Strategic Logistics Management, Inc. (SLM) is a U.S.-based third party
company whose primary business is to deliver logistics services.
Currently, SLM manages several warehouses in Los Angeles and the New
York/New Jersey area. SLM provides expertise in air and ocean
shipping, customs clearance, forwarding, warehousing, and ground
transportation. Over the past five years, SLM has built a successful
logistics information system (LIS) that includes personnel, equipment,
and technology. The decision-support systems included in the LIS are a
transportation management system (TMS) and a warehouse management
SLM employs experienced personnel in the United States to handle a
wide range of logistics activities and provide customized logistics
solutions and services. The company is considering expanding their
global operations to provide the same range of services in Australia,
Imports: A network of offices and trade connections to support import
consolidation, provide warehousing of goods prior to customs
clearance, and manage import documentation for customs formalities.
Door-to-door services: Cargo pickup from supplier locations and
transportation of goods directly to the customer, as well as freight
bookings with airlines and ocean lines to handle cargo exports from
both the United States and Australia.
Exports: Handling of various types of cargo exports by ocean and by
air, ensuring the timely movement of goods at the most competitive
rates. Complete export documentation is provided.
SLM is working to secure two contracts in Australia that will go into
effect next year. The first contract is with Greer Wire Company in
Melbourne, Australia, to transport two million pounds of stainless
steel brushfire mesh used in protecting homes in brushfire prone
areas. This cargo will be shipped to Los Angeles, California. The
stainless steel wire mesh is supplied in five-meter rolls with an
outside diameter of 500 mm, and each roll weighs 50 kg.
The second contract is with Brooks Brothers, a clothing company
located in New York City, for warehousing and transportation of
clothing in various sizes of cardboard boxes that easily assemble in
one unit load on a 48-inch by 40-inch pallet. The goods will be
shipped from New York, New York, to Sydney, Australia. For the purpose
of this assignment you can make reasonable assumptions about the
weight of the boxes.
SLM will manage a rapid flow of goods to and from Australia. The
proposed warehouses in Australia will be located in proximity to two
large metropolitan areas, Sydney and Melbourne. In the first year of
its operations in Australia, SLM plans to handle an average of 200
20-foot equivalent units (TEUs) of imports and exports between the
United States and Australia every month.
You are a Logistics Manager at SLM. As part of the company’s goal to
strengthen its competitiveness in the global marketplace, the CEO has
asked you to design a logistics plan for the proposed warehouse
operations in Australia and transportation of goods between Australia
and the United States.
In your report (allowing for reasonable assumptions when necessary),
Select one of the two SLM contracts described above.
Analyze the product’s physical properties, volume, and quantities to
determine if the product’s shipment size is small (150 to 500 pounds)
or a larger (consolidated) shipment (at least one TEU).
Evaluate at least two modes of transportation that best support the
organization’s supply chain for shipping the product from one country
to another, door-to-door, in a multimodal shipment. Explain your
Identify the type of warehouses that SLM should employ in Australia to
ensure a rapid movement of goods. Recommend either public, private, or
contract warehousing and explain how your recommendation supports
SLM’s supply chain management.
List and describe the necessary commercial, banking, and shipping
documents that comply with export and import procedures in the United
States. These may include a commercial invoice, certificate of origin,
shipper’s export declaration, shipper’s letter of instruction, bill of
lading, freight bill, and letter of credit.
Determine the appropriate Incoterms® 2010 rule, depending on the
shipment mode and buyers’ and sellers’ responsibilities.
Select a process (Lean, Six Sigma, Just-in-Time, or Kanban) and
explain how the process can be implemented to ensure effective and
efficient warehouse operations techniques are in place that support
the company’s supply chain design.
List a minimum of four additional budget line items in the table below
with a rationale to ensure smooth warehouse operations in Australia.
Support your rationale by including various logistics activity
measures, cost drivers, profit models, and the role of inventory and
how they influence SLM’s financial outcomes.
Budget line item
Cost savings management
Warehouse safety and security
Efficient and safe warehouse operations
Order management, customer relationship management, and load-planning
for a truck trailer.