Australian Logistics Activities - Example

Logistic Management Name Course Name and Code Instructor’s Name Date Executive summary Logistics management is a part of the stages of execution and planning. These stages include strategic, tactical as well as operational. This report has aimed at explaining the differences between online retailing and in- store retailing in regards to the optimal design of the new company’s Australian logistics activities of order management and customer service. It also includes Australian distribution centre design and operations as well as physical distribution within Australia. The report is purposed to help in the opening of the new company in Australia. It is evident that many differences exist between online retailing as well as in store retailing in the design and operations, order management and customer service as well physical distribution. As is evident from the report, online retailing seems to have a plus over in store retailing in that it is convenient and it reaches to a worldwide market. It is recommended that the new company factor its customer service; invest in suitable technologies, logistics as well as personnel management for it to be successful. Moreover, invest more in terms of time and money to maintain, test, design, develop and implement the distribution centre. In conclusion, the company should realize that in the contemporary age, of rapid competition between businesses, a consumer perceives an outstanding customer service as an opportunity for multiple channels to order for desired goods. To have their orders delivered on time and with the goods as ordered as well as no hassle product returns and that, this reflects its commitment to the customers. Table of Contents Executive summary 2 Table of Contents 3 Logistics Management Assessment 2 4 Introduction: Background 4 Scope and Aims 5 Online retailing and in- store retailing 6 Order management and customer service 6 Australian distribution centre design and operations 9 Physical distribution within Australia 11 Recommendation 12 Conclusion 13 References 14 Logistics Management Assessment 2 Introduction: Background Logistics management is a cross subject of management, engineering, economics and science. In the past people did not know of logistics management (Wood and James, 1996). It is evident that the managers were not aware of economic theories and technology as well as economics was not aware of management. In the contemporary world however, logistics management is evident in both the national as well as the international environments (Wood and James, 1996). In addition in the present times, efficient warehouses, online and in store retailing centres as well as distribution centres is the heart of logistics, and provide control, efficiency and velocity for goods moving through the system (Wood and James, 1996). Recent studies indicate that logistics management has continued to grow tremendously especially due to the trend of the economy; the general trend toward outsourcing and the previously unprecedented growth of e-commerce (Wood and James, 1996). The term logistics management has been defined differently by different scholars (Wood and James, 1996). However in the recent studies the term has been used to refer to the governance of the supply chain functions (Wood and James, 1996). Typically, logistics management activities include the inbound as well as the outbound transportation management, warehousing, order fulfilment, fleet management, supply and demand planning, materials handling, management of third party logistics service providers, logistics network design and inventory management (Wood and James, 1996). To some degree, it also includes such functions as customer service, packaging and assembly, production planning as well as scheduling and sourcing as well as management. Logistics management is a part of the stages of execution and planning. These stages include strategic, tactical as well as operational (Wood and James, 1996). Moreover, a fundamental function coordinates all the activities of logistics and integrates these activities with other functions such as sales manufacturing, marketing, information technology as well as finance (Wood and James, 1996). Scope and Aims According to the case study, a consortium wishes to establish a new company. The operations of the company include purchasing the products for resale locally as well as through the China based overseas sourcing office. As is evident the main aim is to have the goods delivered to collection centres in Hong Kong as well as Shanghai by the suppliers. The goods will then be collected and distributed in Australia. Though the main aim of the company is to have distribution centre in almost all the major cities of Australia, the company will first have a distribution centre in Sydney where they will then distribute to its customers in Australia. It is clear that for the reason that there are some differences in the execution between the operations of in store retailing as well as online retailing, the company is set to establish a new distributing centre within a period of 18 months. This paper presents a report that explains the differences between online retailing and in- store retailing in regards to the optimal design of the new company’s Australian logistics activities of Order management and customer service Australian distribution centre design and operations Physical distribution within Australia Online retailing and in- store retailing According to studies, online retailing is a form of electronic commerce (Gerrit and Schwarzl, 2010). This implies that it is an online shop, internet, web store, web shop, e-store or online store. Evidently, in online retailing, the goods or products are bought via the internet as opposed to in store retailing. The customers make the payments with credit cards (Gerrit and Schwarzl, 2010). In addition, goods are delivered to the respective customers by shipping. On the other hand, in store retailing goods are sold to the customer with the help of an intermediary. In the in store, the consumer chooses the good or merchandise and pays cash for it (Gerrit and Schwarzl, 2010). In addition, he carries the good purchased to his premises. Order management and customer service This is the main system by which the sellers as well as the buyers communicate information mainly regarding the orders (Evans, 1997). According to studies, effective order management enhances the efficiencies of operations. Furthermore, it ensures that the customers are served in a manner that ensures their satisfaction (Evans, 1997). In addition, order management also entails how the organization changes the way that the consumers place their orders. Through this system, the customers are able to complete their order processes with the retailers. Order management performs the plan of operation about demand forecast. This is the main interface between the sellers and the buyers. Order management consists of influencing the order and order execution. Customer service on the other hand, is the interface that links marketing and logistics. It entails all the information that influences the flow of information, flow of cash as well as the flow of products between the organization and its customers. Evidently, there are three perspectives of a customer service (Lamb et al, 2011). They include Philosophy- it necessitates that an organization is remarkably committed to its customers to ensure that they get satisfied. An organization can achieve this through practicing the right customer service (Lamb et al, 2011). Performance- this perspective denotes customer service as a particular performance measure as well as address tactical, strategic and the aspects of operation of order managements (Lamb et al, 2011). Activity- the perspective regards a customer service as a specific task that an organization ought to perform in order to satisfy the orders of the customer as required (Lamb et al, 2011). Apparently, both order management and customer service goes hand in hand. This implies that the two terms are not mutually exclusive (Pride et al, 2010). Evidently, there is a direct as well as critical relationship between these two concepts. Studies have revealed that order management influences customer service greatly (Lamb et al, 2011). If the product ordered by the customer is not available on time, it follows then that the company’s ability to meet the special requests as well as the sudden changes will not be effective. In addition the organization will not be in a position to deliver in time, this is due to the fact that there will be delays between the time of order and the shipment time. In online retailing, the customers carry out the order placement through the internet (Gerrit and Schwarzl, 2010). Firms get to use the internet to capture the order information from their customers directly. Apparently, the internet allows the seller to collect cash from its customers faster. Besides, it saves time as it collects the information and immediately starts working on the order (Gerrit and Schwarzl, 2010). As a result, the organization is able to ship the product or merchandise to the purchaser on time. It has been revealed by studies that most customers prefer online retailing since it is convenient. Moreover, online retailing has better pricings as well as free shipping. This attracts many customers for the shops that practice online retailing as compared to in store retailing. Studies indicate that the customer is the king to any business (Lamb et al, 2011). Delivering the goods to the customer in time ensures customer satisfaction. Besides using, the internet ensures that the retailer does not spend hours in an attempt to contact all their suppliers as well as resellers individually. The internet serves as a management tool that that scans all the company’s inventory to determine what needs to be reordered as well as the product selling best in the market (Gerrit and Schwarzl, 2010). Another plus for the management tool for online retailing over in store retailing is that the retailers are able to access the accounts of their stores from anywhere and this ensures that they are always aware of what is going on in their businesses. In store retailing, this is usually not the case. Here the customers have to directly go to the shop in order for them to place orders (Lamb et al, 2011). According to scholars, this in itself can be either convenient or inconvenient for the customer. It will be convenient for the customer if he lives near to the shop and inconvenient especially if the customer resides far from the shop (Peterson et al, 1997). As a result of this, the customer choses to purchase the goods from a nearby retail shop. Due to this reason, the firm makes minimal sales and can easily lose customers (Peterson et al, 1997). A big plus for the in store shop over online retailing is that customers are constantly charged every time they enter the wrong shipping address. Whenever the customer makes such a mistake, they expect the changes to be fixed for them for instance by having the return shipping being free depending on the type of product. In addition, due to so much paper work, the seller may not capture everything that the customer is placing an order for and because of this, the customer will either get the wrong orders or delayed deliveries (Peterson et al, 1997). This does not ensure an effective customer service as the customers are not satisfied and as a result, they could run off to other shops where they will get customer satisfaction (Peterson et al, 1997). Therefore, the company should factor the aspects that attract a customer to a shop. The company should realize that in the contemporary age, of rapid competition between businesses, a consumer perceives an outstanding customer service as an opportunity for multiple channels to order for desired goods, to have their orders delivered on time and with the goods as ordered as well as no hassle product returns. This therefore suggests that the company should bear in mind that its customer service would definitely reflect its order fulfilment (Lamb et al, 2011). Moreover, the new company should take into consideration the supply chain operations as well as order fulfilment services. It should ensure that the customer never sees a label saying out of stock on the website or an email for delayed shipping, incorrect orders. If it chooses an in store retailing, it should ensure that the shop does not run out of stock. This is because this shows the company’s dedication to its customers. Australian distribution centre design and operations Distribution centres are very essential for the success of any supply chain. This is because this is usually the last destination where the products are consolidated as well as dispatched to the esteemed customers (Schmenner, 1993). Basically, in terms of cost, the distribution costs usually account for approximately a quarter of all the logistics cost. Despite the fact that the distribution centre design and operation have a significant influence on the costs as well as the service levels, they are also the most neglected aspects of the supply chain research (Schmenner, 1993). It is apparent that most firms do not have the expertise of designing a distribution centre (Evans, 1997). It is evident that customers are not only attracted to a shop by high levels of convenience but competitive pricing, broader selection range as well as a good access of information (Evans, 1997). Clearly, a difference exists between online retailing and in store retailing regarding the design and operations of a distribution centre. Online retailing is able to increase its customer value by offering adequate information, reach a worldwide market as well as build sustainable capabilities (Evans, 1997). The in store retailing on the other hand does not reach out to a worldwide market and as a result, their customer value is not as enhanced as in the online retailing. It is therefore important that the new company take into consideration what will work best for them. The new company’s consortium should approach the systems supplier. The company should consider the design that will naturally meet their range of equipment. Moreover, it is the company’s scope of expertise and supply that will determine a solution to their problem (Brenner, et al, 1990). The costs that the company incurs when designing the solution, should be recovered in the equipment cost (Evans, 1997). According to studies, the location of the new company should be a major driver of the transport costs as well as the implementation. Evidently, the Logistics Bureau can in the making of the decision regarding these using elements of the Network Design and Supply Chain Mapping tools (Tan, 2003). The company should be keen to venture into the retailing that will support the culture and brand name of the organization as well as ensure customer satisfaction. Clearly, understanding the needs and wants of the customer and living up to them enhances the customer’s comeback to the shop (Kotler and Gary, 2010). Therefore, the new company should invest more in terms of time and money to maintain, test, design, develop and implement the distribution centre. Besides, since there are volatile forces in the market today that causes most companies’ momentum to disappear into the thin air, the new company should ensure to design the distribution network in a flexible manner in order for it to withstand the changes in the market that include the requirements of new customer service, competitor adjustments, product proliferation as well as product life cycle, new markets, market segmentation and Geographic shifts in production as well as consumption. Physical distribution within Australia Physical distribution is a term used to refer to the set of activities that oversee the efficient movement of products from the production centre to the customer (National Library of Australia, 1983). Physical distribution is evident in almost all wholesaling as well as retailing distribution channels. It includes such important aspects as decision-making, inventory control, protective packaging, transportation, customer service, materials handling, order procession, warehouse site selection as well as warehousing (Dent, 2011). Basically, physical distribution is only a part of a bigger process of distribution that entails retail and wholesale marketing. In addition, it includes the physical movement of the products (Wood, and James, 1996; Bowersox, 2000). Recently, the activities of physical distribution have received an increasing attention from business managers and this includes the owners of small businesses (Jhoudhury, 1994). This is because these activities represent more than half the total cost of marketing a product. Apparently, studies have revealed that the costs of physical distribution nationally amount to around 20 % of the total gross national product (GNP) of a country (Baker, P., 2012). These findings have encouraged many businesses to enlarge their cost –cutting efforts to go beyond their historical focus on the production process to include the activities of physical distribution. Physical distribution is also known for enhancing customer satisfaction. By businesses ensuring that they store the goods in a convenient location for shipment to the retailers and wholesalers, and developing a fast as well as a reliable means of shipping the goods, businesses can ensure their continued growth in the rapidly changing and competitive worldwide market (George, 1982; Jhoudhury, 1994). Similarly to the way that the retailer revolution has a number of years to run, so are the effects as well as the implications of physical distribution in Australia (National Library of Australia, 1983). The new company should not assume that it could meet the challenges of physical distribution so easily. It is clear from past studies that some firms are taking the complexity of modern physical distribution systems too lightly (Brechner, 2012). In order for the new company to be successful, it needs to factor its customer service, invest in suitable technologies, logistics as well as personnel management (Nah, 2002). In addition, the company should be well aware that new distribution is not an easy task. It requires sufficient time, effort as well as the right skills in order to be successful (Artman and Clancy, 1990). In addition, the company needs to adopt the integrated physical distribution management systems (Taylor, 1997). Recommendation It is recommended that the new company factor its customer service; invest in suitable technologies, logistics as well as personnel management for it to be successful. Moreover, invest more in terms of time and money to maintain, test, design, develop and implement the distribution centre. In conclusion, the company should realize that in the contemporary age of rapid competition between businesses, a consumer perceives an outstanding customer service as an opportunity for multiple channels to order for desired goods. To have their orders delivered on time and with the goods as ordered as well as no hassle product returns and that, this reflects its commitment to the customers. Conclusion The paper above has encompassed an introduction to logistics management. The term has been defined to include the inbound as well as the outbound transportation management, warehousing, order fulfilment, fleet management, supply and demand planning, materials handling, management of third party logistics service providers, logistics network design and inventory management. Having this in mind the paper has aimed at explaining the differences between online retailing and in- store retailing in regards to the optimal design of the new company’s Australian logistics activities of order management and customer service, Australian distribution centre design and operations as well as physical distribution within Australia. It is evident that many differences exist between online retailing as well as in store retailing in the design and operations, order management and customer service as well physical distribution. As is evident from the report, online retailing seems to have a plus over in store retailing in that it is convenient and it reaches to a worldwide market. References Artman L, and Clancy, D. 1990. Distribution Follows Consumer Movement. Transportation and Distribution. London: Cengage learning Baker, P. 2012. Distribution Centre Design and Operations. 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