Recently, the ABC Manufacturing Company hired me as the Logistics VP. This position had just been introduced by this company. The interview process was lengthy and during the process, the CEO, who was interviewing me shared the company’s strategic plans that will enable it expand its market. This company had only been selling its products domestically.
This is due to the fact that its staff did not have enough logistics experience and thus, they made use of the traditional models of logistics, in which they had to transport the finished commodities from their East Coast warehouse. However, it received competition from the West-Coast warehouse as the market there was expanding.
The company was well recognized nationally from a quality perception but its penetration in the West Coast was very poor. This was due to the fact that the shipping costs were expensive and this made the company to charge higher costs. The CEO was concerned about this issue.
The marketing executive had initially tried to alleviate these challenges by employing freight equalization that could have lessened the costs to their clients, particularly from the West Coast. Unfortunately, this was not successful because the delivery time became a concern.
To that effect, I was given a first assignment by the CEO. This paper aims at elucidating my first assignment. In so doing, it will elucidate a number of points as per the headings below.
Introduction
Generally, in the U.S., having a number of shipping locations as well as numerous distribution centers can be advantageous. Similarly, it can also be of disadvantage. To begin with, these centers and locations are capable redefining the ways of how they correlate with the integrators of material handling.
Numerous shipping locations and centers of distribution will assist an organization in gaining more purchasers and escalating the company’s revenue. Also, numerous shipping locations are disadvantageous in essence that the organization ought to as well have numerous inventories. It is vital for any kind of organization to have an inventory control. The company will save a lot of money, especially if their inventory control is kept simple.
Actually, a company may decide to have a number of multinational centers for distribution to cater for its multinational sales, other than directly shipping from a manufacturing warehouse that is located in America. This can be advantageous as it will escalate the organization profits, make use of multinational trade and techniques, and enhance the probable expansion of the company.
Similarly, it also has disadvantages as the organization will have to increase its staff with the aim of launching a multinational trading. Also, the organization has to modify the packaging of its products and thus, incurring additional costs.
Ultimately, the organization may opt to become a supplier to a multinational mass-merchandise. This as well has challenges as well as merits. One of the merits is that in view of the fact that the merchandiser is fanatical in determining the retail-price of each product; the supplier is likely to present the best commodities. Also, merchandising will institute a proper working-relationship amid the suppliers and the retailers.
The challenges that the suppliers face in merchandising came about is essence that the retailers are the ones who agree on the type of the product to be sold in that market. Also, the unit price that the manufacturer charges is usually negotiated by the retailer, who also arrange by the supplier to ensure that those commodities are delivered (Applegate 76).
Decision Making
Currently, the ABC Manufacturing Company’s CEO is mulling over ensuring that its warehouse is expanded, so as to be next to the manufacturing plant in the East Coast; or using the entire cost of operation to construct a distribution cost in the West Coast; or utilizing the total operational costs in constructing a warehouse location along with a manufacturing location in the West-Coast.
The CEO also came up with an utterly separate notion. She contemplated about ensuring that a distribution center is constructed out of the country, so as to make provision for the markets of Spain or/and France that were expanding quickly because of their warm weather.
On the basis of the above information, the top ten criterion that ought to be put in mind when establishing a new-fangled or ensuring that the shipping warehouse is expanded either internationally or domestically will encompass the following: propinquity to the target marketplace; propinquity to customers that are in existence; major interstate access, accessibility to the airport; accessibility to the railway; propinquity to areas that are regarded as being metropolitan; propinquity to the suppliers; the availability of the workforce; the mean wages of the workforce; and taxes (Band 30).
As a matter of fact, a warehouse is deemed to be a facility that is capable of providing an appropriate environment that will be employed in keeping those materials or commodities that need to be protected from elements. The warehouse plan should be able to store those materials that are regarded as being heavy; store the handling-associated equipments; and enhance trucking.along with shipping operations.
As thus, the company ought to plan the warehouse design space so that it will be capable of accommodating the requirement of the organizational services as well as the stored commodities. In actual fact, the finances of saleable warehouses that are contemporary clearly portrays that a nominal turn-around time is required in processing commodities.
The designers of the shipping warehouse ought to put their focus on constructing the spaces of the warehouse that will be effective and functional and at the same time providing an environment that is not dangerous and contented, which will enable the staff of ABC Manufacturing Company to: escalate their effectiveness and control; reduce the costs of operations; and guarantee that the customer service is improved.
In addition to that, the shipping warehouse ought to maintain an image that is corporate as well as guarantee the satisfaction of its employee. Vitally, the concerns that are essential in making real estate markets to be effective will encompass the following: guaranteeing the comfort and safety of the worker; landscaping; building aesthetics; and building a corporate image.
In view of the fact that the warehouse to be designed is a shipping warehouse, they are a number of spaces that ought to be considered by ABC Manufacturing Company and they include: space for storage; space for office; light-industrial space; computer centers; and loading docks, particularly for shipping as well as receiving.
To that effect, the ABC Company: ought to design their shipping website on the basis of future or/and current needs; utilize the space maximally by providing circulation paths that are sufficient, especially for equipments like fork-lift trucks that are capable of handling both the material and the personnel; optimize both the configuration and the design layout for the operations of the warehouse, encompassing a storage process that is effective; and correlating exterior/internal receiving as well as shipping operations that are capable of facilitating the smooth flow of commodities across the website (Blankenship 75).
Ultimately, there are a number of things that we ought to be aware of. Primarily, the commodities will be the insulated cooler that can either be of large size or medium size, which can be used by someone, particularly for a beach trip, or an expedition to the picnic. To that effect, no matter the shipping code that is being employed, transportation organizations can only charge by cubic feet, or space, other than charging by weight.
This methodology is deemed to be normal. Also, the coolers that the East-Coast suppliers produce comprise of three components and the competition has stabilized the market. Warm countries experience steady sales and the raw materials that are employed in manufacturing the commodities are bulky.
Ultimately, there is a likelihood that the domestic demand will escalate and for the customers from the Coast to remain happy, the ABC Company’s CEO has guaranteed that those customers are only charged with the local-freight shipping costs.
Metrics to Assess Success
In order to evaluate whether the logistic plan that I was involved in as a manufacturer and a multinational mass merchandiser, I employed metrics. Dissimilar metrics are likely to serve dissimilar purposes. “There are metrics for purposes of accountability and there are metrics with the aim of improving of the organization” (McChesney 87).
I used those metrics that were useful in steering ABC Company to be strategic and in an effective manner. Also, I used those metrics that communicated the worth of ABC Manufacturing Company to all the parties that are interested. Nonetheless, the metrics that I employed were used in the tuning up of the organization, guaranteeing quality improvement and re-engineering the business process.
I also employed the organizational metrics that were able the answerability measures, which were employed in scrutinizing the quality of the supplier or guesstimating the potential expansion of this company.
Ultimately, it is vital that I implemented these metrics so as to enable the ABC staff to also implement them. If the individual performance of each employee in this organization is properly measured, it will be useful in promoting as well as defining the aspired behaviors, thoughts and doings within this organization (McChesney 87).
The organizational behavior that is deemed to be right ought to be of consistency and capable of supporting organizational strategies, so as to guarantee its growth. In a number of organizations, what the individuals do is not on the basis of what they are expected to do, but on what their supervisor inspects.
To that effect, the organization should adapt a channeling of metrics that is regarded as being proper to their staff at their different levels. This is of necessity as it will facilitate the organization to expand quickly (Aggarwal 6).
Non-Quantitative Factors
Basing on the information that was collected in decision-making, which is section II of this paper, my quantitative recommendation is that the designers of the shipping warehouse ought to put their focus on constructing the spaces of the warehouse that will be effective and functional and at the same time providing an environment that is not dangerous and contented, which will enable the staff of ABC Manufacturing Company to: escalate their effectiveness and control; reduce the costs of operations; and guarantee that the customer service is improved.
In addition to that, the shipping warehouse ought to maintain an image that is corporate as well as guarantee the satisfaction of its employee.
Vitally, the concerns that are essential in making real estate markets to be effective will encompass the following: guaranteeing the comfort and safety of the worker; landscaping; building aesthetics; and building a corporate image.
In view of the fact that the warehouse to be designed is a shipping warehouse, they are a number of spaces that ought to be considered by ABC Manufacturing Company and they include: space for storage; space for office; light-industrial space; computer centers; and loading docks, particularly for shipping as well as receiving.
Kindly, see the attached excel file to see the numeric calculations as to whether we ought to ensure that a distribution center is opened in the West Coast to deal with the customers, or to just add a warehouse to the factory in the East Coast that is already in existence, or we ought we ought to construct the mishmash of the warehouse and West-Coast-manufacturing location.
Conclusion
Decisions are made in each and every day of our life. Things that individuals do as well as what we say are led by our decisions, whether we decided with our conscious mind or not. As a matter of fact, for each of the choices we make, either minimal or large, the formula for coming up with a decision that can be deemed to be right is not that easy.
So, the better thing that individual can try is to approach those choices in all directions as regards to how they perceive them. Then, we ought to select the choice that will remain balanced as well as appear reasonable.
In conclusion, we can say that it is of necessity that the CEO of ABC manufacturing company comprehends the entire process of decision. However, the most vital notions that the CEO needs to comprehend will encompass the following:
- Listing the options that are available.
- Weighing the probable outcomes.
- Consulting her intuition.
- Making a choice.
- Implementing the decision of choice in a joyful manner and wholeheartedly.
- Evaluating that decision that has been implemented.
Works Cited
Aggarwal, Raj. “The soft side of performance.” Intelligent Enterprise 7.1 (2004): 6. Print.
Applegate, Royce. “Shifting our focus.” The Internal Auditor, Altamonte Springs 59.5(2002): 76. Print.
Band, Watt. “Use the right measures to track marketing performance.” Sales & Marketing Management 29.1 (1988): 30-31. Print
Blankenship, Donald. “Understanding selling patterns”. Apparel Industry Magazine 57.1 (1996): 74-77. Print.
McChesney, Harry. “Change your performance measurements or there may be no future.” Hospital Material Management Quarterly 18.1 (1996): 86-90. Print.