Logistics Management - Elle Sport Australian Firm - Case Study Example

Logistics management academic report Name: Student Number: Course Title: Lecturer: Date: Executive summary The logistics report is focused on Elle sport an Australian firm that comprise of 50 outlets. It is seeking on a way to meet customer’s needs effectively. Since a customer in the most valuable asset to Elle sport. The delay in suppliers such as Trento to deliver as required has made them think of another alternative, which may work better. The report is aimed at addressing on the issues in the both inbound and outbound logistics events, making a comparison on the roles played by logistics and supply chain management and finally, making a critical review on problems that are being faced by logistic managers at Trento manufacturers in trying to meet the needs of Elle Sport. Table of Contents Executive summary 1 Table of Contents 2 Introduction 3 Main activities 6 Business logistics in the firm 11 Logistic managers’ challenges 11 Conclusion 13 Bibliography 14 Introduction An inbound process is a combination of all the steps that occur at the external procurement process during the receipt of goods into the company. On the other hand outbound comprises of any activity that occurs after the inbound, that is, any other activity in required when preparing to ship goods into their final destinations. The two logistic operations are quite similar though in some other occasions differences do exist. A buying process comes in analyzing inbound process whereby it is the duty of procurement manager at Elle sport to survey and come up with the best supply basing timely supply, low costs, and high quality finished products among other products. As at Elle Sport, Trento among other suppliers were selected as they was considered to be offering best services so far. In this case, Elle sport is receiving customer services from Trento concerning order delivery. They are to negotiate on cost, quality and availability of women shoes, as this will greatly influence the final consumer. Trento is to transport the agreed order of items from their store to Elle sport. In this point Elle sport has least or no control over the transportation process as it is under Trento. This is mainly because the cost of transport was included to Trento during the first stage. As it is a finished good, demand for inbound transportation is not stable because of market forces variability. As they are finished goods, they are taken to the warehouse for storage. Stock is place close to the market. This will make it easier for the firm to handle the product for sale. Elle takes charge of the items from Trento. Elle sport and Trento managers will value information management, as it is important to both of them. About Elle sport, they will consider the stock as inbound as they are receiving them while to Trento, it is their finished product therefore it is outbound process. Any activity that is associated with buying is termed purchasing. During purchasing, it is important to be aware on the size to be purchase to reduce inventory. If at all Elle sport engage in a buying that has a discount from Trento because of lump sum, as a result the cost of transporting stock into their premise may increase to an extent that they may go beyond amount being saved. Before an agreement is officially made, both the supplier and buyer had to agree that that should have a close relationship with their customers in order to improve on their performance. Both should be willing to share cost if need be in the development that will result into technological edges. In achieving the set goals the two firms should share information, resources and people to aid them in overcome barriers that might hinder them towards their targets. From the buyer’s perspective, the seller who in this case is the manufacturer should be able to outline on those key areas of buyer’s operations that may call for improvement. Lastly, the manufacture should declare to be willing to respond the soonest to problems or emergencies that might arise in their day-to-day activities. After the stock has been delivered into the store and has been critically inspected by logistics manager from the buying firm, they are recorded ready for distribution to customers using the same process but at this time, the seller was the buyer at the first instance. Focusing on Elle sport and Trento, it was the responsibility of Elle sport to make an analysis on the type of suppliers are preferred to supply the right product with the right quality at lowest cost possible. These are some of the factors that are considered in the first phase of inbound logistics. It is also equally important to consider whether to use more than one supplier in order to ensure continuous supplier of goods into the firm. The size of the buying firm has to consider its strength if it is able to sustain all the suppliers. In summary typical logistics system comprise of customer service, forecasting on demand, communicating with distributors, inventory control, handling of material, processing of order, site selection for a warehouse, purchasing, handling of goods to be returned, transportation, warehousing and storage. Logistics activities vary from one firm to another depending on the activities that is being carried out in a firm. For example, Elle Sport acquires finished products (women shoe) from Trento who are the manufacturers. Trento get raw materials following the same channel supply chain. Main activities The main aim of customer service is to ensure that standards that exists meet align with the prevailing market conditions so as to establish customer needs for logistics customer service. It is responsible evaluating the way in which customers respond to their services. Has a responsibility of setting levels that customer service should strive to achieve. Transportation being the second activity, the logistic management ensures that preferred means with the best services is selected. They also ensure that the freight is consolidated. They handle claims that relate to transportation and auditing rating. Thirdly, inventory management, policies are made that focus on the finished goods stocking. During this step forecast are made on short-term sales and issues of product mix are analyzed. Quantities about number and size of stock points and locations are determined. Strategies of Just-in-time, push and push are formulated. Lastly, information and order processing which gives procedures on sales and order inventory interface. Rules are set that will govern the ordering process such as means that will be used in ordering either online, calling, or an application is made. Moreover there are support activities one of them being warehousing; it is all about coming up with the enough space that will accommodate stock, it gives a clear design of dock and layout of stock. It also gives a detailed report on how stock would be placed. Material handling comprise of selecting appropriate equipment to be used in handling materials, policies that govern those equipment, and a procedure of how to pick orders. Policies that state when to add or remove stock are established. Thirdly, purchasing comprise of selecting the right source of supply, recommendable time for purchase and the quantities that are to be purchased. Fourth, protection package design, which deals with handling, safe storage to avoid loss or damage of materials. Fifth, the production and operation department should cooperate so as to come up with aggregate quantities, determine the sequence in which production is to be done and make a schedule on supplies (Stock & Lambert 2001). Lastly, maintenance of information where data is collected, analyzed, information are stored and manipulated to give a control procedure. Separation of both activities will occur within the bracket of logistic channel while others will be dictated by the prevailing circumstances in a given firm. Majorly, key activities are within the main loop of firm’s immediate physical distribution channel. The standards that govern customer service give degree at which output or how ready the logistics system should respond. The level of customer service that is provided determines the logistics cost in that standards that has been put in place will dictate the cost for supporting that level. The higher in the level of service the higher the logistic cost. The most well known logistic activity to consume much of the cost is transportation and inventory maintenance. Transportation will add up to the place value of the product or services while inventory maintenance increases the time value. Both raw materials and finished goods must go through this logistic activity in all firms whatsoever. They are faced by problems of finances because of national railroad strike and other constraints. Though inventory is of essential importance, it is not easy to offer instant production or ensure times to customers. It is therefore a link between demand and supply so that if case may be, a customer may require its product be maintained as provision of flexible production and logistics are granted (Stock & Lambert 2001). The last main activity is the process of ordering. Mild costs are incurred in this activity as compared to transportation and inventory maintenance. However, is it a key activity as far as time taken for goods and services to reach the customer is concern. The second phase is the supportive activities. They are as critical as those in the first phase are and sum up into the success of logistic process. A few of the support activities are only applicable in the logistic activities depending on the firm and circumstances therein. For example finished shoe products may not need to maintenance cost because there are finished and those with weaknesses may be returned to the manufacturing firm the refine it. Protective package is required in both transportation and warehousing activities as a support activity mainly because it increase the efficiency of the activities when they are carried out to them. In addition, the general productivity of logistic process is improved. It also happens than there are other activities that are within the supply channel and cannot be handled by the firm after it had been taken by its immediate supplier or customer. Planning is therefore important for such situations so as to control the occurrence of such issues. Roles of Logistics It is through logistics that quality is created for both suppliers and customers of the firm and its executives. Logistics is based on time and place. Goods and services are of no quality unless they have place and time factors. For instance, a shoe-producing firm will base its production on the time it will be used and where to be used. Logistics therefore gives value for time and place. Out of logistics, costs are easily traced. A number of researches have been done to determine the cost of every country and economic years of the world in order to determine the Gross Domestic Product. For example, a research was conducted in the between 1992 and 2002 and the following information was found; It is through logistics that customers’ expectations in terms of customer service are improved. Request processing has been increased at a fast rate due to the employment of internet and procedures relating Just-in-Time, which is currently being put in place by firms. Logistic activities have resulted into the rise in lengthier channel of supply distribution and is too more complex. Firms have extended their efforts into the world market in the process of searching low cost raw materials. Similarly, they produce products locally with low cost and sell them to the world market. Such strategies have been developed as an outcome of logistics. A product does not have quality if the customer cannot access it. Logistics helps to identify the value that is in product by delivering the product in the process of transportation to the customer so as to gain quality. In logistic a product is granted four distinct qualities; possession, form place and time. With increased in information technology, and flexible manufacturing processes, customers have been served within the shortest time possible from the time order to delivery process. Customers can order through the internet and within the shortest time possible, the products and services are delivered to them. In similar way also firms are adopting the same system so as to meet the needs of internal environment (Stock & Lambert 2001). Logistics or supply chain can wok best in the current world of technology if well put in place. In the service industry sector, service sector end up producing a product as their outcome. An example is a firm publishing newspapers. It undergoes all the processes of logistics in the delivery of its services. A postal service firm who need to extent its branches must cite on the location to erect their expected project An increase in population growth has created awareness on environmental related issues. In this regard, waste products are increasing day after day and are calling for prevention measures. Logistic processes are also applied in transporting waste products, or refurbishing for resale. Business logistics in the firm The presences of marketing and production departments in the current organizations are mainly to offer logistics. Marketing involve acquiring a product through selling and production is to make a product for sale. Logistic managers’ challenges Logistic managers are responsible for the smooth running of the business by ensuring that they order raw materials of the right quality, and at the right time. In ensuring that appropriate processes are followed is quite challenging. Researches have been done to analyze on the causes of such challenges and are as follows. Companies have experienced difficulty in trying to maintain their competitive advantage for themselves basing the product mix because currently, competitive advantage is openly imitated by other companies for the sake of competition. Logistic managers should embark on building a stronger competitive advantage, which cannot be easily imitated. The use of railroad as a means of raw material or finished goods delivery is very cheap and can connect a larger area of over 500km. despite the fact that it is cheap; it cannot connect all the outlets of the firm. Road transport has to be employed so as to deliver the products to their destinations. This is another instance where managers are face with cost problems; in a case where the costs are low other means have to be put in place. The current market is basically focused on technological innovation. There are firms, which are still using the old methods of logistics in meeting customer’s needs. Logistic Managers experience difficulties in expressing themselves in the market when acquiring either raw materials or selling their finished products. Manual presentation of products in the market is not applicable in the current market. Firms should take a measure of adopting the new forms of undertaking logistic processes. It is now turning to be impossible to make forecast on the economic performances as revealed by a group of scholars. Policies are too rigid to fit into the fluctuating economy. Due to poor road infrastructure, there is not time limit for trucks transporting raw materials and finished products to their destinations. Urgent orders may therefore not deliver on time. A customer who expects products at a stated time may fail to be delivered. Logistic manager will be counted liable for such issues. International trade has introduced strict regulations on procedures of importing and exporting items and that valid documents are required before being allowed to proceed. This is a time consuming and costly process. Those responsible in the supply chain may not coordinate well on how the process is to be undertaken. Logistic activity may be suspended in the middle mainly because other participants are not available as a result time will be wasted and will be costly. Customers may not be impressed by what is being done in the company and may quit it leaving the company in distress (Stock & Lambert 2001). An increase rate of insecurity in the transport sector especially to water transport. In the process of transporting items abroad or into the company, they might be invaded and everything stolen leading to losses to both the company and the customer. Another challenge that is faced is in a situation where the company lack trained personnel to gather for logistic process. It will be difficult to come up with estimates on the inventory and cargo movement as demanded by the customer. Conclusion Logistic manager are recommended to strive for the set organizational goals despite the challenges. The managers should establish a logistic activity mix, which yield better outcome on investment in respect to time. There are two dimensions that strive towards the attainment of these objectives; effects of logistic system design on revenue contribution and requirements towards the achieving lower operating costs and the right design. Before an agreement is officially made, both the supplier and buyer had to agree that that should have a close relationship with their customers in order to improve on their performance. Both should be willing to share cost if need be in the development that will result into technological edges. In achieving the set goals the two firms should share information, resources and people so as to aid them in overcome barriers that might hinder them towards their targets. Any activity that is associated with buying is termed purchasing. During purchasing, it is important to be aware on the size to be purchase so as to reduce inventory. If at all Elle sport engage in a buying that has a discount from Trento because of lump sum, as a result the cost of transporting stock into their premise may increase to an extent that they may go beyond amount being saved. Bibliography Stock, JR & Lambert, DM 2001, 'Strategic logistics management', Journal of Logistics Management, vol 34, no. 1, pp. 23-25. Read More