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INTERNATIONAL

PHYSICAL DISTRIBUTION
Logistics and Physical
Distribution

International Trade
Defined

as economic
transactions that are
made between
countries.
International trade
transactions are
facilitated by
international financial
payments, in which the
private banking
system and the Central
Banks of the trading
nations play important
roles.

Trade Agreements

The purpose of Trade Agreements is to


create opportunities for citizens and help to
grow involved parties economy.
Administering trade agreements involves:
Monitoring the trading partners implementation.
Negotiating and signing trade agreements that

advance the President's trade policy

An important type of trade agreement is the


Trade and Investment Framework
Agreement (TIFAs)

PHYSICAL DISTRIBUTION

Physical distribution encompasses all


the activities involved with the
physical movement of products
through distribution channels.
Specifically,physical distribution
includes all activities related to the
storage, handling, and movement of
goods to make these goods available
when and where customers demand
them

Systems Approach to Physical


Distribution

CUSTOMER ORDER

The beginning of the chain starts with


a P/O, S/O
For knowing how much to order and
when , companies , actually the
procurement area has to stablish the
ROP (reorder point)
ROP = UR x LT + Safety Stock.
Average order size(AOS) andaverage number of
orders(ANO) gave us the UR (usage rate)
LT = Lead time

CUSTOMER ORDER

We have to check :
Inventory (stock)
Lead times for delivery of row material,

supplies or finished-goods that we


commercialise to know if we can accomplish
our clients deadlines.

Costs associated to this activity:


Follow up of the customer
Costs of allocating a purchase order to our

suppliers

Order Processing

Lead time concept is involved


Finance is fundamental to have our
p/o, p/s on time
Knowing and follow the companys
rules is basic not to get our
requirement rejecteds
JIT concept : providers as well as our
company offers certain LT and
minimums

Order Processing
Ordering costs
They are the costs
associated with
purchasing products

Data processing
Follow up
Warehousing costs

These costs will be incurred with each


order that is placed, By reducing the
number of orders placed in a given time
period, ordering costs per unit will decline.

Inventory Management

Its not mandatory to have a WMS


(wharehouse management system) to
control your inventory.
The correct management method is
mandatory in order to keep your
inventory accurate.
Finding the right size of the inventory is
key to reduce logistic costs
Again, JIT is present in order to keep the
lowest inventory.

Wharehouse materials and handling

The facility
The size
The MHE (material handling
equipment)

Packaging for shipment

The packaging selection is based on


different criterias:
Product nature
Transportation mode
Cargo size
Transit time,weather etc.

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