A Dissertation About Issues In logistics management

A Dissertation Ab come in Issues In logistics anxiety1. IntroductionThis dissertation is ab step up logistics way. It is a part of the come forth grasp caution which involves with the inf number 1, outflow, procurement, keep and storage of in force(p)s and portions. The interpret cooking stove exists mingled with come forwarding point to spoken communication point.As mentioned by Ackerman (2000), Logistic counseling radical tout ensembley pith having a right thing, in the right place at the right date. This declargon oneself is focus on the shapeivities of bangr of famous union to per pains in outrank to make the organisation a supremacy. In to solar days environment thither is a need to stay updated in tramp to know the flaws in headache, to think at the right era and act accordingly. there is alship canal a complexity in dealing with the ever-changing node fatalitys, their expectations relating to price, competitions in the economy and so on. All thes e yield to be met efficiently in raise to cope up with the situation. The success of a goods or service dep completes on how well strengthens of the distribution st regulategy is studied and how the suppliers, food marketplaces, storage and loony toons atomic number 18 dealt with right dodging. The upcoming aras deal with the entire c be for gnarly in the transformation of a in the unsanded hearty into the ultimate consummate crossway. Logistics attention presents a variety of tools to understand the logistics in effective close making and how it goes in relating the broader issues in the entire egress cooking stove in that locationby finding out ways and meat in achieving the strategic goals (Ackerman, 2000).The association that is selected here is Tolam Logistics which is located in Hong Kong. It was established in 1996 by Mr. Eric convulse who had about 20 years experience in freight and tape enthr all. The TLs countenance One S choke shop logistics r un by all reference of facility of logistics desire storage, speech, custom clearance and so ontera The TLs main guests include Toshiba, Sanyo, Kleon, Fujis air conditioner and Plasma Televisions. It had a w areho work of 100,000 sq. ft. and owns around 32 trucks. The lag strength resulted to around 100 including permanent staffs (Magee, 1985).Tolam Logistics is a logistics keep gild active in the distribution of goods that are received at its wareho consumption. The main points that we focussed here is wareho utilize and distribution. The objective of this case study is to discuss its objectives, strategies and organisations aim inTransportation preparation TL uses its own trucks to raptus the goods without depending on outsourcing of imparting. Only when the demand exceeds its transport facilities it does not hesitate to make use of outsourcing and in situations where the demand is low it has no problem to sit its trucks idle. They use their trucks in overmuch( prenominal) situations to generate income by outsourcing their trucks to other uses. E.g. In monsoon assuage due to low business activity at that eon not using outsourcing trucks and deploy that own trucks which runs on resolute travel guidebook and fixed contract which surety of fixed set down and income. fund vigilance TL provides a sound gunstock formation. They receive aims in the dark and make despatches in the day snip. They forecast the ware provide space and exaltation on a quarterly basis in set to know its requirements. Companies usually reserve their space in the warehouse depending upon the volume to be held in the warehouse. They have latest technology for loading and unloading 14 vehicles at a period.Information technology TL has an ex give wayed use of figurer forms to record various transactions happening inside. It maintains a separate database for all(prenominal) node. TL is now in the process of developing a parvenue IT integrated system that will open up late exits to the company. TL does have difficulties in providing diametric legacy systems, so they are planning to install a common platform on the web so that all its customers buttocks be satisfied at a time. They are implementing grade insigniacode system to tracking goods(Frederick Ross, 1996)2. Aims and ObjectiveWe are learning about the issues of logistics management and for this end I am planning to seclude up the company Tolam Logistics as the main subject. Tentative research questions gouge be get winded for this purpose is What are the main occurrenceors that affect the logistics management at TL, Do theories of logistics move over at the ground level?, How distinguished is logistics in managing customer blessedness?, What are the performance measures, monetary valueing manners and metrics used for logistics management?, mickle modern communication technologies impact logistics management.3. Theoretical Background3.1 Logistic dodge and Plannin gThe put out range of a function strategy is main link to process of business strategy and it should taking care of balance maintained mingled with the cost and service bided by pie-eyed.As mentioned by Tompkins (1998), following factors have to be considered here,The customers and suppliers should be aligned in regard to the immanent company operations. Companys inflow (Raw Material) and outflow (gross r pull downue) should be maintained as per market demands and trends with the suffice of internal company operations likes collect, pickup, packaging, deliver and so forthThe marketing and gross exchanges plan should be aligned to collide with the render arrange strategy means like E.g. For entrance a new product in the market sales plan like marketing should be start after enough employment flow carry on to foregather the demand of market, If market trends change the immediately we have other strategy for product modification.The bully expenditure has to be aligned to the ply filament operations. E.g. Firm have enough capital for monthly fixed expense like production cost, sales, salary, rent, marketing and promotion cost etc.The HR social structure has to be aligned to the supply chain E.g. HR structure have enough manpower to operate the production, sales and marketing etc dept.The supply chain has to be aligned in order to master the investiture policies.The supply chain has to be aligned in order to meet the growth targets.The supply chain has to be aligned in order to make room for expansion of the business.Logistic planning involves the use and management of all logistic resources in order to maintain the desired cost and service performance. The ruminations include the inscription positioning, size up levels, number of warehouses, types of warehouses, mode of attack aircraft carrier selection and so same will be forwarded. The company provoke decide on whether to deploy a senior eminent school service system or a low cost s ervice method. A high cost method deploys more(prenominal) warehouses, use unbendable rescue imparting and maintain high stock levels. This method of course is mostly difficult to keep down the high cost. Whereas, a low cost service method gives respect for cost by reducing the number of warehouses to one, use specious transportation and maintain long-lasting lead time in say stocks.Through im foldd warehouse design the cost of handling materials roll in the hay be reduced to a great extent prior speech communication goods arrange as to advantageously loading and unloading from trucks, by arrange direct vehicle loading of materials from the warehouse and implementing machine-driven installations are 2 methods that crumb reduce handling material be. By conducting an assessment of the transport cost and implementing the right choice by comparing current transport be with that of the occurring standard rates can bring down transport costs to the minimize with routes selection, speed of vehicle, Regular maintained vehicle, road maps, uses the GPRS system to reach at delivery point. This type of logistic planning goes a long way in attaining the right logistic system. Company has to consider four main points piece of music planning a logistic system they are as stated preceding(prenominal), customer service levels, facility location, inventory decisions and transportation decisions. These four levels are related to each other and and then integrated planning has to be considered. Planning here means excogitation the logistics network as a configuration of warehouses, production plants, handleing areas, stocking-areas, transportation and information systems that aim at balancing an equilibrium between the overall costs and the r correctue. Briefly idea for the logistic planning means the join cost ideal should be studied to consider the supply chain.3.2 node Service StrategySupply chain is basically considered as a strategic concept that involves understanding and managing the sequence of activities -from supplier to customer-that add value to the product supply pipeline (Tompkins, 1998). The role of customers in the supply chain market is not incidental. Every company in this chain, irrespective of market size mainly they thankful to its customers as the fact is that in all profit of firm there are customers are in centralize whom to buy the goods and services produced by each one of them. This century attach the end of monopolies and therefore customers can make an array of choices. When customers decide not to buy products in a particular supply chain, then no dubiety the company would collapse without earning any revenue for the expenses incurred in launching the product on the stage of volume and decline stage.So, the supply chain should be structured in such a manner that there is a common link between the products as such and the end customer. It is because that the tastes of customers keep changing and t heir expectations goes on rising, when product cycle at saturation and decline stage at they began decreasing brand loyalty and put in for anything that attracts them. Thus the importation must be put on conducting effective market analysis to know the of necessity of different groups of customers to whom the offer is to be make. Its main aim is to polish its contact with the customers. The rationale foot this strategy is to improve services provided directly or indirectly to its customers and to use the information in the system for targeted marketing and sales purposes. A smorgasbord of metrics should be used to assess the customer service, like the companys power to fill the orders in limited time or the delivery of the products on the due date. Other researches can be conducted to find out the discernment for not delivering the products on the due date. in that respect is no compromise for an act of negligence in meeting customer satisfaction as it is the customers who at l ong last judge the life span of the company.In todays fast ontogenesis economy, it is not the matter of fact that the big beat the small but it is the fast beats the slow and the accurate beats the inaccurate. Below are mentioned septet steps to reduce the fulfilment costs by improving customer service at the same time (Tompkins, 1998). According to him, the following points are important with regard to supply chains,Integrate with order entry system In todays hyper competitive economy it is very difficult to maintain order fulfilment through the internet. Most of them placed through internets are managed under the weather and which end in resulting distorting customer satisfaction due to delay in product delivery. Integrating a systematic order fulfilment process tends to reduce manual labour that saves time, improvers profitability and customer satisfaction E.g. prescribe received in night and make delivery in the day time.Build in adaptability Providing exceeding customer s ervice has proved to be challenging in todays competitive environment. Companies can meet this challenge by proving to be adaptable with the customer wants makes changes in their orders right from the bargain for and even upto and after shipment. This can prove to be successful as the customers can get what they want even if their product changes from the market. E.g. Tailor made transportation system like packaging facility as per weather.Confirm with bar codes By changing the bar coding into an automated one ,the company can save a lifesize amount of its time and thrust and even implement perfection in planning as it presents sincere time data instead of mere projections. E.g. In the ware house material arranged with barcode easy to locate particular product with the barcode system we can easily shift goods as per priority of delivery and delivery places.Conducting automated pickings Automated technologies are easily fulfills the needs of customer thereby increasing customer satisfaction and legal transfer in recurrent business in a shorter time span. E.g. Goods collection from customer coating is one of good example of automated pickings its save time and bullion of customers which speech repeated business.Automated shipping plans Using automated shipping plan the workers can pick to a predesigned way of stacking the containers without termination for trial and error methods. This saves a lot of time and capacity of the workers busy in stacking the containers and speeding the delivery with less expense than without ASP. E.g. Barcode system on containers and on the area of ware house which easily track the goods and easily stacking and speeding the delivery.Automate shipment chip By applying automated verification together with automated picking and using bar codes, more time can be saved on packing, verifying and shipping process.Sourcing orders base on facility workload Logistic managers should use the method of exceed utilize of space when multiple warehousing and distribution facilities are lendable in order to improve responsiveness and maximize flexibility.The above factors tend to make the shipment reach the customers more quickly and which therefore has a direct impact on their satisfaction levels. The standards of service provided to end customers should be determined and mentioned on top of the list. The remaining strategic decisions should to a fault be taken considering the customers interests. Frohne, (2008), Organization has to adjusting the supply chain as such to meet the market demand and product features, Determining the relation model among the supply chain participants, Selecting the suppliers, Determining on the distribution channels, Adopting a specific method of stock h dodderinging, Determining the location and nature of the warehouse, Formulating guidelines in selecting the transportation.Taking a decision on any of the above mentioned factors without giving due consideration to the customer nee ds may seriously affect the implementation of the cosmopolitan strategies of the supply chain, as the strategies of the supply chain are competitive in nature that aimed at end customer satisfaction. The focus of supply chain on the customers can be studied more explicitly using the Quick Response concept, which means identifying the demands and reacting to its changes as quickly as possible. This concept was developed in relation to textile industry in order to avoid losses due to change in demand. The QR nature is such that it assume in close cooperation with the supply chains by providing uttermost satisfaction to its customers by reducing the costs to its minimum. This becomes material if the customers provide seasonable information to the suppliers regarding their demands and they make timely supply of the demand. This method would no doubt increase sales by reducing the costs by bringing in profit to all the supply chains involved.3.3 Procurement managementProcurement is ap propriate goods at best cost which fulfill the requirement of acquire with good quality, quantity, time and location. It is regarding the profit orientation fastest growing business firm rather than simple cost cutting measures. there is an old saying Goods well bought are half sold, this means that the success of an organisation depends on the efficiency of its purchasing discussion section. If organization purchase good quality raw material then its increase the productivity of internal operation, quality of final goods, reduce the wastage. Buying dept and selling departments are interlinked, in other words if buying dept purchased goods without victorian consultation with the sales department which knows the nature and trend of the market, then the sales department cannot succeed to sell the goods at a profit. E.g. if purchase department without consult with sales dept purchase water resists packaging material in monsoon season to purchase seal off material for packaging its indirectly effect on business cost, time etc wastage. In monsoon season low business activity need low quantity of packaging material need to know quantity of material as well. Scientific purchasing methods should be adopted in order to purchase the right product at the right price and place, in right quantity and quality and from the right supplier. All these factors are interconnected. There is always confusion for all the charges regarding what to buy, where and how to buy. All these problems can be lick by performing the following purchasing functions. Jones, James V., p82(2006)Planning the purchase of goods The producer should decide on the required amount of stock of raw materials and parts that is to be purchased on the basis of expected volume of sales and the estimated rate of production. It has some sub functions that has to be followed to make the purchase effectively. They are preparation of the budget, determination of quantities to be ordered, stock turnover, consid eration of effects of changes in fashion and price changes.Assembling It means gathering goods from various sources and bringing them to the business place. E.g. Head dresser ordered for packaging material and workshop in warehouse then need to supply at all limbes on right time. If goods received from japan to deliver at wedlock London then japan branch send goods to main office at uk branch then they supplies to London branch and London branch supply to north london branch whom deliver it to customer.Locating the sources of supply The buyers have to search for various sources of supply and maintain contact with them. In the selection of the suppliers, the buyers should consider the efficiency, rate and location, capacity of supply goods, goodwill and monetary stability of the suppliers. It is always desirable to maintain liaison with two or more suppliers to come across uninterrupted supply in case of non handiness of raw material from one supplier buyer sure for functiona l from another supplier and supply of raw material not interrupted. grocery store news The buyers should be always aware of the market, the prices, the change in fashion, tastes and situation of the customers should be updated. The launching of the product and their impact on the customers should also be monitored by survey of customers like-dislikes, market share, market trends etc.Negotiation of wrong After the above activities have been completed the buyer has to finalise on buying. For this he has to negotiate with the suppliers foothold and conditions. Usual negotiations will be on the quality, quantity, price, discounts and terms of delivery.Transfer of title Finally, immediately after the hire the buyer should get the title transferred in his name. He should get the relevant documents like final agreement copy, terms and condition letter, quotation etc in his custody.To take a quick look at how CEVA logistics a leading supply chain management company has tied up its hands with Ford, a global leader in the automotive world, proved to be a success. The operation is located closely to the plants proximity and provides small lot market consuming areas, container management and efficient transportation system. CEVA was awarded three awards for its efficient supply chain in providing customer satisfaction through maintaining quality, fast delivery and excellence in management from Ford.3.4 Financial aspects of logisticsFinancial managers have a responsibility to raise capital for maintaining inventory and also for the firms overall profitability. There is a global solution for low risk work. Once a company enters to do business globally its financial risks also arises. It needs to ask questions as to how it will get its money in business or whether the goods will be accepted only after the shipment. Companies can use various financial instruments that banks offer nowadays in the form of letter of credit and the like. The payment condition regulates the fl ow of goods or services in the logistic system and the mode of payment. Some of the common means of payment are way bills, letter of credit, commercial invoice etc. on the basis of payment conditions banks have adopted a new means of payment under the term called financial engineering. These have proved to be very much useful in enabling the forfeit of capital that is blocked in ventures and also reducing the time of monetary resource being locked up in business. They also have to verify the terms and contract of payment with customer and what is fixed expense are occurred against payment method with customers.The currencies of various countries can also affect international logistics in many ways. These are foreign exchange control and risks of exchange associated with warehousing. This can be reduced by selecting specific company locations, countries that have a stable market for their currencies. By reducing the order processing time can also minimise the risks involved in exch ange rate. 3.5 packaging and Inventory Management packaging is technology of preparing goods for transportation, sales, warehousing, logistics, evaluate the design of product. promotion is reviveed with the planning, distribution, sals and storage etc. Packaging makes attractive to the end consumers the old product. It is a group effort of the designer, the researcher, the engineer, the marketing expert, the sales department and the top management. It should be designed in a systematic manner in order to achieve its very purpose (Voortman, 2004).The various factors to be considered while taking packaging decisions are the size, colour, material, text, brand name, caption etc. In packaging designs the AIDAS formula (see Figure 1) has to be successfully implied. AIDAS represents five basic points. They are attention, interest, desire, action and satisfaction. These are very much important in the supply chain strategy which goes ultimately in meeting the customer needs. The need of packaging is to ensures the supply of right quantity and quality of the product, to protects the product from any damage caused due to dust, mishandling, pilferage etc, to makes the handling of products conveniently, to facilitates the storage of products, to makes it convenient to furcate our products from that of the others, to makes the product more attractive, to wait ons the customers to reuse the product for some other purposesPackaging holds a very important place in the supply chain logistic management. Only when the products are presented well the customers has an urge to buy it more frequently.Fig. 1 AIDAS first- self4. Inventory Management Inventory management aims to handle all function correctly with tracking and management of material. Inventory management is very wide definition like to replenishment lead time , carrying costs of inventory, asset management, forecasting, valuation, visibility, future inventory cost, space, quality etc. The ultimate aim of supply cha in management is how well you manage your inventory. Manufacturers face a number of challenges which require not just exceptional planning but also an effective communication setup that keeps you updated at the spur of a moment. From rapid changes of customer demands, globalisation or even natural calamities can cause your inventory to be stuck up coat way for no wages to the employees. and then there should be a quick information system to discuss the inbound and outbound issues touch the demand and supply. For this there should be a well managed supply chain inventory management in order to keep the business track without any interruptions (Bowersox, 2000)There are benefits and risks of holding inventory as mentioned below,Avoiding risks of sale If a desired amount of inventory are stored that are gain to be sold, can bring in return to the company. It can avoid losing its customers for non supply of products. Shelf-stocks are those products which are sold to its customers w ith little or no modifications an example of such a product is automobiles.Quantity discount When goods are purchased in bulk quantity the suppliers offer a discount. This is in fact helps the buyer to make a more margin in profit. level off sometimes suppliers are ready to supply goods on credit for time period like one week /month thats all capital invest in other source for time being help to cash cycle.Reducing ordering costs Each time an order has to be placed it incurs certain expenses like mailing costs, typing, approving and the like, so if inventory is stored in bulk it can reduce the ordering costs to a great extend.Reducing the set up costs scrawl up costs is incurred each time a product is produced. Maintaining large stocks of inventory helps in reducing the set up costs.Reducing risks of production shortage If any part of a product is unavailable it may result in the production to stay at a halt. Therefore it is good to hold inventories to maintain sufficient flow of supply to the customers.Avoiding risks of holding inventories Reduction or decline in the market price It faces the risks of price cutting by competitors or the arrival of a new product. In such situations holding inventories in large amount would only prove to be a loss for the holding firm. Also inventories more money on new product like advertisement, launching, promotion offers, discount schemes etc.Deterioration of the product Product may get worse when it is held for longer periods.Obsolescence of the product The product may become obsolete and outdated when the customers tastes and preferences change. succession dealing with inventory management in the supply chain it is also advised to go through the costs of holding inventory. The costs associated with inventory are of two types direct costs and indirect costs. The direct costs of holding inventory are the materials cost, ordering costs and carrying costs. The indirect costs of holding inventory are costs of funds tied up in inventory (opportunity cost) and the costs of running out of stock (stock-out cost) (Waters, 2003).When critically evaluating the inventory management we can sum up the objectives like to ensure that the materials are available for production without interruption, To maintain sufficient stock of raw material in times of shortage, To ensure that inventory of finished goods are readily made available to meet the customer demands., To maintain a balance between the inventories., To prevent the inventory from deterioration by providing proper warehousing and insurance.From the above mentioned points it is evaluated that inventory if not controlled properly may both way prove to be wastage to the concern. This has induced the need to find out techniques to control the inventory.4.1 Economic Order QuantityEOQ (see Figure 2) is the level where entire demands of product is constant over and each new order is delivered in regularly when in the inventory is reach at zero level. It is im portant to note that only the right amount of the inventory has to be stored. EOQ means the determination of the right quantity to be purchased. A balance has to be maintained between the carrying costs and the ordering cost. EOQ is the point where the total cost of ordering and the cost of carrying the inventory would be the minimum. For EOQ we assume that the ordering cost, rate of demand, purchase price and delivery quantity are constant with fixed lead time. The main point here to be noted is whether you increase or decrease the purchase the total of all the costs should be maintained at a minimum (Stock, 1993).Fig. -2 Formulas for Economic Order Quantity.Source- Google Image.4.2 ABC analysisABC analysis (See Figure 3) is a technique of exercising selective control over inventory items. It is a method of overbearing material according to its value. Its a mechanism for impact on inventory cost by identifying items. A concern need not exercise the same degree of control over all materials. Materials of high value should be closely controlled than materials of low value. Accordingly, the materials will be assort as A, B and C. A sept material constitutes only a small percentage of the total items but they have the highest value. By category items constitutes a higher percentage of the total items but have only a medium value and the C category items constitutes the highest percentage in the total inventory but it has the lowest value. ABC analysis is base on the principles of Selective Inventory Management.Fig-3 ABC Analysis.Source Google Image4.3 inclination of Re-order levelRe-order level (See Figure 4) is that level of inventory at which the firm should place orders in order to maintain stock of the inventory. It is with regard to the quantify of purchase. When orders are placed new products will reach the before it runs out of stock. Last minute order placing is not found here as the orders are placed slightly above the minimum stock level.The above techniques can go on a long way to control the sufficient inventory. As inventory forms the life blood of a concern not a minute carelessness can be made in maintaining adequate stock of inventory. As there is a supply chain all over the globe it is high time to throw in with traditional inventory management process and continuously manage inventory through the global supply chains to optimise the inventory. The excellence in supply chain is required to strike a balance between the lead times, budgets, inventory costs and the risks. In order to maintain best utilization of inventory it is necessary to balance the supply chain management against the business policies, changing market demands, risks and other constraints. It makes it important to know what inventories to carry, how, when and in what form.Fig. -4 Diagram of Reorder Level.Source- Google Image.5. Physical Distribution and Monitoring work5.1 WarehousingAnother important area which forms an important part of the supply chains strategy is the provision of proper storage and warehousing facilities until the goods are ready to be consumed by the end customers. Its primary aim is controlling the movement and storage of goods until they are demanded in the market. Warehouse management system aids in supporting the associated areas like transportation, put away and picking (Frazelle, 2002). Here the warehousing systems can be managed in both ways either manually or automatically. In order to explain this much better an illustration is explained below. A UK based company is a shaper of books, cards, antiques and other souvenirs. The company has to ship its products to more than 500 destinations around the world. straight off to know the challenge it has faced, it managed to build up its own warehouse of a 10,000 foot and used paper based system. All the products have to be located based on the colour or relying completely on the staffs employed there. But this system proved to be inefficient as there always raised confusion between the products as different products sometimes were of the same colour. This took up a lot of time and energy of the concern and they were piling up with shipments that were yet to be dispatched. This started to affect the concern both on its revenue as well as its customer satisfaction. It also led to the duplication of work as the same lists were printed twice. They recognized that th