Inbound Logistics Case Study
1.1. Background
Over the last decades, the increasing globalization of the manufacturing and distribution companies have driven significant changes regarding their business environments. Being one of the main drives behind these changes, globalization leads to a more affordable international market but also to a dramatically change in the competition situation between emerging and developed nations as well as between companies (Moavenzadeh et al, 2012).
Jeffery (2002), made an approach regarding the meaning of it, saying that ‘’Globalization can be seen as a positive, negative or even marginal process’’. He further states that despite the fact if it works for good or not, its exact meaning will continue be the subject between those who oppose,
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Problem statement
A way to analyze the inbound logistics is to look how to apply the current trade standards, the Incoterms. As the global sourcing environment is a reality, it is increasingly important to understand the impact that Incoterms have on the total cost of a product (Shah Baljko, 2002) .
As JoC Week (2002) states, by exercising greater control of the inbound logistics, a firm can leverage its buying power when purchasing its own transportation. An additional action is the consolidation of shipments from multiple shippers that previously would have arranged their freight individually.
Specific focus on inbound logistics is observed in plenty of companies mainly due to the economic environment and competitive landscape that are forcing companies to find alternative ways in order to reduce cost and improve productivity (Hannon,
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To accomplish this, a mapping of current deliveries and Incoterms used from suppliers and their components shall be made. Hence, following relevant questions are raised: o What are the main characteristics of the current inbound logistics flow from external suppliers to Refresco Gerber? o Which delivery and Incoterm is most advantageous for the inbound transportation from external suppliers to Refresco Gerber?
The data obtained in the mapping part of the thesis is studied by comparing different alternatives and presenting a recommendation that enables Refresco Gerber to establish a more beneficial policy for selecting the appropriate Incoterms for the inbound logistics flow.
This leads to the main problem definition (Research Question), which is:
Analyze the transportation and warehousing costs of the inbound flows in order to optimize the Total Cost of
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