Flexible and Effective a Control System in Managing Logistics - Essay Example

?Logistics Task: Outline I. Introduction II. Logistics Systems III. Components of Logistics Management IV. ICT Systems in Components of Logistics Management V. Benefits and Challenges of Using ICT Systems VI. Conclusions VII. List of References Introduction A control system that is flexible and effective has to be used in managing logistic issues of virtually all firms in different sectors. This is mainly because the objectives of supply chain are not met in many firms. There are fluctuations and disturbances that interfere with the supply chain coupled with irrational decisions that firms make at certain times (STOCK & LAMBERT 2001, p. 7). The system selected should be able to tackle these fluctuations and disturbances and enable smooth operations of firms. There are firms that have developed themselves as logistics providers and offer value added services to other firms. These firms manage logistics issues and supply chains of other firms since many firms prefer to outsource these functions. They plan, organize and direct firms’ supply chains and logistics. They provide integrated systems that usually meet the needs of their clients (LONG 2004, p.339). They have to organize how the client’s cargo reach destination on time and safely. Additionally, they ensure cargo clearance by the customs and order processing. This means that the operating costs of the clients reduce since the process is efficient. The idea is to make the logistical service provided be a component of the business of the clients. The provision of these logistical services by third parties enables firms to concentrate in the production process only, which is their core business. Once the firms produce products, logistics providers take over and deal with issues such as transport and communication. This paper discusses the various types of systems used in logistics services provision and the components of logistics management. In addition, it discuses the benefits and challenges associated with these systems. Logistics Systems There are various systems used in logistics management. These systems mainly aim at enabling firms to achieve quick response manufacturing. The business world is competitive, and the ability of a firm to produce faster gives it an edge over others. The firms should also be able to develop concept, design it and produce a product faster in order to be highly competitive. Opportunities are also available to firms that can produce products faster and deliver them to market quickly. Quick response manufacturing is a method that enables firms to reduce their lead times in the various stages of productions and operations. The goods produced thus reach the market early enough and enables the business to secure its prospects. It enables the firm to be more competitive since its products are in the market early enough. It attracts clients due to the fast production and delivery of products to the market. Additionally, the profits of the firm are likely to increase since production time reduces, and the return on investments is likely to be improved. The benefits of this system are that the outlay on production reduces and the market share increases. The needs of the customers are also met faster, and the introduction of new goods in the market can be done swiftly. In addition, quick response production removes wastage and increases efficiency in the production process. One of the systems used in logistics management is the kanban system. This is an information system used in managing manufacturing quantities in various stages of production. It enables the firm to produce the desired quantities within the set time. Kanban is a card which notes the nature and the number of units to be produced. The card is dispatched to individuals in the prior stage from the succeeding process. The result is joining of all stages in the production process. The quantities and qualities of the products can then be easily monitored. The process enables autonomation and the tasks that workers do are homogeneous. The other benefit of this system is the reduction of time wastage, and the process is highly efficient. Toyota factories use this system and kanban specifies quantities to be produced, and the nature of inputs to be produced. Machines can also operate autonomously, and there are measures put to ensure that machines do not produce defective inputs (LOUIS 2006, p. 2). Another system used in logistics management is the two bin system. In this system, two bins control inventory. Stock in the first inventory is used and once it is empty, activities that aim at replenishing it begins. The content in the second bin are then used as the first bin gets filled. The system is effective in managing record keeping and limits mistakes that are likely to occur during record keeping. Just in Time (JIT) is a logistics management system used in many Japanese organizations. It is a system used in many plants of Toyota since its development. It enables the company manage challenges that threatened its survival. It is a method that can increase a company’s market share and has the capacity to enable production of quality products. These systems enable identification of problems and solving them early enough. There is also quality assessment of products at various stages of production. The quantity of in process inventories reduces together with required space. Lead times reduce, and there is flexibility in the process. Finally, the other system used in logistics management is the Vendor Managed Inventory (VMI). In this system, the supplier manages inventory sizes. Electronic data interchange is the method used in managing inventory. This is mainly used in management of retail stores. The retailer and supplier pass information to each other and then the supplier organizes transfer of enough quantity of products needed to satisfy demand. It is been used by Procter and Gamble and Wal-Mart. Procter and Gamble was the supplier while Wal-Mart was the supplier. In this system, use of computers in communication minimizes errors related to data entry. There are examples for logistics systems used in management of transport and warehouses. LBASE TMS (Transport Management Systems) is a system used in managing transport. It is a system developed by Imtech ICT, a software company based in United Kingdom. In addition to these, there is a Ware House Management System (WMS) and a parcel management system known as cargoNET developed by Imtech ICT. Various companies such as DHL and Swiss Post use LBASE. This system integrates and manages operations from reception of orders. These systems can also be used in the internet and thus makes it efficient (BLECKER & ABDELKAFI 2006, p. 251). FoCaMed is another example of systems developed to manage logistics. MedICT developed it to assist in managing drug requirements. It can calculate the needed quantities of medicine. In addition, it estimates costs implications to individuals with chronic diseases. In the system, individuals have cards and monitoring of attendance to the clinic is done. Data can be transferred electronically, and it can collect information from various sources. Components of Logistics Management Customer service is one of the components of logistics management. The service provided depends on the requirements of customers and the nature of the product. The important considerations in customer service include the terms of contract and the quality of the service provided. Customers can be offered a free trial of the products and be given guarantee or warranty to improve image (VOORTMAN 2004, p. 144). The other component is transportation means for the products. The means should be reliable, fast and regular so as to avoid inefficiency. The cost of transporting goods should also be affordable to the retailers. A mechanism must be put in place to manage fleet, and there has to be a means of communicating with drivers. The transport means has to take in to consideration the urgency requirements. Another component of logistics management is inventory control. Retailers should be able to get their materials in time, and they have to be of the correct quality and quantity. The regions for stocking have to be known, and essential raw materials have to be given priority. In addition, material handling is a component of logistics management. The process of handling materials has to be smooth and fast depending on the nature of the material and urgency. The locations of materials at all stages should be known and tracing them should be easy. Tools have to be used in handling materials to avoid damage and increase efficiency. The method used in handling can be through operation research or analysis of material flow (FERNIE 2007, p. 4). Packaging is the other component of logistics management. Products have to be properly packaged to avoid damage or loss. The nature of the products dictates requirements of packaging, for example, vegetables may need refrigeration. Appropriate method of packaging protects and contains products. It also passes a message to customers and seeks to meet their expectations. The other component is a network design, which has to do with locations and sizes of facilities (CHERUNILAM 2010, p. 51). The design has to consider the relationships between different facilities, government regulations and available infrastructure. It has to take in to consideration the distance between suppliers and retailers and the costs of service provision to customers. ICT Systems in Components of Logistics Management A significant ICT System used in management of customer service is Customer Relationship Management System (CRM). It can be used to send e-mail messages to clients and clients can be identified through log-in. It can also be used to reward loyal clients and surveys can be conducted through it. In addition, customer queries and feedback can be received through the system. Oncontact, a software developer in United States developed such a system. It has developed CRM 7 which is a web based. It assists in sales, customer care and marketing of companies’ products (DEKKER, FLEISCHMANN, INDERFURTH & VAN 2004, p. 392). A significant ICT system used in management of transport is the LBASE TMS. It is a system developed by Imtech ICT, a software company based in United Kingdom. Various companies such as DHL and Swiss Post use LBASE. This system integrates and manages operations from the point orders are received. It can be customized to meet clients' needs and has GPS. In addition, drivers can be managed easily. They can also be used in the internet and thus makes it efficient (MACHARIS, PEKIN & CARIS 2010, p. 34). International coding technologies is a software development company and has developed a system used in management of inventory. The system is TrackCon. The system manages inventory for clients in building and construction industry. It enables transportation of correct materials to clients and can automatically take GPS coordinates of product locations. The forklifts used also have screens and portals making tracing of inventory easier (GALLOUJ & DJELLAL 2010, p. 754). Benefits and Challenges of Using ICT Systems The use of ICT systems technology in business has benefits and challenges. However, the benefits of using the systems outweigh the challenges associated with the systems. One of the benefits of using ICT systems in business is that it increases efficiency in operations and management of the business. They enable easy storage, retrieval and gathering of date on various issues such as clients contacts. Transport systems such as LBASE enables easy monitoring of fleet and goods on transit and these increases efficiency (SCHULZ 2008, p. 112). The other advantage of the ICT systems is that they enable businesses to minimize their operational costs. The systems reduce cost when compared to manual operations. Data and information is usually stored in computers and hard disks and thus no expenses on papers. In addition, with ICT systems, firms need only a few people to do tasks that would otherwise be done by many people. Companies are thus able to minimize expenses on labor. ICT systems also enable firms to have competitive advantages. They improve production efficiency, reduce operation costs and reduce time used in production. They enable easy monitoring of the processes and are usually accurate. As long as users are accurate and knowledgeable in their use, the production process and delivery of products to clients can be efficient and fast. This enables firms to deliver their products to the market in time and meet demand expectations. Consequently, the competitiveness of the firm in the market improves, and the market share is likely to be increased (VICKERY 2004, p. 121). In addition, ICT systems enable firms to respond adequately to changes in market conditions. They enable easy adaptation and flexibility and thus firms can adjust faster. This is mainly because the flow of information in these systems is usually faster. Users of ICT systems can use emails or phone calls to convey information from one person to another and decisions can be made faster. Some of these systems have simulations of the production processes and these can be used to monitor effects of any variable change (KOH & MAGUIRE 2009, p. 262). They are also simple to use and can be used online. The challenges facing use of ICT systems relate mainly to poor implementation, inadequate training and use of wrong procedures. Users can at times give wrong commands to the system and this result in wrong information and data. This can lead to losses to firms and goods can also get misplaced. ICT systems require people to be adequately trained so that they can use them correctly. Without proper training, the systems may lead to poor results and can lead to exit of clients. Firms, therefore, have to train staff on the use of the systems to avoid these negative results. The other challenge is that, for the systems to work effectively, they have to be compatible with the hardware that a business uses. If not compatible, then the management has to get the right hardware (OBI 2010, p. 7). Conclusions There are different systems that can be adopted to manage supply chains and tackle logistics issues that firms have. The systems that firms adopt must enable efficiency in operations and reduce costs. There are firms that have developed as logistics providers and they use integrated systems that meet the needs of their clients. This paper looked into the types of logistics systems, the components of logistics management and the benefits and challenges of these systems. Some of the systems discussed in the paper are the Kanban system, the Just in Time system and the Vendor Managed System. These systems increase efficiency in production processes and reduce costs. They improve the market share and competitive ability of firms. This is mainly because they enable quick response manufacturing. LBASE TMS, WMS, and FoCaMed are examples of logistics systems used in transport, warehouse and clinics respectively. They can be used online and increases efficiency. The components of logistics management discussed in the paper include customer service, transportation, inventory control, packaging, network design and material handling. These components have to be managed properly to ensure satisfaction and retention of clients. Proper management of these components is also necessary to ensure safety of products and that they reach retailers on time. There are systems such as LBASE, CRM and Oncontact that can be used to manage these components. The merits of using these systems are that they reduce costs, and they increase efficiency. They also reduce time used in the production process and makes firms more competitive. However, if they are not properly used, losses can occur. Users must be trained so as to ensure proper usage of ICT systems. 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(2004). International logistics: global supply chain management. Norwell, Mass, Kluwer Academic Publishers. LOUIS, R. S. (2006). Custom Kanban designing the system to meet the needs of your environment. New York, Productivity Press. http://www.lib.sfu.ca/cgi-bin/validate/books24x7.cgi?bookid=17551. MACHARIS, C., PEKIN, E., & CARIS, A. (2010). Adecision support system for intermodal transport policy. Brussel, VUB University Press. OBI, T. (2010). The innovative CIO and e-participation in e-government initiatives. Fairfax, Va, IOS Press SCHULZ, S. F. (2008). Disaster relief logistics benefits of and impediments to cooperation between humanitarian organizations. Bern, Haupt. STOCK, J. R., & LAMBERT, D. M. (2001). Strategic logistics management. Singapore, McGraw-Hill. VICKERY, G. (2004). OECD information technology outlook 2004. Paris, OECD. VOORTMAN, C. (2004). Global logistics management. Cape Town, Juta Academic. Read More