensive and polluting.

Thus, the Zbox is an original idea that allows to solve the saturation of space in the transport of goods and save 10,000 million of Euros per year. If you take into account that 25% of containers are empty, taking up a lot of space, it is a great idea to create a collapsible container that lowers the cost of operations, occupies less space (saves 80% of space), reduces CO2 emissions, it is cheaper to produce, more efficient to operate and it folds with the least possible technology. All this by guaranteeing its resistance, sealing and loading functions, just like a normal container.

From what I have been able to read, given the suitability and necessity of this product, important investments are being made, as well as pilot routes that verify the saving. Its commercialization is expected next year, with the sale of 3000 units in 2019.

Without a doubt it is a product that will revolutionize the logistics industry of storage and maritime transport. It offers considerable competitive advantages and due to its characteristics it is convenient to integrate it into the worldwide logistics chain.

Bravo for this Valencian company that, based on a simple idea, can revolutionize the problem of shipping merchandise.

Bravo for this Valencian company that has managed to patent its Zbox container, not only in Spain and the US. but also in China, container producing country.

And above all, bravo for this Valencian company that cares about climate change and pollution.

If you are interested in the news enter these websites:

http://www.levante-emv.com/economia/2018/02/21/contenedor-plegable-patentado-china/1681977.html

 

http://www.lasprovincias.es/economia/fotos-zbox-contenedor-plegable-para-transporte-maritimo-mercancias-20170705205139-ga.html