Logistics Management - Trento Company - Case Study Example

Logistic Management Name: Course title: Instructors Name: Institution: Date: Executive summary The need of maintain logical flow of goods and series in the supply chain management can not be underrated in the contemporary marketing environment. By maintain a healthy supply chain, small and big companies are able to have raised customer base, as they feel more satisfied with products and services provided. This paper will evaluate on ways in which Trento can be able to improve on its entire logistic channels in order to satisfy the needs of customers such as Elle Sports among other notable customers in Australia and international customers. Wallenburg (2011, p. 57) logistics is a part of supply chain management that plans, implement and controls effective and efficient flow and storage of products and services. It is worth noting that logistic providers plays a big role in maintain a smooth flow of products in the supply chain .By collaborating with their clients, logistic providers are able to make seamless and tight bounds thus high profitability levels. By employing best practises such as total quality management and the continuous improvement among other notable best practises in supply chain, Trento will be bale to delivery of high quality services, thus attracting and retaining customers. Some of the major challenges facing majority of supply chain management includes inefficient information systems, lack of supply chain metrics, and inventory versus customer services among other notable challenges. To improve on service delivery to its customers, Trento should employ modern logical management software such as CTMS software for container trucking, increase its packaging and materials handling, effective management of warehouse among other important aspects such as customer’s service. In conclusion, Trento Company should employ various elements of supply chain management, such the use of modern information systems to maintain and attract new customers Table of Contents Executive summary 2 Table of Contents 3 Introduction 4 Role of logistic providers in supply chain dynamics 7 Best practises in the supply chain 8 Characteristics of excellence in supply chains 9 Challenges facing supply chain management 10 Inventory versus customer services 10 Deficiency of supply chain metrics 10 Definition of customer service 11 Inefficient information systems 11 Evaluating Trento logistic channels 11 Logistic management software 12 Increased packaging and materials handling 13 Packaging Testing and monitoring 13 Materials handling 13 Effective warehousing management 14 Improved demand management and customer service 14 Conclusion 15 References 16 Introduction As far as history records, commodities required by people are not always produced in areas where they would wish to have them consumed, or the goods are not accessible when these group of people wants to consume them. Earlier on, people had choices of consuming the goods or services within the immediate locations or moving the goods to preferred sites for future uses. However, due to logistical problems as there was no organised mode of transport as well as storage system, movement of goods was highly limited to what individuals could personally move. The limited movement and storage systems generally constrained individuals to live near the sources of productions and forced them consume narrow range of commodities. In the recent years, these trends have drastically changed, as movement of goods and services across different geographical, economical and political regions is evident. The main driving factor for the improved logistic systems is increased technological know how such as emergence of social medias, new modes of transport an communication and increased region alliances such as the European union, United Arab emirates, BRICS ( Brazil, Russia, India, China and South Africa) alliances among other notable global alliances. The need of improved logistical systems and management has also been increased by high population increase as witnessed in the last half century where global population has almost doubled from 3.9 to 6.9 billion from the year 1950 (Baziotopoulos 2008, p.43) . As a result of improved logistic systems, companies across different regions heavily rely on others for supply of raw materials, transportation of finished products among other notable elements along the supply chain management. This paper critically evaluates on how, Trento can improve on logistical channels to meet customers’ needs. Background on logistic management Transportation as well as timely delivery of required good and services is the main factors, which enhances the success of businesses. Whether it is the transportation of raw material to manufacturers or finished products to consumers, effective and efficient logistics play major role for growth of business. Without adequate logistics, no any given business can be bale to compete with the others, especially in this modern time when most of the consumers are enlightened on their rights. A healthy logistics offers rapid expansion to any given business, due to enhance as customer satisfaction levels. Stock & Lambert (2001, p.60) logistics is a part of supply chain management, which plans, implement and controls effective and efficient flow and storage of products and services and associated information from point of origin to point of consumption, with the main aim of meeting the customers’ needs. Logistic incorporates warehousing, transport, material handling, packaging, information and related security. Generally, logistic ahs greatly evolved due to increasing complications of many business sectors and raised demand for shipping is some of the major reasons why this business concept has increased. Today, the complexities of production logistic can be analyzed, modelled, optimized and visualized by simulation software, although this keeps on changing with technological improvement. To manage the entire logistic system well, effective and efficient logistic management systems should be embraced to ensure that goods and services are available the required destinations at required time to cater for consumers needs. Baziotopoulos (2008, p.45) says that logistic management is governance of functions of the supply chain. The activities of logistic management includes out bound and inbound transport management, warehousing, fleet management, logistic network design, supply and demand planning, inventory management as well as managing the third party logistic service providers. To varying degrees, logistic systems also includes procurement and sourcing, enhanced customer service, assembly and packaging, scheduling and planning among other notable elements. Logistical management is the part of entire levels of planning and executions, strategic, tactical and operational. An integration functions coordinates the entire logistical activities and integrates logistics to other functions with others such as sales, marketing, finance, manufacturing, as well as information technologies. For Ellen sport, a large Australian retail company having around 50 outlets, the need of effectively managing its supply distribution systems from its suppliers cannot be underrated. Among the firms, manufacturing suppliers is Trento, which produces sports for women. Trento supplies shoes to Ellen Sports on weekly basis among other major retail outlets in Australia and abroad. Despite its large customer base, Trento is finding it difficult to manager its logistic channels. This makes it hard for Trento to deliver shoes to Elle Sports within 10 days of delivery from order date. The manufacturing of shoes that also includes supply of shoe parts to Trento, materials and accessory has a short lead-time for finished shoes for delivery within 10 days predetermined duration. Due to the lack of efficient supply chain management, the earliest Trento can be able to deliver finished goods to Elle, sports is within duration of between 15 to 20 days. Currently, Trento has around 15 local suppliers and 20 overseas suppliers. The order process for Trento is carried out by five purchasing personnel’s who are also in charge of ordering all other items in the firm such as stationary, manufacturing equipments among other elements. This makes it hard for Trento to have improved supply channels to its customers a factor that has made the firm to loose major clients, who may include Elle Sport, if the trend continues. This is further, aggravated by lack of computerisation of the ordering system, despite pressure from major clients such as Elle Sports to do so. Phelan (2009, P. 32) indicates that companies should computerize their systems to improve on their efficiencies, improve on ability to handle customers compliments and related issues in real time. During the recent global recession, supply companies, which failed to handle customer queries, found it hard to survive as they ended up loosing loyal customers to those firms, which had computerized their customer complements. For instance, firms such as Logistics dynamics, intelligent logistics, and Ameriquest transport system among other firms have been able to conquer the international markets due to their abilities to respond to the needs of customers, thus more revenues. Role of logistic providers in supply chain dynamics It is worth noting that, the objectives of the supply chain becomes hard to meet due to individual behaviours of the decision makers in organisations, as their behaviours are neither rational nor optimal. As a result of dynamic nature of the supply chains, fluctuations and amplifications occurs from the suppliers to all other sectors in the chain. Therefore, there is a great need of a robust control system, which is flexible enough in counteracting any disturbance occurring along supply chain. Logistics as well as supply chain managements are thus viewed as fields where logistic providers, through the virtue of their particular expertise, this being able to offer most benefits to transactions in freight trades. Freight forwarders plays an important role in the supply chain management as the number of firms outsourcing their logistics keep on increasing (Baziotopoulos 2008, p.29) .The third party logistic providers are becoming highly involved in designing, management and control of supply managements of many firms. For any given firm such as Elle Sport, it is worth noting that proper selection of logistic provider is one of the most crucial elements in the supply chain management. Third party logistics provides pivotal roles in provision and designing of integrated supply chain, which responds to needs of the clients they serve. In order to help the customers, the logistic providers should behave more like associates of their clients rather than usual business partners. Not only do the logistic providers arrange for transport of cargos and facilitating clearance trough the customs, they area also required to manage the ordering processes of their clients. Based on this, logistics providers are highly involved in lowering the operational cots of their clients as well as integrating their supply chains. By collaborating with their clients, they are able to make seamless and tight bounds thus high profitability levels. Suppliers are supposed to respond to various situations affecting the clients and within specified time durations. Failure to achieve this, it is important for clients choose another, thus rectifying the challenges to retain customers. Generally, the main role of the logistic providers is managing supply chain like arrival of raw and finished products in time among other important aspects. However, it is important noting that, logistic companies face the challenge of limited resources among other operation constraints, which hinders delivery of quality services making the less competitive. For instance, Trento face the challenge of lack of a computerized system that makes it hard for is clients such as Elle sport to order products from the firm. Best practises in the supply chain To achieve the desired results, it is crucial for all chains in the supply chain to follow the set practises to enable firms such as Elle sports effectively serve their loyal customers. Multinational companies have set numerous focus group workshops to assists small and medium business such as Trento to streamline their supply chains to their loyal customers. Cross organisation integration is one of the important element adopted in integrating client and supplier’s network process. The main driving force for streaming is creating optimized flow of materials that are free from wasteful and obstruction activities. Stock & Lambert (2001, p. 51) argues that collaboration between the supply chain partners reduces the risks involved as well as raise their efficiency of the entire pipelines. Therefore, supply chain efficiencies rely on a success long-term relationship where information, joint problem solving schemes and raised trusts among the suppliers such as Trento are key success factors. Total quality management and the continuous improvement include quality managements of the whole supply chain as well include all suppliers in supply chain down to final customers. JIT (Just in time) is a zero waste reduction and inventory (Stock & Lambert 2001, p.67). Supplier developments and evaluation of supplier performances is useful in managing supplier relationships. If performance of suppliers fails to meet the required standards, as assisted in order to enhance their performance, through trainings and increased improvement teams. Characteristics of excellence in supply chains AS indicated by EAC (European Advisory council) and American IAC (Industry Advisory Council) teams the success of a supply chain ahs four main characteristics. One of the characteristics is enhancing and supporting the strategy of organisation, by being vital part of overall designs of the business. Complementary operating model is useful for maintaining a healthy supply chains, thus creating a competitive advantage. The other characteristic is emphasizing on high performance executions, where there is measure of performances by balanced set of relevant business objectives or metrics. Good supply chains advantages tailors to sets of practises, such as strategy, operation objectives and models as well as strategy. Therefore an, an excellent supply chains will always be found in firms having clear business strategies and enabled by the complementary operating models aimed at achieving balanced sets of operation objectives. Success of supply chain excellences relies on how well firms achieve operational objectives, thus delivering quality services to their customers (Phelan 2009, P. 18). Challenges facing supply chain management Inventory versus customer services Wallenburg (2011, p. 77) indicates that if lead time is kept constant, ability of a firm to fill orders is dependent on inventory levels in supply chains, as long as there exists products in FGI (finished goods inventory) from where goods are taken. Other forms of inventories like raw products inventories have indirect effects to satisfaction of customers. Based on this, stocks out at any part of the chain supply will obstruct and eventually result to stock out in finished goods inventories. The figure below briefly indicates the relationship between effective customer services and performances of the firm such as inventory and general firms flexibilities. (Stock & Lambert 2001, p.33) Deficiency of supply chain metrics In the supply chain management having multiple choices, every site has autonomous management teams, whose objectives may highly differ. In most of the chains there have been lack of metrics to measure on how performances of whole system is changing hence reduced overall performance. This is due to the fact that, the supply chain metrics provides basis for evaluation of entire performances of whole chain as one distinct system. Definition of customer service In the supply chain management, there is clear lack of elaborate metrics on customers’ service. Due to this, evaluation of performances become difficult as well as overlooking of aspects related to customer services. Inefficient information systems A database on various operational sites, which describes system environments, backlog, inventories, and plans of production among other important aspects in information, lacks efficient linkage. To some suppliers, there is general lack of employing modern forms of information storage, thus becoming hard to monitor different processes of supply chain. For instance, Trento is yet to computerise the ordering system, thus making it hard for customers to place their orders in time for effective delivery of goods. Evaluating Trento logistic channels Badenhorst-Weiss (2005, p. 108) notes there is an urgent need for companies to evaluate and improve their distribution channels in order to satisfy the needs of customers they serve. Failure to do this, firms will suffer reputational damages due to massive inadequacies to meet the needs and wants of their loyal customers. For instance, by failing to meet the needs of customers, Trento may end up loosing companies such as Elle Sports, having substantial sales revenues to Trento. To reverse on this trend on, the firms should improve on some detrimental areas, which affects have raised the firm’s inefficiencies. Logistic management software This is software installed for logistic automation. It helps supply chain industries for automating workflow and management of entire system. By atomizing its operations, Trento will improve on ways customers such as Elle Sports place their order as well as allowing them to make subsequent follow-ups for their suppliers. Currently, customers place orders by verbal means, followed up by written purchase orders posted out. Often the poorly written orders have to be redone a factor that reduces general efficiency of the firm. At current times, there exist numerous types of software’s due to the fact that there exists no any generalized system and work flow , although practises is much related. Most of the logistics companies use one or more custom solutions. Some of the software solutions that Trento and Elle Sports will help to address problems facing the warehousing, container department, and convectional department among other important departments in firms logistic (Magrab 2007, p.109). For instance, the convection department can use CVT software or CTMS software, while the container trucking use CTMS software among other notable software. Further, by using current operating software the firm will be able to integrate its different levels as indicated below, thus higher profits. (Stock & Lambert 2001, p.28) Increased packaging and materials handling Efficient packaging and material handling is one of the important aspects that improve overall performance of the firm. For instance, in the recent years customers are more sensitive to modern forms of packaging as it leads to improved environmental packaging and protection efficiencies (Badenhorst-Weiss 2005, p.103). Packaging refers to materials used for containment, handling, protection, presentation and delivery of goods, therefore promoting, protecting and indentifying relevant products. Packaging Testing and monitoring Packaging system requires three systems of information of design, such as fragility of product, severity of distribution environments, and performance characteristics of various cushion materials. Some of the package testing, which can be adopted by Trento to improve on customers satisfaction includes, vibrations, dropping, horizontal impacts, compression, rough handling among other parameters (Magrab 2007, p.100). Materials handling This refers to short distance movement, which usually takes place within confines of building such a plant between a building and transport service providers. For instance, the way products handled from Trento to its customers depends on whether they are in bulk or packaged. To improve on material handling, Trento should adopt unit load, which consolidate several units into larger units. This way the firm will be able to raise its efficiencies through reduced operational costs that will translate to satisfaction of customers needs (Phelan 2009, P. 20). Effective warehousing management Effective warehousing management is another vital area in logistic management. Stock & Lambert (2001, p.67) indicates that warehousing refers to that part of firm logistic system, which stores products, whether raw material, goods in process or finished products at between point of origin and the point of consumption. Over the years, warehousing management includes value-adding services such as custom labelling, promotional pack, and price marking among other notable areas. Transport and warehousing are substitutes to one another, with warehousing referred as transport rational at zero miles per hours as indicated by the flow chart below. (Badenhorst-Weiss 2005, p.108) Improved demand management and customer service By understanding the linkage that exist between demand management, order management and customer service, Trento will be able to improve on its service delivery to its customers. Further, Elle sports will effectively manage goods delivered from its major suppliers such as Elle Sports. Demand management is creation across the supply chain and its market of coordinated flow of demands. Some of demand forecasts, which ca be implemented by Elle spots includes judgemental, time series as well as associative (cause and effect) among others. Elle sports should also carry out CPA (customer probability analysis), ascertaining customer service services and service failure and recovery (Badenhorst-Weiss 2005, p.110 ) Conclusion From the above information, it is clear that effective management of logistics systems for all firms in the contemporary marketing environment is vital in maintaining high levels of customer satisfaction. By employing the above elements of supply chain management, firms such as Elle sports and Trento will ultimately improve on customer satisfaction hence more profitability. In conclusion, Trento Company should employ various elements of supply chain management in order to maintain and attract new customers. For example, by employing logistic management software as well as carry out regular customer probability analysis in its operations, firms such as Elle sports will be able to place orders in time. This will enable these firms to manage movement of goods, consequently increasing their short and long-term profitability levels due to enhanced customer satisfactions levels (Phelan 2009, P. 32). References Badenhorst-Weiss, J 2005, The applications of supply chain management best practices by small business suppliers. Global Logistics & Supply Chain Strategies, Harvard Business School Press, Boston. Baziotopoulos ,T 2008, An Investigation of Logistics Outsourcing Practices In the Greek Manufacturing Sector, Sage, Texas. Magrab, E 2007, Integrated Product and Process Design and Development: The Product Realization Process, CRC Press, Florida Phelan, J 2009, Guest Column: Knowing When a WMS or WCS Is Right for Your Company. Supply & Demand Chain Executive, Macmillan, Pretoria. Stock ,J & Lambert. D 2001 Strategic Logistics Management, McGraw-Hill Irwin, New York Wallenburg, C 2011, Commitment and Trust as Drivers of Loyalty in Logistics Outsourcing Relationships: Cultural Differences Between the United States and Germany. Journal of Business Logistics, Vol. 32, No. 1, pp. 83-98 Read More