Page 284 - DMGT501_OPERATIONS_MANAGEMENT

Operations Management

Notes shipped and relevant details are documented. The outbound delivery forms the basis for goods
issue posting.
The data required for goods issue posting is copied from the outbound delivery into the goods
issue document so that:
1. Warehouse stock is reduced by the delivery quantity.
2. Value changes are posted to the balance sheet account in inventory accounting.

3. Requirements are reduced by the delivery quantity.
4. The serial number status is updated.
5. The goods issue posting is automatically recorded in the document flow.
6. Stock determination is executed for the vendor's consignment stock.

7. A work list for the proof of delivery is generated.
After goods issue is posted for an outbound delivery, the delivery might be shipped to the
customer directly from the fulfilling locations (more than one delivery), or consolidation may
occur at one location before one complete shipment is transported to the end customer.
Proof of Delivery (POD) is an instrument involved in business processes in which an invoice is
issued only after the customer has confirmed the delivery's arrival. This is especially important
for deliveries where the delivery quantity varies because of the nature of the goods or for which
the exact delivery quantity is unknown from the start.
The reasons for deviation that occur most frequently in real-world scenarios are stock shrinkage,
theft, certain characteristics of goods (volatility, for example), and transportation damage. These
are recorded and analyzed in the system. This analysis is especially valuable when you are
negotiating with forwarding agents, vendors, or customers, since all deviations can be reflected.

The role and nature of transportation is changing, companies are finding that responsive, cost
efficient, door-to-door service often involves using more than one mode of transportation. They
are increasingly searching for solutions of using different modes of transport in such a way that
all the parts of the transportation process, including information exchange, are efficiently
connected and coordinated. This has brought about a mushrooming of logistics companies that
warehouse and act as 'middlemen' to distribute products of more than one company.

Figure 13.4: Transportation Modes and their Economics
Truck
Rail

Water

Freight Rate

O B C
Distance

Figure 8.4 depicts the hypothetical transport costs profile for freight by mode type and distance.
Point B is the actual distance at which average rail ton-kilometer costs become lower than

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