International Logistics - Global Supply Chain Management - Research Paper Example

? Logistics and Operations Logistics and Operations Logistics is the movement of people, goods from a point of production or origin to the final consumer. Logistics management deals with the governance of all the supply chain functions. Its activities include; fleet management, both inbound and also outbound transport management, warehousing, logistics network design, supply and demand planning (Long 2003, p.10). These logistics functions also include; sourcing and procurement, customer service, production planning, packaging, scheduling and also assembly. Logistics management is a vital part of the entire planning levels and execution, and also strategic, tactical and operation. Logistics management is an integrating function that coordinates the entire activities in logistics, together with logistic activities related to other functions such as marketing, finance, sales manufacturing and information technology (Long 2003, p.12). There are a number of components in logistics management, since it covers the entire business supply chain. Transportation logistics is one of the most discussed parts in these supply chain management. How a firm moves its goods from a certain location to a different one can have a monumental impact on the general performance (Long 2003, p.10. In a number of cases, this sector of the supply chain becomes given to a third party that deals in the transportation. This enables a business to manage all the seasonal and market demand changes, reducing the desire to hire and fire workers based on the business cycles. Nevertheless, transportation is just but a piece of logistics. There exist sectors in supply chain that get governed by this logistic management. These are; warehousing, supply, order fulfillment, transportation and also customer service (Long 2003, p.11). Supply Supply majors with the capability of securing goods or even raw materials that will later get sold to the consumer as finished goods. Running an appropriate supply requires considerable forecasting in demand, and the sound understanding of the minimum requirements in production to turn to profits (Long 2003, p.10). All the buyers based in the purchasing department, are solely responsible for getting the necessary raw material or goods, for the best available price and having the products in their possession when needed. Firms should have knowledge of the trends in the market to predict the supply that people will need, and to use this information to manage raw materials for the production of goods in order to meet the high demand. Manufacturers find this sector of the supply chain a little complex (Long 2003, p.11). They can employ a few vendors to make sure they will always locate all the raw materials the firm requires. They should always be aware of the lag times for these raw materials to reach their base. If any raw material takes three months to arrive from the date of purchase or order, the business should have not less than a three month supply on hand (Long 2003, p.14). The suppliers should be at all times monitored and counted. Transportation The transportation logistics does not only apply to the acquisition of raw materials and goods to the warehouse, but to supply all the retail locations (Long 2003, p.15). In other instances, the sales force moves with the goods at hand in a way to different retail stores, as with beverages and snacks. In a number of instances, leading retailers get shipments of goods from these warehouses. Where the movement of goods takes freight through country borders or state lines, management in logistics should address compliance with the set regulations whether local, federal and even international. Vehicles that get registered improperly or failure to reach the Transportation Department regulations can totally spoil a firm’s ability to transport goods when required (Long 2003, p.16). Such delays lead to additional costs as other third parties must become hired to take the goods where they should be on time. This is also a reason as to why a number of companies outsource their transportation logistics. Warehousing There exist a couple of ways to manage the storage of raw materials and goods. Producers tend to have a location with raw materials on standby and a near warehouse where other materials can become stored when needed. Some organizations have main warehouses that store and feed the other smaller warehouses (Long 2003, p.17). These smaller warehouses are always in strategic locations all over the country, to take full advantage of the shipping routes from large cities. In other instances, firms by pass warehousing through the use of cross docking. Cross docking is a method of transporting goods from one region or the manufacturers directly to the customer (Long 2003, p.18). There might exist a few minor handling or even packaging during this process, but warehousing becomes entirely eliminated. Cross docking reduces the expenses of shipping and handling for businesses while removing storage costs. Efficient and effective packaging rely mostly on the logistics management of the set warehouse. The slotting profile, or how stored goods get arranged, can have significant impacts on how quickly and safely, employees can pick orders and then pack them (Long 2003, p.20). Goods that come in and out of the warehouse regularly should be easily accessible, and have enough space to hold a large quantity. The goods that are less frequently on order should become stored in locations that are less accessible. When, and how the stock gets received, unloaded and finally replenished, influence profoundly the efficiency and speed of the fulfillment of the order (Long 2003, p.20). This is the part where technology plays a crucial role. Through the use of software and communications high technology, the warehouses are able to take orders quickly with minimal errors. Customer Service This is the final component in logistics management, and it has to do with ensuring the satisfaction of the customer. The order should get processed smoothly and delivered on time, and in the best condition. Systems must be set in place, to make sure the customers can obtain information about the order status while it is on transportation (Long 2003, p.21). All the shipping systems, the businesses uses, play a critical role in making sure the goods get delivered timely and also accurate customer information about their order. In addition, logistics management should put in place methods of handling returns and spoilt or defective goods. Problems like these in the supply chain should become investigated, and solutions found, to enable consumer satisfaction and a declined level of return goods in the future days. Logistics Integration New and modern businesses are on the process of learning how to integrate these logistics so that all considerations for the entire aspects get considered in an overall strategy by the company. In the past centuries, logistic management focused primarily on production, operating on a different scale from both sales and marketing (Long 2003, p.24). These production departments focused majorly on complete efficiency and also a high output minus regard to the chains of distribution or even the market trends. Sales department did all they could do to make sure they sell vast number of goods as possible, without taking into consideration the supply of the raw materials or the manufacturing time lag. During this period, marketers wanted to maximize the customer service and profit even without taking into consideration distribution chains or transport logistics (Long 2003, p.25). By making sure logistics becomes integrated in all points along the chain of supply, firms leverage all the efficiencies of every part of the company’s business to utilize profits and at the same time customer satisfaction. ICT systems are a set of components for the collection, storage, processing of data, and for information delivery. Companies and other organizations rely majorly on information systems to do and manage all their activities, interact with all their consumers, suppliers and compete in the market for their goods. For example, companies use these information systems to communicate with their potential customers, using messages on the web, to manage efficiently their human resources, and to process all their financial accounts (Long 2003, p.26). A number of digital goods like software, electronic books, and online service related activities such as social networking and auctions, get delivered through the use of information systems. People tremendously depend on ICT systems, mostly the internet, for doing a number of researches on their personal lives; for study, banking, socializing and entertainment (Long 2003, p.27). Both the web and the internet have enabled instant access to relevant information and many more resources, and have accelerated relationship forming among organizations and people on a high level. Electronic commerce has led to immense growth in digital interpersonal communications (Long 2003, p.28). As these information systems continue to diverse human activities, they have continued to exert enormous influences on the greater society. ICT Systems in Logistics ICT in the supply chain has made it possible for the gathering, analysis and storage of large amounts of data. It also facilitates companies planning in all sectors through data sharing and analysis. This enables planning to occur at different strategic tactical and also operational levels. ICT also gathers, integrates and analyzes the logistical data to help streamline the local and worldwide supply chain (Long 2003, p.40). ICT organizes the movement of demand supply, and also cash in supply chain networks with the same information flow materials, and also cash flow that include; the flow of information to delay or replace stock flows when necessary; logistics and its cost information parts of the physical flow of materials become done electronically for efficient velocity and reliability, higher levels of customer service and the Electronic Cash flows such as the safe Electronic Fund Transfer, to free up cash quickly for reinvestment purposes (Long 2003, p.41). Transportation The use of ICT in transportation has led to the introduction of the Intelligent Transport Systems System. This system links individual transportation parts and combines them into one system by using advanced information technologies and a number of institutional functions to obtain safe, efficient, and also environmentally acceptable transport systems. Using traditional design method of transportation infrastructure, it is extremely difficult to account for different dynamics changes in relation to logistics. To avoid this problem, dynamic logistic control is necessary. The use of strategic applications like Electronic Commerce, Global Positioning System integrated through the use of the internet will be inevitable. The existence of sophisticated and complex information infrastructures will lead to an interactive logistics processes (Long 2003, p.45). Vehicle and goods tracking together with real time vehicle scheduling and routing systems nearly in all parts of the world have significantly changed the logistics management in transportation. Lead time has become reduced by the use of Electronic Data Interchange, automation, mechanization and final vehicle routing systems, leading to extremely low levels of stock surplus (Long 2003, p.46). Warehousing A lot of information systems are mainly delivery tools for information stored in databases. A database can become defined as a collection of related records arranged so that group or individual records can become easily retrievable to satisfy different criteria. Examples of databases include; product catalogs of the stored goods (Long 2003, p.47). These databases support all the operations and the managerial functions of any enterprise. Archival data get contained in the data warehouse, collected over some time, which can be useful for information for the product development and ultimate marketing of the new products, serve the existing customer base in an efficient manner, and even reach out to new customers. Any person who has ever bought an item with a credit card, by mail order or through the internet becomes included in these data collections. Customer service The customer databases are electronic storage of all manners of customers’ information. These may range from the customer's contact information, security information to help the company confirm the identity of the customer, the customers buying history, policy renewal dates and also payment information (Long 2003, p.48). When a consumer logs on, or even makes a phone call, the representative of the customer service or the website has vast information to offer the goods and services that the consumer will more likely want to purchase. Whenever a consumer makes a purchase, more information gets added in the web. Data gets gathered through the use of the Electronic Point of Sale (Long 2003, p.48) Since the consumer databases are all electronic and also centralized, it is not effective to continue holding customer data in any local branch. This is reason to a move to the on line banking and also call centers making the data accessible in any region. Benefits and Challenges of adopting the Technology Information sharing A number of the technologies are beneficial as they allow for easy sharing of information. They are crucial as they allow the accessibility of information to every supply chain. The development of distributed databases facilitates the development of close ties with other supply chain operators (Long 2003, p.49). Also, the presence of consistent information, improves operators decision making process. The sharing of data has always been effective in the manufacturing and transport Logistics Company. The access to the information and its availability in intermodal transport contribute significantly to reducing the processes and hence saves time in freight transfer from one transport mode to another. It also minimizes the errors associated by drawing up of freight documentation, increasing the overall efficiency in transport. The data warehouse store and present the needed, necessary information in a principled way that allows the business directors make significant decisions. They also allow business directors to look at the firm as a whole instead of departments that it has. These warehouses have the ability of handling server tasks that become interconnected to querying that is not used by many transaction systems (Long 2003, p.49). Despite all these advantages there exists a challenge to the use of data warehouse in that the Data Warehouse has a lesser compulsion for its usage, unless there are vital operational reports that get needed (Long 2003, p.50). Setting up all the necessary ICT components can be costly and lead to an increase in the operating expenses of the companies. The use of Radio Frequency Identification (RFID) has made it easy to recognize, track and locate where goods are (Long 2003, p.51). RFID also has a lot of advantages over the traditional bar coding. Its tags can give way long read distances, keep vast amounts of data, need no direct sight line between both the reader and the tag and it can also collect information from a number of sources at the same time. Nevertheless in adopting the technology, there are many business and technology challenges, RFID has to overcome (Long 2003, p.52). Technical problems are like; interference problems, and also issues of accuracy and security. Business challenges, however, relate to lack of standards and costs. There is also the challenge that a number of managers face in adopting the technology, this is working out a business issue for the executive board. People who adopted the technology way back became marred with problems like adverse customer outbursts to a seen invasion in their privacy, health issues, safety and integration and also RFID reliability. References Long, D, 2003, International Logistics: Global Supply Chain Management, Massachusetts: Kluwer Academic Publisher. Read More