A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from

supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to the end customer. In sophisticated supply chain systems, used products may re-enter the supply chain at any point where residual value is recyclable. Supply chains link value chains.[2]
Contents

1 Overview 2 Supply chain modeling 3 Supply chain management 4 Regulations 5 Development and design 6 See also 7 References 8 External links

[edit]Overview The Council of Supply Chain Management Professionals (CSCMP) defines Supply Chain Management as follows: Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies. Supply Chain Management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the logistics management activities noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance and information technology. A typical supply chain begins with ecological and biological regulation of natural resources, followed by the human extraction of raw material, and includes several production links (e.g., component construction, assembly, and merging) before moving on to several layers of storage facilities of everdecreasing size and ever more remote geographical locations, and finally reaching the consumer. Many of the exchanges encountered in the supply chain will therefore be between different companies that will seek to maximize their revenue within their sphere of interest, but may have little or no knowledge or interest in the remaining players in the supply chain. More recently, the loosely coupled, self-organizing network of businesses that cooperates to provide product and service offerings has been called the Extended Enterprise.[citation needed] [edit]Supply

chain modeling

A diagram of a supply chain. The black arrow represents the flow of materials and information and the gray arrow represents the flow of information and backhauls. The elements are (a) the initial supplier, (b) a supplier, (c) a manufacturer (production), (d) a customer, (e) the final customer.

There are a variety of supply chain models, which address both the upstream and downstream sides. However the SCOR model is most common. The SCOR Supply-Chain Operations Reference model, developed by the Supply Chain Council, measures total supply chain performance. It is a process reference model for supply-chain management, spanning from the supplier's supplier to the customer's customer.[3] It includes delivery and order fulfillment performance, production flexibility, warranty and returns processing costs, inventory and asset turns, and other factors in evaluating the overall effective performance of a supply chain. The Global Supply Chain Forum (GSCF) introduced another Supply Chain Model. This framework[4] is built on eight key business processes that are both cross-functional and cross-firm in nature. Each process is managed by a cross-functional team, including representatives from logistics, production, purchasing, finance, marketing and research and development. While each process will interface with key customers and suppliers, the customer relationship management and supplier relationship management processes form the critical linkages in the supply chain. The American Productivity & Quality Center (APQC) Process Classification Framework (PCF) SM is a high-level, industry-neutral enterprise process model that allows organizations to see their business processes from a cross-industry viewpoint. The PCF was developed by APQC and its member companies as an open standard to facilitate improvement through process management and benchmarking, regardless of industry, size, or geography. The PCF organizes operating and management processes into 12 enterprise level categories, including process groups, and over 1,000 processes and associated activities. [edit]Supply

chain management

A German paper factory receives its daily supply of 75 tons of recyclable paperas its raw material

In the 1980s, the term Supply Chain Management (SCM) was developed[5] to express the need to integrate the key business processes, from end user through original suppliers. Original suppliers being those that provide products, services and information that add value for customers and other

stakeholders. The basic idea behind the SCM is that companies and corporations involve themselves in a supply chain by exchanging information regarding market fluctuations and production capabilities. If all relevant information is accessible to any relevant company, every company in the supply chain has the possibility to and can seek to help optimizing the entire supply chain rather than sub optimize based on a local interest. This will lead to better planned overall production and distribution which can cut costs and give a more attractive final product leading to better sales and better overall results for the companies involved. Incorporating SCM successfully leads to a new kind of competition on the global market where competition is no longer of the company versus company form but rather takes on a supply chain versus supply chain form.

Many electronics manufacturers ofGuangdong rely on supply of parts from numerous component shops in Guangzhou

The primary objective of supply chain management is to fulfill customer demands through the most efficient use of resources, including distribution capacity,inventory and labor. In theory, a supply chain seeks to match demand with supply and do so with the minimal inventory. Various aspects of optimizing the supply chain include liaising with suppliers to eliminate bottlenecks; sourcing strategically to strike a balance between lowest material cost and transportation, implementing JIT (Just In Time) techniques to optimize manufacturing flow; maintaining the right mix and location of factories and warehouses to serve customer markets, and using location/allocation, vehicle routing analysis, dynamic programming and, of course, traditional logistics optimization to maximize the efficiency of the distribution side. There is often confusion over the terms supply chain and logistics. It is now generally accepted that the term Logistics applies to activities within one company/organization involving distribution of product whereas the term supply chain also encompasses manufacturing and procurement and therefore has a much broader focus as it involves multiple enterprises, including suppliers, manufacturers and retailers, working together to meet a customer need for a product or service.[citation
needed]

Starting in the 1990s several companies chose to outsource the logistics aspect of supply chain management by partnering with a 3PL, Third-party logistics provider. Companies also outsource production to contract manufacturers.[6] Technology companies have risen to meet the demand to help manage these complex systems. There are actually four common Supply Chain Models. Besides the two mentioned above, there are the American Productivity & Quality Center's (APQC) Process Classification Framework and the Supply Chain Best Practices Framework

An unusual food supply chain operated by Dabbawalas in Mumbai is noted for being extremely reliable without using any computers or modern technology. It has been verified to be a six sigma supply chain.[7] [edit]Regulations Supply chain security has become particularly important in recent years. As a result, supply chains are often subject to global and local regulations. Several major regulations emerged in 2010 alone that have had a lasting impact on how global supply chains operate. These new regulations include: The Importer Security Filing (ISF)[8] additional provisions of the Certified Cargo Screening Program (CCSP) [9]. [edit]Development

and design

With increasing globalization and easier access to alternative products in todays markets, the importance of product design in demand generation is more significant than ever. In addition, as supply, and therefore competition, among companies for the limited market demand increases and pricing and other marketing elements become less distinguishing factors, product design also plays a different role by providing attractive features to generate demand. In this context, demand generation is used to define how attractive a product design is in terms of creating demand. In other words, it is the ability of a product design to generate demand by satisfying customer expectations. However, product design impacts not only demand generation, but also manufacturing processes, cost, quality, and lead time. The product design affects the associated supply chain and its requirements directly including, but not limited to: manufacturing, transportation, quality, quantity, production schedule, material selection, production technologies, production policies, regulations, and laws. From a broad perspective, the success of the supply chain depends on the product design and the capabilities of the supply chain, but the reverse is also truethe success of the product depends on the supply chain that produces it. Since the product design dictates multiple requirements on the supply chain, as mentioned previously, it is clear that once a product design is completed, it drives the structure of the supply chain, limiting the flexibility of the engineers to generate and evaluate different (potentially more cost effective) supply chain alternatives.[10] [edit]See

also

American Production and Inventory Control Society Chemicals, Tire, and Process Industries (CTP) Cold chain Council of Supply Chain Management Professionals Demand chain Demand chain management Demand optimization Document automation in supply chain management & logistics Distribution Distribution resource planning Factory Physics

Extended Enterprise Industrial engineering Inventory control Last mile (transportation) Liquid logistics Logistics Military supply chain management Nomenclature Reverse logistics Supply network Supply chain management Supply chain network Supply-Chain Operations Reference Model Supply chain optimization Supply Chain Risk Management Supply chain security Value chain Value network

Vertical integration Outlook for Air Cargo: Turbulence Ahead; Blue Skies Beyond
Robert J. Bowman, SupplyChainBrain | October 31, 2011 Imagine youre a major international airline with a substantial cargo operation. Call it Cathay Pacific Airways Limited. Youre bouncing back from a dreadful recession, and youve ordered 10 new aircraft, the latest version of the worlds most popular widebody freighter say, the 747-8F fromBoeing Commercial Airplanes. Delivery of the aircraft was supposed to take place over two and a half years, but production delays have disrupted that plan, and now all 10 of them are going to arrive at your doorstep within a 12-month period. Meanwhile, storm clouds are massing on the horizon, in the form of another global economic downturn, turmoil in the European Union and proposed legislation that could trigger a trade war between the U.S. and China. Now youve got to conjure up enough cargo to fill those new planes. Which, by the way, cost around $300m apiece. Air cargo: not for the faint of heart. Nick Rhodes, director of cargo with Hong Kongs Cathay Pacific, is a man with a strong constitution. He admits that 2011 has been a pretty lousy year for his industry. The trend has been relentlessly downward since the spring, with exports from China falling by 7-8 percent and freight capacity climbing by 15-20 percent. The drop in demand follows an unusually strong 2010, he notes. Boeings own figures bear him out. Jim Edgar, regional director of marketing in the Commercial Airplanes division, chalks up the successes of 2010 to a systemic shift of inventory closer to manufacturing points. The strategy, driven by uncertainties over the availability of inventory financing, caused shippers to rely more heavily on the air cargo mode. The result was a one-time bump for carriers. Negative factors impacting the trade this year include sluggish consumer spending, higher fuel prices and the earthquake and tsunami in Japan. Thats a typical cycle for a capital-intensive industry like transportation. Strong economic activity spurs

demand for capacity, so carriers run out and buy more equipment. Then the inevitable downturn leaves them with excess space. Theyre forced to cut rates, park aircraft in the desert or, in some cases, go out of business. The airlines cant let those micro-cycles affect their thinking; they have to plan for the long term. (Cathay Pacific depreciates its equipment over 20 to 25 years, Rhodes says.) Still, the decision on whether to operate a particular plane comes down to dollars and cents. Each of those 747-8Fs contains 16 percent more volume than a 747-400 freighter. With any aircraft type, the planes owner must answer two key questions: Does it cover the cash spent to operate it? And, even more important in the long run, does it cover the cost of the aircraft itself? Cathay Pacific has no plans to park its brand new 747-8s in the desert anytime soon. But the extra capacity that they bring to the marketplace will affect the airlines operations system-wide. After all, notes Rhodes, about half the 1.8 million tons of freight carried by Cathay Pacific last year went in the bellies of its passenger planes. The airline is looking beyond what it views as a short-term slump in the market. Were not so pessimistic that [we think] its going to last for the next several years, says Rhodes. On the contrary, all indications are that air-cargo volumes will grow between 5 and 7 percent annually over the next 20 years. (The latest figures from Boeing put the average number at 5.6 percent, down from earlier estimates of 5.9 percent.) Thats roughly a tripling of global traffic over that period, according to Boeings most recent World Air Cargo Forecast. Rhodes predicts growth in all three of Cathay Pacifics major markets: Asia-U.S. (where all 10 of the 747-8s are to be deployed), Asia-Europe and intra-Asia. But its the last category in which Cathay Pacific sees the greatest promise. Driven in large part by China, the intra-Asia trade will grow at an average annual rate of 7.9 percent between 2009 and 2020, the Boeing forecast says. Rhodes sees a big increase in volumes of cargo flowing into China, as that nations developing middle class spurs demand for imports of consumer goods. Now about those 747-8s. Launched in November of 2005, the new aircraft promises more space, quieter engines, fewer carbon emissions and greater fuel efficiency than its predecessors. The freighter version offers 134 metric tons of revenue payload and has an operating range of 4,475 nautical miles. Parts of the wings, nacelles and engines are made of the same innovative composite materials that are being used for much of Boeings new 787 Dreamliner. (Literally, says Edgar, the [747-8] wouldnt have been possible without the 787.) Like the Dreamliner, however, the 747-8 has suffered numerous production setbacks, due in part to the innovative nature of the design and the way that Boeing has chosen to assemble the plane. In the case of 747-8, the inaugural customer, Cargolux Airlines International SA, cancelled delivery ceremonies in the late summer of this year and delayed acceptance of the first two aircraft over what were described as contractual issues. News reports suggested that Cargolux was dissatisfied with the initial performance and weight of the aircraft. Boeing and Cathay Pacific officials have also hinted at friction between them in the months leading up to delivery; Cathay Pacific cant be pleased by the compressed period for accepting the 10 planes. But the two parties were all smiles in October, at a celebration in Seattle marking introduction of the 747-8F, and the aircraft appears finally to have surmounted its birth pangs. Other challenges loom. The biggest, says Rhodes, is the uncertain condition of Europes economy. The collapse of one or more members of the European Union could cripple one of the largest markets for Asian-made goods. Another wild card is a bill in the U.S. Congress to punish China for intervening in monetary markets to keep its currency weak. Should the bill pass, China will almost certainly retaliate, setting off a full-scale trade war. Additional pressing issues, according to Edgar, include fuel-dprice volatility, the threat of modal diversion, and new rules on security and environmental responsibility. Rhodes expects activity for the rest of 2011 to be pretty flat, but hes predicting recovery in 2012 and steady growth beyond. For its part, Cathay Pacific is expanding service into promising markets such as India, and even expects renewed economic activity in Japan. The last few years have been rough on

carriers and aircraft manufacturers alike, but Rhodes is convinced that the story has a happy ending. The only question is, how long does the industry have to wait for him to be right?

Package delivery
Package delivery or parcel delivery is the shipping of packages (parcels) or high value mail as single shipments. While the service is provided by most postal systems, private package delivery services have also existed in competition with and in place of public postal services.

Package delivery in the United States

Private parcel services arose in the United States in part over discontent with the United States Post Office, whose rates were seriously inflated due to the monopoly it held over regular mail and the appointment of postmasters as political patronage jobs. In 1852 Wells Fargo, then just one of many such services, was formed to provide both banking and express services. These went hand-in-hand, as the handling of California gold and other financial matters required a secure method for transporting them across the country. This put Wells Fargo securely in the stagecoach business and prompted them to participate in the Pony Express venture. They were preceded, among others, by the Butterfield Overland Stage, but the failure of the latter put the business in Wells Fargo's hands and led to a monopoly on overland traffic that lasted until 1869, when the transcontinental rail line was completed. During this period they carried regular mail in addition to the package business, defying the post office monopoly; eventually a compromise was worked out wherein Wells Fargo charged its own fee on top of federal postage, in recognition of the limitations of the post office reaching all areas easily. From 1869 on package services rapidly moved to rail, which was faster and cheaper. The express office was a universal feature of the staffed railroad station. Packages traveled as "head end" traffic in passenger trains. In 1918 the formation of the United States Railroad Administration resulted in a consolidation of all such services into a single agency, which after the war continued as the Railway Express Agency (REA). On January 1, 1913, parcel post service began, providing rural postal customers with package service along with their regular mail and obviating a trip to a town substantial enough to support an express office. This, along with Rural Free Delivery, fueled a huge rise in catalog sales. By this time the post office monopoly on mail was effectively enforced, and Wells Fargo had exited the business in favor of its banking enterprises. Motor freight services arose quickly with the advent of gasoline and diesel powered trucks. United Parcel Service had its origins in this era, initially as a private courier service. The general improvement of the highway system following World War II prompted its expansion into a nationwide service, and other similar services arose. At the same time the contraction of rail passenger service hurt rail-based package shipping; these contractions led to the cancellation of the mail contracts with the railroads, which in turn caused further passenger cuts. Eventually REA was dissolved in bankruptcy in 1975. Air mail was conceived of early, and scheduled service began in 1918. Scheduled airlines carried high valued and perishable goods from early on. The most important advance, however, came with the "hub and spoke" system pioneered by Federal Express (now known as FedEx) in 1973. With deregulation in 1977, they were able to establish an air-based system capable of delivering small packagesincluding mailovernight throughout most of the country. In response the postal service initiated a comparable Express Mail service. Ironically, in the same period they also began contracting

with Amtrak to carry mail by rail. Thus at the beginning of the 21st century, the US consumer can choose from a variety of public and private services offering deliveries at various combinations of speed and cost. [edit]Role

of parcel shipping consolidators

Continued growth of business to consumer (b2c) e-commerce has increased demand for low-cost package shipping services. Demand for inexpensive parcel shipping is especially intense for online and catalog retailers. These merchants, many of whom primarily ship low-cost goods, face consumers resistant to paying exorbitant shipping costs (often driven up by fuel surcharges, residential delivery fees, etc.) for package delivery to their homes. As a result, [package shipping consolidators step in to combine low-cost "last-mile delivery" strengths of the US Postal Service with the technological and operational capabilities generally associated with private carriers. Large parcel carriers, such as United Parcel Service (UPS) and FedEx, often include an array of accessorial charges (like fuel and residential delivery surcharges) in addition to their standard fees. The US Postal Service (USPS) offers low-cost options for small package delivery to the home, such as Parcel Select and Parcel Post. However, many merchants prefer low-cost shipping options without sacrificing visibility of their parcels while in transit ("track and trace"). The US Postal Service does offer a limited "Delivery Confirmation" for even their lowest-cost package delivery services, but more robust tracking is currently only available for Express Mail service and some international services. Instead, the USPS has established "worksharing agreements" with parcel consolidators, who pick up a shipper's parcels, sort and route them, then enter them into the Postal system for final delivery. The Postal Services claims parcel shipping consolidators provide "up-front estimates on expected delivery time" and can offer "value-added services," like "customized rates, manifesting, delivery confirmation, billing, insurance, electronic data interchange (EDI), and pickup service." Indeed, most USPS "workshare partners"--from major carriers likeFedEx SmartPost and DHL Global Mail to specialty carriers like Streamlite, Argix Direct and Newgistics--provide full tracking and tracing for their customers' parcels. [edit]Regional

Parcel Carriers

In addition, a number of regional parcel delivery companies have sprung up over the last twenty years including OnTrac in the Western United States, Eastern Connection on the Eastern Seaboard, Lone Star Overnight in Texas and Spee Dee Delivery Service in the Mid West. They combine the track and trace capability of the national carriers with the ability to guarantee next day delivery at ground rates over a larger delivery footprint. Because they are regionally based, they are able to improve shipment time in transit and increase shippers productivity with later pick up times. The regional parcel carriers can be a cost effective enhancement to UPS and FedEx because they do not charge the full array of accessorial charges mentioned in the section above. [edit]Package

handling

Transport packaging needs to be matched to its logistics system. Packages designed for controlled shipments of uniform pallet loads may not be suited to mixed shipments with express carriers.

The individual sorting and handling systems of small parcel carriers can put severe stress on the packages and contents.Packaging needs to be designed for the potential hazards which may be encountered in parcel delivery systems. The major carriers have a packaging engineering staff which provides packaging guidelines and sometimes package design and package testing services.

Shipping list
From Wikipedia, the free encyclopedia

A shipping list, packing list, waybill, packing slip (also known as a bill of parcel, unpacking note, packaging slip, (delivery) docket, delivery list, manifest or customer receipt),[1][2][3] is a shipping document that accompanies delivery packages, usually inside an attached shipping pouch or inside the package itself. It commonly includes an itemized detail of the package contents and does not include customer pricing. It serves to inform all parties, including transport agencies, government authorities, and customers, about the contents of the package. It helps them deal with the package accordingly.

Bill of lading
A bill of lading (BL - sometimes referred to as BOL or B/L) is a document issued by a carrier to a shipper, acknowledging that specifiedgoods have been received on board as cargo for conveyance to a named place for delivery to the consignee who is usually identified. Athorough bill of lading involves the use of at least two different modes of transport from road, rail, air, and sea. The term derives from the verb "to lade" which means to load a cargo onto a ship or other form of transportation.[1]

Contents
A bill of lading can be used as a traded object. The standard short form bill of lading is evidence of the contract of carriage of goods and it serves a number of purposes:

It is evidence that a valid contract of carriage, or a chartering contract, exists, and it may incorporate the full terms of the contract between the consignor and the carrier by reference (i.e. the short form simply refers to the main contract as an existing document, whereas the long form of a bill of lading (connaissement intgral) issued by the carrier sets out all the terms of the contract of carriage; It is a receipt signed by the carrier confirming whether goods matching the contract description have been received in good condition (a bill will be described as clean if the goods have been received on board in apparent good condition and stowed ready for transport); and It is also a document of transfer, being freely transferable but not a negotiable instrument in the legal sense, i.e. it governs all the legal aspects of physical carriage, and, like a chequeor other

negotiable instrument, it may be endorsed affecting ownership of the goods actually being carried. This matches everyday experience in that the contract a person might make with a commercial carrier like FedEx for mostly airway parcels, is separate from any contract for the sale of the goods to be carried; however, it binds the carrier to its terms, irrespective of whom the actual holder of the B/L, and owner of the goods, may be at a specific moment. The BL must contain the following information: Name of the shipping company; Flag of nationality; Shipper's name; Order and notify party; Description of goods; Gross/net/tare weight; and Freight rate/measurements and eighteenth of goods/total freight

While an air waybill (AWB) must have the name and address of the consignee, a BL may be consigned to the order of the shipper. Where the word order appears in the consignee box, the shipper may endorse it in blank or to a named transferee. A BL endorsed in blank is transferable by delivery. Once the goods arrive at the destination they will be released to the bearer or the endorsee of the original bill of lading. The carrier's duty is to deliver goods to the first person who presents any one of the original BL. The carrier need not require all originals to be submitted before delivery. It is therefore essential that the exporter retains control over the full set of the originals until payment is effected or a bill of exchange is accepted or some other assurance for payment has been made to him. In general, the importer's name is not shown as consignee. The bill of lading has also provision for incorporating notify party. This is the person whom the shipping company will notify on arrival of the goods at destination. The BL also contains other details such as the name of the carrying vessel and its flag of nationality, the marks and numbers on the packages in which the goods are packed, a brief description of the goods, the number of packages, their weight and measurement, whether freight costs have been paid or whether payment of freight is due on arrival at the destination. The particulars of the container in which goods are stuffed are also mentioned in case of containerised cargo. The document is dated and signed by the carrier or its agent. The date of the BL is deemed to be the date of shipment. If the date on which the goods are loaded on board is different from the date of the bill of lading then the actual date of loading on board will be evidenced by a notation the BL. In certain cases a carrier may issue a separate on board certificate to the shipper.

Main types of bill

[edit]Straight

bill of lading

Bill of lading for casks of wine shipped by United States Consul to Lisbon, Portugal, William Jarvis to President Thomas Jefferson.

In this importer/consignee/agent is named in the bill of lading, it is called straight bill of lading. It is a document, in which a seller agrees to use a certain transportation to ship a good to a certain location, where the bill assigned to a certain party. It details to the quality and quantity of goods.. [edit]Order

bill of lading

This bill uses express words to make the bill negotiable, e.g. it states that delivery is to be made to the further order of the consignee using words such as "delivery to A Ltd. or to order or assigns". Consequently, it can be indorsed (legal spelling of endorse, maintained in all statute, including Bills of Exchange Act 1909 (CTH)) by A Ltd. or the right to take delivery can be transferred by physical delivery of the bill accompanied by adequate evidence of A Ltd.'s intention to transfer. [edit]Bearer

bill of lading

This bill states that delivery shall be made to whosoever holds the bill. Such bill may be created explicitly or it is an order bill that fails to nominate the consignee whether in its original form or through an endorsement in blank. A bearer bill can be negotiated by physical delivery. memo bill of lading: Needed for documents &revenue purpose. Express bill of lading: Non negotiable bill of lading consigned directly to third party.Hard copy is not required by shipper. [edit]Surrender

bill of lading

Under a term import documentary credit the bank releases the documents on receipt from the negotiating bank but the importer does not pay the bank until the maturity of the draft under the relative credit. This direct liability is called Surrender Bill of Lading (SBL), i.e. when we hand over the bill of lading we surrender title to the goods and our power of sale over the goods. A clean bill of lading states that the cargo has been loaded on board the ship in apparent good order and condition. Such a BL will not bear a clause or notation which expressively declares a defective condition of goods and/or the packaging. Thus, a BL that reflects the fact that the carrier received the goods in good condition. The opposite term is a soiled bill of lading, which reflects that the goods are received by the carrier in anything but good condition. [edit]Other

terminology

A sea or air waybill is a non-negotiable receipt issued by the carrier. It is most common in the container trade either where the cargo is likely to arrive before the formal documents or where the shipper does not insist on separate bills for every item of cargo carried (e.g. because this is one of a series of loads being delivered to the same consignee). Delivery is made to the consignee who identifies himself. It is customary in transactions where the shipper and consignee are the same person in law making the rigid production of documents unnecessary. The UK's Carriage of Goods by Sea Act 1992 creates a further class of document known as a ship's delivery order which contains an undertaking to carry goods by sea but is neither a bill nor a waybill. A straight bill of lading by land or sea, or sea/air waybill are not documents that can convey title to the goods they represent. They do no more than require delivery of the goods to the named consignee and (subject to the shipper's ability to redirect the goods) to no other. This differs from an "order" or "bearer" bill of lading which are possessory title documents and negotiable, i.e. they can be endorsed and so transfer the right to take delivery to the last endorsee. Nevertheless, bills of lading are

"documents of title", whether negotiable or not, under the terms of the Uniform Commercial Code. Definitions of "Document of Title" and "Bill of Lading"

Transportation Logistics
From A to Z, Apple Controls Its Supply Chain, Giving It Huge Advantage Over Anyone Else
Operations provides a massive competitive advantage for Apple. This is the world of manufacturing, procurement and logistics in which the new chief executive officer, Tim Cook, excelled, earning him the trust of Steve Jobs. According to more than a dozen interviews with former employees, executives at suppliers, and management experts familiar with the companys operations, Apple has built a closed ecosystem where it exerts control over nearly every piece of the supply chain, from design to retail store. Because of its volumeand its occasional ruthlessnessApple gets big discounts on parts, manufacturing capacity, and airfreight. Operations expertise is as big an asset for Apple as product innovation or marketing, says Mike Fawkes, the former supply-chain chief at Hewlett-Packard and now a venture capitalist with VantagePoint Capital Partners. Theyve taken operational excellence to a level never seen before.

Reverse Logistics
High Supply Chain Priorities for High-Tech & Electronics in 2011
Analyst Insight: As high-tech companies move forward into 2011, it is critical to develop a list of supply chain priorities for the year. Topping this years list is a renewed focus on logistics and manufacturing outsourcing and an increased sense of urgency in developing the Chinese consumer market for new revenue. In addition, there is a growing need to create additional value from an often under-appreciated source the service supply chain. Greg Hazlett, principal at Tompkins Associates The past years challenges have left high-tech companies with a new set of significant priorities for 2011. Below are the top 11. Logistics and Manufacturing Outsourcing: Flexible organizational processes, technology and resources are becoming extremely important. Outsourcing provides the opportunity for high-tech companies to maximize results by focusing on core competencies, while delegating non-core processes and activities. Globalization - China as a Consumer Market: Global business is looking to China not only for sourcing and production but for growth. Companies around the world are gearing up to begin selling or further ramp up sales capabilities into Chinas growing consumer market. Reverse Logistics/ Service Supply Chain: The service supply chain helps companies differentiate themselves from their competitors while reducing costs and improving residual value recovery from their returned products. Transforming high-tech service supply chain organizations into profit centers will be a game-changer for companies in this industry. Uncertainty: Today, uncertainty is certain. High-tech organizations must accept uncertainty and implement agile processes that allow them to move forward. The best strategy is to respond to uncertainty and make it an ally in achieving profitable growth. Maximizing Supply Chain Flexibility: The primary factors driving this industry frequent new product introductions, short product lifecycles, speed to market, new distribution channels, and changing consumer preferences require more flexibility in supply chains than normal. Agility is an absolute requirement, while maintaining operational excellence. Global Trade and Risk Management: Automating global trade processes will help high-tech companies enhance supply chain performance. Furthermore, effective global trade and risk

management must address margin protection, brand integrity, and customer satisfaction. Sustainability: In the U.S., nearly 70 percent of heavy metals in landfills comes from discarded electronics. Companies are fighting to be environmentally friendly and keep the costs of recycling, demanufacturing and scrap at a minimum. Tax-Effective Supply Chain Management: TESCM is the process of integrating tax planning into the overall management of the companys supply chain and is an important priority to be considered. On-line Digital Content to Drive Product Innovation, Acceptance and Obsolescence: Audiences today can stream almost any digital content they want, at any time. Enhancements in digital delivery and usage, including cloud computing and mobile phone applications, are indications of market acceptance. How high-tech companies respond and innovate will determine what audiences embrace or reject. Inventory Working Capital/Sales Optimization Planning: With demand returning, the people, processes and technology of Sales, Inventory & Operations Planning must be brought to a new level to enhance inventory turns while improving customer service. Strategic Market Planning and Growth: M&A activity for technology companies is rising, due to recession pressures that created bargain prices for various technology companies. But risks persist, and success comes from gaining a leading and sustainable position in the served markets. The Outlook With these top priorities in 2011, high-tech companies have their work cut out for them. However, it is not as simple as completing one task and moving forward. High-tech companies will need to ensure that each of these areas are included in their continuous improvement strategies.

How Technology Can Ease Supply Chain Management and Mitigate Risk
Maz Ghorban, Vice President, Corporate Development, MIR3 | August 29, 2011

As recently as 20 years ago, supply chain management was seen as something that took place behind the scenes without dedicated staff and resources. For many, it was regarded as a necessity for only the largest brands or companies with international distribution. When there was a disruption to the supply chain, the fix was easya company would pull a couple of people from whatever they were doing and put them on the problem. Once the kinks were ironed out, those people could go back their regular jobs. In those days consumers were less demanding, less aware and certainly more patient, as they werent familiar with online ordering with the ability to track shipments to a timely and expected delivery date. Even items that were custom built, beginning when an order arrived via the U.S. Postal Service, were handled with an understanding that completion and delivery would be unpredictable. Supply chain management has been around at least as long as the assembly line, but until recently, the concept of a chief supply officer has been foreign. Now that role is seen as a highly strategic one that is increasingly valuable from both a customer service and a business perspective. As the role has evolved its become a critical one, as managing a supply chain is complex, fraught with risk, subject to complex regulations, fines, competition, international shipping restrictions, and more. As the internet, email and other technologies have become ubiquitous, the expectations of consumers have grown correspondingly. Todays companies are increasingly global and complex, with competition growing on every front and acquisitions that change business processes taking place with astonishing

frequency. At the same time, roles and responsibilities within companies have expanded and become more specific. With new technologies skills have become more specific, and companies are much less likely to want to pull people from important jobs to focus their attention on supply chain problems. The supply chain itself has become increasingly complex, with a higher number of ingredients and components leading to a finished product, and with a broader and more widespread base of suppliers. Its clear that monitoring the path of goods using tacks on a map no longer works. Technology has crept into SCM step by step, beginning with electronic invoicing, computerized shipping and tracking and automated notifications that were advanced by companies like FedEx and UPS. Initially intended for business-tobusiness interactions, it took time before that level of tracking and accountability was provided to consumers. But even in those early days it was clear that the ability to notify everyone along the chain was important. It wasnt until customer-focused companies like Zappos, the online retailer with the tagline Powered by Service, came on the scene that consumers got a taste of how involved they could be with their purchases. Online natives like Zappos, didnt start with brick-and-mortar stores, so rather than having to adapt to new technology, they were born into the arms of it. Consumers love these businesses because they can see immediately that their orders have been received, they are notified when orders are shipped, and they can track their purchase every step of the way. Before they order, they can read extensive reviews of the products they are about to purchase, as well as the company they are about to purchase from. This has set a new standard for online customer service; companies that can meet or exceed that standard have a distinct competitive advantage. Companies like Apple and Harley Davidson use that advantage to further personalize the purchase experience by taking custom orders, then building a product to the exact customer specifications. That same kind of tracking and accountability can be applied to virtually every link in the supply chain to provide a moment-by-moment snapshot of how goods are moving around the planet. This is the aim of a supply chain manager, to know where inventory is and to anticipate delays and hitches before they affect the final assembly line. And just as technology has provided the business landscape with many more capabilities; it has contributed to a new recognition of supply chain management as a profession and a discipline. Today, knowledgeable supply chain managers command respect and correspondingly high salaries. Modern supply chain managers understand that technology provides increased visibility and accountability; therefore, a stronger competitive edge and tight control of the supply chain is worth the investment. Key to this kind of efficiency is the ability to notify everyone along the supply chain when things arent going exactly as planned. Notification technology has adapted along with SCM to provide an easy way to send one message to many at once, by a wide variety of devices. So employees at desks will get a call and an email, and someone out in a plant will get a text sent to their smartphone. When the information is shared in real-time, it allows teams to adapt and change to suit the situation, helping to keep manufacturing lines on time and on track.

As an example, one company that manufactures condiments that are packed in glass jars received a shipment of bottles that seemed fine, but revealed a visible flaw after being filled. The product was packed, labeled and shipped to retailers before the flaw was discovered, and the entire lot had to be recalled. With notification technology in place, the complicated task of issuing a recall was completed in minutes. The manufacturer notified everyone along the chain by sending a single automated alert. Whether the goods had shipped to a dozen or a thousand customers, tracking ingredients and notifying customers would still take just minutes. Unfortunately, even though the SCM profession and the technology are burgeoning, many companies are still entrenched in outdated, monolithic systems, using phone, fax and email to communicate throughout their lengthy and complicated supply chains. But even these companies feel the pressures of competition and keeping costs down pushing them towards more and better technology and automated processes that provide a way to notify everyone along the chain. The fact that technology with notification has influenced the SCM scene is evident by the increasing trend towards just-in-time inventory management. JIT is a great way to free up cash and increase working capital by letting inventory run down. This can free up many millions of dollars, not just held in the goods themselves, but in storage, security and management of goods. It also reduces the risk of inventory becoming obsolete while in storage. JIT also comes with risks, many of which have been starkly illustrated by the earthquake and subsequent tsunami in Japan, which have left global manufacturers scrambling for alternative parts and materials that were impacted by the double disaster. The moment that tragedy occurred, alerts began. Supply chain managers quickly used notification to reach everyone along the chain, both suppliers and customers, to assess the situation and reserve materials they knew would soon be in short supply. Suppliers, in turn, could easily respond to these alerts, and those responses were logged, making it easy for supply chain managers to track materials and adapt accordingly. Despite the risks, JIT manufacturing has become so entrenched that many companies simply cant afford to stock and warehouse as much inventory as they used to. So if the supply chain is impacted, orders are affected or downtime in the plant occurs. Successful JIT relies on a tightly managed supply chain, with the ability to alert suppliers quickly in the case of an increased need for materials or goods. This tight management is only possible when SCM technology is tightly integrated with notification capabilities. Manufacturing is complicated, and supply chain interruptions can cause inventory levels to plummet precipitously. To maintain a steady flow of ingredients, components and finished goods there must clear communication all along the chain. That requires a solution that is more efficient and sophisticated than sending a mass email or pulling staff to make panicked phone calls. When the earthquake and tsunami happened earlier this year, many executives around the world had emergency meetings to assess how the disaster would affect their companies and determine what they could do to minimize that impact. Those who had a notification system in place were able to do so quickly, notifying all top managers at once via phone, email, SMS and more, and

connecting these decision makers using a conference call bridge that everyone could join with a touch of their keypad. This helped them share information, make urgent decisions and coordinate response efforts. This disaster reminded us all that, when it comes to business continuity, its important to plan for the worst. It also highlighted the fact that old systems and old ways of doing things just dont work in this type of extreme situation. When this kind of interruption happens, consumers start clamoring for information and solutions; expectations are higher than ever before. Its important to get ahead of consumer reaction quickly, as call centers will quickly be swamped with calls for information. With a plan in place its possible to use a bad situation to build goodwill and trust with customers. The situation in Japan reminded a lot of people that bad things can happen, and that an event can have a huge impact, even on those that are highly prepared. Sadly, many companies stop right there, realizing that they dont have a plan, and paralyzed about where to go from there. The survivors over the long term are those who have considered the what-ifs and have put solid plans in place for dealing with interruption. Wise companies will initiate the use of SCM technology and a notification solution. Any company that doesnt use technology as part of SCM is at a distinct disadvantage, no matter how good their business continuity plans. According to supply chain experts, there are four major areas where SCM technology with notification will help. Those areas are global trade, supply relationship management, reverse logistics, and supply chain execution. Lets look at each of these areas: Global trade Global trade is fraught with constantly changing regulations. A well-respected company recently received an exceedingly heavy fine for inadvertently side-stepping regulations and shipping night-vision goggles that eventually landed in the hands of terrorists. Automated notification, as part of SCM technology, could have kept everyone along the chain appraised of the latest updates and helped to avoid such a situation. Supply relationship management In 2007, Mattel had to recall over 10 million toys because lead paint was detected. To stop the spread of tainted toys, the company had to work backwards along the chain to find out where the lead came from, and also forward to where the final goods were all shipped to effect a recall. With notification as part of an SCM toolkit, much of this communication could be automated, thus speeding the process and providing a reliable audit trail. Reverse logistics Reverse logistics is the process of managing the return of goods, recycling of batteries and other components, disposal of products coming off lease, and the auctioning of those items, etc. When there is a sudden influx of new goods, manufacturers have to offload outdated goods quickly. Notification can help alert a variety of recyclers and other parties at once, allowing them to respond with times they are available to remove redistributed goods. Supply chain execution One large discount retailer uses notification to make the delivery cycle more efficient. When a delivery arrives, staff has already been notified to be on standby to receive it immediately. If staff is not available, its easy to alert truck to deliver to an alternate store and to reroute staff, saving

both time and money. As business complexity and global competition increases and consumer loyalty becomes more tenuous, more and more companies are exploring SCM technology to gain operational efficiencies. Using technology complemented with a reliable notification solution, they can establish a foundation for consistent leadership and secure a strong competitive edge.
[edit]Multi-modal

Transport Documents

The advent of unitisation in air and sea transportation brought about many innovations in international transportation of goods. Multi-modal or combined transport is one such innovation. Cargo today can be moved from an inland freight station in the exporting country to an inland destination in the importing country. Goods may be picked up and transported using different modes of transport. E.g. a consignment of garments may be containerised at a factory in Mysore, customs cleared at ICD Bangalore, moved by rail to Cochin, by sea to Dubai, by air to Frankfurt and road to Dsseldorf, all under a single transport document. In such an operation, involving one or more land legs and/or air or sea legs, one carrier makes itself responsible for the entire transport operation. The contracting carrier is referred to as a multi-modal or a combined transport operator (MTO). He is liable in contract to the shipper if the goods are damaged at any stage of the carriage. The multi-modal transportation document may be issued either in non-negotiable or negotiable form. The multi-modal transportation document (MTD), whether negotiable or non-negotiable, is prima facie evidence of the MTO taking charge of the goods for transportation. MTDs are of two types, the COMBIDOC evolved by the Baltic International Maritime Council (BIMCO) and FBL or FIATA MT Bill of Lading evolved by the International Federation of Freight Forwarders' Associations (FIATA). This document (FBL) has been approved by the International Chamber of Commerce (ICC) for the purpose of documentary credit. FIATA has evolved specific norms for the use of FBLs. Having seen what is covered by sea, air and multimodal transport let us look at other modes including courier and charter movements. The ICC has a publication called the Uniform Customs and Practices, UCP 600(UCP 500 and UCP 400 were the earlier editions) which among other things deals with various transport documents, including those we have already looked at. Articles 20 to 24 of the UCP 600 deal with these documents. [edit]A

sample of the issues

In most national and international systems, a bill of lading is not a document of title, and does no more than identify that a particular individual has a right to possession at the time when delivery is to be made. Problems arise when goods are found to have been lost or damaged in transit, or delivery is delayed or refused. Because the consignee is not a party to the contract of carriage, the doctrine of privity of contract states that a third party has no right to enforce the agreement. However, whether this is a problem to the consignee depends on who owns the goods and who holds the risks associated with the carriage. This will be answered by examining the terms of all the relevant contracts. If the consignor has reserved title until payment is made, the consignor can sue to recover his or her loss. But if ownership and/or the risk of loss has transferred to the consignee, the right to sue may not be clear in contract, although there could be remedies in tort/delict (the issue of risk will have been most carefully considered to decide who should insure the goods during transit). Hence, a number of international Conventions and domestic laws specifically address when a consignee has the right to sue. The legal solution most often adopted is to apply the principle of subrogation, i.e. to give the consignee the same rights of action held by the consignor. This enables most of the more obvious cases of injustice to be avoided. In the municipal law of the U.S., the issue and enforcement of bills which may be documents of title, is governed by Article 7 of the Uniform Commercial Code. However, since bills of lading are most

frequently used in transborder, overseas or airborne shipping, the laws of whatever other countries are involved in the transaction covered by a particular bill may also be applicable including the Hague Rules, the Hague-Visby Rules and the Hamburg Rules at international level for shipping, The Warsaw Convention for the Unification of Certain Rules for International Carriage by Air 1929 and The Montreal Convention for the Unification of Certain Rules for International Carriage by Air 1999 for air waybills, etc. It is customary for parties to the bill to agree both which country's courts shall have the jurisdiction to hear any case in a forum selection clause, and the municipal system of law to be applied in that case choice of law clause. The law selected is termed the proper law in private international law and it gives a form of extraterritorial effect to an otherwise sovereign law, e.g. a Chinese consignor contracts with a Greek carrier for delivery to a consignee based in New York: they agree that any dispute will be referred to the courts in New York (since that is the most convenient place the forum conveniens) but that the New York courts will apply Greek law as the lex causae to determine the extent of the carrier's liability. [edit]Examples

Southern Railway Company bill of lading (1906): front side, back side

[edit]BoL
[2][3][4][5]

and fraud

[edit]Introduction Because of their nature, Bills of Lading (BoL) present numerous opportunities for fraudsters to manipulate the commodity trades e.g. false certification of the loading date. But also in relation to the number of original documents fraud is possible. [edit]Background Bills of lading are normally issued in sets of three or six originals. Treating each BoL as an original leaves it open to misuse because presentation of part of a set is enough. The carrier delivers the cargo against presentation of the bill of lading and it is not necessary for the holder of the bill of lading to present the entire set. The carriers duty is to deliver goods to the first person who presents any one of the original BoL. Delivery of the cargo against one of a set would cause no problems if the endorsee had the complete set. The endorsee will therefore ensure that he receives the full set of the BoL with all originals. If he receives an incomplete set of documents it can not be excluded that a third party can deliver the goods. Despite the tendency to fraud and the developments in communication technology the using of bill of ladings in sets continues. Why this practice goes on these days is unclear. [edit]Historical

review

Already in 1882 Lord Blackburn suggested that making a bill of lading in parts would be confusion unless the delivery of one part of the bill of lading had the same effect as the delivery of all parts would have had. He also noticed that making only one bill of lading which should be the sole document of title (master document) and taking copies, certified by the master to be true copies which would suffer for every legitimation purpose (e.g. for an appraisal) for which the other parts of the bill can be applied, but could not be used for the purpose of pretending to be the holder of a bill already parted with.

[edit]Liability In the event of misdelivery the carrier will not be liable if he has no notice of other endorsements. There is no duty on the carrier to make inquiries of the unendorsed bill of lading holder whether any assignments have taken place. The House of Lords already said in 1882: the warehouseman was not liable for misdelivery. Case: Glyn Mills v. East and West India Dock Co. 1882:

a set of three bills of lading was issued, named Cottam and Co as the consignees. Freight was to be payable on arrival of the goods at London. Cottam and Co endorsed one bill of lading as security to Glyn Mills and kept the other two bills in the set. When the goods arrived in London, they were stored, an Cottam and Co got delivery of the goods from the warehouse on presentation of the unendorsed bill of lading. Glyn Mills sued the warehouseman for misdelivery.

It would be neither reasonable nor equitable nor in accordance with the terms of such a contract that an assignment of which the shipowner has no notice should prevent a bona fide delivery under one of the bills of lading, produced to him by the person named on the face of it as entitled to delivery (in the absence of assignment) from being a discharge to the shipowner. Assignment being a change of title since the contract, is not to be presumed by the shipowner in the absence of notice. Wheras a carrier delivers cargo without presentation a bill of lading the carries violates the contract. E.g. the carrier discharged the goods to their agents, who delivered the goods against an indemnity from the bank. No bill of lading was presented. The breach is regarded as a fundamental breach. He will lose the benefit of a general exception clause in the contract of carriage because one of the key provisions is the promise not to deliver the cargo other than in return for an original bill of lading.

[edit]BoL

and electronic data interchange (EDI)

The impact of information technology and using paperless documents[2][3][4][5] [edit]Introduction The use of electronic communication in international commercial transactions has received considerable attention in recent years. The term ELECTRONIC DATA INTERCHANGE is commonly used to designate systems of computer to computer exchange of information in predetermined formats. The advantages are e.g.: saving time by speeding up processes of documents transfer and transaction completion; the ease doing business over long distances; the reduction of costs.

[edit]Background A well known EDI system is e.g. SWIFT the Interbank Financial Telecommunications, the transmission of bank to bank financial transaction messages. Suitable amendments have made in trade terms to accommodate the use of electronic bills of lading: Contracts conclude electronically are now recognized in many jurisdiction; Formal requirements for a contractual document such as a signature have been made possible as a result of legislation modeled on the UNICTRAL Model Law on Electronic Signatures;

The CMI Rules on electronic Bills of lading and the BOLERO Rules have made use of electronic bills of lading a reality.

[edit]Advantages

and disadvantages of using electronic documents

Electronic bills of lading are reducing: problems created by late arrival of documents at the port of discharge; fraud, because bills of lading will no longer be sent in sets of 3 or 6 originals.

But the using of open networks such as Internet enhance fraud because of computer misuse. The successful implementation of paperless documents is only possible if: it is nearly impossible for hackers or fraudsters to gain access; e.g. using digital cryptology; Organisations like OECD or EU are continuously considering policy issues with a view to arriving at a solution that makes electronic commerce more secure. deterrence based on law; this legislation, like the Computer Misuse Act 1990 in the UK, carries criminal sanction in the event of computer misuse; but is not clear, if there is any success in decreasing computer misuse;

the Council of Europe with the intention of harmonizing the law on computer misuse has draftet the International Convention on Cybercrime which hopefully will have wide impact.

there is a greater co-operation between countries to exchange information about cross border data flow;

this depends on the countries willingness to participate. the laws allow computer based documents for the case of evidence; e.g. the UNCITRAL Model Law on electronic Commerce, on which many jurisdictions have based their legislation allows computer generated evidence in Art. 9.

[edit]The CMI Rules on electronic BoL [edit]Short Overview The model rules for Electronic Bills of Lading were adopted by the Comit Maritime International (CMI) in 1990.The main feature of the CMI Rules is the creation of an electronic BoL by the carrier who also acts as an unofficial registry of negotiations. CMI Rules for electronic bills of lading: Art. 1 Scope of Application Art. 2 Definitions Art. 3 Rules of procedure Art. 4 Form and content of the receipt message

Art. 5 Terms and conditions of the Contract of Carriage Art. 6 Applicable Law Art. 7 Right of Control and Transfer Art. 8 The Private Key Art. 9 Delivery Art. 10 Option to receive a paper document Art. 11 Electronic data is equivalent to writing

The CMI Rules for electronic BoL, like INCOTERMS, need to be incorporated into the contract. After the parties agree that the Rules apply the shipper delivers the goods to the carrier who then transmits a receipt message to the shippers electronic address. This message must contain: the name of the shipper, the description of the goods, the date and place of receipt and the private key to be used in subsequent transmission.

The private key is the device that makes issuance, endorsement negotiation and registration of the electronic bill of lading possible; it secures the electronic transmission. Art. 2 f CMI: Private key means any technically appropriate form such as a combination of numbers and/or letters which parties may agree for securing the authenticity and integrity (realness) of a transmission. The party who possesses a valid private key is the holder and is the only party entitled to claim delivery of the goods, name the consignee, transfer ownership and so on. The shipper must send a confirmation to the carrier immediately after receiving the receipt message. The shipper does not become holder until this confirmation is send. The receipt message is the equivalent to a traditional bill of lading. In other words, the receipt function of the electronic bill is to be no different from a paper bill of lading. Once the shipper confirms the receipt message, he becomes the holder. The carrier acts as an central registry and cancels the previous private key and issues a new one to the new holder. The rules place excessive responsibility on the carrier. If the holder has been careless with the private key as a result of which an entity other than the holder gives instructions to the carrier on which the carrier acts then it seems the loss will fall on the holder since the carrier shall be under no liability for misdelivery if it can be proved that it exercised care to ascertain that the party who claimed to be the consignee was in fact that party. The holder has the option at any time prior to delivery of the goods to demand from the carrier a paper based bill of lading. The issue of a paper bill of lading will cancel the private key and terminate the EDI procedures under the CMI Rules but does not affect the rights, obligations or liability of the parties; The success of the CMI Rules will depend on whether merchants are ready to give up their control over the bill of lading and entrust the carrier with information to effect a transfer. [edit]The

Bolero Rules

Bolero stands for Bill of Lading Electronic Registry Organization and was commercially launched on September 27th 1999. Bolero International Ltd. is a joint venture between SWIFT (Society for Worldwide Interbank Financial Transactions) and the TT Club (Through Transport Mutual Insurance Association Ltd.). It is a project of the EU to study feasibility of electronic bill of lading.

It is a closed network and can only be used by subscribers. The subscribers are subject to the BOLERO Rule Book which is the legal framework. Transfer is effected by a combination of notification, confirmation and authentication through digital signature.

It is not clear how widely this system is used.

Waybill
A waybill (US) or consignment note (UIC) is a document issued by a carrier giving details and instructions relating to the shipment of aconsignment of goods. Typically it will show the names of the consignor and consignee, the point of origin of the consignment, its destination, route, and method of shipment, and the amount charged for carriage. Unlike a bill of lading, which includes much of the same information, a waybill is not a document of title. Most Freight Forwarders and Trucking Companies use an in-house waybill called a House Bill. These typically contain 'Conditions of Contract of Carriage' terms on the back of the form. These terms cover limits to liability and other terms and conditions. Most Airlines use a different form called an Air Waybill which lists additional items like Airport of Destination, Flight # and time. [edit]Digital

waybill

A digital waybill is an electronic version of a waybill, which has become very common as many shipments are ordered through the internet. The driving force behind the movement to the Digital Waybill has been the lowering of printing costs for shipping companies in the North American market. The European market has also benefited from cost savings through the reduction in telephone and fax costs due to the increased usage of the digital waybill. In some regions, it has been referred to as an e-Waybill however this is not the industry standard.

Letter of credit
From Wikipedia, the free encyclopedia

After a contract is concluded between buyer and seller, buyer's bank supplies a letter of credit to seller.

Seller consigns the goods to a carrier in exchange for a bill of lading.

Seller provides bill of lading to bank in exchange for payment. Seller's bank exchanges bill of lading for payment from buyer's bank. Buyer's bank exchanges bill of lading for payment from the buyer.

Buyer provides bill of lading to carrier and takes delivery of goods.

A standard, commercial letter of credit (LC[1]) is a document issued mostly by a financial institution, used primarily in trade finance, which usually provides an irrevocable payment undertaking. The letter of credit can also be payment for a transaction, meaning that redeeming the letter of credit pays an exporter. Letters of credit are used primarily in international trade transactions of significant value, for deals between a supplier in one country and a customer in another. In such cases, the International Chamber of Commerce Uniform Customs and Practice for Documentary Credits applies (UCP 600 being the latest version).[2] They are also used in the land development process to ensure that approved public facilities (streets, sidewalks, storm water ponds, etc.) will be built. The parties to a letter of credit are usually a beneficiary who is to receive the money, the issuing bank of whom the applicant is a client, and the advising bank of whom the beneficiary is a client. Almost all letters of credit are irrevocable, i.e., cannot be amended or canceled without prior agreement of the beneficiary, the issuing bank and the confirming bank, if any. In executing a transaction, letters of credit incorporate functions common to giros and Traveler's cheques. Typically, the documents a beneficiary has to present in order to receive payment include a commercial invoice, bill of lading, and documents proving the shipment was insured against loss or damage in transit

Terminology
[edit]Origin

of the term

The English name letter of credit derives from the French word accreditation, a power to do something, which in turn derives from the Latin accreditivus, meaning trust. This applies to any defense relating to the underlying contract of sale. This is as long as the seller performs their duties to an extent that meets the requirements contained in the letter of credit.[citation needed] [edit]Types

and related terms

Letters of credit (LC) deal in documents, not goods. An LC can be irrevocable or revocable. An irrevocable LC cannot be changed unless both buyer and seller agree. With a revocable LC, changes can be made without the consent of the beneficiary. A sight LC means that payment is made immediately to the beneficiary/seller/exporter upon presentation of the correct documents in the required time frame. A time or date LC will specify when payment will be made at a future date and upon presentation of the required documents.[citation needed] Negotiation means the giving of value for draft(s) and/or document(s) by the bank authorized to negotiate, viz the nominated bank. Mere examination of the documents and forwarding the same to the letter of credit issuing bank for reimbursement, without giving of value / agreed to give, does not constitute a negotiation.[clarification needed][citation needed] [edit]Documents

that can be presented for payment

To receive payment, an exporter or shipper must present the documents required by the letter of credit. Typically, the payee presents a document proving the goods were sent instead of showing the actual goods. The Original Bill of Lading (OBL) is normally the document accepted by banks as proof that goods have been shipped. However, the list and form of documents is open to imagination and negotiation and might contain requirements to present documents issued by a neutral third party evidencing the quality of the goods shipped, or their place of origin or place. Typical types of documents in such contracts might include:[citation needed]

Financial Documents Bill of Exchange, Co-accepted Draft Commercial Documents Invoice, Packing list Shipping Documents

Transport Document, Insurance Certificate, Commercial, Official or Legal Documents Official Documents

License, Embassy legalization, Origin Certificate, Inspection Certificate, Phytosanitary certificate

ransport Documents Bill of Lading (ocean or multi-modal or Charter party), Airway bill, Lorry/truck receipt, railway receipt, CMC Other than Mate Receipt, Forwarder Cargo Receipt, Deliver Challan...etc Insurance documents Insurance policy, or Certificate but not a cover note. [edit]Legal

principles governing documentary credits

One of the primary peculiarities of the documentary credit is that the payment obligation is abstract and independent from the underlying contract of sale or any other contract in the transaction. Thus the banks obligation is defined by the terms of the credit alone, and the sale contract is irrelevant. The defences of the buyer arising out of the sale contract do not concern the bank and in no way affect its liability.[3] Article 4(a) UCP states this principle clearly. Article 5 the UCP further states that banks deal with documents only, they are not concerned with the goods (facts). Accordingly, if the documents tendered by the beneficiary, or his or her agent, appear to be in order, then in general the bank is obliged to pay without further qualifications. Policies behind adopting the abstraction principle are purely commercial, and reflect a partys expectations: first, if the responsibility for the validity of documents was thrown onto banks, they would be burdened with investigating the underlying facts of each transaction, and would thus be less inclined to issue documentary credits as the transaction would involve great risk and inconvenience. Second, documents required under the credit could in certain circumstances be different from those required under the sale transaction. This would place banks in a dilemma in deciding which terms to follow if required to look behind the credit agreement. Third, the fact that the basic function of the credit is to provide a seller with the certainty of payment for documentary duties suggests that banks should honour their obligation notwithstanding allegations of misfeasance by the buyer.[4] Finally, courts have emphasised that buyers always have a remedy for an action upon the contract of sale, and that it would be a calamity for the business world if, for every breach of contract between the seller and buyer, a bank were required to investigate said breach. The principle of strict compliance also aims to make the banks duty of effecting payment against documents easy, efficient and quick. Hence, if the documents tendered under the credit deviate from the language of the credit the bank is entitled to withhold payment even if the deviation is purely terminological.[5] The general legal maxim de minimis non curat lexhas no place in the field of documentary credits.

Letter of credit also refers to FIATA documents. More strictly, in practice freight forwarders usual present FIATA documents and the question is does FIATA documents can use like a document for activating letter of credit. In theory, the question is not very clear, because of the weakness in UCP 600. [edit]The

price of letters of credit

All the charges for issuance of Letter of Credit, negotiation of documents, reimbursements and other charges like courier are to the account of applicant or as per the terms and conditions of the Letter of credit. If the letter of credit is silent on charges, then they are to the account of the Applicant. The description of charges and who would be bearing them would be indicated in the field 71B in the Letter of Credit.[citation needed] A standard, commercial letter of credit (LC[1]) is a document issued mostly by a financial institution, used primarily in trade finance, which usually provides an irrevocable payment undertaking. The letter of credit can also be payment for a transaction, meaning that redeeming the letter of credit pays an exporter. Letters of credit are used primarily in international trade transactions of significant value, for deals between a supplier in one country and a customer in another. In such cases, the International Chamber of Commerce Uniform Customs and Practice for Documentary Credits applies (UCP 600 being the latest version).[2] They are also used in the land development process to ensure that approved public facilities (streets, sidewalks, storm water ponds, etc.) will be built. The parties to a letter of credit are usually a beneficiary who is to receive the money, the issuing bank of whom the applicant is a client, and the advising bank of whom the beneficiary is a client. Almost all letters of credit are irrevocable, i.e., cannot be amended or canceled without prior agreement of the beneficiary, the issuing bank and the confirming bank, if any. In executing a transaction, letters of credit incorporate functions common to giros and Traveler's cheques. Typically, the documents a beneficiary has to present in order to receive payment include a commercial invoice, bill of lading, and documents proving the shipment was insured against loss or damage in transit. [edit]Legal

basis

Although documentary credits are enforceable once communicated to the beneficiary, it is difficult to show any consideration given by the beneficiary to the banker prior to the tender of documents. In such transactions the undertaking by the beneficiary to deliver the goods to the applicant is not sufficient consideration for the banks promise because the contract of sale is made before the issuance of the credit, thus consideration in these circumstances is past. In addition, the performance of an existing duty under a contract cannot be a valid consideration for a new promise made by the bank: the delivery of the goods is consideration for enforcing the underlying contract of sale and cannot be used, as it were, a second time to establish the enforceability of the bank-beneficiary relation.[citation needed] Legal writers have failed to satisfactorily reconcile the banks undertaking with any contractual analysis. The theories include: the implied promise, assignment theory, the novationtheory, reliance theory, agency theories, estoppels and trust theories, anticipatory theory, and the guarantee theory. [6] Davis, Treitel, Goode, Finkelstein and Ellinger have all accepted the view that documentary credits should be analyzed outside the legal framework of contractual principles, which require the presence of consideration. Accordingly, whether the documentary credit is referred to as a promise, an undertaking, a chose in action, an engagement or a contract, it is acceptable in English jurisprudence

to treat it as contractual in nature, despite the fact that it possesses distinctive features, which make it sui generis. A few countries including the United States (see Article 5 of the Uniform Commercial Code) have created statutes in relation to the operation of letters of credit. These statutes are designed to work with the rules of practice including the UCP and the ISP98. These rules of practice are incorporated into the transaction by agreement of the parties. The latest version of the UCP is the UCP600 effective July 1, 2007.[7] The previous revision was the UCP500 and became effective on 1 January 1994. Since the UCP are not laws, parties have to include them into their arrangements as normal contractual provisions. For more information on legal issues surrounding letters of credit, the Journal of International Commercial Law at George Mason University's School of Law published Volume 1, Issue 1 exclusively on the topic. . [edit]International

Trade Payment methods

International Trade Payment method can be done in the following ways.

Advance payment (most secure for seller)

Where the buyer parts with money first and waits for the seller to forward the goods

Documentary Credit (more secure for seller as well as buyer)

Subject to ICC's UCP 600, where the bank gives an undertaking (on behalf of buyer and at the request of applicant) to pay the shipper (beneficiary) the value of the goods shipped if certain documents are submitted and if the stipulated terms and conditions are strictly complied with. Here the buyer can be confident that the goods he is expecting only will be received since it will be evidenced in the form of certain documents called for meeting the specified terms and conditions while the supplier can be confident that if he meets the stipulations his payment for the shipment is guaranteed by bank, who is independent of the parties to the contract.

Documentary collection (more secure for buyer and to a certain extent to seller)

Also called "Cash Against Documents". Subject to ICC's URC 525, sight and usance, for delivery of shipping documents against payment or acceptances of draft, where shipment happens first, then the title documents are sent to the [collecting bank] buyer's bank by seller's bank [remitting bank], for delivering documents against collection of payment/acceptance

Direct payment (most secure for buyer)

Where the supplier ships the goods and waits for the buyer to remit the bill proceeds, on open account terms. [edit]Risk

situations in letter-of-credit transactions

Fraud Risks The payment will be obtained for nonexistent or worthless merchandise against presentation by the beneficiary of forged or falsified documents. Credit itself may be forged.

Sovereign and Regulatory Risks Performance of the Documentary Credit may be prevented by government action outside the control of the parties.

Legal Risks

Possibility that performance of a Documentary Credit may be disturbed by legal action relating directly to the parties and their rights and obligations under the Documentary Credit

Force Majeure and Frustration of Contract Performance of a contract including an obligation under a Documentary Credit relationship is prevented by external factors such as natural disasters or armed conflicts

Risks to the Applicant Non-delivery of Goods Short Shipment Inferior Quality Early /Late Shipment Damaged in transit Foreign exchange Failure of Bank viz Issuing bank / Collecting Bank

Risks to the Issuing Bank Insolvency of the Applicant Fraud Risk, Sovereign and Regulatory Risk and Legal Risks

Risks to the Reimbursing Bank

no obligation to reimburse the Claiming Bank unless it has issued a reimbursement undertaking.

Risks to the Beneficiary Failure to Comply with Credit Conditions Failure of, or Delays in Payment from, the Issuing Bank Credit Issued by Party other than Bank

Risks to the Advising Bank The Advising Banks only obligation if it accepts the Issuing Banks instructions is to check the apparent authenticity of the Credit and advising it to the Beneficiary

Risks to the Nominated Bank Nominated Bank has made a payment to the Beneficiary against documents that comply with the terms and conditions of the Credit and is unable to obtain reimbursement from the Issuing Bank

Risks to the Confirming Bank If Confirming Banks main risk is that, once having paid the Beneficiary, it may not be able to obtain reimbursement from the Issuing Bank because of insolvency of the Issuing Bank or refusal of the Issuing Bank to reimburse because of a dispute as to whether or not payment should have been made under the Credit

Other Risks in International Trade

A Credit risk risk from change in the credit of an opposing business. An Exchange risk is a risk from a change in the foreign exchange rate. A Force majeure risk is 1. a risk in trade incapability caused by a change in a country's policy, and 2. a risk caused by a natural disaster.

Other risks are mainly risks caused by a difference in law, language or culture. In these cases, the cargo might be found late because of a dispute in import and export dealings.

Hitchment
Hitchment -- In maritime situations, if the tariff of the steamship company provides for it, portions of a shipment originating in different places may be joined together under one bill of lading from one shipper to one consignee at one destination.

Delivery order
From Wikipedia, the free encyclopedia

Admiralty law
History

Ordinamenta et consuetudo maris Amalfian Laws Hanseatic League

Features

Freight rate General average Marine insurance Marine salvage Maritime lien Ship mortgage Ship registration Ship transport Shipping

Contracts of affreightment

Bill of lading Charter-party

Types of charter-party

Bareboat charter Demise charter Time charter Voyage charter

Parties

Carrier Charterer Consignee Consignor Shipbroker Ship-manager Ship-owner Shipper Stevedore

Judiciary

Admiralty court Vice admiralty court

International conventions

Hague-Visby Rules Hamburg Rules Rotterdam Rules UNCLOS Maritime Labour Convention

International organisations

International Maritime Organization London Maritime Arbitrators Association

vde

A Delivery Order (abbreviated D/O[1]) is a document from a consignor, a shipper, or an owner of freight which orders the release of the transportation of cargo to another party.[2] Usually the written order permits the direct delivery of goods to a warehouseman, carrier or other person who in the course of their ordinary business issues warehouse receipts or bills of lading.[3] According to the Uniform Commercial Code (UCC)[4] a delivery order refers to an "order given by an owner of goods to a person in possession of them (the carrier or warehouseman) directing that person to deliver the goods to a person named in the order."[3] A Delivery Order which is used for the import of cargo should not to be confused with delivery instructions. Delivery Instructions provides "specific information to the inland carrier concerning the arrangement made by the forwarder to deliver the merchandise to the particular pier or steamship line."[5]

"A delivery order was not regarded as a document of title at common law with the result that the transfer of the delivery order did not effect transfer of constructive possession of the goods. Attornment on the part of the bailee was required (i.e., an acknowledgement that the bailee held the goods on behalf of the transferee). The Uniform Documents of Title Act permits the use of negotiable delivery orders (if the order directs delivery to a named person or order). However, it is still necessary to single out delivery orders for special treatment. Until the delivery order is accepted by the bailee, there is no basis for imposing obligations on the bailee. See discussion under sections 18 and 19. See also the definition of "issuer"."[3]

Affreightment
Affreightment (from freight) is a legal term used in shipping. Contract of Affreightment is the expression usually employed to describe the contract between a shipowner and another person called thecharterer, by which the ship-owner agrees to carry goods of the charterer in his ship, or to give to the charterer the use of the whole or part of the cargo-carrying space of the ship for the carriage of his goods on a specified voyage or voyages or for a specified time. The charterer on his part agrees to pay a specified price, called freight, for the carriage of the goods or the use of the ship. A ship may be let like a house to a person who takes possession and control of it for a specified term. The person who hires a ship in this way occupies during the specified time the position of ship-owner. The contract by which a ship is so let may be called a charter-party; but it is not, properly speaking, a contract of affreightment, and is mentioned here only because it is necessary to remember the distinction between a charter-party of this kind, which is sometimes called a demise of the ship, and a charter-party which is a form of contract of affreightment.

Rules of law
The law with regard to the contract of affreightment is, of course, a branch of the general law of contract. The rights and obligations of the ship-owner and the freighter depend, as in the case of all parties to contracts, upon the terms of the agreement entered into between them. The law, however, interferes to some extent in regulating the effect to be given to contracts. Certain contracts are forbidden by the law, and being illegal are therefore incapable of enforcement. The most important example of illegality in the case of contracts of affreightment is when the contract involves trading with an enemy. The law interferes again with regard to the interpretation of the contract. The meaning to be given to the words of the contract, or, in other words, its construction, when a dispute arises about it, must be determined by a judge or court. The result is, that certain more or less common clauses in contracts of affreightment have come before the courts for construction, and the decisions in these cases are treated practically, though not perhaps quite logically, as rules of law determining the sense to be put upon certain forms of expression in common use in shipping contracts. A third way in which the law interferes is by laying down certain rules by which the rights of the parties are to be regulated in the absence of any express stipulation with regard to the matter dealt with by such rules. This is done either by statutory enactment, as by that part (Part VIII) of the Merchant Shipping Act 1804 which deals with the liability of ship-owners; or by established rules of the unwritten law, the common law as it is called, as, for instance, the rule that the common carrier is absolutely

responsible for the safe delivery of the goods carried, unless it is prevented by an Act of God or enemies of the Queen. These rules of law, whether common law or statute law, regulating the obligations of carriers of goods by sea, are of most importance in cases in which there is an affreightment without any written agreement of any kind. It will, therefore, be convenient to consider first cases of this kind where there is no express agreement, oral or written, except as to the freight and destination of the goods, and where, consequently, the rights and obligations of the parties as to all other terms of carriage depend wholly upon the rules of law, remembering always that these same rules apply when there is a written contract, except insofar as they are qualified or negated by the terms of such contract.

Delivery order

A Delivery Order (abbreviated D/O[1]) is a document from a consignor, a shipper, or an owner of freight which orders the release of the transportation of cargo to another party.[2] Usually the written order permits the direct delivery of goods to a warehouseman, carrier or other person who in the course of their ordinary business issues warehouse receipts or bills of lading.[3] According to the Uniform Commercial Code (UCC)[4] a delivery order refers to an "order given by an owner of goods to a person in possession of them (the carrier or warehouseman) directing that person to deliver the goods to a person named in the order."[3] A Delivery Order which is used for the import of cargo should not to be confused with delivery instructions. Delivery Instructions provides "specific information to the inland carrier concerning the arrangement made by the forwarder to deliver the merchandise to the particular pier or steamship line."[5] "A delivery order was not regarded as a document of title at common law with the result that the transfer of the delivery order did not effect transfer of constructive possession of the goods. Attornment on the part of the bailee was required (i.e., an acknowledgement that the bailee held the goods on behalf of the transferee). The Uniform Documents of Title Act permits the use of negotiable delivery orders (if the order directs delivery to a named person or order). However, it is still necessary to single out delivery orders for special treatment. Until the delivery order is accepted by the bailee, there is no basis for imposing obligations on the bailee. See discussion under sections 18 and 19. See also the definition of "issuer"."[3]

Document automation
From Wikipedia, the free encyclopedia

Document automation (also known as document assembly) is the design of systems and workflow that assist in the creation of electronic documents. These include logic based systems that use segments of pre-existing text and/or data to assemble a new document. This process is increasingly used within certain industries to assemble legal documents, contracts and letters. Document automation system can also be used to automate all conditional text, variable text, and data contained within a set of documents.

Automation systems allow companies to minimize data entry, reduce the time spent proof-reading, and reduce the risks associated with human error. Additional benefits include; savings due less paper handling, document loading, storage, distribution, postage/shipping, faxes, telephone, labour and waste.

edit]Document

automation in supply chain management & logistics

There are many documents used in logistics. They are called; invoices, packing lists/slips/sheets (manifests), pick tickets, forms/reports of many types (e.g. MSDS, damaged goods,returned goods, detailed/summary, etc.), import/export, delivery, bill of lading (BOL), etc. These documents are usually the contracts between the consignee and the consignor, so they are very important for both parties and any intermediary, like a third party logistics company (3PL) and governments. Document handling within logistics, supply chain management anddistribution centers is usually performed manual labor or semiautomatically using bar code scanners, software and tabletop laser printers. There are some manufacturers of high speed document automation systems that will automatically compare the laser printed document to the order and either insert or automatically apply an enclosed wallet/pouch to the shipping container (usually a flexible polybag or corrugated fiberboard/rigid container). See below for external website video links showing these document automation systems. Protection of Privacy and Identity Theft are major concerns, especially with the increase of e-Commerce, Internet/Online shopping and Shopping channel (other, past references are catalogue shopping and mail order shopping) making it more important than ever to guarantee the correct document is married or associated to the correct order or shipment every time. Software that produce documents are; ERP, WMS, TMS, legacy middleware and most accounting packages.

Software as a service
From Wikipedia, the free encyclopedia

Software as a service (SaaS, typically pronounced [ss]), sometimes referred to as "on-demand software," is a software delivery model in which software and its associated data arehosted centrally (typically in the (Internet) cloud) and are typically accessed by users using a thin client, normally using a web browser over the Internet. SaaS has become a common delivery model for most business applications, including accounting, collaboration, customer relationship management (CRM), enterprise resource planning(ERP), invoicing, human resource management (HRM), content management (CM) and service

desk management.[1] SaaS has been incorporated into the strategy of all leadingenterprise software companies.[2][3] According to a Gartner Group estimate,[4] SaaS sales in 2010 have reached $10B, and are projected to increase to $12.1b in 2011, up 20.7% from 2010. Gartner Group estimates that SaaS revenue will be more than double its 2010 numbers by 2015 and reach a projected $21.3b. Customer relationship management (CRM) continues to be the largest market for SaaS. SaaS revenue within the CRM market is forecast to reach $3.8b in 2011, up from $3.2b in 2010.[5] The term software as a service (SaaS) is considered to be part of the nomenclature of cloud computing, along with infrastructure as a service (IaaS) and platform as a service (PaaS).[

History
Centralized hosting of business application dates back to the 1960s. Starting at that decade, IBM and other mainframe providers conducted a service bureau business, often referred to as timesharing or utility computing. Such services included offering computing power and database storage to banks and other large organizations from their worldwide data centers. The expansion of the Internet during the 1990s brought about a new class of centralized computing, called Application Service Providers (ASP). Application service providers provided businesses with the service of hosting and managing specialized business applications, with the goal of reducing cost by central administration and through the solution provider's specialization in a particular business application. Software as a service is essentially an extension of the idea of the ASP model. The term Software as a Service (SaaS), however, is commonly used in more specific settings:

whereas most initial application service providers focused on managing and hosting thirdparty independent software vendors' software, contemporary software-as-a-service vendors typically develop and manage their own software; whereas many initial application service providers offered more traditional clientserver applications, which require installation of software on users' personal computers, contemporary software as a service solutions are predominantly web-based and only require an internet browser to use; and, whereas the software architecture used by most initial application service providers mandated maintaining a separate instance of the application for each business, contemporary software as a service solutions normally utilize a multi-tenant architecture, in which the application is designed to serve multiple businesses and users, and partitions its data accordingly.

The concept of SaaS has been popularized by Salesforce.com, which coined the term "The End of Software" to differentiate its (then new) software-as-a-service approach from its competition, which at the time offered only traditional on-premises software. The SAAS acronym is said to have first appeared in an article called "Strategic Backgrounder: Software As A Service", internally published in February 2001 by the Software & Information Industry's (SIIA) eBusiness Division.[7]

The popular camelback version of SaaS was coined at an SD Forum conference by John Koenig in March 2005 and is considered the tipping point of the industry adoption of the term "SaaS", including the point of departure by Salesforce.com, which for many years had used the "On Demand" tag.[8] [edit]Pricing Unlike traditional software, conventionally sold as a perpetual license with an associated up-front fee (and, typically, smaller ongoing support fees), SaaS providers generally price applications using a subscription fee, most commonly a monthly fee or an annual fee. Consequently, the initial setup cost for SaaS is typically lower than the equivalent enterprise software. SaaS vendors typically price their applications based on some usage parameters, such as the number of users ("seats") using the application. However, because in a SaaS environment customers' data resides with the SaaS vendor, opportunities also exist to charge per transaction, event, or other unit of value. The relatively low cost for user provisioning (i.e., setting up a new customer) in a multi-tenant environment enables some SaaS vendors to offer applications using the freemium model. In this model, a free service is made available with limited functionality or scope, and fees are charged for enhanced functionality or larger scope. Some other SaaS applications are completely free to users, with revenue being derived from alternate sources such as advertising. A key driver of SaaS growth is SaaS vendors' ability to provide a price that is competitive with onpremises software. This is consistent with the traditional rationale for outsourcing IT systems, which involves applying economies of scale to application operation, i.e., an outside service provider may be able offer better, cheaper, more reliable applications.

Cloud computing
From Wikipedia, the free encyclopedia

Cloud computing logical diagram

Cloud computing is the delivery of computing as a service rather than a product, whereby shared resources, software, and information are provided to computers and other devices as a utility (like the electricity grid) over anetwork (typically the Internet).

Overview
Cloud computing is a marketing term for technologies that provide computation, software, data access, and storage services that do not require end-user knowledge of the physical location and configuration of the system that delivers the services. A parallel to this concept can be drawn with the electricity grid, wherein end-users consume power without needing to understand the component devices or infrastructure required to provide the service. Cloud computing describes a new supplement, consumption, and delivery model for IT services based on Internet protocols, and it typically involves provisioning of dynamically scalableand often virtualised resources.[1][2] It is a byproduct and consequence of the ease-of-access to remote computing sites provided by the Internet.[3] This may take the form of web-based tools or applications that users can access and use through a web browser as if the programs were installed locally on their own computers.[4] Cloud computing providers deliver applications via the internet, which are accessed from web browsers and desktop and mobile apps, while the business software and data are stored onservers at a remote location. In some cases, legacy applications (line of business applications that until now have been prevalent in thin client Windows computing) are delivered via a screen-sharing technology, while the computing resources are consolidated at a remote data center location; in other cases, entire business applications have been coded using web-based technologies such as AJAX. At the foundation of cloud computing is the broader concept of infrastructure convergence (or Converged Infrastructure) and shared services.[5] This type of data center environment allows enterprises to get their applications up and running faster, with easier manageability and less maintenance, and enables IT to more rapidly adjust IT resources (such as servers, storage, and networking) to meet fluctuating and unpredictable business demand.[6] [7] Most cloud computing infrastructures consist of services delivered through shared data-centers and appearing as a single point of access for consumers' computing needs. Commercial offerings may be required to meet service-level agreements (SLAs), but specific terms are less often negotiated by smaller companies.[8][9] The tremendous impact of cloud computing on business has prompted the federal United States government to look to the cloud as a means to reorganize their IT infrastructure and decrease their spending budgets. With the advent of the top government official mandating cloud adoption, many agencies already have at least one or more cloud systems online. [10]

Characteristics
Cloud computing exhibits the following key characteristics:

Empowerment of end-users of computing resources by putting the provisioning of those resources in their own control, as opposed to the control of a centralized IT service (for example) Agility improves with users' ability to re-provision technological infrastructure resources. Application programming interface (API) accessibility to software that enables machines to interact with cloud software in the same way the user interface facilitates interaction between humans and computers. Cloud computing systems typically use REST-based APIs.

Cost is claimed to be reduced and in a public cloud delivery model capital expenditure is converted to operational expenditure.[15] This is purported to lower barriers to entry, as infrastructure is typically provided by a third-party and does not need to be purchased for onetime or infrequent intensive computing tasks. Pricing on a utility computing basis is fine-grained with usage-based options and fewer IT skills are required for implementation (in-house).[16] Device and location independence[17] enable users to access systems using a web browser regardless of their location or what device they are using (e.g., PC, mobile phone). As infrastructure is off-site (typically provided by a third-party) and accessed via the Internet, users can connect from anywhere.[16] Multi-tenancy enables sharing of resources and costs across a large pool of users thus allowing for:

Centralisation of infrastructure in locations with lower costs (such as real estate, electricity, etc.)

Peak-load capacity increases (users need not engineer for highest possible load-levels) Utilisation and efficiency improvements for systems that are often only 1020% utilised.[18]

Reliability is improved if multiple redundant sites are used, which makes well-designed cloud computing suitable for business continuity and disaster recovery.[19] Scalability and Elasticity via dynamic ("on-demand") provisioning of resources on a fine-grained, self-service basis near real-time, without users having to engineer for peak loads.[20][21] Performance is monitored, and consistent and loosely coupled architectures are constructed using web services as the system interface.[16] Security could improve due to centralisation of data, increased security-focused resources, etc., but concerns can persist about loss of control over certain sensitive data, and the lack of security for stored kernels.[22] Security is often as good as or better than other traditional systems, in part because providers are able to devote resources to solving security issues that many customers cannot afford.[23] However, the complexity of security is greatly increased when data is distributed over a wider area or greater number of devices and in multi-tenant systems that are being shared by unrelated users. In addition, user access to security audit logs may be difficult or impossible. Private cloud installations are in part motivated by users' desire to retain control over the infrastructure and avoid losing control of information security. Maintenance of cloud computing applications is easier, because they do not need to be installed on each user's computer.

On-Demand Transportation

On-Demand Transportation is a relatively new term coined by 3PL providers to describe their brokerage, ad-hoc, and "flyer" service offerings. On-Demand Transportation has become a mandatory capability for today's successful 3PL providers in offering client specific solutions to supply chain needs.

These shipments do not usually move under the "lowest rate wins" scenario and can be very profitable to the 3PL that wins the business. The cost quoted to customers for On-Demand services are based on specific circumstances and availability and can differ greatly from normal "published" rates. On-Demand Transportation is a niche that continues to grow and evolve within the 3PL industry. Specific modes of transport that may be subject to the on-demand model include (but are not limited to) the following: FTL, or Full Truck Load Hotshot (direct, exclusive courier) Next Flight Out, sometimes also referred to as Best Flight Out (commercial airline shipping) International Expedited

Enterprise resource planning (ERP) systems integrate internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application. Their purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders.[1] ERP systems can run on a variety of hardware and network configurations, typically employing a database as a repository for information.[

Characteristics
ERP(Enterprise Resource Planning ) systems typically include the following characteristics:

An integrated system that operates in real time (or next to real time), without relying on periodic updates.[citation needed] A common database, which supports all applications. A consistent look and feel throughout each module. Installation of the system without elaborate application/data integration by the Information Technology (IT) department.[3] General ledger, payables, cash management, fixed assets, receivables, budgeting, consolidation Human resources payroll, training, benefits, 401K, recruiting, diversity management Manufacturing Engineering, bill of materials, work orders, scheduling, capacity, workflow management, quality control, cost management, manufacturing process, manufacturing projects, manufacturing flow, activity based costing, product lifecycle management Supply chain management

Finance/Accounting

Order to cash, inventory, order entry, purchasing, product configurator, supply chain planning, supplier scheduling, inspection of goods, claim processing, commissions Project management Costing, billing, time and expense, performance units, activity management Customer relationship management Sales and marketing, commissions, service, customer contact, call center support Data services Various "selfservice" interfaces for customers, suppliers and/or employees Access control Management of user privileges for various processes

Service-oriented architecture
In software engineering, a Service-Oriented Architecture (SOA) is a set of principles and methodologies for designing and developing software in the form of interoperable services. These services are well-defined business functionalities that are built as software components(discrete pieces of code and/or data structures) that can be reused for different purposes. SOA design principles are used during the phases ofsystems development and integration. SOA also generally provides a way for consumers of services, such as web-based applications, to be aware of available SOA-based services. For example, several disparate departments within a company may develop and deploy SOA services in different implementation languages; their respective clients will benefit from a well-understood, well-defined interface to access them. XML is often used for interfacing with SOA services, though this is not required. JSON is also becoming increasingly common. SOA defines how to integrate widely disparate applications for a Web-based environment and uses multiple implementation platforms. Rather than defining an API, SOA defines the interface in terms of protocols and functionality. An endpoint is the entry point for such a SOA implementation. Service orientation requires loose coupling of services with operating systems, and other technologies that underlie applications. SOA separates functions into distinct units, or services,[1] which developers make accessible over a network in order to allow users to combine and reuse them in the production of applications. These services and their corresponding consumers communicate with each other by passing data in a well-defined, shared format, or by coordinating an activity between two or more services.[2] SOA can be seen in a continuum, from older concepts of distributed computing[1][3] and modular programming, through SOA, and on to current practices of mashups, SaaS, and Cloud Computing (which some see as the offspring of SOA [4]).

Electronic data interchange

Electronic data interchange (EDI) is the structured transmission of data between organizations by electronic means. It is used to transfer electronic documents or business data from one computer

system to another computer system, i.e. from one trading partner to another trading partner without human intervention. It is more than mere e-mail; for instance, organizations might replace bills of lading and even cheques with appropriate EDI messages. It also refers specifically to a family of standards. In 1996, the National Institute of Standards and Technology defined electronic data interchange as "the computer-to-computer interchange of strictly formatted messages that represent documents other than monetary instruments. EDI implies a sequence of messages between two parties, either of whom may serve as originator or recipient. The formatted data representing the documents may be transmitted from originator to recipient via telecommunications or physically transported on electronic storage media." It distinguishes mere electronic communication or data exchange, specifying that "in EDI, the usual processing of received messages is by computer only. Human intervention in the processing of a received message is typically intended only for error conditions, for quality review, and for special situations. For example, the transmission of binary or textual data is not EDI as defined here unless the data are treated as one or more data elements of an EDI message and are not normally intended for human interpretation as part of online data processing."[1] EDI can be formally defined as the transfer of structured data, by agreed message standards, from one computer system to another without human intervention.

Transportation Logistics
From A to Z, Apple Controls Its Supply Chain, Giving It Huge Advantage Over Anyone Else
Operations provides a massive competitive advantage for Apple. This is the world of manufacturing, procurement and logistics in which the new chief executive officer, Tim Cook, excelled, earning him the trust of Steve Jobs. According to more than a dozen interviews with former employees, executives at suppliers, and management experts familiar with the companys operations, Apple has built a closed ecosystem where it exerts control over nearly every piece of the supply chain, from design to retail store. Because of its volumeand its occasional ruthlessnessApple gets big discounts on parts, manufacturing capacity, and airfreight. Operations expertise is as big an asset for Apple as product innovation or marketing, says Mike Fawkes, the former supply-chain chief at Hewlett-Packard and now a venture capitalist with VantagePoint Capital Partners. Theyve taken operational excellence to a level never seen before.

Reverse Logistics
High Supply Chain Priorities for High-Tech & Electronics in 2011
Analyst Insight: As high-tech companies move forward into 2011, it is critical to develop a list of supply chain priorities for the year. Topping this years list is a renewed focus on logistics and manufacturing outsourcing and an increased sense of urgency in developing the Chinese consumer market for new revenue. In addition, there is a growing need to create additional value from an often under-appreciated source the service supply chain. Greg Hazlett, principal at Tompkins Associates The past years challenges have left high-tech companies with a new set of significant priorities for 2011. Below are the top 11. Logistics and Manufacturing Outsourcing: Flexible organizational processes, technology and resources are becoming extremely important. Outsourcing provides the opportunity for high-tech companies to maximize results by focusing on core competencies, while delegating non-core processes

and activities. Globalization - China as a Consumer Market: Global business is looking to China not only for sourcing and production but for growth. Companies around the world are gearing up to begin selling or further ramp up sales capabilities into Chinas growing consumer market. Reverse Logistics/ Service Supply Chain: The service supply chain helps companies differentiate themselves from their competitors while reducing costs and improving residual value recovery from their returned products. Transforming high-tech service supply chain organizations into profit centers will be a game-changer for companies in this industry. Uncertainty: Today, uncertainty is certain. High-tech organizations must accept uncertainty and implement agile processes that allow them to move forward. The best strategy is to respond to uncertainty and make it an ally in achieving profitable growth. Maximizing Supply Chain Flexibility: The primary factors driving this industry frequent new product introductions, short product lifecycles, speed to market, new distribution channels, and changing consumer preferences require more flexibility in supply chains than normal. Agility is an absolute requirement, while maintaining operational excellence. Global Trade and Risk Management: Automating global trade processes will help high-tech companies enhance supply chain performance. Furthermore, effective global trade and risk management must address margin protection, brand integrity, and customer satisfaction. Sustainability: In the U.S., nearly 70 percent of heavy metals in landfills comes from discarded electronics. Companies are fighting to be environmentally friendly and keep the costs of recycling, demanufacturing and scrap at a minimum. Tax-Effective Supply Chain Management: TESCM is the process of integrating tax planning into the overall management of the companys supply chain and is an important priority to be considered. On-line Digital Content to Drive Product Innovation, Acceptance and Obsolescence: Audiences today can stream almost any digital content they want, at any time. Enhancements in digital delivery and usage, including cloud computing and mobile phone applications, are indications of market acceptance. How high-tech companies respond and innovate will determine what audiences embrace or reject. Inventory Working Capital/Sales Optimization Planning: With demand returning, the people, processes and technology of Sales, Inventory & Operations Planning must be brought to a new level to enhance inventory turns while improving customer service. Strategic Market Planning and Growth: M&A activity for technology companies is rising, due to recession pressures that created bargain prices for various technology companies. But risks persist, and success comes from gaining a leading and sustainable position in the served markets. The Outlook With these top priorities in 2011, high-tech companies have their work cut out for them. However, it is not as simple as completing one task and moving forward. High-tech companies will need to ensure that each of these areas are included in their continuous improvement strategies.

How Technology Can Ease Supply Chain Management and Mitigate Risk
Maz Ghorban, Vice President, Corporate Development, MIR3 | August 29, 2011 As recently as 20 years ago, supply chain management was seen as something that took place behind the scenes without dedicated staff and resources. For many, it was regarded as a necessity for only the largest brands or companies with international distribution. When there was a disruption to the supply chain, the fix was easya company would pull a couple of people from whatever they were doing and put them on the problem. Once the kinks were ironed out, those people could go back their regular jobs. In those days consumers were less demanding, less aware and certainly more patient, as they werent familiar with online ordering with the ability to track shipments to a timely and expected delivery date. Even items that were custom built, beginning when an order arrived via the U.S. Postal Service, were handled with an understanding that completion and delivery would be unpredictable.

Supply chain management has been around at least as long as the assembly line, but until recently, the concept of a chief supply officer has been foreign. Now that role is seen as a highly strategic one that is increasingly valuable from both a customer service and a business perspective. As the role has evolved its become a critical one, as managing a supply chain is complex, fraught with risk, subject to complex regulations, fines, competition, international shipping restrictions, and more. As the internet, email and other technologies have become ubiquitous, the expectations of consumers have grown correspondingly. Todays companies are increasingly global and complex, with competition growing on every front and acquisitions that change business processes taking place with astonishing frequency. At the same time, roles and responsibilities within companies have expanded and become more specific. With new technologies skills have become more specific, and companies are much less likely to want to pull people from important jobs to focus their attention on supply chain problems. The supply chain itself has become increasingly complex, with a higher number of ingredients and components leading to a finished product, and with a broader and more widespread base of suppliers. Its clear that monitoring the path of goods using tacks on a map no longer works. Technology has crept into SCM step by step, beginning with electronic invoicing, computerized shipping and tracking and automated notifications that were advanced by companies like FedEx and UPS. Initially intended for business-to-business interactions, it took time before that level of tracking and accountability was provided to consumers. But even in those early days it was clear that the ability to notify everyone along the chain was important. It wasnt until customer-focused companies like Zappos, the online retailer with the tagline Powered by Service, came on the scene that consumers got a taste of how involved they could be with their purchases. Online natives like Zappos, didnt start with brick-and-mortar stores, so rather than having to adapt to new technology, they were born into the arms of it. Consumers love these businesses because they can see immediately that their orders have been received, they are notified when orders are shipped, and they can track their purchase every step of the way. Before they order, they can read extensive reviews of the products they are about to purchase, as well as the company they are about to purchase from. This has set a new standard for online customer service; companies that can meet or exceed that standard have a distinct competitive advantage. Companies like Apple and Harley Davidson use that advantage to further personalize the purchase experience by taking custom orders, then building a product to the exact customer specifications. That same kind of tracking and accountability can be applied to virtually every link in the supply chain to provide a moment-by-moment snapshot of how goods are moving around the planet. This is the aim of a supply chain manager, to know where inventory is and to anticipate delays and hitches before they affect the final assembly line. And just as technology has provided the business landscape with many more capabilities; it has contributed to a new recognition of supply chain management as a profession and a discipline. Today, knowledgeable supply chain managers command respect and correspondingly high salaries. Modern supply chain managers understand that technology provides increased visibility and accountability; therefore, a stronger competitive edge and tight control of the supply chain is worth the investment. Key to this kind of efficiency is the ability to notify everyone along the supply chain when things arent going exactly as planned. Notification technology has adapted along with SCM to provide an easy way to send one message to many at once, by a wide variety of devices. So employees at desks will get a call and an email, and someone out in a plant will get a text sent to their smartphone. When the information is shared in real-time, it allows teams to adapt and change to suit the situation, helping to keep manufacturing lines on time and on track. As an example, one company that manufactures condiments that are packed in glass jars received a shipment of bottles that seemed fine, but revealed a visible flaw after being filled. The product was packed, labeled and shipped to retailers before the flaw was discovered, and the entire lot had to be recalled. With notification technology in place, the complicated task of issuing a recall was completed in minutes. The manufacturer notified everyone along the chain by sending a single automated alert. Whether the goods had shipped to a dozen or a thousand customers, tracking ingredients and notifying customers would still take just minutes. Unfortunately, even though the SCM profession and the technology are burgeoning, many companies are still entrenched in outdated, monolithic systems, using phone, fax and email to communicate throughout their lengthy and complicated supply chains. But even these companies feel the pressures of competition and keeping costs down pushing them towards more and better technology and automated

processes that provide a way to notify everyone along the chain. The fact that technology with notification has influenced the SCM scene is evident by the increasing trend towards just-in-time inventory management. JIT is a great way to free up cash and increase working capital by letting inventory run down. This can free up many millions of dollars, not just held in the goods themselves, but in storage, security and management of goods. It also reduces the risk of inventory becoming obsolete while in storage. JIT also comes with risks, many of which have been starkly illustrated by the earthquake and subsequent tsunami in Japan, which have left global manufacturers scrambling for alternative parts and materials that were impacted by the double disaster. The moment that tragedy occurred, alerts began. Supply chain managers quickly used notification to reach everyone along the chain, both suppliers and customers, to assess the situation and reserve materials they knew would soon be in short supply. Suppliers, in turn, could easily respond to these alerts, and those responses were logged, making it easy for supply chain managers to track materials and adapt accordingly. Despite the risks, JIT manufacturing has become so entrenched that many companies simply cant afford to stock and warehouse as much inventory as they used to. So if the supply chain is impacted, orders are affected or downtime in the plant occurs. Successful JIT relies on a tightly managed supply chain, with the ability to alert suppliers quickly in the case of an increased need for materials or goods. This tight management is only possible when SCM technology is tightly integrated with notification capabilities. Manufacturing is complicated, and supply chain interruptions can cause inventory levels to plummet precipitously. To maintain a steady flow of ingredients, components and finished goods there must clear communication all along the chain. That requires a solution that is more efficient and sophisticated than sending a mass email or pulling staff to make panicked phone calls. When the earthquake and tsunami happened earlier this year, many executives around the world had emergency meetings to assess how the disaster would affect their companies and determine what they could do to minimize that impact. Those who had a notification system in place were able to do so quickly, notifying all top managers at once via phone, email, SMS and more, and connecting these decision makers using a conference call bridge that everyone could join with a touch of their keypad. This helped them share information, make urgent decisions and coordinate response efforts. This disaster reminded us all that, when it comes to business continuity, its important to plan for the worst. It also highlighted the fact that old systems and old ways of doing things just dont work in this type of extreme situation. When this kind of interruption happens, consumers start clamoring for information and solutions; expectations are higher than ever before. Its important to get ahead of consumer reaction quickly, as call centers will quickly be swamped with calls for information. With a plan in place its possible to use a bad situation to build goodwill and trust with customers. The situation in Japan reminded a lot of people that bad things can happen, and that an event can have a huge impact, even on those that are highly prepared. Sadly, many companies stop right there, realizing that they dont have a plan, and paralyzed about where to go from there. The survivors over the long term are those who have considered the what-ifs and have put solid plans in place for dealing with interruption. Wise companies will initiate the use of SCM technology and a notification solution. Any company that doesnt use technology as part of SCM is at a distinct disadvantage, no matter how good their business continuity plans. According to supply chain experts, there are four major areas where SCM technology with notification will help. Those areas are global trade, supply relationship management, reverse logistics, and supply chain execution. Lets look at each of these areas: Global trade Global trade is fraught with constantly changing regulations. A well-respected company recently received an exceedingly heavy fine for inadvertently side-stepping regulations and shipping night-vision goggles that eventually landed in the hands of terrorists. Automated notification, as part of SCM technology, could have kept everyone along the chain appraised of the latest updates and helped to avoid such a situation. Supply relationship management In 2007, Mattel had to recall over 10 million toys because lead paint was detected. To stop the spread of tainted toys, the company had to work backwards along the chain to find out where the lead came from, and also forward to where the final goods were all shipped to effect a recall. With notification as part of an SCM toolkit, much of this communication could be automated, thus speeding the process and providing a reliable audit trail. Reverse logistics Reverse logistics is the process of managing the return of goods, recycling of

batteries and other components, disposal of products coming off lease, and the auctioning of those items, etc. When there is a sudden influx of new goods, manufacturers have to offload outdated goods quickly. Notification can help alert a variety of recyclers and other parties at once, allowing them to respond with times they are available to remove redistributed goods. Supply chain execution One large discount retailer uses notification to make the delivery cycle more efficient. When a delivery arrives, staff has already been notified to be on standby to receive it immediately. If staff is not available, its easy to alert truck to deliver to an alternate store and to reroute staff, saving both time and money. As business complexity and global competition increases and consumer loyalty becomes more tenuous, more and more companies are exploring SCM technology to gain operational efficiencies. Using technology complemented with a reliable notification solution, they can establish a foundation for consistent leadership and secure a strong competitive edge.