Logistics Management and Logistics Outsourcing Relationships - Essay Example

Students Name Affiliate Institution Logistic management According to Susan Mallik (2010 Managing transport is very important in logistics. The interface between transportation systems and logistics systems can be described in terms of nodes and modes. First there is an aspect of warehousing, sorting, goods handling, processing, among others, then there is the aspect of transportation services and needs. The role of transportation services in freight movement includes the physical movement of goods and services along the logistic chain. In this case, the movement of 50 large subassemblies from the manufacturing site in Hanjin Shipyard, Philippines to Large Natural Liquid Gas in Curtis Island, Queensland, Australia. Moving these goods along the logistics chain ensures that all logistic utilities are achieved. This include place (where), Time (when), and Form utility for customer satisfaction. While transporting subassemblies from the manufacturing site to the final destination, there are factors which must be considered. Some work against while other work for. For instance, globalization lengthens the physical distance and cost information, technology and communication. This facilitates the flow of information through the transport chain. This will influence the speed of flow. Political factors integrate markets which facilitate easy transportation but put in place a barrier to transportation via the varying legislations. Some of the countries in which the subassemblies must pass through may dictate on the legislation ranging from environmental, degradation, competition, use of green materials, promoting innovation and driving down margins among others. Deciding on the viable mode of transport is quite technical. Many factors may affect the choice of transportation. For instance dwindling natural resources may constrain the mode of transport to other alternative sources like seeking water supply; similarly, fossil fuel rise in economic power blocs has shifted the balance of economic power which impacts on the political dynamics since there has been realignments in economic resource flow. These economic powers include China, South Africa, Brazil and the Asia Tigers among others. The transport logistics must also take into consideration natural disasters like earth quakes, typhoons, floods, drought, and tsunamis among others to avoid some routes. The sub-assemblies should only be ferried through places which have the least probability of such natural disasters because they are uncontrollable. The transportation modes may be categorized into sea, Road, Air, Rail and Water transport. The selected mode of transport must be one which will ensure the safe delivery if the goods and on a timely manner. The choice of carrier looks at the speed of delivery, avoidance of damages, timing, freedom from interruption, avoidance of loss through pilferage, impact of ancillary services and quality. From Hanjin Shipyard (2007), the heavy subassemblies may be transported by bulk carriers if they weigh between 135,000 tones to 205,000 tones, or by container ships if they weigh between 4300 TEUS to 12,800 TEUS. Hanjin Shipyard has the capability of transporting heavy materials over a long distance. It currently focusses on large container ships, tankers and bulk carriers. It has manufactured high-technology/ value-added vessels which reduce the risks involved during transportation. The convenient mode of transport from Philippines to Australia will be sea transport. This is because the weight of the materials might make it dangerous to use air transport. Furthermore, sea transport is cost effective. The Sea mode of transport alongside other international transport is regulated by the convention/ international agreement that are supposed to standardize the process of documentation and foresee the carriage contract. The transit of subassemblies to Australia must adhere to these rules on legal questions that concern international transport over the six months period. If the mode of transport was by air, the Warsaw convention would apply. This convention was amended at The Hague in 1955 (Sec 3; Art 5-11). For water transport, the terms will apply to shipments between ports of the two nations. Many nations including the U.S apply the Cabotage laws. They require the shipment vessel to bear the national flag of the country it originates from and provide local interport services. All legal requirements for thee shipment must be intact. The ship must be registered and adhere to the respective international law, federal law, local law and provincial law. Recently, the logistics and transportation process has faced numerous pressures which have led to new legal issues. This has heightened the need for sufficient legal advice for each shipment. The process of transporting goods across the waters may carry contingent liability, several insurance risks, and diverse international legal regimes, heightening demand for innovative finance and tightening regulatory structures. For this reason, the legal advice must be global in nature and dynamic. It will resolve all issues related to loss and damage of the luggage, contract disputes, insurance claims, collection matters, customs, safety, security and cross border issues among others. In case the company faces liability charges, a legal advisor may see to it that such costs are minimized amicably. The sub-assemblies must be properly sorted. It must also consider a cage, where valuable items that are supposed to be shipped alongside the sub-assemblies are stored. This may include important documents or highly valuable sub-assemblies. According to Baziotopoulos (2008) a capacity requirements planning will reveal the number of machine and labor resources that are required for the six months transit. The Logistics and transport process is highly labor intensive. It is prone to frequent employment issues and disputes. Therefore, the process must begin by securing and training the accurate number of employees in the process. This includes site development, security details officers, technical advisers, logistics officers, transport details officers, procurement officers and accountants/ finance officers. Site development of LNG might be quite technical, and experienced human resource management officers must be outsourced to help acquire the most qualified personnel. The shipment of goods to Australia must have a joint venture corporate structure between large natural Liquid Gas enterprise in Queensway Australia and Hanjin Shipyard in Philipines Subie Bay. This will ensure that they benefit from the synergy. The two partners must have a similar objective of safe and cost effective transit of these goods. Such relationships are very important in logistics. They involve negotiation, and documentation of agreements, a process which must be convened before the commencement of the shipment. This will reduce any conflicts and misunderstanding significantly and increase the level of operational efficiency. The Logistics process is often ignited by the presence of all resources and funding for the transportation. A feasibility study may be eminent, and it begins with sourcing enough capital for the six months. For the sake of communication to limit the occurrence of conflicts, it is essential to install a CAPSTAN (Computer Aided Planned Stowage and Networking system). A CAPSTAN is a networking system that facilitates real communication for urgent matters. It helps reduce costs in case of any eventualities by ensuring that any hazards are prevented on time. On arrival at the Australian coast, the captain must send a ‘captain’s protest.’ This is a document that the captains send back to Philistine, upon arrival at the port. It details the conditions encountered at the high seas and during voyage. It helps relieves the owners of the ship and shifts responsibility to the insurers, in case anything happens thereafter. In conclusion, the management and carrier must sanction pre-project processes, before the initiation of the transportation of the vessel. The feasibility tests will dwell on labor requirements, resources requirement, preparation of legal instruments and personnel, costs, contingents, acquisition of proper documentation and the acquisition of sufficient Capital. The two interested parties at the point of departure and the point of final decision. The agreements must be contracted to avoid conflicts as much as possible. The most important part of the process is acquiring smooth passage across foreign country’s Seas. They must consent to free passage or else the carrier must change the direction of the passage. When transporting the subassemblies, it is essential to use metal strips to fasten and lock every item in the vessel. Every seal has to be numbered to provide the possibility of accountability. Furthermore, the Cargo must be ferried alongside a Cargo manifest in order to increase the level of accountability, effectiveness and efficiency. Moreover some cargos are reserved by national laws. They only allow a specific type of cargo that is registered in their country and their seas. This means that the feasibility study should select the route where the Cargo is in compliance with country in which they pass through. The ideal route is from Hanjin ship yard’s port through the China Seas then through Sulu seas. The ship can go through the Sulu Arch into Celebes seas. From the Celebes seas, it must Molucca Sea, and then go into Banda sea through Maluccas Misool. From Banda Sea it has to enter Arafura Sea, before going into Coral Sea Island’s territory, via the Torres Strait and along the Great Barrier Reef. While in Coral Sea, the vessel must prepare to stop at the Queensland port. The cost billed on the transport should be based on the Cargo tonnage. This is the method most ocean freight bill freight. Since the sub-assemblies are heavy, they may not be expressed in terms of short tons of 2000 pounds. In most of the foreign countries mentioned above, the management of the freight has to seek for a Carnet. This is a document that permits temporary passage through the foreign country’s seas. The display/ demonstration of the goods must be sent in advance in order to acquire the customs document. Sometimes, this process prevents the management from paying duties or in other cases posting bond. This document may be sent alongside the carrier certificate and release order, which advices customs about the categories and details of the Cargo. It also assures that a specific individual, company or consignee, is the owner of the Cargo. The liability of shipment loss, damage or delay is on the common carrier. However, he is exempt from all Acts of God, act of public authority, act of public enemy or act of the shipper. According to Loguisuite (2012), Logistics bears a unique geographical dimension. The main convergence is between time/ space and costs. The relationship between space and time need to be integrated. The synchrony between time and space allows efficient communication through the respective network strategies and nodes. Ultimately, the process must secure enough consultations from, experienced personnel from different fields related to the transport. References Loguisuite, (2012), “Industry Terms Glossary”, http://www.logisuite.com/logistics-terms-glossary/ accessed on Dec 10, 2012 Susan Mallik (2010). Hossein Bidgoil. ed. The Handbook of Technology Management: Supply Chain Management, Marketing and Advertising, and Global Management, vol 2 (1 ed.). Hoboken, New Jersey: John Wiley @ Sons, Inc.. p. 104. John T. Phelan, Jr. P.E. "Guest Column: Knowing When a WMS or WCS Is Right for Your Company". Supply & Demand Chain Executive. Enom, Inc. accessed on Dec10, 2012. Wallenburg, C., Cahill, D., Michael Knemeyer, A., and Goldsby, T. (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, Baziotopoulos (2008). An Investigation of Logistics Outsourcing Practices In the Greek Manufacturing Sector. PhD thesis- TanquinticE. (Nov 30, 2012), “Curtis Island New Mining Frontier of Queensland State,” IB Times Accessed on Dec 10, 2012 http://au.ibtimes.com/articles/409655/20121129/coal-lng-curtis-queensland-bowen.htm#.UMYGsWfUhw7 Hanjin Subic Bay (June 27, 2007), “Hanjin and its Shipyard Presence in Philippines,” accessed on Dec 10, 2012 http://coconuter.blogspot.com/2007/06/what-is-hanjin.html Read More