All You Need To Know About FOB

FOB is an important term related to the shipping of goods. It stands for “freight on board” or “free on board” indicating the designation when the ownership or liability of goods gets transferred from the seller to the buyer. The term FOB is often confusing for many in the shipping industry. However, it is crucial that both sellers and buyers must understand the proper FOB definition and scope so that they do not end up in losing dollars. This term determines the responsibility of the party for bearing the charges of freight and also decides the point of time when the shipment is passed over from the sellers to the buyers.

For instance, in case of international shipping, FOB indicates that the consignor is going to bear the loading cost and the transportation cost for sending the goods to the port. The consignee bears expenses related to insurance, ocean freight, unloading and the transportation cost of the goods from the port to the actual destination. The seller in this situation passes over the risk of the goods to the buyer when there is the loading of goods at the port for shipment.

Difference Between Origin And Destination:

FOB origin indicates that the ownership of the goods is transferred as soon as in gets out of the hands of the seller. If shipping of the goods is required then it is the buyer’s responsibility and he or she has to bear the expenses. This type of transaction is often referred to the city name like FOB Boston, FOB San Francisco, etc.

FOB destination, on the other hand, indicates that ownership of goods is transferred to the buyer when the original products reach the doorstep of the buyer. Here, the seller has to arrange for the transportation of the goods for which either he pays or charges the buyer for the expenses. The seller also has to be liable in case the goods suffer any damage while en route.

FOB comes more into the picture when there are wholesale or B2B shipments of large goods.

Use Of FOB In The Shipping Documents:

There are four ways in which the FOB term is included in the documents for shipping:

  • FOB (place of origin)- Freight Collect
  • FOB (place of origin)- Freight Prepaid
  • FOB (place of destination)- Freight Collect
  • FOB (place of destination)- Freight Prepaid

It is important that the shippers understand the FOB designations well especially in case of damages to the goods. Some of the receiving docks totally deny the delivery of the damaged goods without accepting the damage notation. However, when a shipment is designated properly, it is clear that the damage risk has to be borne by the seller or the buyer. In such cases, there is no question of confusion. Moreover, the Incoterm 2010 has also amended the definition of FOB which has made the sale contracts simpler and understandable by all.

Why Does FOB Matter?

The term is particularly important for those companies who are engaged in shipping huge quantities of goods. A clear concept of the FOB term helps in understanding the liability of the party regarding the safety in the delivery of the shipment. It also helps the buyer and the seller in knowing which party owns the materials at a particular point of the shipping cycle. This information is also helpful for the accountants who can maintain instant records of the transactions on the basis of FOB. Moreover, the term is also useful in proper logistics management.

Sales Tax And FOB:

If you are falling in the nexus of any state which charges selling taxes on shipment, then FOB can be your friend. For the packages which have FOB origin marked on them, the buyer pays the freight charges directly by contracting with a shipper. Thus, the seller has no role here. The buyer does not have to bear sales taxes as he has already paid the freight charges which most of the states consider exempted.

When people find the term quite complex to understand and interpret, they often take the help of professionals who are expert in the field. This ensures that you comply with the terms without any faults and the shipments get managed quite fast. FOB incoterms is another interesting aspect which the shipping industry must pay attention to and know about in details.

3PL Logistics Solutions for Better Warehousing and Distribution

What is 3PL Logistics?

The term 3PL stands for third party logistics. It is a process that refers to the outsourcing of supply chain functions and logistics functions to a third-party provider. When one engages in a product manufacturing business, the process of shipping logistics becomes vital. There are many businesses that have ties with contract warehousing, commercial carriers, government postal services and various airlines to get their products shipped from the manufacturing facility all the way to the end customer. However, when the product is ready to ship, the 3PL logistics collect the package and conveniently deliver it to the end customer. The total shipping costs is billed by the service carrier to the business handling department. The third party logistics specializes in transportation and shipping, in turn saving the overall costs of the business and their need to invest in trucks, planes or employees to transport the goods or packages.

In brief, 3PL is a platform in logistics that manages and outsources goods of one company to another company. In the international business market, companies offering third-party logistics have gained a lot of popularity. They are becoming dominant in the field of supply chain management. The support and services that is provided by a third-party company normally include consolidation services, freight, delivery of freight and warehousing and distribution. 3PL services offer logistics solutions to domestic as well as international transactions.

Warehousing

Contract warehousing or also widely known as warehousing and distribution is another method that conveniently outsources to third party logistics. This facility is useful for those businesses that want to efficiently devote their time and efforts to other important priorities like sales, manufacturing and designing of the products. Basically, a third-party warehousing service reduces the number of employees needed and also the amount of space needed for a business to function smoothly.

Advantages of 3PL Logistics

The main advantage of 3PL system is the transportation of goods and products along the supply chain. This logistics includes the proper shipping of items along with handling of paperwork that is related with the shipments.

Another advantage is the concept of third-party outsourcing. When a company hires another logistics organization to manage the shipping and distribution part of the business, the company saves its costs on many aspects. It also improves the quality of the products that are designed and manufactured. Most of the companies believe that 3PL service providers offer quality supply chain services instead of running some functions internally.

3PL logistics system brings many other advantages like less manpower and fewer business headaches. Having a self-business and being an owner of a company, one needs to do everything possible to ensure the profit margin remains intact and profitable. Third-party logistics definitely scrutinizes every problem and provides a solution to everyone’s needs.

Gift Ideas For the Many Summer Events

Although the summer is the best time of the year, it is also the most expensive time of the year between Christmas. There are weddings, bridal showers, graduations, Mother's Day, Father's Day, and other national holidays to celebrate. This means that you are not only forking out a lot of money for gifts, but you are also coming up with gift ideas that will be meaningful and thoughtful for the people receiving them. However, if you have all of these types of events to go to, you do not want to stress yourself out and ruin your summer with trying to come up with ideas. Here are just a few simple ideas that anyone would love to receive for their special day or holiday.

A beautiful flower bouquet is always a kind gesture for any occasion. If you need to go to a bridal shower, but have no idea what to get that bride to be, then get her a beautiful bouquet of flowers to brighten her home and her day. Flowers are also great gifts for Mom on Mother's Day, so think about sending her or handing her a beautiful arrangement of her favorite flowers to make her feel extra special.

If time is running short and you need a gift for the new happy couple at their wedding, then just giving some money will definitely please them. Money is a great gift because you do not really have to wrap it, and everyone loves receiving it. It's also a great gift idea for the new graduate. So, do not stress yourself out, and just go buy a card and fill it with money for one of the best gifts out there.

Project Management 2.0 – The Ultimate Benefits Of The New Approach To Project Management

NEW OPPORTUNITIES FOR BUSINESSES BROUGHT BY ENTERPRISE 2.0

The social network phenomenon has already transformed the consumer Web into so-called “Web 2.0.” Now Web 2.0 is affecting business processes in thousands of organizations by offering incredible communication and collaboration opportunities known as “Enterprise 2.0.” “All these things that are thought to be consumer services are coming into the enterprise,” says former Oracle Corp. President Ray Lane, now a general partner at the venture capital firm Kleiner Perkins Caufield & Byers. Major corporations all over the world, such as IBM, Procter & Gamble, and Walt Disney, have embraced Enterprise 2.0 technologies. We are witnessing the transformation of traditional ways of doing business, and this transformation is caused by the new-generation applications.

The term Enterprise 2.0 was coined by Andrew McAfee, an associate professor at Harvard Business School, in spring 2006. Professor McAfee introduced this term to describe the use of emergent social software platforms within companies, or between companies and their peers (partners or customers).

Through the adoption of wikis, blogs, collaboration planning tools, social networks, and other “weapons of mass collaboration,” as Don Trapscott calls them in his book Wikinomics, collaboration patterns are changing in today’s organizations. Enterprise 2.0 software and business practices provide managers with access to the right information at the right time through a system of interconnected applications and services. Examples of thousands of small companies as well as giants like Microsoft, Toyota, and many others show that Web-based Enterprise 2.0 applications let businesses obtain a huge competitive advantage in the form of enforced innovation, productivity, and agility through access to the collective intelligence of many professionals.

Efficient gathering and sharing of information, facilitated social connections within enterprises, and improved customer interactions are not the only benefits that Enterprise 2.0 software delivers to small companies and huge corporations. Let’s see how these tools can help to manage projects.

THE NEW APPROACH TO MANAGING PROJECTS

The Enterprise 2.0 movement is naturally affecting and captivating project management in organizations. Blogs, wikis, and other second-generation tools offer better opportunities for communication and collaboration. Thus they provide a great potential for improving existing project management practices.

Traditionally, a project manager is the major link in all project-related communications. This directly influences the efficiency of the team, as well as the manager’s own productivity. Nowadays, many companies still utilize Microsoft Excel spreadsheets or traditional project management applications, like Microsoft Project, for tracking their projects. E-mailing text documents and spreadsheets is still very popular, despite its many shortcomings.

E-mail is a closed communication medium, and many companies confirm that it does a poor job of capturing and sharing knowledge. For example, if you e-mail a document to two people, you then have three copies of this document to manage, merge, and differentiate. It is hard to work on this document simultaneously. This is not the only problem. Knowledge is buried in e-mails, as it is available only to the sender and the recipients, so all the other team members cannot benefit from it. For example, if an employee e-mails a status update to his manager, the change will only be visible to other people after the manager manually updates the schedule. This produces unnecessary work and delays the exchange of information. There is little visibility and control over the project if all information is buried in thousands of e-mails residing in employees’ mailboxes. The list of disadvantages could go on.

Traditional project management tools are not focused on collaboration, either. They were mostly designed with the top-down approach in mind and are not meant for open collaboration. These tools are focused on a project manager and make him the core element of the project communications. He first has to pull facts out of employees through meetings and e-mails, then put them into a file and communicate the project plan to upper management and clients. The process is then repeated every time something changes. The project manager also needs to play the role of an alarm clock, reminding employees of their deadlines and overdue tasks. The whole process turns out to be time-consuming and effortful, and it results in a heavy burden for a project manager. The amount of routine work sometimes does not leave the manager time for leadership.

Enterprise 2.0 technologies catalyze innovations in project management. These innovations can be called Project Management 2.0. The term highlights a new approach to project management, characterized by a dramatic shift toward having collaboration as the heart of managing projects. The new-generation tools take care of the routine part of a project manager’s work: reminding team members about deadlines, merging status updates into a single plan, and communicating changes. New tools also let people collaborate and share information easily. The role of the project manager is changing; he is becoming a project visionary, instead of a taskmaster. New-generation tools give him more space for being a project leader.

What makes the new technologies so effective? I will list the five key benefits below.

Making It Simple to Collaborate

One of the major constraints associated with traditional project management software was its complexity. Traditional tools have hundreds of features, which take months to master. Adoption of traditional project management software is often connected with spending a lot of the employees’ time and the company’s money on training. In contrast, the second-generation project management tools are lightweight and easy to use. They provide an opportunity to start collaborating immediately, without any delays for extensive learning and initial set-up.

New project management tools can be easily utilized even by unskilled computer users, making it possible to involve more people in project collaboration. A well-known example is blogging. It is very simple to share ideas in a blog and get feedback in comments. Simplicity drives adoption. When people like the software, they use it more often.

New software tools provide a much better user experience, which helps to solve one of the biggest challenges of traditional software packages. One of the major problems with traditional tools was the users’ unwillingness to update data regularly. Plans often got outdated and became useless because of that. New tools are much more convenient to use. For example, they let you create tasks in the system by sending e-mails from their Blackberry devices. This level of simplicity and convenience engages users and thus helps to keep information up-to-date. This is a critical component for successful project management software implementation. The power of new tools comes to the surface when they turn simple actions of individual users into a great product of collective work. In Enterprise 2.0 terms, it is called collective intelligence and emergent structures.

Collective intelligence is the capacity of human communities to evolve to higher order complexity and harmony, through differentiation, integration, competition and collaboration. In other words, it is a form of intelligence that emerges from the collaboration and competition of many individuals. This notion is closely connected with the term “emergent structures.”

Emergence is a way complex systems and patterns arise out of a multiplicity of relatively simple interactions. In plain terms it is a form of collective behaviour, when parts of a system do together that they would not do by themselves. Therefore, emergent structures are the structures that appear as a result of multiple, relatively simple interactions of a number of individuals. The interactions are uncontrolled, but are purposeful.

Together these two powerful principles make project management 2.0 tools powerful instruments for improving teams’ productivity.

Taking Advantage of the Wisdom of the Whole Team

The new-generation, Web-based tools give team members an easy way to contribute to the common repository of tasks and plans. These tools unleash the power of collective intelligence and change the pattern of project management.

In his book The Wisdom of Crowds, James Surowiecki states that “groups are remarkably intelligent and are often smarter than the smartest people in them. Groups do not need to be dominated by exceptionally intelligent people in order to be smart.” He also stresses that “decentralization’s greatest strength is that it encourages independence and specialization on the one hand while still allowing people to coordinate their activities and solve difficult problems.”

With the new technologies, people get a more efficient working environment where they can gather and share knowledge from different fields that each project team member is an expert in. The project manager guides the team’s work and chooses the right direction, based on the information received from the individual employees. The tools even help the manager to merge this information, turning an e-mail mess into well-organized timelines.

At the same time the new-generation tools let project managers control changes and the progress of the project work. Reporting is highly automated on all levels, including corporate executives, who get their view of the project automatically.

The reports are pulled on the fly from real data, so they are up-to-date. All these factors boost the team’s productivity and help the company make the right decisions at the right time.

Collective intelligence goes hand-in-hand with emergent structures, another practice that has a great impact on contemporary project management.

Many-to-Many Structure Benefits

Microsoft Project and many other traditional management tools allow you to have only a strict, one-to-many work breakdown structure of tasks (and other similar items). This creates several negative consequences. First, there can be only one view of the project, while in real life there might be a need to have many different views of the same project. Project marketers, business analyst, engineers, and testers might want to slice the project in different ways. Often, the same person needs different slices – for example, by release and by feature. This inconvenience makes the software less usable and thus people become hesitant to check plans and update them regularly. On one hand, these factors lead to obsolete and useless project plans. On the other hand, the necessity to select one work breakdown structure greatly increases the cost of mistake for the project manager.

The whole process becomes very tricky and requires a lot of up-front thinking, predictions, and responsibility for the project manager.

Project management 2.0 tools have fewer restrictions. They let structures emerge, without strong central control. These structures are born from lots of little interactions that are designed to solve specific problems. For example, collaboration planning tools, like Wrike allow work-breakdown structures to emerge from the bottom up. What employees design as the best work-breakdown structure for their tasks becomes a part of a bigger picture seen by the manager.

In these tools hierarchies are many-to-many, in contrast to the one-to-many hierarchy in Microsoft Project. This effectively means that you can pick any reasonable sub-set of tasks, create a view and share it with someone who needs this view. It is not like all-or-nothing sharing of a file. At the end of the day more people can collaborate. As the new tools allow team members to make changes to the initial structure simultaneously, more people can organize and reorganize their views, and more structures emerge. The resulting structures fit project participants much better than one stiff work-breakdown structure.

This agility helps to bring iterative and incremental practices into project management without giving away the control.The project manager’s job becomes more about coordination and guidance than routine manual updates, and the whole team can react to changes much faster.

Project management 2.0 tools allow you to start with one task, add twenty more, organize them, add more tasks, reorganize them, and repeat the process on a daily basis by many or your employees and managers. When seven employees share their daily to-do lists with a team leader, the team leader gets a bigger picture. When five team leaders share their teams’ plans with project managers, a picture gets bigger. When it goes through directors and the vice president to the CEO, the whole structure evolves from what was one task into a big ecosystem that perfectly suits the organization. All with a help of very simple tools and very powerful principles that stay behind those tools – collective intelligence and emergent structures.

Empowered by emergent structures and collective intelligence, project managers can combine field knowledge coming bottom-up with the guidance coming top-down. There is also a significant benefit for executives: emergent structures emergent allow you to get complete visibility that bridges the gap between strategic corporate plans and daily to-do lists of employees. Getting the Bigger Picture

Full insight into what is going on in the organization is vital for aligning internal business resources with the requirements of the changing environment. For example, if we speak of software development, the bug fixing schedule may affect the next release schedule. The next release schedule in its turn may affect the marketing campaign, which may affect sales plans. Sales plans will naturally have an impact on financial plans. Having the whole picture helps corporate executives to make a better choice for allocating internal resources when there is a need to react properly to the changes in the business environment. Project management 2.0 tools empowered by emergent structures and many-to-many hierarchies are naturally able to provide this big picture view. Emergent structures help to turn separated strategic plans, quarterly plans, project plans and daily to-do lists of team members into one business development master plan. Many-to-many hierarchies let corporate executives see each project and their whole organization from different points of view. These two powerful principles allow managers to drill down to each team member’s tasks and follow the work of the whole enterprise at the same time.

When project managers can easily view every detail of their project development, and corporate executives are able to use their business resources most rationally, projects bring value faster.

Productivity Boost

With new tools, project managers save hours on routine operations related to aggregating the information from e-mails and meetings and keeping it up to date. Reporting is simplified on all levels, as part of it can be easily achieved by sharing the related part of the collaborative workspace. Second-generation project management software gives every team member an opportunity to be aware of the changes in the project without unnecessary meetings, e-mails, and phone calls. The collaboration becomes much faster and much more productive. It results in faster project delivery and faster return on investment.

To start innovation and improvements in your organization is easy. As was already mentioned above, new tools are very user-friendly and easy to adopt. You just have to pick the right ones.

PROJECT MANAGEMENT 2.0 TOOLS: A NEW COLLABORATIVE SPACE

Perhaps the most popular of the new-generation applications that companies can benefit from are blogs, wikis, and collaboration planning tools.

Blogs

Both internal and external use of blogs can be advantageous for a project. The major benefit of internal blogging is that it gives the opportunity to facilitate direct communication between various layers of an organization. Blogs allow team members who otherwise would not have been aware of or invited to participate in a discussion to contribute their expertise. Thousands of companies now use blogging tools like Blogger, LiveJournal, Typepad, Movable Type, WordPress or Radio UserLand. For example, British Library and University College London collaborate on a project called the LIFE (Lifecycle Information for E-Literature) through a blog. A blog is a way for these two organizations to work together more efficiently and keep all the project information in one place.

External blogging helps to encourage the strongest community goodwill, and this goodwill, in turn, promotes significant marketing and sales gains. Thousands of companies are already reaping the rewards of their investment in external project blogging. For, example, companies like Microsoft, IBM, Google, Sun Microsystems, and SAP write project blogs on a regular basis. The number of non-technology organizations that have their own project blogs is rapidly growing, too. One of the most prominent examples is the From Edison’s Desk blog – a blog for the GE Global Research project. It offers an opportunity for technology enthusiasts around the globe to discuss the future of technology with top researchers from one of the world’s largest and most diverse industrial research labs.

Wikis

A wiki is another technology that can be successfully applied to managing projects. Its basic advantage is that it lets users to create, edit, and link Web pages easily. Wikis usually have very few restrictions, thus they tend to accumulate a shared knowledge that was traditionally kept out of stiff corporate enterprise software and intranets – the knowledge that was usually buried in e-mails. A good example of wiki usage would be Dresdner Kleinwort, the investment banking division of Dresdner Bank AG that gained an e-mail traffic volume reduction by 75%. They also slashed meeting time in half. Another example is a Linux-based operating system called Fedora, which uses a project wiki to bring the end user’s point of view into the product development. There are a lot of wiki solutions that are be successfully used by many companies. The most well-known is an open source wiki called MediaWiki, the one that is used by Wikipedia.

Wikis and blogs are good generic tools that can help to share knowledge much more effectively than e-mails. To gain visibility and control over operations, companies also need to empower their managers and employees with a collaborative planning solution.

Collaboration Planning Tools

New collaboration applications and platforms combine the level of control associated with traditional project management software with the benefits of Web 2.0 applications to give a productivity boost to companies and bring better visibility. The best tools in this field are integrated with e-mail and easy and inexpensive to adopt. They democratize project management software. Can you provide some examples

Collaboration planning tools bridge the gaps between employees’ to-do lists, project plans, and strategic goals. With the help of these tools, a project manager gains complete visibility of all the projects he is responsible for. The upper management knows what is going on inside of every project and has the whole picture. The software takes a lot of routine operations on its shoulders – turning e-mail mess into a nice-looking timeline, reminding people about overdue tasks and building reports. These tools help to collect information and make it accessible to any team member anywhere. This expedites information sharing and accelerates decision making.

Governmental, educational, commercial, and non-profit organizations all over the world are embracing project management 2.0 tools to improve their project management. Corporations like McDonalds, Walt Disney, Apple, Toyota and Capgemini utilize second-generation project management applications within their departments.

CONCLUSION

The use of innovative project management technologies promises to have a profound and far-reaching effect on how projects are managed today. These technologies let companies acquire the key ingredient to success in any business – they help companies make better decisions faster. Project management 2.0 gives a great productivity boost to project managers and their teams.

Today, the project management landscape is changing, opening new competitive advantages for companies. While some companies are struggling with the pains of traditional project management tools and e-mail, others are becoming more efficient and innovative by leveraging the benefits of the new technologies. I hope this article will help you adopt some of the Project Management 2.0 tools and practices.