Maritime Logistics at Hitachi Transport System Company - Essay Example

Introduction Maritime logistics entails a combination of two terms, namely, logistics and maritime. The two terms tend to lie under the context of supply chain management (Song and Panayides, 2012). Researchers assert that there is no clear definition of maritime logistics. This is because maritime logistics is a contemporary global operation chain in logistic industry (Song and Panayides, 2012). However, researchers and academicians assert that maritime logistics involves transportation of passengers and cargo between two or more seaports (Song and Panayides, 2012). Researchers assert that, maritime logistics have been brought out by an increase in trading activities across the glob. This has made business to come together through multilateral and bilateral trade agreements, to integrate their maritime logistics operations in a more efficient and effective manner (Wisner, Tan and Leong, 2011). The term maritime logistics can not be separated from supply chain management because both concepts have got some underlying commonalities on areas of their operations (Song and Panayides, 2012). Whereby, supply chain management encompasses bringing together business operations through coordinated activities to ensure that there is flow of input from supplies to manufacturers till goods and services reaches to the final consumer (Wisner, Tan and Leong, 2011). Therefore, this assessment focuses on providing a sharp insight on the principles of third party logistics, advantages and disadvantages of third party logistics and suggested improvement that could be implemented at Hitachi Company(selected company for assessment) to make maritime logistics more effective and efficient. `. Principles of a third party logistics (3PL) approach when managing a logistic supply chain Third party logistics refers to a company or an organization that focuses on providing outsourced logistic services to other firms (Neubauer, 2010). For example, Hatachi Company was selected as one of third party logistic companies for this assessment (Schoenfeldt, 2008). The principle of third party logistics involves complementing logistic supply chain management by offering outsourced logistic services to their customers (Goldsby and Martichenko, 2005). Whereby, third party logistic providers have extended their services by acting as forwarders and hauliers. Recently, third party logistic firms not only provide physical logistic services but also additional services such as forwarding (Goldsby and Martichenko, 2005). Third party logistic providers have expanded their services to incorporate consumption services (Schoenfeldt, 2008). This expansion has made customers to pay much attention on other activities rather than concentrating on the flow of goods and services (Goldsby and Martichenko, 2005). In above connection, logistic providers have realized that information technology is a key to success (Goldsby and Martichenko, 2005). Therefore, logistic leaders and information technology executive are anticipated to implement the following six principles (Schoenfeldt, 2008). The principle of automation to increase business profitability, the principle of leverage technology, the principle of configured solutions, the principle of collaboration with all stakeholders, the principle of measures for improvement and the principle of delivering truth version (Schoenfeldt, 2008). The principle of automation entails implementing computerized systems that can perform complex task and allow employees to focus on customer (Vasiliauskas and Jakubauskas, 2007). The principle of leverage technology focuses at preventing time wastage and speed up time to the market (Wisner, Tan and Leong, 2011). Under this principle, information technology executives implement platforms that ensure workflow automation, reliability towards quality delivery and pro-active monitoring of materials and projects (Vasiliauskas and Jakubauskas, 2007). The principle of configure solution without processes customization, focuses on adoption and implementation of platforms for both time management and warehouse management systems(Vasiliauskas and Jakubauskas, 2007).Under this principle, logistic providers ensures that services rendered are of high quality to enhance reliability and customers satisfactions (Wisner, Tan and Leong, 2011). The principle of measure to drive improvement focuses on how logistic leaders can enhance decision making through performance dash boards (Vasiliauskas and Jakubauskas, 2007). On the other hand, the principle of delivering single version of truth focuses at ensuring that organization data has been stored in various systems to make sure that LSP do not get a clear view of customers and operations (Wisner, Tan and Leong, 2011). The logistic leaders under this principle focus in centralizing shipment and reducing organization master data as well as reducing information technological cost (Wisner, Tan and Leong, 2011). Advantages of a third party logistics (3PL) approaches when managing a logistic supply chain Research evidence indicates that integration of various services by third party logistic providers have enabled customers to concentrate on other activities without fear, knowing that there is efficient flow of goods and services(Kotzab, 2005). The introduction of 3PL has helped to reduce environmental pollution and road congestion (Kotzab, 2005). Through 3PL, various innovations have been embraced such as information communication technology (Kotzab, 2005). Additionally intermodal terminal and global positioning systems have been developed (Blecker and Aldarrat, 2008). Those innovations have facilitated trade flows, making logistic operation more efficient unlike before (Blecker and Aldarrat, 2008). The following are five other benefits of outsourcing 3PL into a company; the first benefit is that the company is able to save time and money because 3PL eliminate the need for committing funds in warehousing and spacing activities (Blecker and Aldarrat, 2008). Secondly, 3PL provides a resources network that help companies to provide fastest and efficient services at a reduced cost (Blecker and Aldarrat, 2008). Thirdly, 3PL have tools and technology required in ensuring customer is able to get their goods at required place within the shortest time possible (Blecker and Aldarrat, 2008). The 3PL is more flexible and allow utilization of more space and resources when needed (Blecker and Aldarrat, 2008). This makes it more suitable for business which undergoes through seasonal periods (Kotzab, 2005). The 3 PL have the required expertise of ensuring exact amount of inventoried are delivered to the required destination within the stipulated time (Blecker and Aldarrat, 2008). Disadvantages of third party logistics (3PL) when managing a logistic supply chain Empirical research findings indicate that though 3PL is beneficial, it also have some challenges to the participants (Zanjiranifarahani, 2011). One of the most prominent short comings of third party logistic is that outsourcing companies may lose control over logistic operations (Zanjirani farahani, 2011). Additionally, failure from suppliers may cause substantial harm and interruptions over the logistics operations (Zanjiranifarahani, 2011). Conflict of interest may arise between the third party logistics providers and outsourcing companies (Zanjiranifarahani, 2011). This is because the two companies have different goals and objectives that they may want to achieve (Zanjiranifarahani, 2011). Lack of proper management of services rendered to customers may tarnish reputation of third party logistic providers (Zanjiranifarahani, 2011). On the other hand, companies which relay fully on the services of 3PL may find themselves at a greater risk of losing revenues especially when 3PL providers are unable to deliver goods and services within the stipulated time (Zanjiranifarahani, 2011). Companies using the services of 3PL logistic are faced with the challenges of lack of direct touch with their customers (Zanjiranifarahani, 2011). This may lead to low profitability of the outsourcing companies as customer try to look for other firm that may provide them with what they are looking for (Zanjiranifarahani, 2011). Improvements that could be implemented within Hitachi Transport System Company The company should embark on quality and infrastructure infrastructural improvements by ensuring that the quality of services rendered to customer conform to desired customers requirements (Hitachi Transport System, 2012). Additionally, Hitachi Company embarks on infrastructural improvement by ensuring that there are proper mechanisms in place that facilitate flow of information and materials from the manufactures to the customers (Hitachi Transport System, 2012). The company should continuously adopt new technological changes by offering optimal storage facilities to their customers (Hitachi Transport System, 2012). The company should establish a global network program that ensures that both local and international customers have access to company services and products (Hitachi Transport System, 2012). Geographical scope should be well defined so that the company can efficiently and effectively meet the needs and anticipation of the customers located in different geographical regions (Hitachi Transport System, 2012). The authority and power within the supply chain management should flow from the top management to lower levels of supply chain management (Hitachi Transport System, 2012). In above connection, an implementation process should be established in Hitachi Company to ensure that there is sustainability of the suggested improvements (Hitachi Transport System, 2012). Additionally, Hitachi Company should establish a customer information protection policy that ensures privacy of customer information against unauthorized access (Hitachi Transport System, 2012). This policy is anticipated to boost customers’ confidence and increase profitability of the company because more customers are anticipated to use this company as their third party logistic provider (Hitachi Transport System, 2012). Conclusion Therefore, based on the above assessment it can be scrutinized that Hitachi transport system was selected as a supply chain organization for this analysis. The company offers third party logistical services to different companies. The company has maritime departments that provide shipping logistics services to both local and international companies. In above connection, the principles of third party logistics have been put forth and how they can be implemented by information technology executives when managing their companies supply chain logistical operations supply. Conclusively, the analysis has put forth the advantages and disadvantages of third party logistics. It can be scrutinized that, third party logistics have numerous benefits such benefits include; logistical companies tend to save time and money, customers are able to get goods and services at their destinations within the shortest time possible. The 3PL help to create global network that ensures that there is efficient flow of goods and services to the customers. However, despite having a lot of benefits, the 3PL are faced with some challenges which include; outsourcing firms tend to lose control over logistic operations, supplier’s failure may subject the outsourcing company to substantial amount of losses. The assessment discussed the suggested improvements that Hitachi company can put forth to become more efficient and effective in conducting its supply chain logistical operations. Reference list Blecker, T., & Aldarrat, H. 2008. Management in logistics networks and nodes: concepts, technology and applications. Berlin, Erich Schmidt. Goldsby, T. I., & Martichenko, R.2005. Lean Six Sigma logistics: strategic development to operational success. Boca Raton, Flor, J. Ross Pub. Hitachi Transport System, 2012. Third Party Logistics 3PL. Hong Kong; Retrieved: http://www.hitachi-hb.com.hk/en/privacy.html>on 20th November 2012. Kotzab, H. 2005. Research methodologies in supply chain management: with 67 tables. Heidelberg [u.a.], Physica-Verl. Neubauer, R. 2010. Business Models in the Area of Logistics: In Search of Hidden Champions, their Business Principles and Common Industry misperceptions. Wiesbaden, Betriebswirtschaftlicher Verlag Gabler. Schoenfeldt, T. I. 2008. A practical application of supply chain management principles. Milwaukee, Wis, ASQ Quality Press. Song, D.-W., & Panayides, P. M. (2012). Maritime logistics: a complete guide to effective shipping and port management. London, Kogan Pag Vasiliauskas, A, & Jakubauskas, G 2007, 'Principle and Benefits of Third Party Logistics Approach when managing logistics supply chain', Transport (16484142), 22, 2, pp. 68-72, Academic Search Premier, EBSCOhost, viewed 20 November 2012. Vaidyanathan, G 2005, 'A framework for Evaluating Third-Party Logistics', Communications Of The ACM, 48, 1, pp. 89-94, Academic Search Premier, EBSCOhost, viewed 20 November 2012. Wisner, J. D., Tan, K.-C., & Leong, G. K. 2011. Principles of supply chain management: a balanced approach. Mason, OH, South-Western. Zanjiranifarahani, R. (2011). Logistics operations and management: concepts and models. Amsterdam, Elsevier. Read More