Logistics in Context - Essay Example

INTRODUCTION   Young’s seafood is well known Sea Food Company, with its headquarters located in Grimsby. Grimsby is basically a small seaport town set up on the Humber Estuary in England, UK. As a quality and efficient caterer to its restaurant clients, Young’s sea food is fast building up a chain of restaurants with an annual turn over of more than £320 million each year. Young’s Seafood has fast become one of the most desirable eating joints in the UK and the leading sellers of frozen sea foods in the country. The company boasts of being the largest employer in Grimsby and its consistent expansion activities are attracting high employment from adjoining areas as well. At present, the total strength of the company employees’ stand at a robust 5600 figure spread over 30 countries in international destinations.  The sea food restaurant chain has been able to sustain the market glitches due to its consistent performance and desire to lead the industry with exhilarating new techniques to attract and help out people enjoy more fish. The development of the Grimsby town and the Humber region was eclipsed till the 19th century. However, the business activities initiated with the building of new ports and docks which led to the sharp rise in the export / import activities of the Humber region. At present, the Grimsby Port and Immingham possess the largest tonnage capacity in the UK, and the deep waters of the Humber playing a perfect host to the largest shipping companies across Europe, thereby being the main promoter of the region’s economy. Effect of Globalization on the Company The far reaching effects of Globalization have already transformed the sefood industry across the globe. Young’s seafood, Grimsby is not an exception. Globalization has assisted the company to reform its production methods, expand its distribution area, and venture into the previously unknown territory of retail marketing of seafood industry. The company is looking at new ventures and investments along with some acquisitions in the Humber region so as to support the rising needs of its clients. Also, the power of Globalization has revealed an all new territory of clients to the company who are willing to pay more for better quality, rather than paying less for more quantity. Therefore, grasping this opportunity, Young’s seafood has been able to legally source better quality product to clients worldwide and as a result command a larger market share with higher profit margins. Youngs sea food has been able to attract a lot of attention from its customers as well as competitors. In order to share the profits and name of the company, many small companies dealing in sea food have merged with Youngs seafood. Also, a number of local and international retailers and brand names have associated themselves with the company. Such types of mergers and acquisitions made by Young’s seafood in the recent past are a direct result of the globalization of the economy, which has made it simple enough for such business activities to take place, (Alcamo, Leemans, Kreileman, 1998).  Referring to the effect of Globalization in the context of logistics advantage to Young’s seafood, the recent global logistics regulations have proposed the third party logistics policy. This policy helps small scale shipping and logistics companies to enter the logistics market without much apprehension. Young’s sea food being a large scale multinational company is able to look forward to reaping more benefits by outsourcing their logistics to these small scale and third party logistic companies. This would subsequently save their money, time and resources which is in fact being spent on setting their own logistic setups, and therefore devote more time in efficiently running their sea food supply chains, (Samaddar, Nargundkar, & Darley, 2006).    Effect of the Humber region on the Logistics Activity  The Humber region has played the most significant part in the rapid development of the company – Young’s seafood and the entire region as it is a hub for a diversity of resource mixes and supply infrastructure. The unique location of the Humber region, and efficient port connectivity handling more than 17% of the country’s sea trade, it has fast become the busiest trading centre in the UK and is ranked at 4th position in Europe. With easy and accessible connection points to the National Grid, the Humber region has no shortage of power supply and resources for new energy developments in the area. Huge volume trading of natural gas and other petroleum products, in close proximity to oil refineries has attracted new companies to the area which have broadened the market horizons for the Youngs sea food.  With a total strength of 48,000 people employed in the Humber region, and a huge bulk of shipping and logistics companies catering their services to over 50 nations through 175 shipping routes across the world has been the prime advantage to the sharp rise in the company’s business. The Humber ports have offered a fast and efficient connectivity to the company through which it has spread its business and outlet centres.  Moreover, the connectivity of the region to the UK’s mainland helps Young’ss to get a direct access to a vibrant market of 40 million people at a drive of just 3 hrs away.  Also, the logistics and transport connectivity from the region to the Rotterdam offers a fast entry to the company into Europe and other adjoining markets. The government has also identified the Hull and the Humber region as the “Global Gateway” which connects the North of England, the UK Midlands and Scotland to the world. Also, along with the entry to the E20 countries, it is well connected to from Limerick, Ireland to Northern Europe. The Humber region has enough of skilled workforce which is another criterion for the growth of the region. Skilled professionals from the Grimsby Institutes of Higher education and other training institutes, facilitates education in subjects like supply chain management, logistics, retail management, trade liberalization, business management, value chain management, total productive maintenance etc., are the spearheads of the growth and development. Innovative programmes in the logistics management are being offered especially by these institutes which help the graduates to develop skills in the field of ensures logistical and supply chain activity. Thus, the Humber region is offering expert and skilled professionals for companies like Young’s seafood to build their work force and enhance their supply chains through effective management skills, (Stadtler and Kilger, 2004). Moreover, since the skilled expertise belong to the local area, it becomes much easier for companies to hire them without the issue of relocating these skilled professionals and experts. This in is a way saves a part of logistics cost of the company for transporting / commuting these professionals from far places.   Effect of the European Union on the Business The total of 25 countries of the European Union, with an estimated total population of 450 million, is the largest market place for seafood in the world followed closely by US and Japan. However, since a very long time, there exists a gap in the demand supply chain in the region. The main reasons of this gap are the government strategies, regulations, import/export standards and measures of the seafood industry.   In a recent change, the new laws of the EU state that all fishing stock needs to be accompanied with a authority certificate from the shipping vessel, which is being seen as an official hurdle by most fishing companies.  In another compliance to be followed, many food retailers are required to purchase fish from certified fisheries only. In view of these challenges, many companies have reported their dissatisfaction and the EU has planned to come up with new tariff, trading and fish auction rules of companies functioning within the EU. Low labor wages and irregular pricing is also a subject which will be soon looked into by the EU and the government. It is important that the government works in unison with the companies for the development of the economy as a whole. The government has promoted new innovative methods and techniques for process and supply chain enhancements of the seafood industry.   Young’s seafood being an international seafood company is not isolated from these situations and concerns spread across the industry. The company definitely faces these trading (import /export) issues (discussed above) while trading within EU and to an extent also suffers from price irregularity in the fish and other seafood market. The company has acknowledged some barriers while maintaining trading compliance at the time of setting up a new food outlet in the EU. However, as compared to earlier, relaxed norms of the EU sea food trading has assisted the company in expanding its business within the region.  CONCLUSION While making strategic decisions regarding the local as well as overseas market, the management at Young’s need to assess and evaluate the involved risks thoroughly. The effects of globalization on the business of the company have been positive, but the management should be careful of overexposure in the international market which may lead to quality issues and brand exclusivity issues. Further, overlooking the logistics of the Humber region, it has played an impressive role for the growth of the company as it has been able to offer better and enhanced communication, transport and logistics services which serve as the most important factor of business growth for any company. References 1.      Samaddar, S., Nargundkar, S., & Darley, M. (2006). Inter-organizational information sharing: The role of supply network configuration and partner goal congruence. European Journal of Operational Research, 174(2), p. 744-765. 2.      H. Stadtler and C. Kilger: Supply Chain Management and Advanced Planning: Concepts, Models, Software and Case Studies, Indiana University Press, 2004, p. 25. 3.      Alcamo, J., Leemans, R., Kreileman, E. (1998), Global Change Scenarios of the 21st Century. Elsevier, London, p. 54-61.   Read More