1. CHAPTER 13 Logistics Systems Controls

2. 13-2

3. 13-3 Learning Objectives To understand the use of accounting techniques for logistics system control To examine the worker productivity issue

4. 13-4 Learning Objectives To discuss problems and solutions involved in a product recall To learn how to reduce pilferage, organized theft, and vulnerability to terrorist activity

5. 13-5 Logistics Systems Controls Key Terms Batch number Building security Computer security Document security Key Terms Pilferage Product recall Short-interval scheduling

6. 13-6 Logistics Systems Controls Key Terms System security Vehicle security Key Terms Warehouse work rules Worker productivity

7. 13-7 Figure 13-1: Device in a Kenworth Truck for Reading and Matching Fingerprints

8. 13-8 Financial and Accounting Controls Accountants would like to reduce inventory float Accurate inventory records are essential Logistics costs should be accurately recorded and used as measures of control

9. 13-9 Figure 13-2: An Integrated Financial Accounting System

10. 13-10 Worker Productivity Warehousing labor Goal to achieve lowest cost per volume of output Schedule work in advance Workers should work to a goal for the day Short-interval scheduling Worker productivity Warehouse work rules

11. 13-11 Figure 13-5a: Sample Warehouse Work Rules

12. 13-12 Figure 13-5b: Sample Warehouse Work Rules (continued)

13. 13-13 Worker Productivity Transportation labor Truck drivers don’t have immediate supervision They are in contact with customers Their trucks can be seen by thousands of motorists May fall behind schedule due to external factors May use a tachograph to record truck drivers’ driving performance May use global positioning, photos, or videos

14. 13-14 Figure 13-4: Employees Have Varying Degrees of Skills

15. 13-15 Product Recalls Product recall occurs when a hazard or defect is discovered in an item that is already in distribution Reversal in the outward flow of goods is needed Once recall is in process, new goods must be shipped to take the place of defective ones Recall channels may be different than distribution channels

16. 13-16 Federal Agencies Involved with Recalls Food and Drug Administration Consumer Product Safety Commission National Highway Traffic Safety Administration The Food Safety and Inspection Service of the U.S. Department of Agriculture

17. 13-17 Product Recalls Publicity, Liability, and Fire Drills Batch numbers

18. 13-18 Controlling Returned and Salvaged Goods Pilferage and Theft Building security Vehicle security Computer security Document security Product identification number security System security

19. 13-19 Figure 13-9: How to Plan a Thief- Resistant Warehouse

20. 13-20 Figure 13-11: Screen Inside the Cab Allows Driver to See Around Truck

21. 13-21 Additional Controls Energy-saving controls Hazardous materials handling Maintaining channel and supply chain integrity Protection against terrorism