Essay on "Global Logistics Management"

Essay 4 pages (1625 words) Sources: 5

[EXCERPT] . . . .

Management

Global Logistics Management

How do you view the challenges and benefits of Information Technology, in regards to Logistics?

It is often taken for granted that products will be available to buy when the customers wants them. Customers are often unwilling to wait to be satisfied or served and they expect instant product availability and gratification. Because of this the supply or logistics system that gets products from production through retailing to consumption has had to change. Physical distribution and materials management has been traded for logistics management and a consequent concern for the entire supply chain. The use of suitable integration of demand and supply, mainly through the extensive use of information technology and systems, enables retailers to provide better service to consumers. With the appropriate logistics, products are of a better presentational quality, are cheaper, have a longer shelf life and should never be out of stock (Fernie and Sparks, n.d.).

Why is inventory important to manage? How do we improve packaging to improve efficiency in supply chain logistics?

Inventory is important to manage because without it a company would not have anything to sell. So not having enough is very problematic. On the other hand having too much inventory is just as detrimental. Inventory costs money and having a lot of money tied up in inventory often puts a strain on a company's bottom line. This is what makes the management of inventory so very important. A delicate balance must be found and maintained in order to be successful.

The design of a package plays a vital role in helping Consumer Package Goods companies attain sustainability and profitability objectives. If packaging is made to be more efficient, then warehouse, distribution and transportation costs along with energy usage and greenhouse gas emissions (GHG) can all be reduced. Efforts to reduce emissions can also improve a CPG company's competitive position relative to other suppliers (Smorch, n.d.).

The Toyota Company has recently suffered a great reversal in its position as an industry leader for quality and safety with the recall of millions of vehicles due to unsafe gas pedals. Survey current literature and offer three causes of this situation.

Any company knows that growth can sometimes be their worst enemy. Systems get stressed, from both a financial and production perspective. In the late 1990s Toyota vowed to become the biggest car company in the world. It set out on a plan of extraordinary growth, generating new models, entering new areas and joining new suppliers outside its customary family. As the company grew, the old system of mentorship broke down and stopped working (Pitts, 2010). The center on rapid growth appeared to have come at a cost to its standing for quality, creating an occasion for others (Maynard and Tabuchi, 2010). Their capabilities were the source of their competitive advantage, and the gap between business growth and capability growth was also the source of their vulnerability. Their capacity for developing people became much overstretched. Toyota's current problems have all stemmed from the fact that they did not recognize this and yield to the temptation to make growth its first priority. Toyota's expansion undermined the precise skills learned as an underdog on the way up, an unbending devotion to quality while competing on speed and cost (Pitts, 2010).

Compare and Contrast the customer service, customer satisfaction, and customer success philosophies of a supply chain management.

Customer service is the whole of what an organization does in order to meet customer expectations and produce customer satisfaction. Customer service usually involves service teamwork. Even though there may be specific people who take a leading role in delivering customer service it usually involves a number of people in a team or in several different teams (Glossary of Terms, n.d.).

Customer satisfaction is the sentiment that a customer gets when they are happy with the customer service that they have been given. Some organizations try to increase customer satisfaction and talk about delighting customers or exceeding customer expectations. Most organizations try to increase the number of customers who are happy to confirm customer satisfaction when they give their customer feedback (Glossary of Terms, n.d.).

Customer success occurs when a company has achieved customer satisfaction by providing good customer service. This allows companies to not only gain customers but it provides them with the opportunity to retain them as well. Most companies know the bottom line is that they have no business if they have no customers. This makes customer service at the top of most company's priority lists.

Why is a performance cycle consistency more important than its speed?

Consistency is a more important element than speed in the performance cycle because it allows a company to gain a better handle on the entire process, if there is a set plan that everyone is committed to following. Many companies can virtually eliminate any lead time variability and uncertainty that exists in the inbound process by working with its suppliers, carriers and distribution centers in order to define and commit to a specific level of performance (Gonzalez, 2009).

The net effect is often that several days are done away with from the end-to-end process and lead time dependability is improved. This often translates into a 20% reduction in inventory for the goods from these suppliers (Gonzalez, 2009). This all leads to better inventory management which works to reduce costs and increase profits.

Explain the rational underlying volume consolidation. What are the risks associated with using a single supplier for an item?

In today's economy sales are down and thus so is purchasing. Buyers must take a hard look at their suppliers and make some decisions. Purchasing organizations with decreasing business often find themselves with several suppliers for any one commodity. The consequence is stressed suppliers who have low utilization. The problem that needs to be looked at is whether to keep all suppliers at low utilization or consolidate to stronger suppliers and increase their utilization (Azaria, 2009).

The problem with consolidating suppliers down to just a few or even to just one for a particular item, is that then one may not be able to be an adequate supply of an item that they need. If several companies consolidate suppliers down to just a few and they happen to be all the same suppliers then that may put a strain on those few to meet the demands that are placed on them.

Why would a company's cost of manufacturing and procurement tend to increase as the firm changes from an MTP (make-to-plan) to an MTO (make-to-order) strategy? Why would inventory costs tend to decrease?

A manufacturing strategy known as make to plan occurs when finished product is also kept available to fulfill customer orders based on a forecasted plan. A manufacturing process strategy that is prompted to start the manufacture of a product when a customer order is received rather than by a market forecast is known as make to order. In make to order products, it is thought that more than 20% of the added value occurs after the receipt of the order (Supply Chain Management Glossary, 2008).

If a firm chose to move from a MTP to a MTO strategy the cost of manufacturing and procurement would go up due to the fact that they would not be able to plan ahead as well. They would not be able to shop around and get the best deals on materials since they would be manufacturing on more of a demand type scale. Inventory costs would go down though since they would not have to store as much inventory as they did before when they manufactured ahead of the orders.

Explain how logistics performance is crucial to JIT (just-in-time)?

Just-in-time (JIT) refers to a technique of inventory control with a focus on waste abolition. It is an… READ MORE

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