Logistics and Logistical Professional Organizations - Assignment Example

Logistics (Name) (University) 1. Logistics and Logistical Professional Organizations Logistics primarily involves comprehensive organization and realization of an operation that is complex (Murphy and Wood, 2014). There are different types of logistics such as mass logistics, tailored logistics and humanitarian logistics. Mass logistics involves giving the same type of logistics services to customers; tailored logistics involve giving particular logistics services for particular customer needs while humanitarian logistics involves logistics for non profit (Murphy and Wood, 2014). Business operations direct logistics through the management of the flow of items and services from the point they are produced to the point where they are consumed. Logistics management therefore includes the control of abstract resources and physical resources. Physical items normally undergo handling, assembly, casing, counting and recording, transport, warehousing and more often than not security. Among the best logistical professional organizations is APICS which has been certified as a great place to work and prides itself on being the principal contributor of research, knowledge and certification courses that improve the distinction and modernism in supply chain. The organization provides business solutions such as supply chain assessments, corporate training, benchmarking and frameworks for business. Training and tutoring also occurs in areas such as operations management, operations planning, sales, risk management in supply chain and supply chain operations reference training. APICS has world renowned programs such as the supply chain operations reference model that improves the performance of the supply chain. The organization is equally certified in logistics, transportation and distribution which are the leading edge in supply chain logistics. APICS is additionally certified in the management of production and inventory which improves the excellence of items and services. Lastly, the organization is certified as a supply chain professional. 2. Logistics Organizational Structures and Designs a. Organizational Structures for Logistics i. Fragmented logistics structure In this structure, logistics are managed through various departments all through an organization ii. Unified logistics structure The structure involves various logistics functions that are put together and managed as one single unit iii. Centralized logistics organization Such a structure maintains a singular department in charge of logistics that is in control of the related activities for the whole company iv. Decentralized logistics organization In this structure, all the decisions related to the operations of logistics are made separately in different divisions and levels b. Organizational Designs for Logistics i. Functional Organizational design This organizational design is based on the capability of the organization and its basic design is outlined below. Advantages of functional organizational design The design provides for the development of improved technical capability in the organization Faster response is achieved through careful assigning of particular requirements to capable personnel Control of costs and budgeting are managed due to the centralization of proficiency areas Communication channels are well established as there is the presence of a vertical reporting structure Disadvantages functional organizational design The maintenance of identity with a particular project is difficult due to lack of responsibility over a project by an individual Little regard is given to project requirements as theories and techniques are oriented on functions The response to particular consumer needs is low making the focus on customers very minimal Lack of individual motivation as the group is focused on group orientation associated with particular areas of expertise ii. Matrix organizational design This design integrates management of projects with the functions required in the company and translates them down to the project. The matrix structure assigns experts from diverse functional areas of work in the organization then the individuals go back to their various departments when the project is complete. The advantages include flexibility of the design as it can respond to environmental changes as well as ease of decision making. The limitations include conflicts arising from tasks and personality and the difficulty of assigning personnel to projects. An illustration of the matrix organizational design is shown below. Advantages of matrix organization design There is easy access to the functions of the organization thus the manager can provide intensive controls for the project The functional organization is basically a support system for the projects There can be exchange of technical expertise between the project with minimal conflict The responsibility and authority of the completion of the project are divided between the functional manager and the project manager Disadvantages of matrix organization design Every project operates singly The unified structure is expensive There is need to balance power given to the authoritative personnel iii. Network organizational design In this design, the structure of management goes top down and inward out. The functions required are assigned to the personnel directly and the objective is to use all the resources required to get the task completed effectively. Communication takes place across the board and members who have been given responsibility and authority can approach anyone in the organization as a resource. The following illustration shows a network organizational design. Advantages of network organizational design Every member of the organization is managed on the basis of performance Any member in the organization can provide support tailored to the client in real time The design is flexible as it can provide current and anticipated customer needs The design is also responsive in terms of accommodating unique customer requests. 3. SCOR and GSCF Models a. SCOR Model The supply chain operations reference model is a tool used to tackle, advance and communicate decisions in supply management in an organization and with the external parties of an organization (Murphy and Wood, 2014). The model is known for its strategic approaches in decision making and integrates business concepts to deliver quality supply chain management. The following are the areas in which the SCOR model focuses on: i. Plan balancing of resources against requirements determination of the communication process determination of the business regulation aligning the supply chain plan and the financial plan of the organization ii. Source acquiring material and infrastructure description of inventory management, supplier network management, supplier agreement, and supplier performance handling of payments reception, verification and transfer of products iii. Make Production Casing Product staging Product release iv. Deliver Management of orders Warehousing Transportation v. Return Handling of returned products which involves business regulations, transportation and regulatory needs b. GSCF Model The global supply chain forum is founded on eight main processes of businesses whose natures are cross-functional and cross enterprise (Murphy and Wood, 2014). Every process is management by a team that has different functions and integrates with the primary parties in the chain, including customers and suppliers. The major success of the model stems from the continuity of information between key players. 4. Order Management and the Order Cycle Order management implements the plan of operations based on the forecast of demand. The process is an interface between the customers and the organization and it basically consists of influencing the order and implementation of the order (Murphy and Wood, 2014). The availability of the product makes the order process easier as it is the main asset that is transferred. An order cycle is the process through which the order is routed. The cycle may involve the following steps: a. Inquiry of order process b. Receiving of order, entering of order and validation of order c. Reservation of inventory and determination of the delivery date d. Consolidation of orders e. Planning of load f. Shipment g. Selection of carrier and calculation of transportation costs h. Warehouse reception of products i. Picking of product j. Loading of vehicle and verification of documents k. Receiving and customer site and verification l. Installation of product m. Invoicing Order management has a high impact on customer service as it constitutes of various elements which affect the perception of the customer. Customer service involves the integration of marketing and logistics and is inclusive of all processes that affect the course of information, the flow of the product or service and the flow of cash between the organization and the consumer (Murphy and Wood, 2014). The order management process therefore needs to be focused on the customer through the provision of the product that the customer wants at the right time and in the right quantity. Time is a distinct dimension of customer service in order management, and this includes the time taken in the order cycle, the safe and accurate delivery of products at the time allocated. Dependability is an additional dimension of customer service as it implies that the organization is efficient which encourages customer loyalty. Furthermore, communication is very important as the information provided before the transaction, during the transaction and after the transaction influences the service performance. Convenience is a dimension that is imperative as it demands that the service be flexible particularly based on the preferences of the consumer. The performance of customer service in order management may therefore be measured based on these dimensions and this influences the fill rate of orders, cycle time, responsiveness, information supply and post sale product support. Service recovery is equally significant as mistakes are bound to occur thus excellent service recovery will ensure that customer loyalty is maintained. 5. Inventory a. Inventory Classifications i. Cycle (base) stock This is inventory required to meet the usual demand in the course of an order cycle ii. Safety (buffer) stock This involves inventory that is held aside from the base stock in case of demand uncertainty iii. Pipeline stock Inventory being transported to the diverse fixed facilities in the logistics system iv. Psychic stock This is inventory carried to influence demand as purchases can are stimulated by inventory that can be seen A-B-C Analysis This inventory technique uses the yearly consumption value of the item to manage the raw material inventory and work in progress inventory which includes labor and overhead costs. Items are grouped based on A, B or C and on the basis of Pareto’s 80/20 principle. The advantage of the analysis is that the control of the inventory of the first group guarantees that the total costs of inventory will be reduced. The disadvantage of the classification is that it needs standard processes and codes for it to be effective. The subsequent disadvantage is that the significance of an item is provided on the value of its yearly consumption and not its importance for the production. b. Inventory Costs i. Holding costs They are also known as carrying costs and include the cost for storage, insurance, depreciation, obsolescence, breakage, pilferage, taxes, handling and the opportunity cost from capital costs. Low inventory levels are favored by high holding costs which provide for frequent replenishment (Murphy and Wood, 2014). ii. Setup costs The making of every diverse product involves obtaining the needed basic materials, equipment and their setup, documentation, time, and removal of previous resources for the former stock iii. Ordering costs These costs cover the costs of management and clerical duties in the preparation of purchase and production orders. Ordering costs are inclusive of the particulars such as the count of items and the calculation of the quantities of the orders. The costs used to maintain the system are equally placed under this cost. iv. Shortage costs Shortage costs are usually an estimate of the lost profits from a stock out. Stock out takes place when demand is not met and the order cancelled due to the depletion of stock. 6. Warehousing Warehousing is primarily the large scale storage of goods in manner that systematic and orderly thus making it convenient when they need to be retrieved (Murphy and Wood, 2014). Ideal warehouses should be conveniently located near travel points, on places with mechanical appliances and on locations with adequate space. Warehousing is imperative due to seasonal production, seasonal demand, fast supply, continuous production and large scale production. a. Public warehousing Public warehousing involves the storage of goods of the general public. Any individual or group is allowed to store their belongings. A license from the government is required to use such warehouses. The government may equally regulate the functioning of public warehouses. Public warehouses are mostly owned by government agencies, exporters, importers, manufacturers and wholesalers. b. Private warehousing Private warehousing involves the exclusive ownership and management of warehouses. The warehouses are usually owned by traders who store their goods in them. The warehouses may be built by farmers near their land, manufacturers near their factories or retailers near their business centers. The facilities are designed based on the nature of the products going to be stored in the warehouse. c. Contract warehousing Contract warehousing lacks the flexibility found in public warehousing but a guarantee is gained. In this warehousing, the space contracted remains the property of the buyer despite being full or empty. Contract warehousing often involves long term contracts and may be accompanied by special equipment needed, qualified personnel and technological input. There is high stability with contract warehousing as everything that is expected is outlined in the contract. d. Multi client warehousing This is basically shared warehousing and provides a method of storage that is cost effective. Multi client warehousing has shorter arrangements thus provide fixes to distribution needs that change frequently. The type of warehousing therefore offers an opportunity for cost reduction in case of space that is not needed and improved service and efficiency due to the expert management present. References Wood, D. F., Wardlow, D. L. & Murphy, P. R. Jr. (2014) Contemporary Logistics (11th ed.). Upper Saddle River, NJ: Prentice-Hall Inc. Read More