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Introduction Logistics be an important factor in our life. A lot of people might not be aware about the importance of logistics until there are concerns appear. Under the pressure of arising competitive environment, a lot of the business agencies are started to focus on the introduction of logistics.
Logistics can be said since the moves of goods and services through the point of origin to the point of consumptions efficiently and proficiently in order to fulfill the requirement of absolutely free themes (Logistics World, n. deb. ). Strategies include the distributions of raw materials, in-progress stocks, finished merchandise and other related information.
Powerful logistics permit the business agencies to deliver the products and solutions consistently for the correct consumers on time. Depending on the question presented, I do not agree with the statements saying that ‘logistics is usually nothing more than receiving goods in one point to another’. Logistics protected much more factors and included a lot other activities other than the particular statement previously discussed. There are still many different types of activities in logistics such as customer solutions, inventory administration, material managing and product packaging, order digesting, procurement and et cetera.
Alternatively, in order to enhance the effectiveness and efficiency of logistics administration, a variety of alternatives and technology advancements have been introduced to the business enterprise market. The literature listed below will review the other pursuits and the technologies improvement intended for logistics (Stock & Lambert, 2000). Crucial logistics activities One of the activities involved in logistics is the customer support. Stock & Lambert (2000) stated customer care is “a customer focused philosophy that integrates and manages all elements of the customer interface in a predetermined the best cost-service mix (p. 4). To design a logistics system, companies should start with environment a strong and clear customer satisfaction objective. With out a common objective for everyone inside the company, decisions about buy strategies, development, transportation, inventory investment, and warehousing will not be consistent and effective. Customer satisfaction objective acts as guidelines pertaining to the logistics managers in setting up focuses on of their efficiency as well as producing decisions when they encounter challenges in the future.
Strategies play a crucial role in ensuring high customer satisfaction. Having the right merchandise to the consumers under the correct condition, on the right place and the right time, and with the right expense are the key criteria intended for achieving a top customer satisfaction (Stock & Lambert, 2000). For example , Kraft Food Incorporate make certain their customers get the right goods they bought at the right time and right place regardless of whether absolutely free themes are at the hypermarket in France or maybe a cafe in Sweden (Kraft Foods, n.. ). Other that the five rights, good customer providers also need to make sure the order and return operations are convenient to clients. The company needs to provide accurate and steady information to customer selling off the products and services which might be worth to get the price. Finally, they need to offer the products and services on time. By providing the very best customer service and fulfilling all of the five ‘right’ criteria, organization will be able make higher client satisfaction and therefore increasing competitive advantage.
When consumers are content with the products and services provided by company, they are going to most likely become the loyal buyers and support the products and services from your company extended range term scenario (Stock & Lambert, 2000). Besides that, Banning & Gibson indicate loyal clients can act as one of the marketing medium by conveying confident messages and comments for their friends and family (Banning & Gibson, n. m. ). In that way, the market talk about and profitability of the firm will increase as well as the total costs of strategies also will lessen.
Other than that, inventory management is also one of the actions under strategies. In the companies now, a lot of the company will host inventory to attain economies of scale. Organization usually obtain and travel all inventory at once to reduce their cost. It is because purchase within a huge amount can reduce the cost of per-unit value while having a complete truckload delivery will decrease the cost of per-unit transportation. In that case, company will even choose to have a greater grow capacity so the per-unit developing cost will be lower.
Yet , holding products on hand contributed an important amount of expenses for the companies because of high storage area costs, capital cost, support cost, risk cost, and some of the product can be obsolescence in short period. Therefore , the corporation might try to minimize the expenses by simply reducing the quantity of inventory with no interrupting the flow of the products for the customers. Seeing that there is conflict between financial systems of level with controlling and warehousing costs, companies need to find a suitable way to balance of these two criteria.
To get instances, firm can use Financial Order Amount (EOQ) to determine the best sum of inventory to buy (Stock & Lambert, 2000). The objective of every inventory advisor is manipulating the inventory they will hold to meet the exact amount of consumers’ demand. The reason is , either extra or shortage of inventory brings up significant costs to the business impacting the operation and possibilities of the business (Management Research Guide, d. d. ). In addition to that, raw materials and parts, work-in-process, and finished products inventories have to be considered.
These kinds of inventories require sufficient physical space, capital, and staff time to maintain and pile up. An effective inventory managing will determine the amount of products on hand necessitate in order to meet the demand of customers and at the same time consider the costs had to put in the logistic activities. Besides that, exceptional inventory administration can boost the cash flow and return on investment. Currently, many companies start off paying more attention to inventory control especially on the products that could become obsolete in short period, such as high end merchandise, vehicles, and periodic goods (Stock & Lambert, 2000).
For instance , in April 2005, Mazda Motor Organization comes away with its Mazda Materials Management Planning (M3P) which is a listing control program.
Materials handling participates managing the flow of raw materials, in-process inventory, and finished products inside a storage place. The costs of firm increases for each and every item managed. Since managing the item is not going to increase the worth of a merchandise but incur more costs to the business, company must always try to decrease the number of material handling whenever we can by reducing the inventory. Then, elements handling design the plan to lower distance went of the elements and minimize the work-in-process of the materials.
Other than that, materials handling ensures the materials can stream through the process consistently without needing troubles. Last but not least, material managing will find methods to decrease the probability of getting losses from break, waste and spoilage (Stock & Lambert, 2000). On the other hand, packaging is definitely the process of receiving the container and wrapper to carry the products (Reference for Business, in. d. ). In logistics aspect, product packaging of the products can act as a barrier to stop the products from getting destroyed during transportation of the products or holding the products.
Furthermore, product with appropriate product packaging is easier to become move or store. Yet , packaging can add up space and weights subsequently get more price. Thus, many people in this area always spend some time in pondering ways to reduce to space and pounds of the items after the labels (Stock & Lambert, 2000). A successful packaging strategy can help a firm to strengthen its competitive advantages including optimizes services, cost, and turn more convenient (Learn Marketing, in. d. ). When a merchandise go international, the packaging can becomes essential to a business.
The products must travel more distances and need more bodily handling in the event compare to home packaging (Stock & Lambert, 2000). Additionally , order finalizing is taken to account the moment discussing about the activities of logistics. Buy processing is theprocess or perhaps work stream that starts with the receipt buy from buyer, followed by validating the purchase status and communicate regarding the purchase with buyer, while finally making buy and ensure the availability of the items to satisfy client’s needs (Jetef, n. m. ). Buy processing can divide in three groupings.
The initial group is the operational components, including buy shipping, setting preparation, purchase entry, booking, and invoicing. Next group is the interaction elements, for example , order status inquiries, buy modification, mistake correction, looking up and expediting, and merchandise information demands. The last number of order control is the credit rating and collection elements, such as accounts receivable processing and credit checking. The quality and speed with the information circulation provided by company during the buy processing for their customers can affect the cost as well as the efficiency from the entire procedure.
If the information flows are slow and erratic, the business will not only endure decreasing in customer, nevertheless also raising transportation, inventory, and warehousing costs. The faster plus more accurate the service the company can provide, the higher the customers pleasure obtained by company. Information system today can help in order processing by making the time of order finalizing to become short between order placement and product delivery. For example , customers’ order can be and sent to the company’s computer directly by making use of electronic data interchange (EDI).
Decision support system (DSS), quick response (QR), efficient consumer response (ECR) and et cetera are other information program that can help the company to improve buy processing and achieve customer service goals by competitive expense. Information program not only allows company to boost its rate, quality, and accuracy of order digesting, but as well help firm to save some logistics expenses like travel and inventory while maximizing the product sales (Stock & Lambert, 2000). Finally, the past activity of logistics that this literature will discuss is purchase.
Procurement is the effective purchasing of goods and services to be sure the manufacturing and logistics processes with the firm are run in effectiveness. To ensure that the company to assure them to receive the supplies that may meet all their requirement with regards to time, area, quality and quantity, the company is required to procure suitable goods and services (Procurement, n. d. ). The purchase function contains supplier variety, determination with the form of materials to acquire, getting time, pricing and top quality control.
In respect to WiseGEEK, while “procurement logistics would be the processes utilized in the delivery, receipt, movement and storage of supplies purchased for the business or perhaps organization. The goals of procurement should be minimize the costs at the same time improve the service supplied (WiseGEEK, and. d. ). In the purchasing process, the most crucial task should be to choose the best supplier from all the potential suppliers. The purchasing process is usually complicated. Decision makers and decision influencers from decision making unit (DMU) need to go through twelve actions of buying method when purchasing items by supplier.
In the event company has been doing routine ordering, then some from the steps may be skipped (Stock & Lambert, 2000). When creating purchasing decision, DMU must also consider the number of orders, business lead time requirements, delivery objectives, product dependability, drop-off locations and others. All the final price of goods should be including transportation and storage cost. Company usually can try to reduce these invisible costs by simply requesting just-in-time delivery by supplier (WiseGEEK, n. d. ). In short, paying enough attention um the managing of purchasing price as well as the evaluation of purchasing performance can lead to elevating profitability of the company (Stock & Lambert, 2000). Solutions related to strategies Due to an increase in attention paid on the strategies, experts begun to develop a growing number of ways to increase the effectiveness and efficiency of logistics through acquiring the solutions. One of the most significant improvements made by technology is the Electronic Info Interchange (EDI) (Stock & Lambert, 2000).
EDI may be the exchange of business text messages and info through computers of the trading partners by way of communication wires with standard protocols and standard info formats (EasyLink Services, d. d. ). For example , EDI can be used when ever there are buy orders. Organizations are able to buy order with the suppliers through computers. EDI is more hassle-free for the organizations while the usage of net are more and more common (Stock & Lambert, 2000). In accordance to GXS, there are a few benefits of using EDI in strategies.
EDI is going to transform the majority of the paper works in electronic base. Many of the procedures can be done quickly and quickly through the growth of technology. Therefore , time taken to finish the process will probably be reduces significantly. It helps bring about the effectiveness of the agencies which leads towards the increase of productivity. Besides, EDI replaced human to key in the data of the agencies routinely. The moment there are significantly less human functions, the probability of getting error in info entry will be reduced substantially or even eradicated.
Furthermore, the info transferred among the computers are employing the standard and same forms. This makes sure that the data utilized in the receivers will be assessed accurately and correctly. Hence, the interaction error between sender and receiver is usually diminished. The diminished in error can subsequently raise the efficiency with the organizations too since you will discover less likely for the businesses to repeat the techniques and make corrections on the mistakes (GXS, n. d. ).
Moreover, EDI can also increase the accuracy and reliability of inventory and reduce the cycle some thus reduce the cost of inventory. In such, EDI boosts the productivity although reducing the costs as well. While using development of the web, EDI can be free if it flows through the internet instead of VAN. A large number of major companies such as NASA Goddard, UNISYS and AVEX Electronics have become using EDI supported by the net (Stock & Lambert, 2000). Bar coding is another technology advancement that contributes to the advance of logistics.
Bar coding are commonly utilization in our daily life such as the goods in supermarket. Bar requirements are a line of parallel bars distanced with a range of gaps based on a width. That they able to convey different messages in the form of letters, numbers and special personas based on the array of breaks between the bars. A beam of light is used to interpret the knowledge of the bar codes and sent that to the computer systems. These requirements are used mainly on monitoring and reliability purposes. They can be important in decreasing the probability of errors beat key in the knowledge manually.
Stats showed the bar requirements error level is one out of hundred thousand while the error rate of manually type in data is usually one away of 25. It had clearly showed the error rate had been better significantly (Stock & Lambert, 2000). Pertaining to the bar codes, as stated by Lyne, Quick React (QR) requirements from Japan are also introduced to the culture. QR rules is a two dimensional bar codes that normally stored with specific links contained with extra data. QR rules are called because it may be scanned quickly even with to the wise phones that installed with QR codes reader.
It can be convenient for the consumers to obtain particular information about the products since it will not required a specific code target audience device much like that tavern code visitor. Furthermore, QR codes capable to store even more variety of data instead of letters, numbers and special personas only just like url backlinks and geo coordinates. QR codes happen to be enable the consumer to know about the product details, contact details, discount coupons or function a link to YouTube video for further information (Lyne, 2009).
For instance, the product code, manufacturing background, expiration time and other info can be protected in the QR codes. Pepsi had employed this characteristic in their logistics management at Chukyo. They can check for the product quality and observe the products very easily using QR codes (Sundaramurthy, n. d. ). Management Information Program (MIS) is additionally one of the systems used to increase logistics. An excellent MIS has the capacity to provide adequate and relevant information to get the managers in order to make an efficient decision.
There are five areas that MIS need to fulfil which are the timing, accuracy, significance, completeness and consistency (Office of the Comptroller of Foreign currency, 1995). MIS should be able to give you the latest and current details using the quickest time. The knowledge collected needs to be checked buy auditors along with ensuring the information is useful. Unnecessary information must be filtered and the relevant details need to be sum it up completely. Finally, the method in processing and compiling the knowledge need to be consistent so that the manager will not misunderstand the information.
LOS is important in logistics pertaining to collecting, analyzing and interpreting the information coming from various aspects such as the suppliers, resources, transport and so on. MIS can make sure that there is no interruption n the supply chain. A well managed MIS allowed the organizations to manage every detail in various region in a faster period (Stock & Lambert, 2000). In genuine example, Globe Health Business need to have an uninterrupted supply of prescription drugs through the supply chain to guarantee the increasing quantity of HIV/AIDS people are able to get their treatment (World Health Firm, n. g. ).
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