Logistics and Transportation as A Service Category within a Category Management Program - Research Paper Example

?Logistics and Transportation as a Service Category within a Category Management Program Table of Contents Logistics and Transportation as a Service Category within a Category Management Program 1 Table of Contents 2 Introduction 3 Concept of Category Management 4 Literature Review 5 Category Management at Nexen Inc 5 Logistics and Transportation as part of Category Management Program 5 Logistics and Transportation Activities in Nexen Inc 6 People, Process and Information Systems and Category Management 7 People, Process and Information Systems in Category Management Program in Nexen 7 Integration of Supply Chain Management and Category Management 8 Supply Chain and Category Management Operations in Nexen 9 Research Design 10 Statement of Results 12 Preliminary Schedule 14 References 16 Introduction The prevailing business environment has augured the need for ensuring better organizational efficiency. This is mainly because of the aspect of the prevailing intensity of competition among the market players. The level of competition has necessitated the need for organizations to ensure organizational excellence. In this regard the role of supply chain management assumes considerable significance. An efficient management of the supply chain networks can lead to generation of sustainable competitive advantage for the organization. The present study would analyse the supply chain management strategies of Nexen Inc with regards to the management of its internal logistics. Nexen is a Canada based energy generation company having a dedicated workforce of about 3800 employees. In addition to this the company also has a strong and visionary management that helps in catapulting the organization to levels of excellence. The company was incepted in the year 1971 in which the Occidental crude oil company merged its subsidiary of energy and gas to create a conglomerate. The company is also engaged in the exploration of oil and gas and also owns gas fields across Canada. The future strategies of the company include investing in exploration in Mexican gulf, West Africa and North Sea. It also includes exploration of oil sands and unconventional gas fields across the nation (Nexen Inc-b, 2011). The company has a considerable and commendable supply chain management strategy under which the company focuses on using technology to reduce the cost of inventory. The logistics and supply chain aspects of the organization include management of the movement of goods from the source to the final destination. Transportation and its efficient management can help generate a lot of competitive advantage for the organization. The aspect of supply chain management is very closely linked to the aspect of warehouse maintenance, transportation as well as management of materials over distances. The present study would try to analyse the aspect of global category management in the supply chain strategies of the company that would help generate greater efficiency for the organization. Use of global category management would help in generating not only cost advantage but would also help generate sustainable and long term competitive advantage for the organization. Concept of Category Management Category Management program objectives are found to bear strong linkages with the product portfolio of a manufacturing or marketing sector company. In this regard, Chiplunkar (2011) observes that the product portfolio of a company operating in manufacturing or retail segment is mostly decided by product managers. Product managers managing that category are responsible for getting the right amount and quality of raw materials for the production of such items. The responsibility for arranging the production of the product is shared eventually by the product managers with other departments like administrative and manufacturing units. Further the product manager also coordinates with the sales and marketing team for getting the product rightly sold in the market to help achieve business profits. The category management concept earns further depth in regards to the product categories through the sub-division of such based on price, the variety of ingredients and also in relation to its different usages. All such sub-divisions have got tied up with the category management concept owing to its strong linkage with the retail sector. These subdivisions help the product manager to increase the focus on product development based on such specific categories to help satisfy consumer taste and likings. Product categorisation made along the different titles grants them the potential to operate as strategic business units to help the concern gain a larger market share and profitability (Chiplunkar, 2011, p.1-2). Literature Review Category Management at Nexen Inc Looking at the category management program practiced at Nexen it is found that according to the official site of Nexen Inc. (2011) the operations of the company are divided along separate strategic business units comprising of oil and liquid natural gas explorations, energy obtained from components like shale gas and oil sands and also has a specific unit focusing on the marketing of energy components. Each of the different units earns the stature of a separate business unit strategically competitive enough to explore newer areas wherein such energy components can be found in abundance. The exploration activities spread worldwide in regards to the above components focus on producing quality energy products at competitively low priced modes. This helps the company in gaining larger markets. Cost effective focus of Nexen can also be viewed in regards to its marketing activities where through considerable marketing intelligence activities the company focuses on gaining the right market for selling energy products of them and also of third party vendors. The above strategic business units help the company in gaining larger profits and market share (Nexen Inc., 2011). Logistics and Transportation as part of Category Management Program Category management activities in relation to a company are found to have a stronger linkage to the logistics and transportation functions. To this end, Bner (2011) states that the retail operations pertaining to a company whether belonging to manufacturing or sales sector increasingly depend on the logistics and transportation activities for carrying out its day to day activities. The retail operations do occur depending on the existence of large number of warehouses spread along different areas. These warehouses are built in such fashion as would help in the storage of bulk items and also contain larger freezers for storing various perishable products. Thus logistics and transportation activities need to be rightly managed for helping in the meeting of orders on a timely basis. Companies through the use of these transport mediums happen to satisfy the needs of the consumers and thus help to increase consumer loyalty. Moreover in addition to the transportation functions the logistics function earns effectiveness through the influence of the category management programs. The functions of the logistics department of the company aimed at making the right product assortments through effective picking earns further importance in regards to the influence of category management programs. Henceforth as an integral part of the category management program the logistics and transportation activities should be effectively planned in helping the company gain newer markets and further profits (Bner, 2011, p.25). Logistics and Transportation Activities in Nexen Inc Focusing on the above discussion it can be further inferred whether the category management activities pertaining to Nexen Inc. also incorporates the dimensions of transportation and logistics function. In this context Nexen (2011) mentions that the company extensively uses the transportation and logistics functions to help procure crude energy resources from the different sites and then help them to reach newer markets. Large number of energy resources pertaining to petroleum and other gas reserves from offshore fields are explored and are then procured using the large scale transportation services. These energy resources along with other energy resources of third parties through the help of effective transportation and logistics functions are transferred over to markets for gaining revenue. Thus the activity of each of the different strategic business units of the company is better contributed and expanded through the service paradigms pertaining to logistics and transportation functions (Nexen, 2011). People, Process and Information Systems and Category Management Category management functions of a company do not operate in isolation. Rather it operates based on an integrated set of components. In the white paper published by UPS (2005) it is found that effective category management functions are carried out through the active integration of human resources potential, the business processes existing in the concern and the infrastructural elements pertaining to information systems. The human resources teams of the different departments or strategic units function to produce the large assortments of the different products or services of the company. Every company works on an integration of different business processes. These business processes pertaining to manufacturing, operations, sales and service help in expanding the category management function of the concern. The modern day businesses operate through the incorporation of key infrastructural elements like information technology. Thus category management activities relating to the operation of the strategic business units earns due effectiveness and efficiency through the contribution of information technology. Information technology use helps the company to focus on enhancing the specifications and thereby help in producing quality products in large quantities (UPS, 2005, p.3). People, Process and Information Systems in Category Management Program in Nexen The different operational categories of Nexen are also tied up in an integral fashion through incorporating the contents belonging to people, process and information systems. Harris and Fleisher (2005) state in this respect that the different categories in Nexen belonging to the exploration, managing the supply chain and logistic activities, information technology parameters, administration and human resources functions are all managed by large number of people. These sets of people actively design newer systems and business processes for helping the company gain effectiveness in their operations in terms of both being cost effective and as well as enhancing the quality dimensions in the products and services. The company encourages the people to develop their leadership skills and technical and managerial competencies while managing the core operations of the company. Thus the category management program of Nexen actively involves the integration of forces pertaining to people, business processes and information systems. Effective business and technological processes help the company in gaining the access to large scale exploration zones and also in gaining better markets for selling the energy commodities (Harris and Fleisher, 2005, p.332-333) Integration of Supply Chain Management and Category Management The paper now focuses on the relation between the tenets of supply chain management activities and the category management operations of the company. To this extent, Varley (2006) holds that category management operates as a part of the larger supply chain management operations of the company. Supply chain management activities of retail and manufacturing companies encompass a large scale of functions right from procurement of raw materials to produce the products to the arrangement of promotional activities and markets for the sales of such goods after being duly produced. Seemingly enough the logistics and transportation activities studied before in relation to category management also holds a part in the larger supply chain management paradigm. The function of the supply chain management operations which is tuned to the production of goods and services and helping them reach the final markets is considered as category management activities. The dimensions of category management and supply chain management operations gain momentum being guided based on responses of the consumers. Consumer driven approach helps the company in being able to produce the right commodity to help satiate the needs of the market and thereby gain more revenues (Varley, 2006, p.54-55). Supply Chain and Category Management Operations in Nexen The above discussion having been made further elucidation can be conducted through studying the above parameters in the context of Nexen. In this regard Nexen-a (2011) observes that the company focuses more on the demands of the clients before proceeding to explore and market the energy produces in an extensive manner. The company in order to meet the enhanced needs of the market endeavour to render quality services through the actions of competent people. Continuous improvement in the technological and business processes are made by the company to help develop the category management and supply chain activities in order to effectively reach the products to the ultimate consumers. Supply chain and category management functions within the company are further enhanced through effectiveness in the communication paradigms among the different people in the concern. This enhancement in the communication paradigm helps in enhancing the productivity and profitability of the concern. Category management and supply chain operations within the company are conducted through the collaboration of around 3,800 people working round the globe. Working based on the best processes pertaining to the cycle of operations and technology the people working around the globe are effectively managed and controlled to render the best possible service to the clients. Moreover the company also focuses on maintaining effective relationship with the different stakeholder communities like the suppliers, consumers and other shareholders rendering finances to the business. This effective collaboration with the different business groups helps the energy producing and trading concern Nexen gain all round productivity in the long run. Stronger strategic partnerships enabled with the different stakeholder groups enables the concern gain large scale effectiveness in its exploration and marketing operations (Nexen-a, 2011). Research Design The research methodology would be a mix of primary and secondary research techniques. The main focus of the research study would be to analyse the effects of globalisation on the aspect of global outsourcing and the impact of this aspect on the ocean ports particularly in the context of Nexen Inc. It would also include an analysis of the aspect of the cost that would be required for improving the transport infrastructure especially the government policies and actions that can have a considerable effect on the aspect of global category management in supply chain and logistics management of the company. The study’s objectives would also include an analysis to find out the aspect of corporate consolidation and the impact that it would have on the total cost of goods and freight being delivered. Furthermore the research study would also try to analyse the impact of lack of growth based strategies and the possible implications it would have on the future of global logistics management of Nexen Inc. Finally the study would analyse the effect of category management in the context of the business prospects of Nexen Inc. The research methodology for the study would include a mix of primary and secondary data analysis technique. The analysis of secondary data would involve an analysis of the various aspects of global logistics and supply chain management especially in the context of Nexen Inc. The aspect of global category management in the aspect of supply chain management and logistics handling would be analysed. The data for secondary analysis would be collected from various articles and books of reputed authors along with publications from reputed organizations. The primary study would include collecting data from a chosen set of respondents through a survey. The primary research would try to gather and analyse data from experts in the area of supply chain management that would include collecting data from the management staff at Nexen as well as experts in the field. The study would try to analyse the actual benefits that can be achieved by inducing global category management in the area of supply chain management. The study would also try to analyse the impact of globalisation on the aspect of supply chain management and to find out the perceived benefits that can be brought about by inducing a global category management in the supply chain and logistics function of the organization. The data for the primary study would be collected using a survey that would be directed towards the individuals. The data collection instrument would involve a questionnaire survey that would contain a mix of open and closed ended questions. A simple random sampling technique would be selected for the study. Simple random sampling is a probabilistic sampling process in which every respondent has an equal opportunity of getting selected for the study. The sample size for the primary study would be fixed at 20 individuals who would comprise of management staff within the organization as well as experts in the field of supply chain management and globalisation. The methodology for research analysis would be a mixed research methodology that would include a combination of qualitative and quantitative research methods. The use of a mixed research methodology would be useful considering the fact that it would help in analysing the data quantitatively as well as offering an in-depth analysis generating a cause and effect analysis of the data collected from the questionnaire survey. The location of the primary study would be a mix of lab and field settings with an in-depth interview being conducted for collecting the data. Telephonic conversations would also be used to conduct the in-depth interviews. Apart from this mails would also be sent to seek information from the selected sample population. A cross sectional research would be conducted for the present study as it would involve collecting data from a single respondent only once. The use of longitudinal methods would not be used as it involves collecting data over a period of time from the same respondent. Considering the time frame and budget constraints of the project the use of cross sectional study is most appropriate. The analysis of the data shall be followed with formulating a set of plausible recommendations that would help generate and signify the importance of category management in a globalised supply chain management strategy. In spite of maintaining a very rigorous methodology with control and evaluation measures, the project would suffer from certain limitations. The most prominent would be the budget and time constraints as the project needs to be completed in a short span of time with limited budgetary support. Moreover sampling errors may unintentionally creep up during the process of conducting the primary study. Finally respondent errors may also creep up due to misinterpretation of the survey questions by the respondents that can affect the quality of research findings making an effect on the outcomes of the research towards fulfilling the objectives of the project. Statement of Results The results of the survey would help in generating a set of results that would help in analysing the advantages of incorporating a category management in the global supply chain management of the company. The results would largely include the views of experts in the matter and would also include the viewpoints of the managers of Nexen associated with the logistics and supply chain department of the organization. The results would help the management of Nexen to analyse the importance of category management in supply chain operations. It would also help in management of supply chain operations including logistics and transportation on a global scale of operations. This assumes significance considering the fact that the company’s long term objectives including operating on a global scale, and moreover considering the need for logistics and transportation, it becomes utmost important for the organization and the management to ensure greater importance on the aspect of logistics and supply chain management so as to generate organizational excellence that would help generate competitive advantage for the organization. The results of the study would help in identifying any issues with regards to supply chain management and logistics. Nexen being an oil and gas energy company would require considerable use of logistics and transportation in shipment of raw materials form oil fields and gas wells to the refineries. The results of the study would help the management of Nexen to frame a strategy that would help integrate the aspect of various forms of logistics that would be used on a global scale. This would help the company to support its global operations that assumes significance considering the effects of globalisation that has led to globalised scale of operations calling the need for greater efficiency and sustainability on the part of organizations. The review of annual operating plans could very well include the recommendations from the report as it would help generate advantages for the organization. The results of the analysis would also help generate a set of recommendations that would help the company to create economies of scale and scope. This would not only help generate cost advantages for the company but would also help in creating entry barriers for the new entrants trying to enter the market. These strategies and recommendations would help the company to not only generate cost advantages and profitability but would also help generate long run sustainable competitive advantage for the organization. Preliminary Schedule Figure: 1: Gantt Chart for Project Scheduling Activity of the Project Time Taken   Week 1 Week 2 Week 3 Week 4 Week 5 Review of Literature           Designing of the Research Methodology           Rendering Statement of the Results           A Gantt chart is prepared to reflect the actual time taken to conduct the proposal for the project based on reflecting the position of logistics and transportation management as part of category management. The project in this regard takes a time span of five total weeks owing to its focus over the case study of Nexen Inc. The literature review takes into account the first two weeks for it focuses on studying the different concepts of category management and also relating the transportation and logistics activities to the same. Literature review then focuses on the situation of Nexen Inc.’s activities in relation to the concepts discussed thus forming a pragmatic understanding of the concepts. The section relating to the preparation of research methodology takes into account week 2 and 3 for it focuses on answering relevant questions as to the evaluating the need of the research to be conducted and the pattern of conducting the same. Finally the statement of results is presented taking into account week 4 and 5 focusing on gaining a complete understanding of the activities of the concern. References Bner, A. (2011). Retail Category Management: Decision Support Systems for Assortment, Shelf Space, Inventory and Price Planning. Springer. Chiplunkar, R. (2011). Product Category Management. Tata McGraw-Hill Education. Harris, P., and Fleisher, C. (2005). The handbook of public affairs. SAGE. Nexen Inc. (2011). Operations. Retrieved on October 10, 2011 from: https://www.nexeninc.com/en/Operations.aspx. Nexen Inc-b. (2011). History. Retrieved October 20, 2011 from http://www.nexeninc.com/en/AboutUs/History.aspx. Nexen. (2011). Legal. Retrieved on October 10, 2011 from: http://www.nexeninc.com/en/Disclaimer/Legal.aspx Nexen-a. (2011). At a Glance. Retrieved on October 10, 2011 from: http://www.nexeninc.com/en/AboutUs/AtAGlance.aspx UPS. (2005). Building a Category Management Capability. Retrieved on October 10, 2011 from: http://www.ups-scs.com/solutions/white_papers/wp_category_mgt.pdf Varley, R. (2006). Retail product management: buying and merchandising. Routledge. Read More