Vendor Management and The Different Aspects of Management in Freight Forwarding Companies - Case Study Example

This chapter starts by presenting a background discussion of the selected topic of this thesis. At the end of this discussion, the research question is formulated and the main purpose of this thesis (which are three folds) is established. What this research hopes to contribute and the delimitation’s of this study are also discussed

1.0Introduction
Vendor management (VM) is a strategic tool employed by present-day businesses to efficiently integrate suppliers, manufacturers, warehouses, and customers so that merchandise is produced and distributed in the right quantities, to the right locations, and at the right time in order to minimize system-wide costs while satisfying service-level requirements ( Cheng, Lai & Gunasekaran 2006). In the 90s, Vendors management within the mainstream of supply chain management (SCM) gained momentum and received due attention from practitioners and researchers. Beaumont & Comer (2003) refers to procurement as the process in which goods and services necessary for a company’s operations are obtained from other organizations. The researcher cautions that organization should be aware of the fact that purchasing usually constitute between 60-70% of the cost structures of companies.

Freight forwarding involves the transfer of goods along cross-border, national, and international routes, to reach pre-determined destinations (David and John 1993P.1). In other words, Ramsay (2000), argues that It is an intermediary facilitative service between importers and exporters. Freight forwarders take up the responsibility for the transfer of goods and utilities between the client and various transport destinations. The transportation of goods, services, and utilities between international destinations involve complex legal requirements. A freight forwarding service takes up the duty of meeting all of these legal requirements with relative professional ease.

Gau, Lau & Neo (1999) cited in Beaumont & Comer (2003) stipulated that procurement is a change of terminology. For freight forwarders are strategic players within the freight forwarding supply chain. They increase the level of customer service, information sharing, and inventory cost reduction through collaborative relationships or partnerships. Here, Mun (2005) stipulated that the freight forwarding supply chain depends on the level of customer service which in turn depends on information technology. Thus, through their activities in Singapore, the clients are obviated from the rigors and tension associated with the movement of goods to various destinations around the globe.