Write-down by Rio Tinto. We rarely have an opportunity to put a value on logistics, but recent reports have shed some light on what logistics can be worth to a business. In 2011, one of the world’s largest mining companies paid U$4.2b for a coal mine in Mozambique. Last week they wrote the value of the mine down by U$3b. … Read More
Reverse logistics does not tell the whole story
Improve the productivity of materials. My previous blog discussed price volatility for hard and soft commodities. This situation is unlikely to change, being influenced by factors of supply availability and disruptions, plus spikes in demand. The flow on effect of volatile raw material prices is that producers must take action to protect their businesses, as materials are a high percentage … Read More
How do you measure productivity in logistics?
The price of commodities. Australia has an open market for fuel. The price of petrol at service stations can change each day; sometimes by large amounts – last week the price increased in one major city from $1.23 to $1.46 per litre. So what has this got to do with logistics? Oil is a hard commodity, like iron ore and … Read More
Where are your warehouses?
Location of LSP facilities. Are you a manufacturer or importer that intends to contract with a logistics service provider (LSP) for storage and distribution of your goods to retail outlets. When outsourcing your distribution to a LSP, you would expect the storage facilities for your inventory to be sighted in an optimum location for efficient distribution. What if the location … Read More
Outsourcing logistics functions
Competencies can change. I am interested that Amazon has recently purchased the supplier of Automated Guided Vehicles (AGV) used in its warehouses. This is an example of vertical integration within a business. When Amazon started, it was portrayed as the ‘new’ style of business. The requirement was to be good at your core competency, in this case on-line book selling … Read More