Business and Supply Chain Strategy for Fleet Logistics Center - Case Study Example

Business and Supply Chain Strategy for Fleet Logistics Center

Janice L. Ali

MGT322: Principles of Logistics Management

Instructor: Dr. Irina Weisblat

May 23, 2016

Business and Supply Chain Strategy for Fleet Logistics Center

Every business, from large corporations to mom and pop small businesses are involved the supply chain. In the highly competitive environment, supply chain management initiatives have become the most effective towards successful operational outcomes. Most importantly, from the evaluation of Fleet Logistics Center, it is evident that the competitive environment has led to the need for a paradigm shift in its business and supply chain strategies. Accordingly, as a recognized important facet of the holistic business strategy, supply chain function has called for more in-depth initiatives towards successful operations. Many issues have led to the increase in complexity of the supply chain management. Hence, the prospect of third-party supply chain providers coupled with focusing on revolutionary product-to-consumer strategy has enabled profitable outcomes in an organization. Therefore, this paper will examine the two main business and supply chain strategies implemented by Fleet Logistics Center for sustainable operations.

First and foremost, organizations are fast realizing that supply chain logistics is is taking a shift in regards to the operational mandate. Admittedly, the examination of the competitive environment has led to the need for a constant analysis of the customers, data collected and even conversion of the evident strategies into actionable information (Ankerstjerne, Brown & Saunders, 2016). Hence, the fleeting sector has been characterized by the emergence of Business Intelligence techniques such as data warehousing and customer management for achievement of the set objectives. Through the provision of a more unified perspective towards analysis of the supply chain, the diverse tools in data management have been imperative towards sustainable outcomes in the performance prospects. Consequently with the fast paced supply chain sector, there has been the evident need for encompassing a more dualistic approach towards supply chain management. The analysis of Fleet Logistics Center as earlier mentioned exudes the implementation of third party service providers coupled with the internally construed revolutionary product-to-consumer strategy. Therefore, an evaluation of the two supply chain strategies at Fleet Logistics Center is as follows:

The Third Party Supply Chain Providers at Fleet Logistics Center

The increased impetus on the fundamental competencies of an organization coupled with the complexity of the supply chain function has led to many organizations to outsource their logistic activities such as inventory management (Ankerstjerne, Brown & Saunders 2016). The outsourcing process has entailed relinquishing their operational mandate to the providers to maintain an easier environment in undertaking the facts that the organization exudes competency (Talib & Rahman, 2015). Therefore, from the analysis of Fleet Logistics Center, the outsourcing of its inventory management function has been critical towards assisting the organization in avoiding locking its capital in containers, warehouses, and even labor costs. Most specifically, from the examination of Fleet Logistics Center, its adoption of third party supply chain service providers have been as a result of globalization. Accordingly, as the organization expanded its markets beyond the local borders, it became evident that the multi-modal transport coupled with trade compliance regulations were an aspect of concern (Wisner, Tan & Leong, 2012). Therefore, focusing on a more collaborative approach to business operations is evident through the outsourcing approach (Fords, 2015). Additionally, the emergence coupled with the growth of the internet that gave rise to novel breeds of e-supply chain companies led to the most viable approaches to solving the complexities of supply chain management. Hence, with the evident increase in complexities in the operational environment, it became evident that the need for a third party supply chain service provider is imperative (Kay, DiPietro & Scipione, 2015). From the analysis of Fleet Logistics Center the use of third party SC (Supply Chain) was profitable since they enabled the organization to:

Improvement of Service Delivery

In the traditional business environment, the third party SC providers have been necessitating and providing services that are inclusive of inventory management, value addition services and even management of fleets for companies such as Fleet Logistics Center. Most specifically, in value addition, the evident services such as assembly, kitting and even information management has been evident among the third part SC (Kay, DiPietro & Scipione, 2015). Hence, through the focus on Fleet third party providers, Logistics Center can enjoy an easier environment in operations and even catapult its level of service delivery to a heightened level.

Provision of Information Technology-Based Services

Through the use of third-party service providers, the clients can be provided with an examination and report specific to their supply chain. Accordingly, the evident services can assist Fleet Logistics Center to assist their customers in regards to response and service provision (Wisner, Tan & Leong, 2012). Furthermore, Fleet Logistics Center can effectively respond promptly to the changes in the market of operation (Kay, DiPietro & Scipione, 2015).

Improvement of Support Functions

Support functions in an organization are ever evident. From the examination of Fleet Logistics Center, the main support functions can include human resource management, costs management, raw material handling and communication management. Therefore, an integrated view of the support functions as a result of the third party SC provider is fundamental for specific and crucial decision making. Additionally, from the examination of Fleet Logistics Center, focusing on a comprehensive operational dynamics entails adhering to the performance trends in the business environment. Therefore, the third party providers necessitate synergy and execution excellence.

Therefore, from the analysis of the benefits of third party SC providers, it is evident that Fleet Logistics Center choice is possible. Through the strategy to outsource its warehouse and value addition services, it is evident that it can provide its services in a more plausible manner. Accordingly, the two services required significant changes for ensuring heightened levels of performance and profitability.

As the first function that Fleet Logistics Center outsources, warehouse management entailed relinquishing diverse operations. Among the functions that Fleet Logistics Center outsources include:

Inventory Analysis

A combination of analysis can be implemented on inventory, especially in the warehouses. Accordingly, from the analysis of Fleet Logistics Center, the diverse analysis that it undertakes includes supplier and material class evaluation for a given period. On the other hand, to necessitate heightened levels of performance, the organization accepted the notion that outsourcing was a viable approach. Therefore, to necessitate a performance centric outsourcing initiative, the company implemented key performance indicators in the analysis of the outsourced companies through evaluation of the inventory accuracy and even turnover.

Assigning Warehouse Costs

Warehousing costs, from the examination of Fleet Logistics Center, are dependent on product dimensions coupled with handling requirements. From the analysis of the outsourcing company, based on the evident past data, the warehousing costs are assigned to the combination of dimensions coupled with the handling requirements. Furthermore, the data on the warehousing costs is availed to Fleet Logistics Center on a daily manner to enable communication efficiency.

Picking Analysis

The concept of picking analysis in regards to Fleet Logistics Center denotes the analysis of the inbound and outbound inventory that Fleet Logistics Center has to manage. Accordingly, from the analysis of the organization, picking analysis is imperative to outsource since it enables or improves warehouse efficiency and helps the layout design of the organization increasingly.

Outsourcing the Value Addition Services

Value addition for a fleeting company is extensively daunting. In reference to diverse pundits such as Nie, (2015) many SC third party providers provide various services such as handling of reverse logistics, customs brokering and even kitting. From the analysis of Nie (2015), the earlier mentioned services entail the important differentiating factors among the third party SC providers. Hence, from the analysis of Fleet Logistics Center the effectiveness of the approach has been dependent on:

Focusing on Reverse Logistics

Reverse logistics in reference to Rigby & Bilodeau, (2015) denotes the capability of an organization to handle customer returns. As a challenge in the fleeting sector, outsourcing companies help in the management of the reverse logistics through associating the returns with the accurate order. Furthermore, analysis of the return delivery time to the supplier and even association of the order to the buyer forms the most important approach towards management of the reverse orders.

Revolutionary Product-To-Consumer Strategy

As the second approach implemented by Fleet Logistics Center, the revolutionary product to- consumer strategy is new to the fleeting sector. As a new basins strategy, the approach encompasses four main activities:

Outsourcing distribution operator

Encompassing shared fleet model

Implementing dynamism in scheduling and routing

Dynamic slot booking coupled with pricing

Therefore, from the analysis of Fleet Logistics Center, it is evident that it offers distinctive logistical services to the potential customers. To manage its operations effectively, the company implements two main approaches emanating from the revolutionary method. As the first approach, the company encompasses the shared fleet model. Majority of the companies in the fleeting sector run their delivery or supply functions through a dedicated internal or in-house fleet. Through the evident services provided by one or more haulers, the fleet is extensively limited in movement to either between depots and company site. The restriction of movement in reference to Kenyon & Sen, (2015) limits the fleet utilization resulting in higher costs of delivery of given products per mile. Using the shared fleet approach, the companies can efficiently move their products through sharing one fleet among different companies and the customer sites are taken into consideration in the scheduling process. Scheduling of the customer sites enables the companies to accrue better routing opportunities between the different operational locations hence lowering the cost per mile. Additionally, the use of the shared fleet model enables companies to use the vehicles for back-hauling. Through the approach, the time spent on the road becomes productive.

Dynamism in the scheduling and routing process as the second approach y Fleet Logistics Center denotes automation of the order generation process. Additionally, it entails planning of the schedules in a more efficient manner. Therefore, as a result of the initiatives, the volume of the products delivered per mil can increase. From the analysis of Fleet Logistics Center dynamic scheduling and routing is important since it affords the organization greater visibility especially in dispatching of the delivered product.

Conclusion

Supply chain process is important for any organization. From the analysis of Fleet Logistics Center, the dualistic approach in supply chain management is beneficial since it ensures core competencies in operations. Most importantly, the focus on outsourcing its warehouse management and encompassing the shared fleet model generates a synergy of operations. Admittedly, the reduction in costs per mile coupled with automation of the scheduling process significantly cuts the expenses of the organization in its supply chain process.