Effective management of the logistics
The logistics department has been playing an imperative role in supply chain management as it aids in the movement of manufactured products from the manufacture to the customer. However, in the recent past, various companies have been looking for input avenues through which they can reduce the cost of the supply chain by applying the use of modern technology in automation activities in the supply chain. SC is one of the multifaceted departments that defines whether a company would be making proceeds or registering losses. The high amount of money used in the SC would reduce the profits that players in the supply chain would be registering at the end of the business day. Streamlining of the logistic department are effective in improving output. Despite the logistic department remaining an important part of the supply chain, its ultimate goal is to move products and services from suppliers to the market place.
Effective management of the logistics is effective in maximization of utility space and efficiency of operation. Actually, the plan of a warehouse space should best suit the accommodation of business services as well as products to be stored (Speier, Whipple, Closs & Voss, 2011). To attain a clear understanding of the two aspects of the warehouse, the original idea of building a warehouse is equally important. For instance, location, layout, and building ought to offer maximum utilization of space. Besides, there must be an efficient area for warehouse operations such as loading and unloading. The reason behind the selection of the two aspects emanates from the major function of a warehouse situated in any business scenario. For instance, for the storage of bulky products, the warehouse ought to be in a location that will favor offloading and on the loading of goods to trucks for easy transportation. Prior to the selection of a warehouse, companies would conduct a study that would ensure that the logistics department would be at ease in releasing the goods to the intended dispatch. Most of the companies in the recent past have been adopting the norm of constructing their distribution center near the target market, as they would want to reduce the cost of transportation. Adidas Company has been buying stores in cities where they have received influx sales in the past. The reason behind such automation looks into brining the products near the customer by eradicating the long process of ferrying goods from the manufacturer to the clients.
Efficient logistic management in a company has an impact on the demand for products. Consumers have varying tastes and preferences compelling various companies to align with the taste of customers in producing goods. For instance, a client would be ready to order from the company again if the time taken in delivering the ordered products is after that they expected. Customers tend to be anxious about their ordered product where they would always be thinking about the time and day that a company would deliver products. This situation creates an opportunity for companies to increase the demand for their products through the simple act of faster delivery of the ordered products. A rise in demand for the product would develop a positive connection a customer would have with a company thus compelling them to always order from the company. Satisfied clients show high chances of visiting the company another as well as referring their friends to the company because of the extraordinary services they felt while dealing with the company. Effective logistic management that would lead to a high satisfaction level of customers would raise the demand for the products that do not only increase the sales but also lead to an increase in the profits made by the manufacturing companies. Any retailer understands that getting products safely to a customer is a vital issue as it pleases customers. However, extreme packing of products also leads to a high cost of goods, which can turn away customers. Thus, the challenge affecting the packaging and handling of materials has always to find the most secure and cost-effective methods of availing goods to customers. For example, finding expensive packing boxes will increase the entire cost of books in a shop to cover the expenses of packaging. This will affect the taste of customers and might cause them to prefer another shop that has affordable book prizes.
Use of the modern technology has been aiding players in the logistics department to register sales. For instance, all companies may not have the ability to organize the transport of products to the clients. This often forces the manufacturing companies to contract other logistic companies to ferry goods to the clients. In the past, logistics companies were charging highly for their services that lead to high prices of the products to the customers. The high prices charged on the product have been affecting the demand for the products. The manufacturing companies would only be able to manufacture more products if the consumers buy the products. However, stagnation on the sale of products and services coming from the expensive logistics would affect the rate of manufacturing from the parent company. This effect has been calling many companies to devise better ways of solving the problem where the researchers in the technology devised various software as well as programs that would aid in managing the logistics department.
The need to reduce the cost of ferrying goods from one point to the next has been expanding the role of the logistics department in the supply chain. The aspect of logistics does not only include the aspect of moving goods from one point to the next but a factor connected to the safety of products from the manufacture to the client. The modern technology on navigation has been proving the fleet drivers with the most effective route system that would not only improve the delivery of goods but also ensure the safety of products. Many cases have been filed in the court where a client would want compensation of either damaged for stolen goods because they two parties did not agree on the best route that would lead to the destination of the goods. For example, the case CITGO Asphalt Refining Co. v. Frescati Shipping Co has been sued as a point of reference by various courts in the US because of the disagreement that appeared between the transporting company and the client who expected the goods. CITGO Asphalt Refining Co had hired the Frescati shipping company to ferry crude oil from Venezuela to New Jersey. While the company was trying to locate the best route to reach the destination of the client, the oil tanker collided with an abandoned anchor that led to the oil spilling into the river. The cleanup mission-led Fresacti Company to use over $143 million with CITGO Company distancing themselves from the accident, as they did not play part in the transportation exercise. However, the ruling of the Supreme Court took a divergent line where CITGO was found liable in the case and was to pay Frescati the damage cost. The jury argued that the client provided the route that the transporting company was to follow but did not take any initiative to pave the way for the successful delivery of the products. This argument meant that CITGO Company had breached the contract they signed with Frescati. This case forms the foundation of the argument that the logistic issue does not only involve the transporting company but also involves the client meant to receive the goods. This implies that the safety of the goods delivered by the client depends on the route that a client would give to the transporting company. For instance, if a client understands that the route leading to their warehouses where the goods would be delivered has many bandits during the night, the client should communicate such critical information to the transporting firm so they can evade the damage of risking the safe delivery of the goods. Therefore, effective logistics management has an impact on the safety of the goods and services delivered by transport companies.
Transportation of goods and products to customers have been experiencing many hiccups in the past. However, the advancement of the transport system in the current world has acted on the reduction of risks that business firms always incur in transporting goods to their customers. Community Transit Network in Colorado and New Jersey Futures in Transportation are some of the transportation companies that offer multimodal transportation (Al-Hashimi, Beresford, & Pettit, 2015). Notably, multimodal transportation is a current mode of transportation that limits the level of risks of transporting fragile as well as bulky products to customers. In essence, the advanced modal transportation do not only favor human transport but also fragile goods. The concept of advanced modal transportation was introduced in logistics to minimize the consumption of resources and maximize profit. For example, the use of different modes of transpiration has been one of the ways that logistics companies have been using to reduce costs. The flexibility on the modes of transportation coupled with a high level of automation has been effective in achieving reducing cost as well as ensuring faster delivery of goods.
Counter argument
Despite the view that many people have on the logistics involving ferrying of products from suppliers to the market place, the development of the discipline has added the role of logistics on companies. However, logistics has been creating an avenue of collaborative work. The supply chain system has been using the logistic analysis to analyze the trend of the demand for products. For instance, the review section that gives customers the ability to comment on the delivery process, and the conditions of the products have been effective in analyzing the satisfaction of the clients on a particular product. Besides, comments on the poor delivery of the goods have also been compelling the manufacturing companies to devise better ways of ensuring that the logistic department does not only think about ferrying the goods but also include the speed on delivery of the ordered goods.
In conclusion, the argument has elicited various points on the significance of effective managing logistic management. Apart from the main objective of transporting products from the suppliers to the consumers as well as from the manufactures to the suppliers, logistics plays an imperative role in supply chain management. For instance, effective management has been important in reducing the cost of ferrying the products from one point to the next. The advancement of technology has enabled companies to restructure their logistics department to be more efficient in delivering goods to customers.