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TEK620 TEK620 Management of physical distribution lp3 VT22 (7.5 hp)

Course is offered by the department of Technology Management and Economics

Contact details

Course purpose

The aim of the course is to provide knowledge about the different parts of the physical distribution system and the flow of goods from the shipping of finished products, transported via a number of nodes and actors, to the final customers/consumers. The course will provide an understanding of the relationships between cost, service and revenues, as well as environmental impact of distribution systems and how these are influenced by physical structures, actors and price mechanisms. The physical distribution is viewed from the perspective of an individual company, primarily a shipper (i.e. the company selling the products to be distributed) but also a logistics service/transport provider.

Schedule

TimeEdit

Course literature

The textbook Lumsden, K.: The Economy of transportation systems, is available in Canvas. A number of articles and reports will be used in addition to the textbook, see list below. For copyright reasons, these have to be downloaded by you. In addition to these articles there are specific articles for the seminars. A list of these will be distributed together with the seminar assignments.

N.B additional course material will be supplied in Canvas during the course

Articles related to the lectures

In the schedule you can see references to these articles and chapters in the textbook The Economy of transportation systems referred to as ETS and number of the chapter. You are encouraged to look at these references before each lecture.

In the schedule you can see references to these articles and chapters in the book referred to as ETS and number of the chapter. You are supposed to look at these references before each lecture.

A1: Kohn, Christofer, Huge-Brodin, Maria, (2008), Centralised distribution systems and the environment: how increased transport work can decrease the environmental impact of logistics, International Journal of Logistics: Research and Applications, Vol 11, Issue 3, pp 229-245.

A2: Ala-Risku, T., Kärkkäinen, M. Holmström, J., (2003) Evaluating the Applicability of Merge-in-transit, The International Journal of Logistics Management, Vol. 14, No 2, pp 67-81

A3: Hubner, A., J. Wollenburg, and A. Holzapfel (2016), “Retail logistics in the transition from multi-channel to omni-channel”, International Journal of Physical Distribution and Logistics Management, Vol. 46 No. 6/7, pp. 562-583

A4: Liljestrand, K., Christopher, M. and Andersson, D. (2015), "Using a transport portfolio framework to reduce carbon footprint", The International Journal of Logistics Management, Vol. 26 No. 2, pp. 296-312. https://doi.org/10.1108/IJLM-06-2013-0073

A5: Abrahamsson, Mats, Wandel, Sten, (1998) A model of tiering in third-party logistics with a service parts distribution case study, Transport Logistics, Vol 1, No. 3, pp 181-194, 1998.

A6:Santén, Vendela, (2016) Towards environmentally sustainable freight transport – Shippers´logistics actions to improve load factor performance, Chalmers, PhD Thesis, ch 5.2-5.3

A7: Pan, Shenle, Trentesaux, Damien, Ballot, Eric, Huang, George, Q. (2019) Horizontal collaborative transport: a survey of solutions and practical implementation issues, International journal of production research, vol 57, no 15-16, pp 5340-5361 (read first page, 5340, and chapter 4, chapter, 5.4, 5.6 and 5.7)

A8: Andersson, Dan and Norrman, Andreas (2002) Procurement of logistics services—a minute’s work or a multi-year project? European Journal of Purchasing & Supply Management, Vol. 8, No. 1, pp. 3-14.

A9: Rogerson, Sara (2016) Environmental concerns when purchasing freight transport, Chalmers, PhD Thesis, ch 5.1

A10: Stefansson G. and Tilanus B., (2000), “Tracking and tracing: Principles and practice”, International Journal of Technology Management,  Vol. 20 Issue ¾

A 11: Storøy, Jostein., Thakur, Maitri, and Olsen, Petter. 2012, “The TraceFood Framework – Principles and guidelines for implementing traceability in food value chains”, Journal of Food Engineering , Vol. 115 , pp.  41-48

A12: Stefansson, Gunnar and Lumsden, Kenth, 2009, “Performance issues of Smart Transportation Management”, International Journal of Productivity and Performance Management, Vol. 58,  1.

A13: Hrušovský, M., Demir, E., Jammernegg, W. & Van Woensel, T. (2020), “Real-time disruption management approach for intermodal freight transportation”, Journal of Cleaner Production, Vol. No. 124826.

A14: Wide, P. (2020), “Improving decisions support for operational disruption management in freight transport”, Research in Transportation Business & Management, Vol. 37 No. 100540.

A15: Why Goods Movements Matters – Strategies for Moving Goods in Metropolitan Areas (2016), Regional Plan Association and The Volvo Research and Educational Foundation, VREF (available at  http://www.vref.se/download/18.1ffaa2af156b50867485a21/1471930162785/Why-Goods-Movement-Matters-ENG+-+June+2016.pdf)

A16: Holguin-Veras J., J. Amaya Leal, I. Sanchez-Diaz, M. Browne and J. Wojtowicz (2020) State of the Art and Practice of Urban Freight Management Part I: Infrastructure, Vehicle-Related, and Traffic Operations. Transp. Res. Part A Policy and Practice, vol 137, pp360-382

A17: Holguin-Veras J., J. Amaya Leal, I. Sanchez-Diaz, M. Browne and J. Wojtowicz (2018) State of the Art and Practice of Urban Freight Management Part II: Financial Approaches, Logistics, and Demand Management. Transp. Res. Part A Policy and Practice, vol 137, pp383-410

A18:National Academies of Sciences, Engineering, and Medicine 2015. Improving Freight System Performance in Metropolitan Areas: A Planning Guide. Washington, DC: The National Academies Press. https://doi.org/10.17226/22159

Course design

The course takes its starting point in the need for distribution that shippers (manufacturing or trading firms) have and their distribution systems. The different functions in the physical distribution system are described and it is discussed how these should be managed and by whom and the effects of different logistics concepts are analysed. The focus is on costs and revenues and factors that influence them but also environmental as well as ICT aspects are considered. Price models and resource utilization is of great importance. The general requirements and cost structures connected to different modes of transport and distribution solutions are outlined and evaluated in the light of value creating in logistics. The connection and disconnection between cost and price in logistics and transport is further developed in the terms of full cost covered or marginal costs. This is of importance since the transport industry has a large portion of fixed costs and vaguely formulated marginal costs. Pricing with a base in marginal costs in relation to full financial coverage is discussed in the light of adjustments necessary to adapt economic models to financial realities, technical aspects, organizational preconditions and demands from the market. One especially important issue is resource utilization with regards to financial as well as environmental impact. The question of overcapacity in transport systems is further complicated by the fact that many systems are forced to work alongside of each other. One way of solving this is to utilize information technology in order to control the resources and movement (e.g. tracking and tracing) of goods.

The course contains the following topics:

  • The different components and functions of the physical distribution system and their coordination and control.
  • Cost structures connected to the different physical distribution structures and combinations of modes of transport.
  • Resource utilization with regards to financial, organizational and environmental issues.
  • Division of roles and responsibilities along the distribution chain.
  • The demand for distribution services and how logistics and distribution services are procured.
  • The role of logistics service providers in physical distribution.
  • The use of information systems to control the movement and the tracking and tracing of goods.
  • Price models for physical distribution services, and marginal cost pricing in relation to average cost.
  • Customer value and consumer surplus.
  • Physical distribution in urban areas

The course is built up around lectures, seminars and a group assignment (based on a fictional case). Theory is mixed with examples of practical applications in the industry

In Canvas you will find all the course material and information you need (e.g. PowerPoints from lectures, exercises, reading material, the case description and additional information). Here you should also upload different assignments (literature seminars, case) and book meetings and register for attending seminars.

 

Learning objectives and syllabus

Having passed the course, you should be able to:

  • Define and analyse resource utilization from a financial as well as environmental perspective while considering contextual influences.
  • Explain the general requirements and cost structures of different distribution systems and corresponding freight transport modes.
  • Review economic models used in distribution with respect to financial and technical aspects, organizational preconditions as well as demands from the market.
  • Explain the relationships between cost and price for logistics and transport services in physical distribution, including defining fixed and marginal costs as well as environmental effects.
  • Analyse and explain how physical distribution systems are controlled and the use and sharing of information.
  • Use tools for quantitative analysis of distribution system data.

Link to the syllabus on Studieportalen.

Study plan

Examination form

The examination consists of the following elements: seminar hand-ins, active participation in the three seminars, hand in of the case report and participation in the case presentation/discussion, and finally a written exam. All of the individual parts of the examination must reach a minimum level for passing the course. In total these parts give 100 points and the course is graded as follows:

  • Failed < 40% 
  • 3 ≥ 40 %
  • 4 ≥ 60 %
  • 5 ≥ 80 %

The points for each part in the course are as follows:

  • written exam: 0-63 points (pass 24p)
  • case assignment (including presentation and discussion): 0-25 points (pass 10 p)
  • seminar I: 4 points (pass 4p)
  • seminar II: 4 points (pass 4p)
  • seminar III: 4 points (pass 4p)

Literature seminars

Three literature seminars are part of the course and it is mandatory to attend these. Each seminar assignment contains two parts: (1) written individually answers to seminar questions and formulation of an own question, to be submitted before the seminar, (2) active participation in the seminar

Each seminar will be based on assigned readings and specific questions, which will be provided in Canvas. In order to be allowed to attend the seminars, you are required to individually answer the questions for each seminar and hand in these before the seminar. Failure in answering seminar questions in advance will prohibit participation in the seminar. If your answers are not adequate you will be given the opportunity to update your answers after the seminar.

The seminar schedule:

Sem I 1st February and hand-in 31st January

Sem II 11th February and hand-in 10th February

Sem III 1st March and hand-in 28th February

Further instructions will be provided in Canvas where you will find the assignments for each of the three seminars.

Case assignment

The case assignment is to be solved by groups of four students, who are supposed to play the role of members of a consultant team. This team is working for a logistics manager at a company, who needs an analysis of their distribution system. Each team of consultants will have a meeting with the CEO of the case company. The CEO will give you information based on his knowledge of the company. He will focus on getting a useful result from you, as representative of the company, and you will not get any specific directions from him regarding how you should carry out your work. Instead, you will get guidance by a supervisor, who you will meet at two supervision meetings during the course.

The presentation and discussion of your work will be held March 11th and the report will be handed in 9th March.

Further instructions will be provided in Canvas. At the same place you will also find an initial information package for the case, which includes a background, shipment data, and an internal report about a new distribution set up. Forthcoming news about the case will be provided continuously.

Course summary:

Date Details Due