Transportation Method: Air transportation & UPS

Transportation is defined by the Oxford English Dictionary as

1. a system or means of transporting.
2. the action of transporting or the state of being transported.
3. a large vehicle, ship, or aircraft for carrying troops or stores.
4. (transports) overwhelmingly strong emotion.
   (http://www.askoxford.com/concise_oed/transport?view=uk)
   

For this blog the first three definitions are of interest.


This video serves as a very good introduction to Logistics, it sees Logistics as a pipeline. "A pipeline that controls the flow of gods" (at 2:30)


Wikipedia (http://en.wikipedia.org/wiki/Transport_in_Europe) says that transportation throughout Europe can be divided into:

• Road transportation
• Rail transportation
• Air transportation and
• Water(sea and river) transportation.
  

Those transportation categories are predominant and very important for Europe.

I wanted to have a deeper look at air transportation to find out how air airfreight works. I have read an interesting article on "How Airline Freight Works" (http://science.howstuffworks.com/air-freight.htm) and I would like to summarize it in this post:

Today it is possible to transport a lot of things by air: Letters, packages, cars, horses, construction equipment and even, what I think is most impressive: Other airplanes!

This picture shows an air-freight plane that can move anything that can be bought or sold. (http://science.howstuffworks.com/air-freight.htm)

According to this article, air freight can be divided into four main categories:

Value in use

This figure (from the lecture) shows that not only manufacturing creates value. During the whole process value is added and from value, some satisfaction of the customer is generated. From the satisfaction some behaviour follows. From the behaviour in turn the companies earn the money.

The following video is done by some students to explain the concept of customer value in Marketing. It is a very funny video, with serious content.

http://www.youtube.com/watch?v=D_Q6BDy3lNg

This video contains important information:
- Starting at 3:00 the term "customer value" is defined
- After that "total customer benefits" and "total customer costs" are analysed
- At 5:50 a definition of "customer satisfaction" is provided

What is the relationship between price, value and cost?

Definitions according to Cambridge Advanced Learner's Dictionary:

Price is defined as "the amount of money for which something is sold" (http://dictionary.cambridge.org/define.asp?key=62775&dict=CALD&topic=costs-expenses)


Value is "the amount of money which can be received for something" (http://dictionary.cambridge.org/define.asp?key=87706&dict=CALD&topic=costs-expenses)

Cost is "the amount of money needed to buy, do or make something" (http://dictionary.cambridge.org/dictionary/british/cost_1)

In the article "Cost, Value, and Price" (http://media.wiley.com/product_data/excerpt/36/04713498/0471349836.pdf) the relationship between the three terms is explained very well. In this article, I will try to summarize the most important facts.

My first Logistics Class

On February 26th, 2010 I attended the first lessen of Logistics given by Jose P. Garcia within the Master degree course International Product- and Service Management.

One of the first tasks we had to do was defining Logistics:

My Personal Definition is:

Logistics is the art and the technique on how to move and store goods and items in an efficient way. It includes a process of continuous improvement on how to manage Logistics in order to control it precisely.

However, we have also been given a definition by our teacher:

Logistics management is that part of the Supply Chain Management process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements.

What is important to mention about this definition is:

• Supply Chain Management is not Logisitcs! It is something more since Logistics is only part of Supply Chain Management
• Product by definition is "Good, idea, method, information, object, service, etc." (see http://www.businessdictionary.com/definition/product.html). That is why in the definition it says "goods, services, and related information" and not just "product".

After having Logistics defined we have talked about World trade and GDP. The following figure is a summary of the results od our discussin in class:


click on the picture for zooming