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The Standard Logistics Operational Characteristics
Business logistics involve either the inbound logistics or the outbound logistics. It covers the flow and storage of materials at all stages. It begins from the manufacturing point to the consumption point. There is needed a logistician to manage the entire process. His or her task involves the inventory, purchases, and transportation. Other roles cover the warehousing, consultation, the organizing and planning of the activities.
The main aim is to ensure that there is a constant movement of goods and services from the stores to the point of sale or delivery. It involves the transportation network linking the stores to the customers. The distribution of resources is also critical for the initiation and delivery of particular projects. It also requires a good warehouse management system and congruent warehouse control systems (Bertazzi, Speranza, & Nunen, 2009). The process involves the suppliers who bring the raw materials to the company and the manufacturer who is the consumer product company. It may also require that the distributor takes the finished product to the retailers. The retailers then deliver the product to the customer.
The case of Mansoor involves the direct delivery to the customer from the manufacturer. It owns the distribution stores that enable the organization to transport the goods to the client within the specified time. The customer service is also crucial to this business because it links the customer concerns to the management. The core activities include the customer service, transportation, management of inventory, flow of information and order processing. The supporting activities are warehousing, data maintenance, purchasing, materials handling, protective packages, and cooperation with operations.
The Problem Areas and Specific Areas of Logistics
The customer’s distribution network was overlapping because of the multiple acquisitions. The organization had increased the distribution centers to 64 locations. And hence, this had increased the fixed costs of the company. It also decreased the ability to control and manage the inbound and outbound inventory. It needed to bring down the costs so that it can benefit more from its sales (Rushton, Croucher, & Baker, 2010).
The specific areas of logistics included the customers who had concerns about the unavailable inventory. There was also the need for same day/next day delivery. The customer service portfolio is another logistical area that needed to increase the service to the customers. It was necessary to reduce the time of delivery as a means of addressing client concerns. Lastly, they also needed the customer care service to increase its service delivery time and be available for 24 hours every day.
Linking the Target Areas of Improvement to the Logistics
The target areas of improvement include the customer’s need for the 24/7 flexible service. It links to the customer service logistics. There was the need for more inventory availability, and same day/next day inventory. The other areas are the management of inventory, transportation, and flow of information. The management could not easily account for the inventory in the warehouses because of extensive warehouse distribution (Krajewski, Ritzman, & Malhotra, 2013).
There was the need to make the products reach the customer within four hours. The warehousing logistic concern required the organization to reduce the number of stores from 64 to 55. The firm also needed to provide the mechanism for materials handling, and cooperation with operations. The customer order frequencies, volumes and geographical locations also helped to determine the best strategy for outbound transportation.
The organization can use lean management technique. It is a process that requires the organization to give value additions to customers. I recommend that the organization uses the lean technique in the demand chain. The reduction of the number of warehouses, while maximizing on the quick delivery to the customer at the same cost and value is appropriate for the organization.
Another method is the Agile technique. It requires the search for alternatives to traditional project management. The firm can use this method because it provides opportunities to assess the direction of work in the system in a development lifecycle (Cline, 2015). For instance, the new development of reduction of warehouse and increased customer supply can be the new direction for the company.
The repetition of this work cycle leads to results which the management can evaluate on a weekly basis. During such re-evaluations, the management can make a decision on whether to continue with the same process or choose another direction (Hughes, 2013). It reduces development costs and time to market the products. Therefore, I also recommend the use of the agile technique.
Implications of the Reduction of the Warehouses
The consultant reduced the number of the stores by 13 significantly to reduce the fixed costs to the company. It also made it easy for the organization to account for the inventory in a shorter time. One of the goals was also to increase the customer delivery time (Branch, 2009). However, this could lead to other costs in transportation.
The risk was that it could lose some clients who were close those stores. Customers in such locations may also not get products in the shortest time possible. It also cut down on the inventory production. If the demand goes up, the organization may only have limited supply that would not be enough to satisfy the market. It may also affect the cost of production since mass production reduces costs. Another risk is about concerns for the workers in the stores that are supposed to close down.
Bertazzi, L., Speranza, M., & Nunen, J. (2009). Innovations in distribution logistics. Berlin, German: Springer-Verlag.
Branch, A. (2009). Global supply chain management and international logistics. New York, NY: Routledge.
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Cline, A. (2015). Agile development in the real world. Berkeley, CA: Apress.
Hughes, R. (2013). Agile data warehousing project management. Waltham, MA: Morgan Kaufmann.
Krajewski, L., Ritzman, L., & Malhotra, M. (2013). Operations management. Upper Saddle River, NJ: Pearson.
Rushton, A., Croucher, P., & Baker, P. (2010). The handbook of logistics & distribution management. London,UK: Kogan Page.