Transportation Logistics Management
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PatrickRRoughjs.docxRunning head: TRANSPORTATION LOGISTICS MANAGEMENT 1
TRANSPORTATION LOGISTICS MANAGEMENT 22
Transportation Logistics Management
Patrick Nellum Comment by Javad Seyed: Class info..APA
Rough draft Comment by Javad Seyed: Table of Contents
Comment by Javad Seyed: Abstract?
Transportation Logistics Management
I. Introduction
Overview
Transportation refers to the carriage of products from one location to another through different means of transport. Logistics, on the other hand, refers to the organization and management of how products will be handled from the time they are ready for distribution until they successfully reach their desired destination. Transportation and logistics have been combined as an important commercial activity which enables the logistics companies to track products from the time they leave the warehouse until they safely reach the buyer or the end user. As such, the transportation and logistics industry has become an important industry which supports the development of other industries such as the transport and the retail industry.
In a world that has fully accepted globalization and regional trade, transportation and logistics have become one of the most imperative businesses processes which enable effective carriage of raw materials to the manufacturers as well as the transportation of manufactured goods from the manufacturers/producers to the final user. Currently, all the means of transportation are effectively used depending on the preference of the client (Akkerman et al, 2010). This crucial business process has led to the emergence of the transport logistics managers whose main role is to ensure that goods being transported reach their destination safely and on time.
Over the years, transportation logistics management has become one the most important process in the supply chain of any business as the key to satisfying customer demands and gaining a competitive advantage. However, the growth of the transportation and logistics industry has led to the development of new challenges which continue to affect logistics management (McFarlane & Sheffi, 2003). Different activities and actors in transportation and logistics have called for effective planning of recourses and process so as to prevent different risks from negatively affecting the products or the efficiency and reliability of the business process.
Thesis statement
The main challenges within transportation and logistics management results from supply chain planning and risk management which are mainly caused by the changing environments within the industry. Comment by Javad Seyed: You mean risk assessment?
Problem Statement
Planning in a supply chain is the process which is responsible for the coordination of assets and resources to ensure best practices in the delivery of goods to the customer whereas risk management is the process of implementing strategies which aim at reducing vulnerabilities and their impacts to ensure continuity. This paper will review some of the sources that have been published in the past few years to create an understanding of planning and risk management challenges that face the transport and logistics industry. Currently, the major trends and challenges facing the transport and logistics industry relate to planning and risk management. This paper will outline some of the common planning and risk management trends and challenges facing the transportation and logistics industry as well as discuss the solutions which can be implemented to mitigate each challenge. Comment by Javad Seyed: Be more specific about planning and risk management
II. Literature Review
A literature review has become one of the major methods that most of the scholars have chosen to use in research. This is because of the fact that the literature review provides scholars and researchers with a wide range of knowledge that they can use to synthesize new knowledge. This study will look at 15 scholarly sources which have discussed some of the most important issues concerning the challenges which are currently experienced in the planning and risk management in the transportation and logistics industry in general. The analysis of these sources provides adequate information which can be used to describe the scope of the challenges as well as provided probable solutions. Additionally, the analysis of different literature sources presents different concepts and approaches which can be used to identify and assess the supply chain planning and risk management challenges as well as evaluate the effectiveness of the solutions in eradicating the risks completely.
One of the scholars that have widely studied transport and logistics is Christopher (2016). According to his study in the article “Logistics & supply chain management,” Christopher argues that there is a huge relationship between transport and logistics and supply chain management. The author in this study focused on how transport and logistics contribute to the efficiency in supply chain management. The argument is also supported by a study that was done by Waters & Rinsler (2014), whereby the authors are of the view that transport and logistics management improves effectiveness in supply chain management. The authors asserted that any form of failure in transport and logistics will definitely lead to failure in the availability of finished goods in different areas where consumers readily wait for them. The assertions that were made in the study by Christopher (2016) were expounded by the results of the study that was done by Waters & Rinsler (2014) who in the study asserted that there was a direct relationship between transport and logistics and supply chain. The author, however, took a different shift from the assumptions that were claimed by Christopher (2016) that sometimes transportation and logistics can fail but supply chain may be sustained based on the warehouse of the business owners involved in the process. There is, however, an agreement that transportation and logistics have a direct relationship with supply chain management.
The research conducted by Wang et al (2016) focused on developing an understanding of supply chain management as it relates to transportation and logistics. The article defines supply chain in relation to transportation and logistics as “the act of organizing for the commercial transportation of goods or raw materials by ensuring that the transportation systems maintain an effective flow whereby the products being transported can reach the receiver safely and on time,” (Wang et al, 2016). The authors are of the idea that transport and logistics equally affect supply chain sustainability efforts. The findings by Wang et al were supported by another different study that was done by Dekker et al (2016). In their separate study, the authors agree with the findings of the study by Wang et al (2016) that transportation and logistics face several challenges which some of them are similar to problems that supply chain experience. The authors are of the views that there’s a room for correcting these challenges in both the short and long-term; however, a study by Christopher (2016) has been criticized by scholars because of the fact that it does not provide applicable recommendations on how these challenges can be overcome.
Despite the fact that the study by Christopher (2016) has been criticized and uploaded in equal measure, the study provides a logical argument on why most the transport and logistics companies have not been able to last in the industry for a very long time. The authors agree with the findings that were put forward by a study that was done by Branch (2009) and provide significant findings that explain why the industry is dominated by few firms since time immemorial. The authors argue that initiating a company in the industry requires a huge capital and there are several government regulations which act as a barrier to industry entry.
Another study that was done by Christopher (2016) focused on the reasons why the governments in different jurisdictions have been very keen to control the transport and logistics industry. According to the author, most of the transport and logistics companies are under the red eye of the government because of the fact that some of the companies have been involved in transportation and distribution of products that are banned or are illegal. This argument is supported by the findings of the study that was done by Stadtler (2005) in his different study. The author is of the views that one of the challenges that transport and logistics face today is the issue of delays on delivery due to sequential police checks that they have to go through before reaching their destinations. These arguments are however refuted by a study that was done by Fernie & Sparks in their study that was done in 2014. The authors argue that most of the transportation and logistics companies do not observe transport and logistics rules because they want to make huge profits in the short run. The authors are of the views that transport and logistics industry experience challenges because the industry does not want to adhere to the rules and regulations that have been put in place to guide the operations of the industry.
According to study Sheffi (2001), transport, did that and logistics managers have a huge role to play in the management of the challenges that face the industry and the companies that operate in the industry. The authors are of the views that managers have to work hard to ensure that their employees that operate in the field comply with the rules and regulations that are rather have been implemented to regulate the industry. The authors, however, note that this is not a major challenge though is of significance as far as smooth operations of the industry are concerned. Johnson (2014) disagrees with the argument which was made by Sheffi (2001) that the rules and regulations in the transport and logistics industry are not major predicaments to the smooth operations of the industry players. The author is of the views that companies that adhere to the rules and regulations that regulate the operations of the industry players have a huge impact on the profitability and efficiency in the industry. For instance, the author argues that some governments require that all the vehicles that transport goods are checked at a very police roadblock. This definitely will increase the time it takes for the goods to reach their destination.
A different study that was done by Grant (2012) and Sheu (2007) in their different studies agree that the major challenges impacting the transport and logistics industry are the management of industry employees. The authors in their different studies agree that managing employees is the major challenge that must be dealt with speed to ensure that the industry is streamlined and meet its expectations. the author of these two different studies agrees with the study findings of a study that was done by Speranza (2018) in which the author argues that apart from planning for the transportation of products, logistics management requires expertise in relating to and dealing with staff members who involved in the entire process. For example, drivers will be required to work in very remote and diverse geographical locations which might not augur well to personal interests. Due to this, it becomes difficult to retain most of the employees involved in the industry.
Besides the identification and the analyses of the different challenges facing the transportation and the logistics industry, the different sources have outlined some of the most suitable solutions which can be used by the logistics manager to reduce a company’s vulnerability. According to the reports by Wang et al (2016) and Dekker et al (2016), the best practices to address the planning and risk management challenges experienced in transportation and logistics management are similar to the approaches used in supply chain risk management. Most importantly, it is important for the transportation and logistics firms to comply with the government laws and regulation about the business practice so as to ensure that government is involved as part of the supporting factor in risk management and mitigation (Fernie, & Sparks, 2014). Generally, each of the resources has been able to share insightful knowledge and information which has been used in the preparation of this research paper.
III. Results and Discussion
The findings from the research help answer the research question “what are the main challenges facing the transport and logistics industry?” Further, the findings emphasize that most of these challenges are related to the planning and risk management operations which are important business processes in supply chain management (Christopher, 2016). Due to this close relationship, the identification of the challenges will follow the three main steps of supply chain risk management (SCRM) planning which include the identification of risks, assessment, and evaluation of risks, and development of contingencies which will enhance risk mitigation. The presentation and the analysis of the findings of the research will address the first two steps of risk identification and risk assessment and evaluation. According to the findings collected from different sources, there are four main challenges which are facing the transport and logistics industry. Comment by Javad Seyed: What are the min challenges?
The first set of challenges are challenges which are caused by challenges which affect the supply chain. Whereas it is important to focus on the challenges within transportation and logistics management, it is important to address the challenges which are related to the supply chain in general. The second challenge is the delays experienced in the transportation of products which have continued to reduce customer satisfaction. The third challenge is strict government laws and regulation which have continued to slow down the transportation process. Lastly, the fourth challenge arises from the management of employees in the transport and logistics industry. Each of these challenges affects transportation and logistics management in different ways.
1. Challenges in the supply chain
Transport logistics managers have the most demanding role in supply chains since they are responsible for facilitating safe and efficient transportation of products from the producers to the end user (Branch, 2009). As such, they are required to satisfy the needs and demands of the producers and the customers. This puts them in a position where they are needed to plan, control, and manage the dispatch and the transportation of products until they reach their destination. This means that they have to address all the challenges and issues which may affect the planning and risk management strategies which they would have put in place to facilitate smooth operations. One of the major challenges which affect supply chain and affects transportation and logistics management at the same time is the fluctuating economic conditions which are caused by the rising fuel costs and declining demand for services and products.
Transportation fully depends on fuel which is the world’s most precious commodity and resources. Most recently, fuel prices have been changing due to the political instability which has been experienced in the oil-producing countries. The increase in the fuel prices has increased the cost of transportation forcing transport and logistics managers to raise the shipping costs of different products depending on the distance and type of transportation being used. It has been difficult for a manager to evade this increase due to fact that all the means of transport rely on fuel for locomotion. For example, the rising diesel fuel in the United States is to blame for the escalating freight rates.
Even though some of the objectives of the transport and logistics manager is to develop a business model which is cost-effective both for the business and the client, the rising fuel prices have forced them to increase the charges of shipment for different commodities so that I can be possible to raise revenue for the business. At some point, it becomes difficult for the manager to develop cost-effective approaches without chasing the customers away. This explains why there are very few players in the shipping industry. With high fuel prices, it becomes impossible to cut the transportation cost whereby customers may be discouraged from using the shipping services and the transport managers will be discouraged to undertake operations which consume high volumes of fuel since the practice may not be cost-effective (Fernie, & Sparks, 2014).
On the other hand, the effect of reducing demand for services and products has been attributed to the use of poor business models which limits the level of customer satisfaction. The adoption of new technology in the transportation and logistics management operations has positively contributed to improving the business models used by most transport and logistics managers to ensure that more convenient methods are used to track products as they are being transported to their desired destinations. However, the adoption of new technology has led to the rise of new technical challenges on a global scale which continues to reduce the customer’s trust in the process.
For example, a customer may be convinced that tracking a product will ensure that there are limited delays in the transportation of products such that more customers may be encouraged to pay for fast shipping which would increase the revenue generation for the industry. Far from this, research shows that the population for U.S. customers who wish to pay anything extra for fast shipping services (which would take less than two days) has significantly reduced to approximately 64 percent of the customers. This shows that there is a big risk of a deteriorating relationship between the consumers and the transport and logistics firms.
2. Delays on delivery
The issue of delays on delivery has been a dominant challenge which mostly affects the client who is forced to wait for products which take longer than scheduled to arrive at their destinations. This is both a planning and risk management challenge whereby the transportation and logistics company becomes unreliable in making timely deliveries. As a planning challenge this issue affects the selection of routes and means of carriage which are going to be used during transportation whereby the transport and logistics manager is expected to plan for the packaging, loading, dispatch, and the safe transportation of products until they reach their desired destination (Akkerman, et al. 2010). However, at times it becomes difficult to estimate the time which will be used in every activity, therefore, making it difficult to assure the client that certain products will be delivered at a specific time. This challenge mostly affects transportation which integrates different means and modes of carriage; for example where goods have to be moved from a ship to a truck. It is evident that a lot of time is consumed during the transition from using one means or mode to another.
The second cause of delivery delays is what results from failed risk management strategies whereby some of the threats facing transportation becomes inevitable. One of the factors which contribute to this issue includes the high number of police checks along the transportation routes whereby it is a requirement that all the trucks passing through a certain route must be inspected (Stadtler, 2005). Sometimes, the traffic inspection may take more time than scheduled in case of unforeseen issues which in the long run causes a delay in the delivery of products. Besides this, there are other challenges such as adverse weather such as heavy rains and snowfall whereby drivers are required to slow down so as to prevent accident risks. This challenge can cause significant economic and operational effects on the company which can lead to business failure. For example, catastrophic climatic conditions such as storms and hurricanes may prevent the transportation of products to a certain region whereby all the business operations directed to that region will be stopped for some time until the situations go back to normal.
3. Strict government rules and regulations
Players in the transportation and logistics industry are required to follow certain sets of rules and regulation which relate to the operation of the transportation business. As an important external environment factor, strict government rules and regulations which are used to regulate business operations. The main challenge with this regulations is that there is no standard shipping regulation across all countries which makes it difficult for the transport and logistics companies to adhere to all the set regulations (Dekker, et al. 2012). For example, the lack of a common standard of information requirements during intermodal freight transactions hinders the efficiency of the freight industry. This is because it becomes difficult for the manager to meet some of the information requirements such as recording and sharing all the required electronic data about a shipment.
According to Fernie and Sparks (2014), transportation and logistics companies perceive the lack of a standard set of regulations in the transportation industry as a gap which can be exploited to increase the profits for the company. As such, most of these companies do not observe transport and logistics rules. For example, a company may choose to violate state or federal rules which relate to environmental protection, or the limitation of truck weight and sizes. In turn, the company is exposed to higher risks such as accidents or confiscation by the law enforcers which altogether leads to a huge financial loss.
4. Employee management
There are various challenges facing the transportation and logistics management industry related to employee management. The most important one being the limited number of personnel who have the needed skills and expertise to perform specific operations. For example, according to Speranza (2018), there is a shortage of drivers in the transportation industry who also have a low retention rate in many transportations and logistics companies. Among the reasons why there are limited number of drivers in this industry is due to the long distances which need to be covered when making certain deliveries. Besides this, some of the drivers prefer a working condition where they won’t have to cover long distances so that they can prevent being separated from their families. Due to this, managers are forced to recruit new employees regularly to maintain an adequate workforce.
Employee management challenges go beyond hiring and recruitment to the operations performed by different employees whereby the manager has to ensure that all the operations are performed diligently. The problem arises when employees don’t complete most of their assigned tasks due to lack of expertise or commitment. This cripples most of the process involved in transportation and logistics management. For example, due to delayed packaging, some of the products may not be ready by the time they are supposed to leave the warehouse. This causes a delayed departure of the shipment and definitely a late delivery (Grant, 2012). As such, the manager has a crucial role to supervise and oversee that all the activities are done correctly and on time which makes this a very demanding position.
IV. The discussion of potential new solutions. To the problem
To effectively solve the planning and risk management challenges the transportation and logistics manager should treat each challenge as a risk which needs to be addressed using strategies which will either eradicate the challenge completely, share the risk, control the risk, or tolerate the risk. This follows the 4 T’s strategies for managing risks; terminate, transfer (share), treat (control), and tolerate (accept). These solutions are therefore formulated to address each challenge independently so as to identify what measures can be adapted to minimize or eliminate vulnerabilities within transportation and logistics management. Comment by Javad Seyed: You are interchangeably using planning and risk. Be specific with each
1. Challenges in the supply chain
This solution is based on the treat/control strategy whereby the main focus is to reduce the impact of the supply chain on the transportation and logistics management operations. There are different solutions which can be adopted by the transport and logistics manager to ensure that challenges in the general supply chain are mitigated. This would require proper planning of all the resources and equipment’s being used in the transportation of products such that there is effective coordination of interconnected operations. The first solution which should be considered to address this challenge is improving customer service such that the transportation and logistics operations are mainly customer-centered. Among the needs of most customers who seek shipping services include cost-effectiveness and timely deliveries. To achieve this, the transport and logistics manager should improve transparency with the clients whereby they will be able to receive regular updates concerning the shipment before reaching the destinations (Christopher, 2016). To achieve this, the transportation and logistics manager should ensure that there are adequate surveillance and tracking of the products such that clients will be notified of the exact location of the product at all times.
Another solution which can be used to prevent the challenges of the supply chain from affecting transportation and logistics management is the adoption of favorable business models which seek to implement cost-effective services which will be affordable to the clients. Sometimes shipping may be expensive to customers due to the location difference between the producer and the customer whereby the customer is forced to cater for a high cost even for products which are in small volumes. Despite the high fuel cost, there are different approaches which can be used by the manager to reduce the customers' cost. One of them is by negotiating with different carriers so as to find a transportation service provider with the most favorable rates. The second approach is the use of regional carriers who will prevent clients who are purchasing items with small volumes from being charged expensively since multiple products will be shipped using the same route/carrier. As such, there is cost sharing or transportation expenses among several clients.
2. Delays on delivery
This challenge can be addressed by completely terminating or controlling risks leading to delays in delivery. The main aim of formulating these solutions is to once again restore the accountability and reliability on the transportation and logistics companies. It is the role of the transport and logistics manager to ensure that there is adequate planning for the transportation of the products which ensures smooth and seamless transitions when products are moved from one means/mode of transport to another. For example, the delivery truck and the delivery personnel should ensure that the transition takes the least time possible such that the products will reach the end customer at the agreed time.
The challenges of adverse weather conditions may be inevitable since it is impossible to alter nature. None the less, the transport and logistics manager can liaise with dependable partners who will advise on the weather conditions of the transportation routes so as to avoid threats which may arise from dangerous weather conditions. To enhance this proposal it is necessary for transportation and logistics firms to ensure that there are proper risk mitigation strategies which are available at the call centers (Waters, & Rinsler, 2014). For example, there may be various warehouses along a particular route where the shipment truck can park to protect the products as well as the personnel from being harmed by the storm.
3. Strict government rules and regulations
To solve the challenge of strict government rules and regulations, it will be important to consider the options of sharing the risk and tolerating the risk. When it comes to sharing the risk, the challenges is transferred to the government since they are at a better position to adjust some of the regulations in order to improve the operation within the transportation and logistics industry. In the past and in the present, government’s efforts to enforce standards and information systems which oversee and ensure the safety of transportation operations have failed despite the fact that the government is also a primary user of the freight transportation services. There is, therefore, a need to harmonize the government regulations both in the federal and in the state level whereby it will be much easier to follow. This solution can only be implemented by the government; which is an external environmental factor for the transport and logistics industry. Planning and risk management can only come into play when advocating for more effective and practical regulations which will improve the safety of the transportation operations as well as promote business operations.
When it comes to tolerating the risk, the transportation and logistics companies will be forced to accept the strict government regulations since they are put in place to ensure that all the business processes are legal and to protect the industries from safety threats such as road accidents. To achieve this, transportation and logistics companies should promote a public-private partnership to improve the security of products as they are being transported from one location to another. One way through which this partnership can solve challenges facing the industry is by mapping out the black spots both accident-prone areas and areas under threat of hijacking, piracy, or theft. The government will contribute to this partnership by providing adequate security in these areas whereas the companies ensure that they adhere to the transportation standards put in place (Sheffi, 2001). This will also prevent the transportation of illegal and banned products which is also a threat to the security of the transportation industry. As such, it is the role of the transport and logistics manager to ensure that the business process complies with all the laws such as environmental laws, possession of permits, and the antitrust regulations.
4. Employee management
The challenge of employee management can be eliminated completely by putting in place measures which motivate employees to improve their performance as well as creating favorable working conditions which encourage employees to stay with a particular company. This can be achieved planning an effective working schedule where employees will be given time to rest before they resume to their usual work. This will significantly contribute to relieving some of the stress which is caused by long working hours without rest. However, since there are days when there will be a higher traffic of products than others, it will be important to consider notifying the employees that they will be needed to work overtime early in advance. This will ensure that all the business operations are completed in a timely manner so as to avoid stacking of work.
The most effective solution which may bring a permanent solution to the challenge of employee management is the innovation and the adoption of new technology. Advanced technology in mechanization should be used to reduce the number of workforce and time required to perform a certain task efficiently. A good example is the use of material handling equipment to facilitate the movement of products from one point to another while in the warehouse. Before the adoption of mechanization in different operations, the manager should ensure that the method is cost-effective and it can save time as when compared to using human effort. Also to ensure a smooth coordination between mechanization and the use of human effort the manager should ensure that only qualified people are selected for a position in the company. Employing qualified personnel will hasten the business operations since there will be a synchrony between the roles played by the employee and the roles played by different machinery.
The other important approach which can be used to eradicate challenges in workforce management is the use of advanced information technology and digital solutions to improve the surveillance and security of transportation and logistics management operations (McFarlane, & Sheffi, 2003). The manager should ensure that all the operations are coordinated together within the company such that it becomes easy to monitor and identify problem areas for immediate response. For example, the manager will be able to monitor the transportation of a product using the GPS tracker which will show the location where the shipment is located. The new information technology system will facilitate easier communication between the manager and the employees as well as among the employees. This will create an effective communication network where issues will be addressed and solutions will be found through feedback and employee interaction.
V. Conclusion Comment by Javad Seyed: The interaction between the proposed solutions needs elaboration.
The field of transport and logistics management is very broad which comprises of different actors and participants. Most of the challenges facing this industry arise when there is limited customer satisfaction and when there is low revenue generation for the transportation and logistics companies. Most of the sources used for this research have handled transport and logistics as either an important sector in the supply chain or as an independent industry which should not be ignored. Among the challenges of transportation and logistics management are challenges in the supply chain, delayed deliveries, strict government laws and regulations, and employee management. Most of the challenges that affect the industry presently have existed even in the past (Akkerman, Farahani, & Grunow, 2010). The only difference between the present and the past conditions of these challenges is that there are more actors in the industry and that the advance in technology has increased the efficiency and effectiveness of different operations. Comment by Javad Seyed: How these impact the application of proposed solution?
The solutions to outlined challenges target on reducing transportation costs, improving customer service, improving business process, reducing labor costs, managing hiring and training, improving the supply chain, improving security, and the compliance of laws and regulations. The studies which have been presented by the different sources used in this research share important knowledge which has been used by in transportation and logistics industry to enhance their effectiveness in the management of different operations. However despite the fact that most of the studies that have been done, there is a huge gap in literature as far as challenges that managers face in ensuring that there is effective management of the sector operations are concerned.
These gaps include limited information concerning which tools and processes can be used by the managers to overcome the challenges experienced in employee management. Further research should be done to identify what approaches can be implemented by the managers to improve their effectiveness in controlling or influencing the performance of other employees. This research will give an intensive analysis of the organization, allocation, and coordination roles of the transport and logistics manager. This research will provide knowledge of how better managers can use their skills to limit planning and risk management risks.
References
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Undergraduate Level Rubric
