communicaon, selecon, and negoaon · mechanical damage of the products during shipping o another 15...

Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org www.build4scale.org

Communica)on,Selec)on,andNego)a)onModule5DShipping,Packaging,andCustomsConsidera6ons

Shipping,Packaging,andCustomsConsidera6onsU.S. DEPARTMENT OF ENERGY • OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY www.build4scale.org

Someresearchdatatoconsider(ShockwatchReport,2013):o 43percentofinsuranceclaimsmadebyshippersareduetomechanicaldamageoftheproductsduringshipping

o Another15percentareenvironment-related(waterandhumidity)

o Poorlyconceivedpackagingcanturncustomersawayfromyourproduct

o Inferiorpackagedesigncancostyoualotintermsofshippingdamage

o Accordingtoonestudy,thecostofgoodsdamagedin-transitismorethanUSD$4billionannually—youcanminimizemanyofthesecostsbydesigningreliableandefficientpackaging

2

Whyisthismoduleimportant?Mo)va)on


o Shippingandpackagingisoneofthelargestcostfactorsinthetotallanded-costsequa6on

o Knowingtheindustryrulesandbestprac6cescanprovidethecompe66veedgeyouneedtoenteranewmarket!

3

Whyisthismoduleimportant?(cont.)Mo)va)on


Shipping,Packaging,CustomsWheredoesthisfitintothedevelopmentcycle?

Conceptand

FeasibilityDefini)on Productand

ProcessDesignImplementandValidate

Produc)onandStock

Launchand

Closure

Pre-alpha Alpha Beta Pilot Ramp Scale

PHAS

ES

BUILDS

EngineeringValida<on

DesignValida<on

ProcessValida-on

ConceptValida<on

4

PRODUCTDESIGNOBJECTIVES

MANUFACTURINGREADINESSLEVELSLevels: 109987654321

MfgDevelopmentMfgResearch

MfgCapability

Produc)on

MarketResearchDesignResearch

FeasibilityDevelopment

Qualifica6onFieldReadiness

Launch

MfgCapacity


o Learningobjec6veso Preparingyourproductsforshippingo Introduc6ontopackagingo Packagingcostsanddesignrequirementso Shippingdocuments— Commonshippingdocumentsandregulatoryrequirements— Interna6onalshipmentdocumenta6on

o Totallandedcost(TLC)

5

ModuleOutline


o LO1–Iden6fynecessarypackaging-relatedandshipping-relatedregulatoryrequirements

o LO2–Understandpackagingcostfactors

6

LearningObjec)ves


o Howdoyouprepareyourgoodsforshipping?o Whatareimportantpackagingconsidera6ons?o Howpackagingcaninfluenceyourproductdesignandmaterialsselec6on

o Costofpackagingandhowagoodpackagingdecisioncanreducetheshippingcost

o Whatdocumentsdoyouneedtoprepareforoverseasshippingandreceiving

o Understandingthebestprac6cesinshippingo Understandingtheimpactofpackagingandshippingontotallandedcost

7

WhatThisModuleAddresses


o Packinstrongcontainers,adequatelysealed,andfilledwheneverpossible

o Regardlessofsize,makesuretheweightisevenlydistributedtoprovideproperbracinginthecontainer

o Goodsshouldbepalle6zedandcontainerizedwheneverpossibleo Considerpackaginganduni6zingalterna6veso Packagesandpackingfillershouldbemadeofmoisture-resistantmaterials

o Toavoidpilferage,avoidwri6ngcontentsorbrandnamesonpackages;othersafeguardsincludeusingstraps,seals,andshrinkwrapping

o Observeanyproduct-specifichazardousmaterialspackingrequirements 8

PreparingproductsforshipmentPackaging/Shipping


o Productsafetyo Productspecifica6onso Quan6tyo Compliancewithcustomerandregulatoryshippingrequirements(regulatorydocumentsandinternalquality-inspec6onreport)

o Packingcustomercompliantandsecured?o 100percentinspec6onorsamplingo Sign-offbyqualityinspector

9

ChecklistPackaging/Shipping


o Packagingconsidera6onsincludepreparinggoodsfortransport,distribu6on,storage,andretailing,aswellastheul6matefunc6on/enduseofthegoods

o Packagingincludesbothengineering(safety)andmarke6ng(communica6on)func6ons

Tip:Agreatstar6ngmethodtoevaluatepackagingneedsistoevaluatetheleadingcompe6torandotherlikeproducts.Itiscri6caltoonlyconsiderthoseproducedbycredible,ethical,reputable,wellrun,longstandingcompanies.Leveragetheirinvestmentininternalandexternalresourcesaswellasprac6calexperiencethatledtotheircurrentpackagingandlabelingformat.Usethisasadatasourcewhilerememberingthatul6matelyyouandonlyyouareresponsibleforyourproductswellbeing,customercompliance,legalstatusetc.

10

BasicsPackaging


o Technicalpackagingprofessionalsneedtoapplyscienceandengineeringskills,whilemarke6ngprofessionalsprovideinsightonar6s6candaesthe6csforunderstandingofconsumermo6va6on

11

Technicalversusmarke<ngPackaging

TechnicalFunc)ons Marke)ngFunc)onsContain CommunicateProtect PromoteDispense DisplayStore Sell

Measure Mo6vatePreserve Inform


Contain:o Howthepackagingcontainmentfunc6onisselecteddependsontheformoftheproduct(theproductcanrangefromallliquid,solid/liquidmixture,free-flowing,non-free-flowingpowder,solidunit,discreteitems,ormul6componentmix)

o Thenatureoftheproductisalsoimportant(itmaybecorrosive,corrodible,flammable,fragile,easilymarked,underpressure,hygroscopic,irregularinshape,s6cky,odorous,toxic,perishable,orasep6c)

12

Keyfunc<onsPackaging


Protect/Preserve:o “Protect”meanspreven6ngfromanyphysicaldamageduetoaccidentandothertravelincidents

o “Preserve”usuallyreferstopreven6ngbiologicalandchemicalchangeinfood(orsimilarbiological/chemical)productssotheshelf-lifeoftheproductscanbeextended

13

Keyfunc<ons(cont.)Packaging


Transport:o Itunderscoresthesafetyofgoodsduringtransporta6onfromthepointofproduc6ontothepointoffinalconsump6on

o Oneshouldconsidervarioustransportmodes(truck,rail,aircral,cargoship,etc.),handlingtechniques,andstoragecondi6onswhenselec6ngapackage

Tip:Manytransporta6oncompanieswillassistyoudeterminingyourpackagingneedsandeventestforyou.i.e.,UPS:hmps://www.ups.com/us/en/services/customized-solu6ons/op6miza6on-logis6cs/package-engineering.page

hmps://compass.ups.com/ups-packaging-solu6ons-facility/

hmp://images.fedex.com/us/services/pdf/PKG_Tes6ng_Under150Lbs.pdf

14



Inform/Sell:o Itcanbeagoodbrandingtoolormediumtoimproveperceivedproductquality

o Itdealswithhowapackagecommunicatesbyitspackagematerial,shapeandsize,color,predominanttypography,illustra6ons,recognizablesymbolsoricons,etc.

o Governmentregula6onscandictatehowamessagecanbepresentedonapackage

Examples:howaproductisnamed,quan6tycontained,andtheaddressoftheresponsibleorganiza6on

15



16

Examples-LevelsofpackagingPackaging

CardboardBoxesPlas6cTrays

PalletsRollcages

Plas6cBomlesIndividualContainers


17

PrimaryPackaging

Source:hmp://www.qsstudy.com/business-studies/levels-of-packaging

Primary

Secondary

o PrimaryPackage:Thepackage,whichhasenclosedtheactualcommodity,iscalledprimarypackage.Itreferstotheproduct’simmediatecontainer.Insomecases,theprimarypackageiskeptun6ltheconsumerisreadytousetheproduct(i.e.,plas6cpacketforsocks);whereasinothercases,itispartoftheproduct(i.e.,atoothpastetube,ketchupbomle,etc.)andisusedthroughoutthelifeoftheproduct.

o ForPrimaryPackagingthatisfororganizingorprotec6ngtheproduct,suchasaclearbagorfilm,itisalsoolencalledthe“InnerPack.”— AproductwithaninnerpackthenhasSecondaryPackaging.


Primary

Secondary

18

SecondaryPackaging


o SecondaryPackaging:Thelayerofcoveraddedtotheprimarypackageforitsprotec6oniscalledsecondarypackage.Itreferstoaddi6onallayersofprotec6onthatarekeptun6ltheproductisreadyforuse,i.e.,atubeoftoothpasteusuallycomesinacardboardbox.

o Whenconsumersstartusingthetoothpaste,theywilldisposeofftheboxbutretaintheprimarytube.Olencalledthe“OuterPack.”

o Forretailproductsthisisthepackagingtheproductisseeninwhensiqngontheshelf.


o Transporta)onPackaging:Transporta6onpackageisusedtofacilitateiden6fica6on,transporta6on,handling,andstoringoftheproducts.Itreferstofurtherpackagingcomponentsnecessaryforstorage,iden6fica6on,ortransporta6on.Forexampleatoothpastemanufacturermaysendthegoodstoretailersincorrugatedboxescontaining10,20,or100units.Olencalledthe“MasterCartonorPack.”Italsoincludesthingslike“Gaylord”,woodencratesetc.thatareneededfortransport.

19

Transit/transporta<onPackaging


Primary

Secondary

Transit


Unitloads:o Aunitloadisacombina6onofproductsthatareputtogethertoimprovetransporta6onandmaterialshandlingfunc6on.

o Includessecondaryitemslikecardboardboxesandplas6ctraysthatareusedtocontainprimaryproducts,andter6aryitemslikepalletsandrollcages,whicharethenusedtouni6zesecondaryitems.

o AccordingtoaEuropeanconsumerresponsereport,“Unitloadsrepresentakeycostdriversincetheyimpactontransport,storage,handlingandpackaging,es6matedtoaccountfor12–15percentofretailsalesprice.”

20

Efficiencythroughuni<za<onandpalle<za<on

Packaging


Palle)za)onofloads:o Loadsaremostcommonlyuni6zedonpallets,whichallowsuseofforkliltruckorsimilarequipmentforhandling.

o Mostpalletsaremadeofhardwood—denserands6fferwoodsarepreferredfordurabilityalthoughtheycanbecostlierthanotherwoods.Plas6cisbecomingmorepopularasthefoodindustryandothersterileor“par6cle”sensi6vemanufacturersarerequiredtouseplas6c.UseofGPS&RFIDdevicesandconcernwithrecyclingwillalsoincreasedfutureuseofplas6c.

o Therearemanypossiblepalletsizesanddesigns;however,forthesakeofstandardizeddistribu6on,certainsizesanddesignspredominate

21

Efficiencythroughuni<za<onandpalle<za<onPackaging


o Theadvantageofunitloadisthatitpacks6ghtlyintowarehouseracks,intermodalcontainers,trucks,andboxcars;yetitcanbeeasilybrokenapartatadistribu6onpoint,usuallyadistribu6oncenter.

22

Efficiencythroughspaceu<liza<onPackaging

Note:Figuresshowhowproductscanbeuni6zedtoimprovetheu6liza6onof

spaceinacontainer.Therearenoone-to-onecorrespondencebetweentrucks(onthelel)andracks(ontheright).

Source:A.T.Kearney,EfficientUnitLoadsproject

Moreperpallet…

Withlessrackspace…


Func)onalrequirements:o Consumerpackaging(directedatahousehold)shouldprovidesafecontainmentfortheproductandsufficientinforma6ontouserabouthowtouse.

o Commercialpackaging(directedatacommercialenterprise)shouldbeamrac6vetothecustomers,provideacompe66veadvantage,andbeeasytostoreandstock.

23

DesignrequirementsPackaging


Distribu)onandsafety:o Productlabelingo Thegoaloftheproductlabellingistoprovideproductsdetails,direc6onsofuse,andotherrelevantinforma6ontotheconsumer

o Salesrequirementso Aesthe6cs,perceivedqualityoftheproduct,andbriefbutadequateproductinforma6onforcustomers

24

Designrequirements(cont.)Packaging


Uni)za)onconsidera)ons:o Rigidcontainerso FlexiblecontainersCommunica)onconsidera)ons:o UniversalProductCode(UPC)o ElectronicProductCode(EPC)o Radio-frequencyiden)fica)on(RFID)technologyMaterials-handlingconsidera)ons:o Pallets,fork-liltrucks,ridertrucks,conveyers,etc.

25

Designrequirements(cont.)Packaging


o Customerrequirements(producttypeandmaterials,func6onalrequirements,salesrequirements)

o Packagingmaterialscosto Recyclabilityandreusabilityofpackageso Shipmentquan6ty(i.e.,enoughforpalle6za6on?)o Governmentregula6ons(i.e.,safetyandenvironmentalconsidera6ons)

26

Contribu<ngfactorsPackagingCosts


27

TradeoffsPackagingCosts

Source:AdaptedfromYam(2009)

Packaging

Damages

CosttoImprovePackaging

CostsofPackage

Op)mumPackaging

o Packagingcostcanincreaseexponen6allyaswemovefromlowtoverylowdamagerate

o Thepointwherethetotalcost(packagingcost+costofdamage)isminimumprovidesadesirablepackagingdesign


Billoflading(BOL):o Arequireddocumenttomoveafreightshipmento Servesasareceiptoffreightservices,conveysthefreightterms,andservesasacontractforcarriageandadeliveryreceipt

o Anofficialdocumentthatmaybeadmissibleincourtoflawandisissuedbytheshippingcompany

Freightbill:o SimilartoBOLexceptthatitdoesnotserveasakeypieceof“evidence”inadispute

o Canincludeaddi6onalcharges,informa6on,ors6pula6onsthatfurtherclarifytheinforma6onontheBOL

28

CommonshippingdocumentsDocumenta)on/Requirements


Freightclaims:o Ademandbyashipperorconsigneeuponacarrier(asforreimbursementofanovercharge,orforlossordamagetogoodsacceptedfortransporta6on).

o Freightclaimsoccurforvariousreasons;somearereal,somearecontrived,somecanbeprevented,buttheyallcanbecontrolled,understood,andkepttoacceptable,understandable,andreconcilablelevels.

29

Commonshippingdocuments(cont.)Documenta)on/Requirements


Occupa)onalSafetyandHealthAdministra)on(OSHA)requirements:o UndertheOccupa6onalSafetyandHealthActof1970(OSHAct),employersareresponsibleforprovidingasafeandhealthfulworkplace.

o OSHA'smissionistoensuresafeandhealthfulworkplacesbyseqngandenforcingstandards,andbyprovidingtraining,outreach,educa6on,andassistance.

o EmployersmustcomplywithallapplicableOSHAstandardso Employersmustalsocomplywiththe“GeneralDutyClause”oftheOSHAct,whichrequiresemployerstokeeptheirworkplacefreeofseriousrecognizedhazards.

30

RegulatoryrequirementsDocumenta)on/Requirements


E-Fulfillment/Third-PartyLogis)cs/Pick-and-Pack:o Inbroadterms,e-Fulfillmentisanamalgama6onofallthepeople,processes,andtechnologyemployedtodeliveranonlineordertoacustomer.

o Thekeyistomakeallofthesecometogethertocreateaposi6vecustomerexperiencebefore,during,andalerasale.

o Itincludeseverythingfromtheonlinecheckoutprocess,paymentprovider,andordermanagementsystem;tothestepstakentopick,pack,andshiptheorder.

o Attheendof2014,U.S.e-trailsalessurpassed$300billionforthefirst6me—Thisnumberisexpectedtokeepgrowingasonlineshoppingcon6nuestoincrease.

31

Regulatoryrequirements(cont.)Documenta)on/Requirements


Environmentalconcerns:o Thenormalshippinghazardsinthefreightenvironmentcanvarybymode.

o Truckload,LTL,railcar,oceanic,andairfreightshippingenvironmentstypicallyincludehazardsthatareuniquetothosemodes,aswellastheircommonhazards.

o Manyofthemoreseverehazardsareduetothenumberofseparatehandlingsrequiredandthemechanizedmaterial-handlingequipmentused.

32

Regulatoryrequirements(cont.)

Documenta)on/Requirements


Handlinganddeterminingmethodofshipping:o Consultwithafreightforwardertodeterminethemethodofinterna6onalshipping.

o Usuallyconsistsoflargeandbulkyshipments,soitrequiresalonglead6meandadvancebookingforaspaceonboardatransport.

o Thecommonprac6ceistohaveamul6-modaltransit(morethanonemeansoftransporta6onsuchastruck,rail,barge,airplane,ship,etc.)operatorstakethefullresponsibilityfortheen6removementofgoodsfromfactorytoyourfinal(i.e.,customer)des6na6on.

33

Considera<onsOverseasShipping


Factorstoconsiderwhendetermininginterna)onalshippingmethods:o Costofshipmento Deliveryscheduleo Accessibilitytotheshippedproductbyyourforeignbuyero CheckMandatoryScreeningofCargoonPassengerFlightsifshippedbyapassengeraircral

34

Considera<ons(cont.)OverseasShipping


Otherimportantconsidera)onsforinterna)onalshipping:o Packagingandlabelingo Cargoinsuranceo Whenshippingagriculturalproducts,checktheU.S.governmentregula6onatShipYourAgriculturalProducts

35

Considera<ons(cont.)OverseasShipping


NeedtocomplywithbothU.S.andforeigngovernmentregula<onsProductclassifica)on:o FindingtheHarmonizedSystem(HS)codeisthestar6ngpointtoclassifyingaproductandpreparingitforexport.

o Theinterna6onalHSisadministratedbytheWorldCustomsOrganiza6on,andservesasthefounda6onfortheimportandexportclassifica6onsystemsusedintheUnitedStates.

o TheU.S.importclassifica6onsystem,theHarmonizedTariffSchedule(HTS)administeredbytheU.S.Interna6onalTradeAdministra6onCommission(USITC),andtheU.S.exportclassifica6onsystem,theScheduleBadministeredbytheU.S.CensusBureau,ForeignTradeDivision,bothrelyontheinterna6onalHScodesfortheir4-digitand6-digitheadingsandsubheadings. 36

Considera<onsPreparingProductsForExport


Rulesoforigin(ROO):o Totakeadvantageofthereduced-dutybenefitsunderafreetradeagreement(FTA),anexportedproductmustoriginatefromanFTAparty,ormustcontainaspecifiedpercentageofU.S.inputsandcomponents.

o EachFTAhasitsownROOsthatdescribehowexportedgoodsshippedtoacountryoraregionmayqualifyforduty-freeorreduced-dutybenefits.

o BecausetheROOsareFTA-specificandproduct-specific,theyneedtobefollowedcarefully.

ForeignStandardsandCer)ficates:o ResearchUSTradePartnerCountriestounderstandthetradebenefitsduetofreetradeandotheragreements(export.gov)

37

Considera<ons(cont.)PreparingProductsForExport


o Reviewimportrejec6onlawsandtradebarrierso Buildrela6onshipsandnetworkonthegroundintheexportcountry

o Hireacustomsbrokero Checklicenseorpermitrequirementsforimpor6ngcertaingoods

o Getassistanceandtrainingo Moreinforma6ononthissubjectcanbefoundathmps://www.sba.gov/blogs/impor6ng-goods-us-introductory-guide-small-business-owners

38

Bestprac<cesImpor)ngIntoTheUnitedStates

Note:Customsbrokersareprivateindividuals,partnerships,associa<onsorcorpora<onslicensed,regulatedandempoweredbyU.S.CustomsandBorderProtec<on(CBP)toassistimportersandexportersinmee<ngFederalrequirementsgoverningimportsandexports.


Acomprehensivereportthatprovidesinforma)ononthefollowing:o Packagingrequirementso Customsdocumentso Internetpurchaseso Intellectualpropertyrightso ToxicSubstanceControlAct(TSCA)o Interna6onaltradeagreementso Adetailedreportcanbefoundat:hmp://www.dhl-usa.com/content/dam/downloads/us/express/local_other/dhl_us_customs_import_guide.pdf

39

ImportIndustryGuideU.S.Customs


Expor)ngdocuments:o BOL,dockreceipt,deliveryinstruc6ons,exportdeclara6on,lemerofcredit,consularinvoice,commercialinvoice,insurancecer6ficate,andtransmimallemer

Impor)ngdocuments:o Arrivalno6ce,customsentries,carrier’scer6ficateandreleaseorder,deliveryorder,freightrelease,andspecialcustomsinvoice(ifapplicable)Note:Fordefini6onsandexplana6onsofthesedocuments,visit

www.export.gov

40

Interna<onaltransportdocumenta<onDocumenta)on/Requirements


Whatitisandhowtouseit

o TLCisthesumofallcostsassociatedwithmakinganddeliveringproductstothepointwheretheyproducerevenue

o Allowsbusinessmodelstoop6mizethesupplychaino Iden6fieshiddencostsinthesupplychaino Reducesworkingcapital,therebyimprovingcashflow

Packagingandshippingcostsarehugedriversofyourlogis<csandtransporta<oncost

TotalLandedCost

41

TotalLandedCost

PurchasePrice

Logis)csandTransporta)on

Cost

RiskandCompliance

Cost

InventoryCost

OverheadandAdministra)ve

CostCustoms

TotalLandedCost


Thebasepriceofsourcingtheassociatedgoodsand/ormaterials—itincludesthefollowing:o Thepriceofgoodspaidtothesellero Bankingfeesifandwhereapplicableo Currencyexchangerates— Choosingwhichcurrencytouseforpurchasingisveryimportant

— Currencieswithlowvola6lityleadtoreduc6onofriskandhandling

42

PurchasepriceTLCDrivers


Includescosttermsthatcannotbeadributeddirectlytoaproduct:o Itdependsuponthehierarchy/levelspresentinanorganiza6onpar6cularlywhenitcomestopurchasingdecisionapprovalprocess(usually,thegreaterthehierarchy,thehigherthecostandinefficiency)

o Bankingfeesifandwhereapplicableo Costofmaterialhandling,manufacturingoverheadcosts,andoversightcosts

43

Overhead/administra<vecostsTLCDrivers


Includestheline-haulcost,domes)c/interna)onalshippingalongsidepackagingandinsurancecosts—itdependsonthefollowingfactors:o Thegeographicaldistancetraversedtodelivertheproducttothecustomer

o Thetotaltravel6me(basetrip6me+refuelling6me+loading6me+bordercrossing6me[forlandshipping])

o Incotermtobeused,detailingtherulesandregula6onsregardinggoodstransporta6on— Typeofpackagingbeingused;takingcaretoensurethatriskofproductdamageisminimum

— Laborandfuelcost,andexpeditedshippingcost(ifapplicable)— Interna6onaltradeagreements

44

Transporta<on/logis<cscosts

TLCDrivers

Examples:hmp://www.dovelogis6cs.com/inco-terms-2016/


Includesthecustomsinspec)on,taxes,brokerfees,andthemerchandiseprocessingfee(MPF)—theimportantfactorstoconsiderare:o Applicabledu6esandtaxes,withtheobjec6veofminimizingthetaxburden

o Loca6onofoffshoreproduc6onfacility(ifapplicable)o Thecountrytowhichtheproductisshipped,sincethecustomsandtaxesvaryvastlyamongstdifferentcountries

45

Customs

TLCDrivers


Itconsistsofthevalueofthesafety/cyclestock,thevalueoftheinventory-in-transit,etc:o Safetystock:theminimuminventoryleveltopreventstock-outs(associatedwithlead-6mevariabilityanddemand)

o Cyclestock:theminimuminventoryrequiredtomeetcustomerdemandsbetweeninventoryreplenishmentruns

o Costofinventory:itdependsonthecompany’sbusinesspolicyandproduc6onloca6ons

46

Inventorycost

TLCDrivers


Itisthecostofcomplyingwithregula)onsandtradepoliciesandthecostofpoten)alrisks—including:o Upda6ngwithrespecttochangesingovernmentrulesandguidelines— Non-adherencecouldresultinthedisrup6onoftheen6reproductsupplychain

o Possibilityofdamagingthebrandname— Thiscanoccurbynotmee6ngsafetyand/orhealthstandardsorcausingdamagetotheenvironment

o Possibilityofproductrecallduetodefects— Thiscanleadtotheoccurrenceofareversesupplychain

47

Risk/compliancecost

TLCDrivers


Example

o ThisisabreakdownofthecostincurredfordeliveringanelectronicproductshipmentfromthemanufacturerintheUStothecustomerinLondon

TLC=$299+$15+$30+$10+$75+$45=$475Contribu6on(%)ofshippingandpackagingcoston:TLC=$75/$475=15.8%Note:*IncludesPackagingCost+InlandFreight+Air/SeaFreight

TLCCalcula)on

48

$45$75*$10$30$15$299

Customerin

London

USSellingPrice

Logis)csandTransporta)on

CostCustomsInventory

Cost

OverheadandAdministra)ve

Cost

RiskandCompliance

Cost

CompanyinUSA


o Johnson,M.D.,Sawaya,W.J.,andNatarajarathinam,M.(2013),Amethodologyformodellingcomprehensiveinterna<onalprocurementcosts.Interna6onalJournalofProduc6onResearch,51(18),5549-5564.2

o WorldIndustrialReporter(2012)-ManagingYourSupplyChain:AccuratelyCalcula<ngTotalLandedCostshmps://www.worldindustrialreporter.com/wp-content/uploads/2012/09/Calcula6ng-Landed-Costs1.pdf

o SupplyChainDigest(2008)-GlobalSupplyChainNews:Ge\ngtoAccurateTotalLandedCostshmp://www.scdigest.com/assets/On_Target/08-06-09-1.php

o Landsberg(2015),ReduceShippingCostswithPackageRedesignWhitepaperhmp://resources.landsberg.com/wp-content/uploads/2014/07/reduce-costs-packaging-redesign-whitepaper.pdf

49

References/Resources


o Onlinear6cles:hmp://news.ewmfg.com/blog/7-ways-to-reduce-packaging-costshmp://www.nosco.com/blog/5-ways-to-reduce-packaging-costs/hmp://www.mckinsey.com/business-func6ons/opera6ons/how-we-help-clients/reduce-packaging-costs

o TheEfficientUnitLoadsReport,EfficientConsumerResponse(ECR),Europe,PP.10,46hmp://ecr-all.org/wp-content/uploads/pub_1997_efficient_unit_loads.pdf

o TheEfficientUnitLoadsReport,EfficientConsumerResponse(ECR),Europe,PP.13hmp://ecr-all.org/wp-content/uploads/pub_1997_efficient_unit_loads.pdf

50

(Cont.)References/Resources


o AdamRobinson(2014),FreightBillvs.BillOfLanding:KnowingtheDifferenceisKeytoEffec<veLogis<cs,PP.1hmp://cerasis.com/2014/01/23/freight-bill-vs-bill-of-lading/

o “FreightClaim”(entry),MerriamWebsterDic6onary,OnlineEdi6onhmp://www.merriamwebster.com/dic6onary/freight%20claim

o TransportGis6cs,Over,ShortandDamageClaimsorLossandDamageClaimshmp://www.insourceaudit.com/Whitepapers/ldclaims.asp

o Occupa6onalSafetyandHealthAdministra6on,UnitedStatesDepartmentofLaborhmps://www.osha.gov/law-regs.html

o Knox,Jillian(2016),5ThingsEveryoneShouldKnowAbouteFulfillmentServices,PP.1hmps://www.nchannel.com/blog/efulfillment-services/

51



o Anonymous(2014),GuidetoPackagingFreightShipments,Ins6tuteofPackagingProfessionals.PP.3hmps://www.iopp.org/files/IoPPFreightShippingGuidelines8414.pdf

o Anonymous(2014),ProductClassifica6on,export.govhmps://www.export.gov/ar6cle?id=Find-HS-Code

o Anonymous(2016),RulesofOrigin,export.govhmps://www.export.gov/ar6cle?id=Rules-of-Origin

o Beesely,Caron(2016),Impor6ngGoodsintotheU.S.–AnIntroductoryGuideforSmallBusinessOwners,ManagingaBusiness,PP.1hmps://www.sba.gov/blogs/impor6ng-goods-us-introductory-guide-small-business-owners

52



o Anonymous(2010),MandatoryScreeningofCargoonPassengerFlights,export.govhmp://2016.export.gov/ar6cles/eg_main_021809.asp

o Introduc6onandhistoryofpackagingdevelopment–module1,historyofpackagingdevelopment–lesson1hmp://ecoursesonline.iasri.res.in/mod/page/view.php?id=6193

o Introduc6onandhistoryofpackagingdevelopment–module1,importanceofPackaging–lesson2,PP.1hmp://ecoursesonline.iasri.res.in/mod/page/view.php?id=6195

o TransportGis6cs,Over,ShortandDamageClaimsorLossandDamageClaimshmp://www.insourceaudit.com/Whitepapers/ldclaims.asp

o Occupa6onalSafetyandHealthAdministra6on,UnitedStatesDepartmentofLaborhmps://www.osha.gov/law-regs.html

53



o Benton,Jr.W.C.,1948-Purchasingandsupplychainmanagement,NewYork,NY,McGraw-Hill

o Anonymous(2016),‘AgriculturalProducts’,export.govhmps://www.export.gov/ar6cle?id=Sector-Specific-Considera6ons-Agricultural-Products

o Anonymous(2016),UnitedStatesCustomsImportIndustryGuide,DHLhmp://www.dhlusa.com/content/dam/downloads/us/express/local_other/dhl_us_customs_import_guide.pdf

o Anonymous(2016),RulesforInterna6onaltradeasdefinedbyIncoterms@2016hmp://www.dovelogis6cs.com/inco-terms-2016/

o Kit,L.Yam(2009),TheWileyEncyclopediaofPackagingTechnology,3rdedi6on,PP.1242.

54



o 3PL–ThirdPartyLogis6cso LTL–LessThanLoado HS–HarmonizedSystemo HTS–HarmonizedTariffScheduleo USITC–U.S.Interna6onalTradeAdministra6onCommissiono FTA–FreeTradeAgreemento ROO–RulesOfOrigin

55

ListofAcronyms


o MRL–ManufacturingReadinessLevelo TLC–TotalLandedCosto UPC–UniversalProductCodeo EPC–ElectronicProductCodeo RFID–RadioFrequencyIden6fica6ono BOL–BillofLadingo OSHA–Occupa6onalSafetyandHealthAct

56

(cont.)ListofAcronyms

Glossary

Module 5D

Unit Load combines individual items or items in shipping containers into single "units" that can

be moved easily with a pallet jack or forklift truck.

Process Validation is the analysis of data gathered throughout the design and manufacturing of

a product in order to confirm that the process can reliably output products of a determined

standard.

Manufacturing Capacity is the volume of products or services that can be produced by an

enterprise using current resources. Three commonly used definitions of capacity are as follows:

design capacity, effective capacity & actual output. (Repeat from 2B)

Production is the processes and methods used to transform tangible inputs (raw materials,

semi-finished goods, subassemblies) and intangible inputs (ideas, information, knowledge) into

goods or services.

Primary Package is the first-level product packaging such as the bottle, can, jar, tube, etc., that

contains the item sold. It is the last packaging thrown by the consumer.

Secondary Package encloses the primary packaging, such as toothpaste tube in its box.

Transportation Packaging is designed to protect goods that are in transit, especially products

that are shipped by truck or train. However, the supply chain often includes other modes of

transportation as well. Therefore, transport packaging needs to be designed for both the local

conditions and the export conditions if the goods are sent from one country to another.

Unit Load combines individual items or items in shipping containers into single "units" that can

be moved easily with a pallet jack or forklift truck.

Palletization of Loads is a method of storing and transporting goods stacked on a pallet, and

shipped as a unit load. It permits standardized ways of handling loads with common mechanical

equipment such as fork-lift trucks.

Universal Product Code UPC) is a barcode symbology that is widely used in the United States, Canada, United Kingdom, Australia, New Zealand, in Europe and other countries for tracking

https://en.wikipedia.org/wiki/Unit_load

https://en.wikipedia.org/wiki/Process_validation

https://www.thebalance.com/measuring-capacity-in-manufacturing-2221213

http://www.businessdictionary.com/definition/production.html

http://www.businessdictionary.com/definition/primary-packaging.html

http://www.businessdictionary.com/definition/secondary-packaging.html

https://en.wikipedia.org/wiki/Packaging_and_labeling

https://en.wikipedia.org/wiki/Unit_load

http://www.businessdictionary.com/definition/palletization.html

https://en.wikipedia.org/wiki/Universal_Product_Code

trade items in stores. UPC (technically refers to UPC-A) consists of 12 numeric digits, that are uniquely assigned to each trade item.

Electronic Product Code (EPC) is designed as a universal identifier that provides a unique

identity for every physical object anywhere in the world, for all time.

Radio-Frequency Identification (RFID) Technology uses electromagnetic fields to automatically

identify and track tags attached to objects. The tags contain electronically stored information.

Bill of Lading is a document issued by a carrier (or his agent) to acknowledge receipt of cargo

for shipment.

Freight Bill is a carrier's invoice for freight charges applicable to a shipment. Also called freight

invoice.

Freight Claims is a legal demand by a shipper or consignee to a carrier for financial

reimbursement for a loss or damage of a shipment.

Occupational Safety and Health Administration (OSHA) is an agency of the United States

Department of Labor. OSHA's mission is to "assure safe and healthful working conditions for

working men and women by setting and enforcing standards and by providing training,

outreach, education and assistance"

E-Fulfillment is an amalgamation of all the people, processes, and technology employed to deliver an online order to a customer.

Third Party Logistics is a company's use of third-party businesses to outsource elements of the

company's distribution and fulfillment services.

Pick-and-Pack is a part of a complete supply chain management process that is commonly used

in the retail distribution of goods. It entails processing small to large quantities of product,

often truck or train loads and disassembling them, picking the relevant product for each

destination and re-packaging with shipping label affixed and invoice included.

Rules of Origin (ROO) are used to determine the country of origin of a product for purposes of

international trade.

Foreign Standards and Certificates are required fro many products that are sold in multiple countries. This may include performance tests and quality assurance tests, to meet qualification criteria stipulated in contracts, regulations, or specifications (typically called "certification schemes" in the product certification industry).

Most product certification bodies (or product certifiers) are accredited to ISO/IEC Guide 65:1996, an international standard for ensuring competence in those organizations performing

https://en.wikipedia.org/wiki/Electronic_Product_Code

https://en.wikipedia.org/wiki/Radio-frequency_identification

https://en.wikipedia.org/wiki/Bill_of_lading

http://www.businessdictionary.com/definition/freight-bill.html

https://en.wikipedia.org/wiki/Freight_claim

https://en.wikipedia.org/wiki/Occupational_Safety_and_Health_Administration

http://www.inboundlogistics.com/cms/article/e-fulfillment-strategies-that-deliver-the-goods/

https://en.wikipedia.org/wiki/Third-party_logistics

https://en.wikipedia.org/wiki/Pick_and_pack

https://en.wikipedia.org/wiki/Rules_of_origin

https://www.export.gov/article?id=Foreign-Standards-and-Certification

https://en.wikipedia.org/wiki/Performance_test_(assessment)

https://en.wikipedia.org/wiki/Quality_assurance

https://en.wikipedia.org/wiki/Contract

https://en.wikipedia.org/wiki/Regulation

https://en.wikipedia.org/wiki/Specification

https://en.wikipedia.org/wiki/Accreditation

product certifications. The organizations that perform this accreditation are called Accreditation Bodies, and they themselves are assessed by international peers against the ISO 17011 standard. Accreditation bodies that participate in the International Accreditation Forum (IAF) Multilateral Agreement (MLA) also ensure that these accredited Product Certifiers meet additional requirements set forth in "IAF GD5:2006 - IAF Guidance on the Application of ISO/IEC Guide 65:1996".

Less Than Load (LTL) is the transportation of relatively small freight in a truck with products

from other companies.

Harmonized System (HS) is an internationally standardized system of names and numbers to

classify traded products.

Harmonized Tariff Schedule (HTS) is the primary resource for determining tariff (customs

duties) classifications for goods imported into the United States.

U.S. International Trade Administration Commission (USITC) is an independent, bipartisan,

quasi-judicial, federal agency of the United States that provides trade expertise to both the

legislative and executive branches.

Free Trade Agreement free-trade area is the region encompassing a tradebloc whose member

countries have signed a free-trade agreement (FTA). Such agreements involve cooperation

between at least two countries to reduce trade barriers – import quotas and tariffs – and to

increase trade of goods and services with each other.



https://en.wikipedia.org/wiki/Less_than_truckload_shipping

https://en.wikipedia.org/wiki/Harmonized_System

https://en.wikipedia.org/wiki/Harmonized_Tariff_Schedule_for_the_United_States

https://en.wikipedia.org/wiki/United_States_International_Trade_Commission

https://en.wikipedia.org/wiki/Free-trade_area

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