Logistics within the Business Organization - Coursework Example

 It is important to understand that business managers are quite busy running their companies and oftentimes require only the bottomline answers to their questions. They do not normally deal with supply management issues and as such, the data relating to the supply chain management situation within the company goes ignored by senior management. They do not realize that the supply chain management issues have a direct impact on the revenues and managemement chain within the company. Senior executives in any company rarely have an understanding of how supply chain management affects their existing business model and that any existing business model can be tweaked and improved upon by strategizing and implementing creative supply management solutions. The reason the business managers remain unaware of this fact accordign to Rudick is because those in charge of the supply chain management situation fail to present their case and ideas in a language that is understandable and interesting to their higher superiors. One of the most important strategies that can be used in encouraging management to pay closer attention to the supply chain management is to call the attention of senior management to the effective “sales” coming out of their competition and other business models that utilize a concentration on the supply chain. According to Dutton, this is a highly effective strategy because it demonstrates the better supply / logistics processes or use of technology that can result in reduced costs for inventory items. It is best that the manager know how to frame his thoughts and words in such a manner that will make the supply and logistics discussion an interesting and important topic for the managers. Rudski agrees with the observations and suggestions of Dutton. But he adds that the supply management must be able to favorably impact 5 areas of supply management. These include: (1) exceeding performance and earnings expectations, (2)growing revenues year on year, (3) reducing risk and volatitlity in revenues and earnings, (4) continiously improve the return on investment capital and return on equity, and finally (5) will it create a unique business model that others cannot copy? Furthermore, Dutton calls attention to some additional tips that can help interest business managers in the demands of supply chain management. She interviewed Ms. Peggy La Rue, Director of international transportation at Abercrombie & Fitch who in turn gave the following suggestions to supply chain managers who find themselves in a predicament. Ms. La Rue adds that it is important to shed light on the fact that more efficient supply and delivery will translate into earning for the company by introducing them to logistics services providers and their functions. La Rue continues to explain that the reason behind that is because “Logistics service providers, such as 3PLs or 4PLs, can be allies in this endeavor. By virtue of their wide exposure to many different companies and practices, they have developed best practices that can be leveraged to minimize the trial and error aspects of new endeavors. And, they have the metrics to support their positions. These outside experts also are well positioned to persuade naysayers within the corporation of the value of improving the supply chain, because they tend to be politically neutral.” At this point of your presentation to upper management it would be best to orient them about the meaning and importance of the 3PL and 4PL groups within the company. Since a 3PL or 3rd Party Logistics provider provides outsourced services for the company, they are an important part of supply chain management. Their specialization in integrated operation, warehousing, and transportation services can be tailored to suit the company's needs as well. Their services can also be adjusted to meet the client's expectations and demands based upon market conditions and delivery demands for products and materials. If a company were to work closely with their 3PL provider, the work relationship would be able to go further than just basic transport services for their goods and services. 3PL's can also offer value related services that can result in a more efficient delivery or procurement of goods through services that can integrate related aspects of the supply chain. By targeting this particular function in management business managers will see an increased performance and return on investment in the company profits. Some of which will come from more effecient and cheaper warehousing and transportation of goods. However, in order to get a fully functional and profitable supply chain program into place at a company, it will require more than just an effective 3PL partner. The 4PL arm or partners will further enhance the positive business results that emanate from the 3PL program. That is because the 4PL's are outsourced integrators who are highly knowledgable and capable of assembling resources, capabilities, and technologies for the benefit of their partner companies. They have an uncanny ability to build and run comprehensive supply chains depending upon the requirements of their clients. Working closely with the 4PL's will provide any company with a set of focused activities that relate to their supply chain objectives. The services that they can provide the company with, which will save the company more money due to the outsourced office functions include 4 PL common services ( including call centers, warehouse and distribution facilities, and invoice management), an implementation center covering business process and analysis plus open systems activity framework that work in direct relation to product and skill centers within the supply chain ingineering. If necessary, they can also provide IT solutions and back office assistance should their clients require it. All of these systems from the main supply chain management office down to the 3 and 4PL's work in synchronicity to provide the company with an excellent business model and increased profit margins. Perhaps the best way to envision my idea of working with these outsourcing aids would be to see a pont with a stone thrown into it. The circular ripple effect that moves outward emulates the motion of the supply chain management, 3PL, and 4PL groups which results in a constantly growing ripple that provides the innermost circle with the ability to continously grow and achieve market goals and objectives. Read More