SMART Freight Process Model - Case Study Example

SMART Freight Process Model-Case Study Student’s Name Institutional Affiliation Course Name Date of Submission Executive summary Businesses have to consider the importance of technology so that there is improved efficiency and effectiveness in product and service delivery. Due to globalisation, traders seek improved methods that reduce costs of production and distribution, ad this results to improved profitability. Apparently, some of the systems are developed to incorporate all the stakeholders and identify the tasks that they ought to execute. As a result, there is a systematic arrangement of duties and improved collaboration between business partners. For this reasons, the port of Melbourne introduced the smart freight structure that articulates all the activities that ought to be improved. Ideally, the use of information technology is one of the factors that have led to the significant growth of the facility. Table of Contents Executive summary 2 Table of Contents 3 Introduction 3 Issues Arising in the Case 5 Globalisation in the 21st Century 6 Advantages of Global Supply Chain 7 Logistics and Supply Chain Management 9 Strategies to Enhance the Supply Chain 10 SMART Freight Approach 11 Development of the Model 12 Advantages of the Model 13 Port of Melbourne 15 Strengths of the Port 16 Weaknesses of Melbourne Port 17 Opportunities of the Port 18 Threats to the Port 18 Conclusion 19 References 20 SMART Freight Process Model-Case Study Introduction The world of business has grown extensively due to globalisation as companies seek to supply their products and services to all the parts in the market. Apparently, many of the firms have to apply global strategies and supply chain management to enhance distribution. In many cases, the markets are saturated with products from rivals and the enterprises have to seek supplementary markets in other regions. For example, the many investors seek to supply merchandise in the emergent markets such as Brazil, Russia, India and China since they have a demand that grow tremendously (Shipp, 2013, p. 5). In essence, businesses seek sustainability by increasing the demand and supply of the manufactured produce. Through this approach, there is an increase in revenue and thus, an increase in the profitability. Contrastingly, there leadership has to focus on the various approaches that may be used to reduce the costs incurred during production and supply of merchandise. Ideally, an increase in the distribution fees reduces the profitability margin, and this could lead to losses. For this reason, the managers employ logistic and supply chain management to ensure there is a low cost of supply in the market. For instance, the port of Melbourne applies the SMART Freight approach to plan and execute all the activities involved in the delivery of services to the customers (Rhodes, 2005, p. 81). In particular, this has been a driving force of the institution that that it is amongst the largest ports in the world and serves a significantly large number of clients on a daily basis. This report focuses on the SMART freight logistics in relation to the supply chain management and the possible advantages that are accrued from this initiative. Issues Arising in the Case In the case study, the author highlights the importance of the port in the economic development of a country. The case demonstrates that the port acts as a critical component since it facilitates the movement of products from one country to another (Sparx Systems 2000, p. 1). This implies that ports acts as a link between a countries to its trading partners. For instance, when a country wants to import or export goods, in most cases, the products would be transported through the ports. Accordingly, the case shows that a port is vital to the development of a country since it delivers since it delivers a combined functionality that includes shipment and transit of exports and imports. However, one of the issues that come from the case study is that the increase in shipment and coupled with the emergence of larger vessels is likely to put a lot of pressure on the infrastructural facilities at the port. Accordingly, this is likely to increase the complexity of the operation processes at the port. For instance, the author is concerned that there is a likelihood that the growth in the inter-capital freight that is expected every year could result in congestion at the ports since the existing infrastructural facilities might not be enough to handle the freight volume passing through the port (Sparx Systems 2000, p. 1). The author is concerned that this might result in a delay in the clearance of freight at the port. The Port of Melbourne, for instance, is already experiencing congestion since the port handles large volumes of freight every day. Therefore, to address the issue of the expected congestion at the ports, the authors advises that there is a need to increase the capacity and the capability of Victorian Transport, Distribution and Logistics industry for it to be able to deal effectively with the expected growth in the freight volume. In a bid to increase the efficiency and reduce congestion at the Port of Melbourne, the cases shows that Victoria government has taken steps that involves introducing new technologies, such as the Smart Freight Initiative. The Freight Initiative is expected to not only enhance efficiency of the operations at the Port of Melbourne, but also to reduce the cargo congestion that has characterized the port because of the increase in freight volume passing through the port. According to the case, the Freight Initiative allows the supply chain team at the port of Melbourne to have a clear understanding of how they can enhance interactions with supply chain participants and minimize the assumptions regarding information flows and processes in the entire supply chain (Sparx Systems 2000, p. 3). Additionally, the Port of Melbourne logistics team has developed an integrated Enterprise Architecture, which has helped increase efficiency and reduces cost for the client. Globalisation in the 21st Century Globalisation is defined as the process of market integration such that different economies are interconnected. Ideally, many markets are linked such as the financial markets, capital markets, and insurance, commodity and credit facilities. Thus, there is an increase in the exchange of services and goods from one region to another through specific middlemen. For example, Japan is considerably a leading producer of motor vehicles that are supplied across the globe. However, they may have to use logistics and supply chain management to ensure the products are available in countries such as Australia. For this reason, they may have to use the port of Melbourne as an entrance to the country. Since there is occasional delivery of products to the country, the manufacturers have to define a specific and reliable strategy that is sustainable and effective. Globalisation has enhanced in the 21stcentury due to a number of contributing factors. First, there is development of information, communication and technology in that the internet enables 24/7 communication across the world. Additionally, this has enhanced distribution and supply of commodities in different markets as there is linkage between the involved parties at low costs. Secondly, there is an increase in capital mobility such that countries can relay resources to investors within a realistic time limit. Thus, there is development and sprouting of different businesses in distinct markets. Nonetheless, firms have started to invest in international markets and repatriate profits to enhance growth (Notteboom, Ducruet and Langen, 2009, p. 14). Thirdly, the introduction of multifaceted financial products including derivatives has enhanced globalisation such that credit markets are steered to success. Nonetheless, trade has been made affordable while other countries engage trade organizations that limit the costs of transactions. As such, there is openness in trade as goods are relayed from one country to another within a short time. Similarly, the ratio of exports as well as imports has grown rapidly in both industrialised and emerging economies. As such, the world has been made a better place for trade as producers seek to enhance the demand and supply for their products. Notwithstanding, there has been an immense growth of multinational companies that provide services and products in multiple countries. Ideally, this has led to the growth of globally recognised brands that have made a significant impact in the world. For example, Microsoft, Nokia and Sony are amongst the brands that perform exemplarily in the global perspective. Advantages of Global Supply Chain Global supply chain management is a critical perspective that is needed to enhance the distribution of products in the market. Ideally, this improves the foreign competition in that superior products are injected into the market to compete with the available supplies. In particular, this improves the quality of production as the investors seek to attract a larger market share in the specified region (Notteboom, Ducruet and Langen, 2009, p. 14). More so, there is immense growth in the foreign demand as the customers define the quality of products that they need. In this perspective, there are many producers that will be encouraged to join the markets although they may be saturated with products from the established companies. Further, the global supply chain encourages global presence of the companies in that they use this advantage as a defensive tool. For example the SMART freight approach used by Melbourne improves the efficiency to serve customers such that people opt to use the facility to transport their merchandise (Sparx Systems 2000, p. 2). In comparison with other ports that may not use the same strategy, the customers will choose the institutions that take limited time to deliver services. Manufacturers have in the recent past introduced plants in different countries to achieve leverage since there is low cost of production due to the reduced expense on direct labour. However, the annihilation of some tariffs and trade fees has enabled investors to focus on the globalisation approach to supply products in the markets. In fact, the critical perspective that allows the companies to produce the merchandise in bulk and transport them to other markets is the economies of large scale production. However, global supply chain management offers a crucial advantage to the traders as they can produce monogamous products and supply them to different markets. Thus, the introduction of the Global supply chain management increases the profitability of the firm since there is augmentation of sales (Rimmer 2014, p. 401). Further, there is a likelihood of increasing the clientele base since markets provide different segments of customers. For example, Apple Inc. introduced a plant to manufacturer iPhones in china due to the advantages that are accrued in the country. Since the company can produce the merchandise in bulk, they are shipped to other countries such as Australia through the port of Melbourne. Thus, the introduction of terminals and shipping points enhances the scope of business of the company. Additionally, the use of the supply chain management (SCM) allows the companies to reduce reliance on the local and national markets since they open outlets in other countries. Further, the provision of internet allows investors to transact businesses across the clock since they can communicate to customers at any time. More so, there is a potential for companies to expand their scope of business as they define new opportunities in the market. For this reason, there is diversification of businesses through a low cost supply chain. Logistics and Supply Chain Management Businesses have to initiate trade in distinct markets by preparing to serve the customers accordingly. Thus, they may need logistics to plan, implement and control the production, supply and delivery of products and services to customers (Lu and Bock, 2015, p. 21). Importantly, the strategies used should be efficient, effective and reliable to ensure the customers are satisfied. Additionally, the firm has to focus on the flow and storage of products to reduce wastage. On the other hand, the supply chain management has to include the logistic planning to manage and control the flow of products and services. Importantly, the customer orders and production processes should be articulated to enhance the flow of products in the market at all times (Uhl and Gollenia 2014, p.23). In particular, the logistics department used in facilities such as port of Melbourne has to include distinct sectors that deal with specific functions. For example, the customer service segment deals with the customer orders, complains and inquiries and ensures they are satisfied with the response. Secondly, the purchasing subdivision deals with procurement of materials, equipment and machines that ought to be used in the service delivery. Thirdly, the production planning segment observes, supervises and controls the manufacturing processes to enhance the quality of products and services as well as improve the efficiency. Additionally, the warehouse supervisors ensure the goods are stored in perfect condition to avert breakages and losses (Steele, National Research Council, National Cooperative Freight Research Program and United States, 2011, p. 45). Lastly, he transport sector has to ensure all the products and services are delivered to the destinations pronto so that they may deal with the subsequent dispatch. Nonetheless, the merchandise should be delivered to the customers immediately unless they are products that are supplied to the market. In this case, the suppliers have to provide raw materials to the manufacturers who in turn deliver the finished goods to the wholesalers. Since the wholesalers occupy a limited region, they may have to link with retailers who in turn deliver the products to the customers. Although the chain may be long, it is efficient to ensure constant supply. Strategies to Enhance the Supply Chain It is important to visualise the growth of a company by focusing on the changes that ought to be made in specific departments. Apparently, the global supply chain management system should be prioritised as it can enhance the distribution of products and services to the distinct markets across the globe. In some cases, the company may need a larger facility due to the significant increase in the number of customers while other businesses may prefer to increase the staff to increase efficiency (Notteboom, Ducruet and Langen, 2009, p. 11). For this reason, a trade that grows internationally should transform the supply chain management so that there is sustainability, reduction in costs and increase in revenue. Importantly, the firm may have to focus on the local experts. For example, port of Melbourne uses experienced professionals to run the activities of the facility (Sparx Systems 2000, p. 3). Importantly, the facility saves costs since hiring professionals from other countries could increase the costs of remuneration. Additionally, the selected staffs are easily available such that they can work on distinct roles whenever they are needed. Resultantly, there is increased effectiveness at the workplace. It is important to store information and data safely so that it can be used as reference by the management. Thus, there is a need to invest in information technology and equipment to ensure that the statistics are easily available in the systems. For example, the budget numbers and the goals of the facility should be outlined in the system to ensure the staff is observant and reaffirms them. Additionally, there is a need to use IT solutions in various situations to avoid unwarranted delays. For instance, customer requests should be tabulated in the systems so that the deliveries are done systematically. Nonetheless, this approach should be used to improve the relations with partners and cut the costs that could be incurred. More so, the facility has to diversify and develop healthy relations with the partners in the global supply chain (O'Shea, 2011, p. 624). Apparently, this leads to enhanced negations where the facility has greater income and the production is increased significantly. Importantly, the appreciation of suppliers enhances the delivery system such that limited time is consumed while transporting goods and services to the customers. More so, there is reduced slack time and common mistakes are avoided. Eventually, the facility develops to become effective, operative and reliable. SMART Freight Approach The ostensible reason for the installation of the SMART freight initiative was to create a seamless system that would articulate all the activities of the institution. Thus, there would be an improvement in the efficiency and reduce congestion at the site in the port of Melbourne. Through an integrated information and communication solution, the facility has made tremendous improvements such that more customers are served in a limited time. Ideally, the model had to enable the firm to participate in many activities although with minimal constraints on the resources and time. First, the system identifies the various operations and the specific areas that should be enhanced to improve customer satisfaction. In this case, it defines the various tasks and the specific people that can perform them without any difficulties (Suder 2006, p. 155). Secondly, the structure enables constant and timely flow of information to initiate processes such as production and delivery of goods and products to clients. Thirdly, the system identifies and recognises all the stakeholders in the firm and isolates the specific roles that should be performed by each individual. Additionally, it enhances collaboration with external businesses so that all the functions are executed effectively. Through this approach, there is no duplication of duties and this reduces the emergence of conflicts in the institution. Fourthly, the system identifies the most appropriate technologies that should be used in the commercial environment so that the impact of the transformation is significant. More so, the structure allows identification of improved technologies that should be incorporated for additional profitability due to increased production. Since the model is used by the port of Melbourne by both large and medium participants, it provides an insightful picture of the interactions between the businesses and customers. Thus, the introduction of this strategy has marked an improvement in the institution as it strives to accomplish its goals. Development of the Model Institutions invest significant resources in initiatives that are capable of improving the effectiveness and delivery of services to the clientele base. In fact, innovation and technology consumes a considerably large part of the resources since this is an ideal approach that can improve productivity of a company. For example, many establishments procure creative accounting systems to rack the flow of income and expenditure so that there is responsible accountability of the resources of a firm. Additionally, the firms have to consider a system that narrates all the processes, stakeholders and the business partners that are involved in the distribution of services (Golińska, Fertsch and Gómez 2011, p. 495). For this reason, the architects were consulted to develop a system that would serve the port of Melbourne and within months, there was introduction of the chain management system. Through the development of various aspects of the technology, the firm has reduced the costs of production and distribution and it has enhanced service delivery to a wide range of clients in distinct markets. The process of development of a system that can be used by the firm was important in that all the processes that are required by the organization are documented in detail. Through this approach, the new entrants in the institution have crucial information that is needed to perform all the duties. More so, there is entry of distinct sets of information such as responsibilities of staff, documents, assets, equipment and names in the system such that there is constant tracking of all the resources (Haralambides and Palgrave Connect 2014, p. 55). Notwithstanding, it helps the management to supervise the staff in all aspects. Ideally, there is consistency in application of the business strategies since they are outlined in the system. Thus, it offers a sense of direction to the employees and supervisors at all times. Nonetheless, tasks, activities, support and corporate strategies are also revealed to inform the concerned parties. Advantages of the Model Organizations have aims, objectives and corporate responsibilities that should be accomplished within specified time. In fact, there should be constant reference to the corporate strategies such that there is a sense of direction and control in the institution. For this to be achieved within specific time, the structure should be put in use as it is effective in reminding the staff about all the factors that should be fulfilled. More so, the system provides potential dimensions that should be used within specific project to initiate the processes. Thus, there is a defined relationship between the roles the organization, the processes and technology in that they should be articulated to support each other. Many businesses do not have an organized and articulated system to store and relay data and this leads to replicated information and processes. Ideally, this is a hindrance to effectiveness of an institution as it leads to redundancy. Eventually, the firm has additional costs, increased time wastage and inefficient processes (Notteboom, Ducruet and Langen, 2009, p. 10). In this situation, the firm may not serve the customers timely since the workers are involved in inconsequential processes. However, with the development of the system, there is efficiency, reduced time wastage and simplified work processes. For this reason, the business goals, objectives and strategies are implemented in a simple approach. Thus, there is customer satisfaction and effectiveness in the usage of resources. Evidently, this leads to significant growth of the institution as it has ample resources that are used effectively. The performance of an institution depends on the systems that are installed to improve customer services. The structure ensures the processes are simplified so that the workforce does not go through a complex structure before the services are delivered to the customers. For example, the easy processes that are involved in the SMART freight strategy ensure the employees are focused on the vital activities and they deliver the products at the ideal time (Quiroga, National Research Council (U.S.), National Cooperative Freight Research Program and United States 2011, p. 10). In this case, the firm has multiple benefits including harmonised processes, simplified operations, gains through efficiency and the reduction of costs. Importantly, the tools are critical perspectives since they define the structure that the port of Melbourne used to deliver and distribute services and products. Ideally, business analysts indicate that the system that was instituted by the state and federal government has been a pivotal factor in the growth of the facility as it has increased the number of customers served each day. It is noted that businesses use distinct technologies to ensure all the activities are executed at the opportune time. Apparently, some of these technologies may not be compatible and this could be problematic to the institution. For example, the technology used by the manufacturer should be compatible with the systems that are used by the wholesalers so that the glow of information and data is harmonised (Great Britain, 2007, p. 34). Contrastingly the incompatibility of the resources could distort flow of information and this eventually affects the efficiency. Apparently, the introduction of a global supply chain management in an institution ensures the technologies are interlinked to make the processes easy. Additionally, it is stated that communication in an institutions critical aspect that should be a point of focus. For instance, the suppliers should relay data to the institution in regard to the raw materials that should be supplied at specific time; however the lack of flow of information may affect production especially if there is a delay in the delivery of raw materials. For this reason, the process is critical as it has direct effects on the profitability and sales revenue of an institution such as port of Melbourne. Port of Melbourne The port of Melbourne is one of the important facilities in Australia due to its impact to the trade and business in the country. Ideally, it is important as it facilitates international trade in the country. Since it is a gateway, it allows the entry and exit of products and services to the country and it links international destinations, markets and economic regions (Notteboom, Ducruet and Langen, 2009, p. 7). For this reasons, merchandise that are meant for the Australian market travel through the facility. Importantly, it is considered the largest part in the country and it handles over 36% of the container trade in the nation. According to statistics, it is stated that it handles over 2.6 million containers each year. Additionally, it covers all the trade regions in Australia since it facilitates trades to customers that are in distinct locations. Since the facility is important for the economy, customers and the country, it needs efficient, reliable and effective methods to augment service delivery. In the port of Melbourne, it is noted that between 25 and 30 stakeholders are included in the importation and exportation of products and services. Thus, the introduction of SMART freight is a critical perspective that outlines the roles of each individual that is involved in the activities of the facility (Yigitcanlar 2010, p. 41). Additionally, the system identifies the technologies that are used and outlines each process so that the users understand the contribution of each concerned party. In fact, institutions and industries have benchmarked the system since it is reliable and effective. Thus, it is easier to exploit the opportunities that are available in different sectors through the implementation and usage of the infrastructure. Nonetheless, the information that is available in the system is updated thoroughly over a period of time to ensure the communication is effective. Additionally, the staffs are made to understand the port of Melbourne through the data that is availed in the structure. Strengths of the Port It is critical to highlight the positive outcomes that have enhanced the work performance of the port of Melbourne in relation to the introduction of the SMART freight structure. First, the facility has coordinated the introduction of the system with the supply of specific equipment that is used to handle the shipment. Since the two work in liaison, the individuals that are involved find it easy to handle over 2.6 million containers each year. Secondly, the facility is strategically located in an area that can be accessed by many people that travel all over the globe. The strategic area allows the facility to serve many customers from different international locations and this is a positive attribute to the growth of the institution. Additionally, the linkage of the stakeholders in the supply chain management allows the facility to communicate to over 30 stakeholders that have distinct roles that ought to be executed independently (Wang, 2008, p. 31). Thus, there is coordination of different duties and responsibilities although they are performed by different people at distinct locations. Thirdly, the institution has improved its information, technology and communications. For a firm to record significant growth, it needs to have systematic approach that relays information to all the concerned parties. In this case, all the workers have a reliable structure that gives all the information that is needed within a short time. Additionally, the employees are made to understand the various structures, technologies and compatible systems that are used by the facility. As such, there is crucial comprehension about the compatible structures and data is given about the collaborative partners that are involved. Thus, the system is a crucial perspective that has enhanced the flow of processes between the facility, the business partners and the clientele base. Weaknesses of Melbourne Port Although the firm has made tremendous improvements to serve a larger number of customers on a daily basis, it has numerous weaknesses that could limit the effectiveness of the SMART freight. First, it has limited berth space that could be used to enhance the number of customers that are served by the facility. Due to the shortage of expansion space, the supply chain management system may not serve more customers, and this could reduce the reliance on the facility (Nof 2009, p. 401). Additionally, there is low port efficiency yet there is the introduction of the supply chain management system. Due tom the low efficiency, the resources may not be used at an optimal rate. Additionally the capacity of the port does not allow the increase of the number of containers that should be handles by the employees. Ideally, there is an increase in the number of containers that can be shipped through the facility but it does not have the capability to increase the rate. Opportunities of the Port Through the introduction of smart freight, the facility may find it prudent to open a second port that can handle containers at the port of Melbourne. Thus, there will be an increase in the capacity that can be handles on a daily basis. Through this initiative, more companies, stakeholders and business partners are involved in the business transactions, and this enhances growth of the facility. Additionally, the port can bank on the initiative of development of three rail tracks that link the facility to other inland ports (Notteboom, Ducruet and Langen, 2009, p. 5). The opening of the terminal is a benefit to the facility as it opens a subsequent distribution avenue. Additionally, there will be efficiency since railways can transport bulky goods in a short time. For this reason, the facility will increase the handling capacity due to the improved transport system and an increase in the number of destinations. Threats to the Port The facility has made significant developments in the past few years yet it faces numerous threats. First, it is noted that a selected few individuals have campaigned for the privatisation of the port of Melbourne so that they can manage the facility. Although the federal and state governments are involved in the management of the port, there is a higher risk of downfall if it is mange by private entities. Secondly, there has been a growth in demand yet the facility has reached its optimal handling capacity. Thus, there is redundancy in service provision due to lack of space. For this reason, many individuals may seek the services in alternative ports so that the time used to transact businesses is reduced significantly (Song and Panayides 2012, p. 43). Additionally, it is noted that the increase in the rent rates at the port increases the costs of business transaction. As such, there is reduced profitability since the facility has to cater for the costs. Therefore, it is critical for the management to consider the various strategies that may be used to ensure the threats do not limit the profitability of the facility while the opportunities are exploited to enhance growth such that there is service provision to a large number of people. Conclusion In conclusion, globalisation has been enhanced by the introduction of technology, systems that solve problems, mobility of capital and availability of credit facilities worldwide. However, companies need strategic systems that enhance the supply and distribution of the products into distinct markets. For example, the port of Melbourne uses the smart freight approach to link the stakeholders, staff and roles so that there is effectiveness. Apparently, the port of Melbourne handles more than 2.6 million containers every year and attributes to over 36% of the total container trade in Australia. Thus, it is a critical premise that should be prioritised. Importantly, the smart freight strategy has enhanced service provision as products and services are supplied to multitudes of consumers all over the world. However, the port of Melbourne should consider introduction of a second port to handle containers since the current capacity is limited. Additionally, the development of direct rail links to inland ports is a strategic approach that could enhance the provision of services. Nonetheless, all the perspectives should be included in the smart freight system such that all the activities are digitalised. Eventually, there will be annihilation of high costs of distribution through improved efficiency and effectiveness. References Golińska, P., Fertsch, M., &Gómez, J. 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