Logistics Management at Online Store - Case Study Example

Introduction Businesses are looking to function in the global environment which has intensified competition and has made businesses look towards using information technology to strengthen their supply chain network or improve their logistics management so that they have an edge of their competitors. Logistics management involves a series of steps where business work through interrelated process so that cost can be reduced, value added to the product or services and the utility function can be multiplied. This paper looks to present the manner in which logistics management for Online Store will help to improve productivity, reduce cost and increase the utility for the customers. To analyze this different areas and directions are being looked into which looks towards opening a sourcing station in Singapore where the goods will be selected, procured and sourced to Australia and ensure quick clearance from the Australian Quarantine and Inspection clearance department so that value can be added and at the same time cost can be reduced to improve productivity. Online Store The Online Store which is looking towards ensuring proper supply chain development so that all goods are available to the customers over the internet is looking to identify the manner in which developing the supply chain will help to improve productivity. The business organizations also looks into different factors as the growth in the demand for internet business provides the scope to develop the required infrastructure which facilitates in the procurement and supply of goods at the minimum cost. The fact that international trade is associated so it is important that prior permission and clearance is obtained from the Australian Quarantine and Inspection clearance so that value can be added Literature Review A study also brings forward the fact that development of e-commerce has facilitated the development of logistics network and is becoming the backbone of business as it facilitates international transactions and helps to develop the required infrastructure to get all the benefits (Delfmann, Albers & Martin, 2002). This furthers helps to reduce the bottlenecks and ensure better timely delivery of services and goods at a lower price (Gray & Khalid, 2006) which facilitates the manner in which business will be developed. Logistics Management at Online Store This makes logistics management the backbone of the online retailing business which Online Store is looking at. Logistics management will help Online Store to ensure value as it will lead towards proper services, order, delivery, transportation, storage, handling, and distribution of the materials to the customers looking for it (Gourdin, 2006). Online store through the process of developing their logistic centre in Singapore and sourcing the materials from there will be able to add value as the value chain looks to provide below (Porter, 2005) The process of having a source station at Singapore will ensure that Online Store is able to take advantage of low cost production prevalent in the Asian countries. This will help the business to ensure that they are able to get the required materials at a lower cost from the correct sources and will be able to ensure low cost (Bowersox, 2009). The fact that Online Store is developing a business model where they look to develop a consortium through which the goods are to be delivered at Singapore and from there it will be sourced to Australia in big containers it will help to save on cost as sending the same materials in different containers is costly compared to sending them in a single container (Arbulu, Tommelein, Walsh and Hershauer, 2002). In addition to it the clearance which has to be obtained from Australian Quarantine and Inspection clearance department will have to be done once instead for all the individual containers which will help to save on time and cost which will thereby help to multiply the utility of the supply chain network. Online Store which looks towards having a collection centre at Singapore and using it as a destination to source the materials to Australia will be able to take advantage of the different modes of shipment, use the broad function associated with logistics and add value to their overall supply chain network (Medute, 2005). This will also facilitate in saving time as shipping everything from Singapore instead of other destinations will help to develop a strategy through which time is saved especially as sourcing from other destinations will compound both in increased time and expenditure which will be curtailed by using a single source (Ballard, Tommelein, Koskela and Howell, 2002). Supply Chain Model at Online Store The supply chain model which Online Store is looking to use so that it facilitates in the development of their business supply chain will look towards the following model and benefits as shown below (Lingguang, 2005) The supply chain model of Online Store will look towards using ensuring that they source the material to Singapore from all the manufacturers so that the goods can be send from there to Australia. This will result in developing a relationship between the different parties as shown above. It will also facilitate in developing the utility function and ensure easy procurement of goods at lower cost and at the correct time which will thereby add value to the overall process. Cost effectiveness due to Logistic Management Online Store which is looking at ensuring cost effective measures in the supply of goods and services will work on the following model The goods here will be sent through a transit agent where the source will be at Singapore. All the goods will be gathered at Singapore as the suppliers will have to deliver the goods there. This will help in developing a logistic centre at Singapore and ensure all goods are sourced from there. Along with it the destination centre is Australia and the goods will be shipped there (Rushton, Oxley & Baker, 2006). The customers can also track their shipment and find out the expected date of delivery thereby helping to use the technology development and ensuring proper services. Since, the process involves international dispatch it has to obtain the necessary permission and clearance from the Australian Quarantine and Inspection clearance department so that value can be added and at the same time cost can be reduced to improve productivity. Requirements for Online Store Logistic Development Online store which looks at changing and developing a strong logistics centre has to watch out for certain requirements which will ensure that they are able to add value and get the required purpose for which the logistics centre is developed. Some of the important requirements are Storage: This is the most important function in the logistic function and looking towards having a storage point at Singapore where all the suppliers will help to send the materials will ensure that the business has the required storage space. This will help to pool various inventories at a single point and ensure easy availability to the customers who are seeking for the concerned food and services. Transport: Businesses have to look towards reducing the lead time and ensure that the goods are supplied at the correct juncture. Developing a centre in Singapore is facilitating in ensuring that the transport cost and time both reduces. This is because of the fact that Singapore has strong ties with rest of the world and the development of the shipping centre in Singapore to different parts of the world facilitates easy transfer of goods and services. Also, being close to Australia compared to other Asian countries will help to use the water way in the best possible manner which will ensure increase in the utility value. Distribution: This is another important aspect in logistics management and the business looks towards distribution centers in Sydney, Melbourne and Brisbane. This will help Online Store as it will ensure that they are able to use the technology of Just In Time (JIT) and ensure that they have the optimum stock requirements which can be supplied to the customers at the correct time. This is helping Online Store as looking at different functions is helping to build the logistics network. E-commerce Services: This is another factor which Online Store has considered as they are looking to transform their business and making the use of more online orders. This is the main basis based on which the business is looking to do their business. This thereby looks that Online Store is developing their online business model and developing a strategy which helps them to ensure better use of the resources and ensure development of the supply chain network. Delivery System Based on the above developed mechanism which looks towards delivering goods and services at a lower cost so that the utility can be added has looked towards a system where the company after receiving order from the customers places the same to the vendor and then the process is processed so that the goods can be shipped from Singapore to Australia and after obtaining the required permission from the Australian Quarantine and Inspection clearance department the goods are send to the final consumer (Nagporewalla, 2007). This is also depicted in the chart below With the prominence of electronic media and development of logistic network the requirement of a strong network to deliver goods and services have arisen which will ensure timely delivery of goods through JIT and ensure maximum utility for the consumers (Roberto, Charles & Qiao, 2007) This is an aspect which Online Store is looking at as it will facilitate the overall services and delivery of goods. Advantages of Logistic Management at Online Store This brings an added advantage for Online Store as it saves time and money and ensures better delivery of goods. Having a centre in Singapore and then having distribution centres over different locations in Australia will ensure that precious time is saved. This model when further developed will help to understand the different problems that the business will face in dispatching the goods and services and the mechanism through which it will be solved. When we have a look at how the transportation logistics look will help us to better understand the problems faced. Sender Carrier Addressee Loading Unloading Here, we see the process of transport that takes place and how it affects the delivery. Due to the fact the different departments have to be involved while looking to provide goods and services to the customers it involves in delay. Using the model where there is a single destination to source the material and different distribution centres will help to deal with the external factors like forwards and clearing agent, packaging, handling and delivery better (Janos, 2002) as it will involve the process to be determined independently. This will have an effect on the utility function as it will ensure better use of the resources by Online Store. This will also help the online store towards developing a mechanism through which proper services are provided and a business model is developed which helps in ensuring better services and looking towards different factors which helps to add utility. Online Store through their process of having a single procurement centre where all the goods have to be gathered will be able to use economies of scale and develop a strategy which helps to deliver the services at the appropriate time. Conclusion Thus, Online Store through their improvement of their logistics model will be able to bring the necessary changes and develop a business model which facilitates the manner in which the business will yield maximum advantage. Further, this will help Online Store to get the required utility and will help to save both cost and time in delivering the goods and services that the customers look at. This will thereby help them to use full advantage of the e-commerce and ensure a mechanism through which they are able to look at different details pertaining to services. This will help Online Store in gaining overall effectiveness and will help to develop the entire process in such a manner that the business is able to garner the advantages they are looking towards this mechanism and also comlpy with the requirements of the law laid down in Australia. References Arbulu, R. J., Tommelein, I. D., Walsh, K. D., and Hershauer, J. C. (2002). Contributors to lead time in construction supply chains: Case of pipe supports used in power plants. Proc. Winter Simulation Conference 2002 (WSC02). Exploring New Frontiers, 8–11 December, San Diego, California, 1745–51. Ballard, G., Tommelein, I., Koskela, L., and Howell, G. (2002). Lean construction tools and techniques. In Best, R. and de Valence, G. (eds) Design and Construction: Building in Value. Butterworth-Heinemann, Elsevier Science, 227–55 Bowersox, D.J., Closs D.J., and Cooper M.B. (2007). Supply Chain Logistics Management. 2nd edition, McGraw-Hill/Irwin, NY, pp. 410 Delfmann, W., Albers, S. & Martin, G. (2002). The impact of electronic commerce on logistic service provider. International Journal of Physical distribution and logistics service provider. 32 (3), pp. 238-243 Gray, R. & Khalid, B. (2006). A logistic and supply chain approach to efficiency. Research methodology in supply chain management, Part 4, pp. 21-23 Gourdin, K.N. (2006). Global logistics management: a competitive advantage for the 21st century. Second Edition, Blackwell Publishers, Malden, MA, 318 pp Janos, K. (2002). Running logistics process of transportation. University of Technical and Economic Studies, Budapest Lingguang Song, L., Al-Battaineh, H.T., and M. AbouRizk S.M. (2005). “Modelling uncertainty with an integrated simulation system.” Can. J. Civ. Eng. , (32) 533-542. Medute, I. (2005). Comparative Analysis of the Definitions of Logistics Centres. Transport, 20(3), pp. 106-110. Nagporewalla, Y. (2007) “Skill gaps in the Australian Logistics sector”, KPMG report, Confederation of Australian Industry, Australia Porter, M.E. (2005). Competitive advantage: creating and sustaining superior performance, The Free Press, NY, pp. 557 Roberto, F., Charles, M. & Qiao, G. (2007). Process control and logistics management for mass customization manufacturing, Australia Rushton, Oxley & Baker, (2006). Handbook of logistics and distribution management. 3rd edition, management business book Read More