Logistic and Operation Management - Essay Example

?Logistic and Operation Management By ID # Table of Contents Introduction It is an admitted fact that the Internet has turned out to be a main driver for financial growth of firms for the reason that the modernism brought by the Internet has revolutionized the ways of carrying out business activities. Without a doubt, the development of e-business and e-commerce platforms has modernized not only the ways in which products, goods, and services are bought and sold, but also how they are delivered to sales and service centers, customers, stores, and dealers. In this scenario, the logistics is the process of managing an operation that involves supplying labor and materials to be supplied. Basically, the idea of logistics is based on the procedures of tactically managing the movement, acquisition and storage of products, parts, materials and finished inventory from the companies and its marketing channel. As a result, the present and future productivity is improved all through the cost-effective accomplishment of orders. In addition, the logistics operations those are automated through the Internet offer supply chain visibility as well as being able to be part of the accessible workflow of e-commerce systems in a corporation (Turban et al., 2005; Laudon & Laudon, 1999; Nigel et al., 2010; Somuyiwa & Adewoye, 2010). This report discusses the role of ICT (information and communication technology) for logistics and transport services industry. Information and communication technology can have a significant influence on the mobility of goods and people. Without a doubt, ICT is a significant facilitator of change in organizational and social practices, therefore influencing the demand for transport in temporal and spatial terms. At the present, we have modern ICT systems supported through GPS, GPRS and other technologies that include systems for traffic and travelling information, transport management and fire vehicle guidance, reservations and mobility cards (Consultrans, 2008). This report will analyze the impact of ICT on logistics management. This report will assess the applications of ICT for different components of logistic services. This report will also outline the benefits and challenges of ICT logistic technology. This report will also outline some of the real life cases regarding ICT technology application for logistic management services. Technology Innovation in Logistics Sector In the last few years, the operations of logistics and transport sector have been modernized with the latest information and communication technologies, especially those which are associated with the Internet and e-business. Though, the idea of logistics and logistics management is not new. Additionally, there is nothing new in the areas of logistics. In fact, people have been maintaining and warehousing goods ever since the days of early Egyptian times. Goods and materials have been transported through transportation means when people initially learnt about the logs float downstream. Also, the storage has been in place since people initially revealed that, there was a way to live long and survive in cold winter (Consultrans, 2008; Somuyiwa & Adewoye, 2010; Nigel et al., 2010). In addition, currently the emergence of ICT and its application to logistics management is the similar token as the ancient transportation was done but slightly changed the associated b2b (business to business) transaction potential also changed the way in which business supply chain operates. In this scenario, the Internet has facilitated data and information exchange on an extraordinary level, frequently at a speed that is extremely quick for standard consumption. Therefore, businesses are at the present prepared to make efficient use of data, from warehouse management systems, which hold information on customer/supplier warehouse record levels and major client ordering outlines and transport management systems inside that data and information pertaining to the site of significant supply chain assets, for example as vehicles or products are normally stored. Additionally, the application of these systems directs to international inventory management and support enhanced visibility that, consecutively, guides to minimize prices and improve client services by minimizing receiving and shipping cycle times, augmenting inventory and shipment accurateness, and reducing lead time erratically that all have influenced on logistics prices (Consultrans, 2008; Somuyiwa & Adewoye, 2010; Nigel et al., 2010). Moreover, in this age of modern technologies every business demands enhanced support, on time delivery and better security. Rapid and better data and information exchange and collaboration among corporate stakeholders are essential to attain this goal (Danielis et al., 2008). ICT Systems in Component of Logistics At the present, we can observe a number of applications of ICT in logistics management. These applications improve the process of logistics management. I have outlined below some of the important applications of ICT for the logistics management. This section describes the fundamental aspects and areas which demand new technology based support for different components of logistics management: (Somuyiwa & Adewoye, 2010; Nigel et al., 2010; Zhelyazkov, 2012) Transaction Management EDI (Electronic Data Interchange) is the process of transferring electronic data and information through agreed message principles from one system to another, with minimum human intervention. In other words, it is the exchange of documents in standardized electronic form, between business firms, in a computerized form, straightforwardly from a computer application in one business form to an application in another. Additionally, in logistics management these systems are used to establish an effective communication link among associated firms in a supply chain. For connecting all these parties we make use of e-commerce, interactive telephone systems, etc. (Somuyiwa & Adewoye, 2010; Clarke, 1998). Logistics Operational planning At the present, business organizations use modern software systems for all kinds of route planning and logistic decision support. In this scenario, these applications offer them an excellent support for advanced planning and scheduling, facilitating the planning, design and operations of supply chain areas. Additionally, these systems present an excellent support for the potential performance measurement for all members of the supply chain. For example in this category of software applications, we have ERP (Enterprises Resources Planning) systems that provide support for recording, processing and fulfillment of corporate orders for example in case of warehouses or stores these systems offer support for supply chain management facilities (Somuyiwa & Adewoye, 2010; SAP1, 2012). Logistics Control Management At the present, we have a wide variety of logistics control management systems which can be used to manage logistic services and control their overall movement. In this scenario, mobile communication (PDAs, Cell phones), tracking vehicles using GPS (Global Positioning System), tracking and tracing systems (making use of Barcode-scanning intended for packages and palettes), assessing vehicle performance through ‘black boxes’ (holding logistic data), and AEI (Automatic Equipment Identification). These all systems collaboratively support the logistics management operations (Somuyiwa & Adewoye, 2010; Shelly et al., 2005). Logistics Information Flow Management The stream of information and data in diverse directions by means of changeable contents among a variety of databases (departments) inside a corporation is acknowledged as business information flow. In addition, information and data for a logistics management is better managed through the application of information system those able to secure and protect such data in a great deal of an improved way (Somuyiwa & Adewoye, 2010; Stair & Reynolds, 2003). Planning/Coordination The general objective of coordination and planning is to be acquainted with necessary operational data and information and to ease supply chain integration with capacity constraints, strategic objectives, inventory deployment, logistics needs, procurement requirements, manufacturing needs and forecasting (Somuyiwa & Adewoye, 2010). Operations Correct and timely data and information to support logistics operations is essential. In addition, operational information is necessary in 6 associated areas: order assignment, order processing, inventory management, distribution operations, procurement and transportation and shipping. Additionally, these all areas are well managed through new technology based supporting systems with automated planning and decision management support (Somuyiwa & Adewoye, 2010). Benefits of Technology Application This section outlines some of the important benefits those are attained through the application of next generation ICTs for the logistics management paradigm. I have outlined below some of the important benefits: (Somuyiwa & Adewoye, 2010; Zhelyazkov, 2012; Gunasekaran, 2002) The implementation of ICT in these days’ logistics management areas makes it easy to manage global supply chain and fast and secure logistics processes. Better stakeholder management Primarily benefits for the both buyers and suppliers of the product or the service. Redacting of travelling costs Selection of most shortest and convenient route Security of transactions Fast response Logistic tracking Offers a great deal of competitive advantage Sharing plus visibility of business information Support for global supply chain management Better transparency through sharing information among stakeholders Creation of better external links for better business information management In addition, the ICT and next generation communication technologies have made it possible to construct communication links among corporations and for numerous organizations. In this scenario, the web based environment of businesses has highlighted the significance of ICT in global supply chain and logistics management areas. Moreover, a number of researchers have found that ICT integration into business operations allows a business to improve its supply chain (Somuyiwa & Adewoye, 2010; Zhelyazkov, 2012; Gunasekaran, 2002). ICT adoption Challenges This section outlines potential issues and challenges in the successful implementation of ICT. One of the basic factors that hinder ICT adoption depends on the business size and IT knowledge. The implementation of the new technology based systems and ICT is not uniformly distributed among big, small and transport businesses. Additionally, the large size businesses have spent a lot of money on the improvement of ICT systems and have been making use of them for a long time; on the other hand the small size businesses hardly ever make use of them. The major cause for this is a lack of resources (either financial or human resources) in small transport businesses. In addition, the fundamental issues regarding web based e-market are the technology challenges and issues. In fact, there is no standard for the implementation of technology based systems and communication tools among the dissimilar buyers and suppliers. Furthermore, a frequent standard for communication is measured as a significant barrier to e-business flow, for the reason that its attendance will take to a possible decrease in transaction expenses with augmented competitiveness (Evangelista & Sweeney, 2003; Zhelyazkov, 2012). Some of the possible barriers and challenges regarding ICT technology application for the global logic systems are outlined below: (Evangelista & Sweeney, 2003; Zhelyazkov, 2012) Extensive investment and implementation expenses High running costs Less effective personal skills Uncertain return on investment Lack of new technology based standards Altering business managements Complexity in selecting better and more effective ICT Complexity in-customer SCM system incorporation Data safety and security issues Some businesses ignore the significance of ICT for their business Transport companies’ clientele don’t need it frequently Competitors are not making use of it Lack of personnel skills High technology training costs Issues of data security and attacks ICT Implementation Case This section outlines a real world implementation of ICT for a corporate arrangement. In their paper, (Danielis et al., 2008) discuss ICT technology based system that is presently working at the port of Trieste. The firm assessed how the ICT system can smooth the logistics management and operations. After a detailed analysis a Petri-net technology implementation model was utilized to create the logistics processes and to estimate their enhanced working and performances with and without sharing information. After the improvement in the East of the European Union, the Friuli Venezia Giulia Region found again its function of technology based logistics systems of the global trade between East and Central Europe. To increase its global role, in 2007 the Region decided to develop and implement the integrated next generation technology supported ICT based logistics system. The basic objective of such technology based system is to connect the local stakeholders; especially the logistics nodes for example truck terminals, ports and airports. This latest ICT system will create a horizontal integration amongst the entire business and corporate infrastructures. In addition, the major objective of SILI is to augment the competence of the local logistics generally as well as to maintain intermodal freight transport that requires synchronization of the logistics processes and then data and information transfer and cooperation (Danielis et al., 2008). Logistic Management System Development Firms This section outlines some of the well-known software development firms those are presently developing logistics management applications. In this scenario, Logisuite is the first software development firm that develops Freight Management Software solution. This solution incorporates a wide variety of functions such as Purchase Order Management, Freight Forwarding Software, Inventory Control Software, Real-Time Online Cargo Tracking, Trucking Software by means of Cross-Dock plus Dispatch, Third-Party Logistics System (3PL), Integrated Accounting Software, etc. These all applications are aimed at offering a great deal of support for software usage and working with greater support (Logisuite Corporation., 2012). The next software development firm is Acatech. Acatech is presently developing a wide-variety of software applications to facilitate clients to automate warehouse procedures to enhance the client service throughout access to correct and real-time production and inventory information, and optimize processes to attain major bottom-line results. In addition, Acatech firm has developed the idea of Order-to-Ship (O2S) to explain robust software suite (AcaTech, 2012).  Another software development firm is McLane Logistics Technology Corporation, which works through to completely recognize our companies’ exclusive needs and demands. McLane Logistics Technology is presently offering application support in: (McLane Logistics Technology, 2011) Network Analysis Warehouse Layout Facility Design Equipment Justification Time Studies Engineered Labor Standards Competence Improvement Analysis Management Support OptiSlot Implementation Warehouse Management System (WMS) Selection as well as Implementation Conclusion Information technology has changed the traditional practices of carrying out business activities. Now traditional business operations are replaced with modern ICT supported tools and processes. At the present, the majority of business organizations are adopting ICTs for automating their business operations. And the application of ICT for logistics management is one of the most attractive trends. This paper has presented a detailed overview of logistics management. This report has discussed the uses of ICT for the different components of logistic services. This report has also discussed the benefits and challenges of ICT logistic technology. This report has also outlined a real life case regarding ICT technology application for logistic management services. References AcaTech, 2012. Welcome to Acatech Solutions. [Online] Available at: http://www.acatech.com/ [Accessed 08 August 2012]. Clarke, R., 1998. Electronic Data Interchange (EDI): An Introduction. [Online] Available at: http://www.rogerclarke.com/EC/EDIIntro.html [Accessed 07 August 2012]. Consultrans, 2008. ICT and e-Business Impact in the Transport & Logistics Industry. Study Report. Bonn/Brussels: European Commission, DG Enterprise & Industry. Danielis, R. et al., 2008. Integrated ICT system for logistics: the case of the Italian region Friuli Venezia Giulia. [Online] Available at: http://www2.units.it/nirdses/sito_inglese/working%20papers/files%20for%20wp/wp120.pdf [Accessed 07 August 2012]. Evangelista, P. & Sweeney, E., 2003. The use of ICT by Logistics Service Providers and Implications for Training Needs. A Cross-Country Perspective. [Online] Available at: http://arrow.dit.ie/cgi/viewcontent.cgi?article=1023&context=nitlcon [Accessed 08 August 2012]. Gunasekaran, A., 2002. Benchmarking in logistics. Benchmarking: An International Journal, 9(4), pp.324-25. Laudon, K.C. & Laudon, J.P., 1999. Management Information Systems. 6th ed. New Jersey: Prentice Hall. Logisuite Corporation., 2012. Logisuite. [Online] Available at: http://www.logisuite.com/ [Accessed 09 August 2012]. McLane Logistics Technology, 2011. Logistics Consulting. [Online] Available at: http://www.mclanetech.com/supply-chain-services/logistics-consulting [Accessed 09 August 2012]. Nigel, S., Stuart, C. & R, J., 2010. Operations Management. 6th ed. Pearson College Div. SAP1, 2012. Enterprise Resource Planning – ERP. [Online] Available at: http://www.sap.com/uk/solutions/business-process/enterprise-resource-planning.epx [Accessed 10 August 2012]. Shelly, Cashman & Vermaat, 2005. Discovering Computers 2005. Boston: Thomson Course Technology. Somuyiwa, A. & Adewoye, J., 2010. Managing Logistics Information System: Theoretical Underpinning. Asian Journal of Business Management, 2(2), pp.41-47. Stair, R.M. & Reynolds, G.W., 2003. Principles of Information System. 6th ed. Toronto : Thomson Learning, Inc. Turban, E., Leidner, D., McLean, E. & Wetherbe, J., 2005. Information Technology for Management: Transforming Organizations in the Digital Economy. New York: Wiley. Zhelyazkov, G.I., 2012. The impact of ICT systems on road transport SMEs in Australia. [Online] Available at: http://galinzhelyazkov.com/wp-content/uploads/2012/05/The_impact_of_ICT_systems_on_road_FINAL.pdf [Accessed 08 August 2012]. Read More