Logistics Planning Case - Essay Example

Logistics Planning Case Logistics Planning Case Logistic planning entails part supply chain management that involves Customers is the key sources of revenue for any successful business. They determine the location and the type of goods that a business should produce/supply. Organizations must take into consideration the needs of the customers and ensures that their needs are adequately met. Managing the provision of goods and services is an important aspect of an enterprise that tends to affect organization supply chain as well as the availability of goods to the customers. Site selection is paramount because it may affect organization supply chain activities. Organization should take into consideration customers supply chain and their logistic operations. The company should be a factor in the requirements of the market and the needs of the customers so that organization can avail goods and services to the customers at the right place, condition and at the right time (Crammer, & Wegfahrt, 2006). Therefore, the study focus to identify whether customers drive location of the business and how it may affect logistic planning in various industries such as beer, clothing, and automobile industry. The company selected for the purpose of this study is Empresas Polar, a Bear Manufacturing Corporation in Venezuela. The company location decision has been compared regarding distribution and retailer location as discussed. Whether customers drive business location and whether they affect logistical planning Empress Polar is a private beer manufacturing company located in Venezuela in Caracas. Mendoza Lorenzo started the company in the year 1941. Since then, the company has grown significantly. It has expanded its operation to numerous parts of the world. The location of Empresas Polar is important because it faster delivery of goods and services to the consumers at the right time. It also ensures that unnecessary delay in delivery of products and services have been eradicated. The company distributes five different brands of bears in its various distribution centers. Some of the alcoholic brands of beers being distributed include; Solera, Polar, Negra, Verde, and Azul. There is also one non-alcoholic drink commonly known as ZERO. Research indicates that business location is very vital, however, the location of the enterprise may not mean a lot if the product mean a lot to customers (Crammer, & Wegfahrt, 2006). Comparing manufacturer, distributor and retailer location decision The location decision of manufacturing company to distributors and retailers tend to be affected by some factors. Some of the factors that need to be taken into account by the manufacturer when deciding about their business location have been put forth. Firstly, the manufacturing company must consider the availability of raw materials and labor. A manufacturing company should also ensure that the location where the production will take place has all the necessary raw materials that will facilitate production and eliminate production cost attributed to transpiration of goods to the customer’s premises. For example, a Bear manufacturing company such as Empresas Polar should consider locating its production facility adjacent to Barley firm so that processing activities can be immediate. Besides, the location of a manufacturing company should be evaluated to ensure that the area where the business is being located there is the availability of labor force both skilled and unskilled labor (Crammer, & Wegfahrt, 2006). The labor force may help the company to execute successfully its production activities at an affordable price and ensure that goods produce meet and exceed the needs and anticipations of the customers. For example, Empress Polar manufacturing may eliminate the cost involved in outsourcing workers from other regions and ensure that production has been carried out on time to eliminate delays. Some product may be rare to find and may only be found in specific locations, in such a case customers may be willing to travel a long distance to look for such products. However, a business that deals with manufacturing and distribution of bears should carefully consider its location decisions (Crammer, & Wegfahrt, 2006). Most customers tend to prefer companies that are strategically located, where the logistic systems are efficient. The study shows that customers tend to be ready to pay a higher price if the business is in a convenient location where road and communication infrastructure is efficient. The company should also consider the community around so that the manufacturing company can evaluate whether its location will create a long-term business relationship with the surrounding communities/customers. Besides, a manufacturer should factor in government and environmental regulations in the identified location. Sometimes government regulations may adversely affect the location of a manufacturing facility. It is imperative for the manufacturing firm to understand those regulations prior setting up a manufacturing facility in any given location. The manufacturer must understand the environmental regulation prior establish a manufacturing facility in any particular location. The facility should comply with legal regulations governing the environmental management and ensure that environment, where the manufacturing activities are taking place, is free from pollution including but not limited to air, water, and soil pollution (Stadtler, 2015). On the other hand, a distributor must consider the following factors namely; logistics and communication network, proximity to other business, parking and accessibility, and foot traffic. A distributor should consider selecting a strategic location that is connected to various road networks to eliminate delays when distributing goods and services to the customers. A distributor should consider locating their organization in the area where parking and security facilities are readily available for the customers. The distributor should also consider selecting a location that is proximate to other business; such company may act as the potential of their product. Besides, another customer may prefer a distributor who is closer to their business to minimize transport cost as well as ensure that when their business run out of stock as they can have easier access to new stock. The parking space within the distributor’s premises should be readily available to allow quick loading and offloading of goods without creating unnecessary traffic congestions among the customers. Security within and outside the distribution facility is paramount. The distributor should ensure that the security of customer’s vehicles and other assets is guaranteed. On the other hand, retailers also need to consider some factors when selecting their locations. Some of those factors include; accessibility to the customers, the level of competition, population demographics, the cost of rent and running the business should be taken into consideration. The retailer location should be strategic carefully selected to ensure that it is accessible to the entire customer. Research indicates that rail business that are strategically located tend to have a competitive edge as compared to those that are situated in a poor location. The retailers should also consider the level of competition while selecting a business location, unlike manufacturing firm. A retailer should go to a place where it can be able to compete with other business to its advantage. The retail business should consider the population demographics’ such as the population size, their purchasing power and their preference to the commodities being sold. Besides, a rail company should consider whether the location of the business regarding the cost of the premises is economical. The cost of the facilities should be less than the returns on investment; after all, deductions have been made. The retailer should consider minimizing the cost so that they can sell goods to the consumer at a lower price. The study shows that most retail business factor in the operating and administration expenses on the cost of the commodities. The factoring of such cost may discourage consumption among the customer because of high commodity prices. Hence, retailers should consider minimizing their variable cost so that they can charge customers affordable prices (Shaharudin, Govindan, Zailani, & Tan, 2015). Conclusion Based on the study it can be observed that customer drives the location of the business. They determine where the business should be located. Besides, the customer tends to influence the location of various businesses such as manufacturers, distributors and retailers in numerous ways as discussed. Therefore, customer’s needs should be identified prior deciding on the enterprise location. References Crammer, L. J. & Wegfahrt, A. M., (2006). Ranked .9 proximity to major markets. Area Development Site and Facility Planning, 41(5). Shaharudin, M. R., Govindan, K., Zailani, S., & Tan, K. C. (2015). Managing product returns to achieve supply chain sustainability: an exploratory study and research propositions. Journal of Cleaner Production. Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg. Read More