Analysis of Supply Chain Logistics Management by Bowersox, Closs, and Cooper - Book Report/Review Example

Book review: Supply chain logistics management Author’s Name Institutional affiliation Date Tutor Introduction Supply chain management refers to the management of how goods flow. There are many processes involved in the supply chain management such as how the raw materials are moved and also stored. It is also concerned with inventory of the work in progress and also the movement of finished goods from where such goods are produced to where the goods are to be consumed. Supply chain management is therefore important since it is involved in ensuring that all the activities involved in supply chain management result in net value and make sure that an organization remains competitive through the use of proper infrastructure, proper use of logistics, making sure that supply and demand are synchronized as well as determining how an organization is performing at the global scale. The paper seeks to examine what Bowersox, Closs and Cooper (2012) have written on the subject of supply chain management. Discussion According to Bowersox, Closs and Cooper (2012) it is highly unlikely that most firms will get into collaborative end-to-end supply chain initiatives. Business leaders are coming up with new business models which entail cross-enterprise integration so as to gain a competitive advantage. Maintaining an integrated supply chain system would require constant redefinition owing to the changing dynamics. Logistics managers need to exploit the new supply chain opportunities with the aim of increasing growth and profitability. Where the structure and strategy for the integrated logistics management are positioned at the international level, new challenges pertaining to globalization arise (Bowersox, Closs, & Cooper, 2012). Logistics refers to the process which forms the link between participants in the supply chain and they form integrated operations. Most businesses have to incur huge costs in performing logistics. Service reliability, availability and operational performance are the metrics used to measure logistical service. Logistics therefore entails provision of customer service at the minimum cost possible. It is important to integrate performance of all the functions involved in logistics. Logistical functions can be categorized into manufacturing support, customer relationship, and procurement. There must be coordination between inventory and flow of information between the three categories. There are many similarities as well as differences to be found between performances cycles that relate to the logistics operating areas. With the aim being to minimize cost, designing a supply chain that is able to carry out the needed logistical work fast enough and also consistently become a challenge. From an operational perspective it is undesirable to have unexpected delays as well as performance which is faster than expected (Bowersox, Closs, & Cooper, 2012). In logistics there is need to develop customer relationships whether the customers are the end users, intermediate or even internal. It is therefore important that the marketing concept developed should focus on the needs of the customer rather than products or services. Organizations embrace three levels of increasing commitment in building their customer relationships. The first level refers to the basic logistics that should be available in customer service. For a firm to be competitive, it should ensure that services are available to customers, such services are reliable and the performance of such services is satisfactory. The second level of commitment entails creating satisfaction for the customers. Customer success is the highest level of commitment and an organization should seek not only to meet but to exceed the expectations of the customers. This can only be achieved by having in-depth knowledge of the needs of the customers (Bowersox, Closs, & Cooper, 2012). According to Bowersox, Closs and Cooper (2012) in an organization, the role of procurement is to obtain the necessary inputs which enable the operations of the organization to run. Professionals in procurement focus on the total costs of obtaining the inputs rather than the quoted purchase price. In procuring goods, the professionals should be guided not only the price at which a product is going for but the supply risk with accompanies an item. Before procurement strategy is implemented and executed there should be audits on the suppliers, performance monitoring which is on-going, supplier development and potential supplier certification. When manufacturing products, firms are concerned by the quality of the product since this is what determines whether a firm is able to compete at the global level. There are several dimensions to the term quality in products. A product could be of high quality due to its performance, reliability, durability, as well as conforming to engineering specifications. Customers would find a product reliable if it is serviceable and attractive. The requirements of the customers dictate the varieties and volumes produced by a firm. Due to developments in manufacturing the three strategies of a firm have been reshaped. It is now possible for manufacturers to customize products on a massive scale amongst others. Due to this the firms have come up with systems that are more efficient, integrated and effective in meeting the exact requirements of the customers (Bowersox, Closs, & Cooper, 2012). Cross-function and Cross-enterprise planning and collaboration are essential for an effective supply chain management. For supply chain planning to be effective there should be supply chain visibility, simultaneous resource consideration as well as joint resource utilization. Collaboration ensures that the three requirements are achieved successfully. Many firms are seeking to have Integrated Business Planning and thus supply chain participants from different organization have teamed up to develop and implement CPFR processes. Forecasts are used to anticipate the requirements of the customers. There are components which go into forecasts and these are trends, level and seasonality. Changes in demand results from acts such as changes in price, promotions as well as introduction of new products. Different techniques, support systems and administration are prerequisite for forecasting. Forecasting techniques provide the starting point in terms of statistics while support systems considers the data bearing in mind the changes taking place in the markets. The management plays the role of guiding and monitoring the whole process (Bowersox, Closs, & Cooper, 2012). In logistics transportation takes up the largest amount of money followed by inventory. As the product get closer to the customer, risks of holding inventory increase. The reason for this is that a product would end up in the wrong form or place and this adds onto the cost of product distribution. There are other risks, in addition to loss of sales due to inadequate supply, such as damage, pilferage and obsolescence. Inventory is maintained due to geographic specialization, balancing supply and demand, decoupling and buffering uncertainty. Management of inventory combines both reactive and planning logics. Where items have high demand, low volume and high performance cycle, then reactive logics becomes the most useful. Reactive logic pushes to a further date the risk of speculating on inventory. Where high volume items are involved and which have a stable demand, then inventory planning logic becomes appropriate. Inventory planning methods make it possible to manage the inventory since they rely on economies of scale as well as improved information (Bowersox, Closs, & Cooper, 2012). The largest single cost in logistical operations is usually transportation. Before deregulation, authorities standardized transportation services which were also inflexible. As a result of this organizations were hardly able to come up with a competitive advantage. Owing to deregulation it is possible to integrate transportation services into supply chain logistics. Logistics management requires intimate knowledge on pricing and transportation economics. Transportation costs depend on factors such as volume, distance, stowability, handling, liability and market factors (Bowersox, Closs, & Cooper, 2012). Managers involved in logistics should be familiar with the specialized transport related services. Traffic administration entails negotiation, operational management, consolidation, auditing and administration of claims. Warehousing supports manufacturing, marketing and distribution efficiency. The traditional role for warehousing was stocking inventory but in recent times there is more value offered by warehouse. There are economic benefits of warehousing such as sorting, breaking bulk, reverse logistics and seasonal storage. Warehouses and distribution centers are made so as to accommodate inventory handling and storage. Storage activities by the warehouses make it possible to ensure that supply and demand are balanced and so is speculation. The classification of warehouses is on the basis of ownership (Bowersox, Closs, & Cooper, 2012). There a private and public warehouses. Warehouse operations require proper site selection expansion, layout as well as others. These functions should be able to accommodate rapid changes and also meet current demands for the businesses. The cost and productivity of logistics is also affected by packaging. The cost is in terms of purchase of packaging material, designing the packaging materials and where necessary, to disposal of such materials. Every logistical activity is affected by packaging. For example inventory control is made possible by accuracy of packaging on products (Bowersox, et. al., 2002). The package size and density do affect the costs of transportation and storage. Proper packaging reduces chances of the product being damaged while being distributed as well as educating the customer and complying with regulations on the environment. At time packaging is postponed for strategic reasons. This ensures that there is flexibility owing to the fact that global supply chains are becoming more complex. Logistics and supply chain executives are increasingly focusing on global operations. There are complex tradeoffs and other decisions to be made with regard to sourcing and marketing. In addition to transportation, warehousing and inventory there are other additional costs such as tariffs, taxes, documentation and import restrictions which add to the total costs incurred. It becomes difficult to determine the total costs incurred in logistics. This results from the fact that there are costs that are not reported though standard accounting systems. The challenges posed by logistics can be overcome through network analysis. The realization of service attributes is related to the logistical network design (Bowersox, Closs, & Cooper, 2012). The highest level of logistical operational support can only be realized when the marginal cost equals the marginal revenue. It should be noted that the marginal equalization envisioned cannot possibly be achieved. Review of the logistics of the process of planning, decisions and techniques provide a guide to a logistics manager in the process of situation analysis, data collection, alternative identification and developing viable recommendations. There are three phases which are involved which are problem definition and planning, data collection and analysis, and finally recommendations and implementation. Regular analyses of the supply chain design are important due to the changes that are experienced at the global level in terms of availability of materials, demand as well as availability of production resources. As a result of the need to have accurate information there supply chain design optimization tool which are used for strategic and tactical analyses (Bowersox, Closs, & Cooper, 2012). Organizations are making use of tools such as dynamic simulation and routing as well as scheduling algorithms in investigating and evaluating inventory as well as transportation alternatives. Conclusion Bowersox, Closs, and Cooper (2012) have observed that there have been massive changes to logistics. There are new concepts and ideas which guide organizations in attaining their goals. Managing organization change poses a great challenge since managers required new skills which allow implementation of the changes without disruption of the focus for the organization. Management of logistics can only be effective where there is a framework for assessment of performance and control of finances. There are risks which are outside the supply chain and which impact its operations, equipment, technology and documentation. These include a regulatory environment which is ever changing. Financial and taxation environment does influence the geographic supply chain activities. There is the challenge of securing the products and lastly the responsibility for the logistics to focus on the sustainability of the whole firm. References Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2012). Supply chain logistics management. Boston, Mass: McGraw-Hill. Read More