Logistics

Logistics

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Section I: Introduction

Domestic sales with multiple distribution centers locally have advantages as well as disadvantages. The advantage is mainly exhibited in the manufacturers serving a large area; it will be cheaper to operate due to the Fact that a large quantity of goods will move around the country efficiently. The disadvantage will come in when the company manufactures small quantities. It will be costly since the goods will be moved from an industrial distribution centre and then transported to a retail outlet (Taylor, 1997).

The multiple distribution centers also give a company the benefit of easy inventory planning. That will enable the inventories to arrive at the outlets at a faster rate and then stock the emptied shelves. Calculations of the available goods will also be easy. On the negative side, it becomes difficult to arrive at an accurate inventory from the collection of data from the various distribution centers. The multiple distribution centers create employment opportunity and give an opportunity for the staff to be trained and operate the centers. They acquire skills in inventory management and the other soft ware and hard ware used in the centers. The disadvantage is that such increases the production cost of the company in the short run

Having international distribution center for the purpose of international sales is more advantageous than shipping directly from a US manufacturing location since a lot of time will be saved. The clients will get their goods on time and when the good is still needed. It will also be much cheaper in the long run since the products will be transported in lamp sum to the international distribution centers. The other advantage is that the locals will have employment in the distribution centers therefore, they will benefit from the company’s operation in their country.

The disadvantage is that it will be costly in the short run to set up the international distribution centers. Being a supplier to an internationally based mass merchandiser increases sale of the company and gives the opportunity to explore the untapped international market with lesser marketing efforts. The challenges are that there is so much competition from the other international and local suppliers, and extra effort is needed to meet the needs of the international market on time.

Section II: Decision making

The network coverage for mobile phones and wireless communication should be perfect. Good mobile phone network coverage will enhance the warehouse effectiveness since communication with the partners in operations will be effective. Poor network coverage for the phones will hinder the essential communication and therefore result in to inefficient operations

The location should be close to electricity and water which are also important for the other warehouse operations to effectively take place.

The place should be hygienic and well secured. Hygienic places eradicate the illnesses that may arise and also enhance the warehouse staff performance.

Community relations should be good and free of confrontations. The society in which to locate the warehouse should be a friendly one. It should be consistent of with people who are willing to corporate and work hand in hand with the organization. Locating the ware house in a location with hostile dweller may lead to inefficiency since the dwellers may cause havoc and interfere with the organization’s warehouse operations.

The storage area should provide the required capacity. The storage capacity should e able to hold the organizations inventory. The future capacity requirement should also be considered since the organization is mostly aimed at expanding.

The network coverage of the area should be effective. With good network in the area, there will be no interference in the communication process. Problems associated with delayed delivery will not e experienced. Communication has proven to be the most effective tool in ensuring that sales are timely and the customers are satisfied. Poor network coverage may hinder communication and the timeliness of delivery.

The location of the shipping warehouse should be served with entrance and exit routes to the main road. Locating the warehouse in such a place will ensure easy flow and transportation of the warehoused products. Lack of entry and exit will cause inconveniences which will be experienced by the truck drivers. That will delay delivery and make the clients lose trust in the company’s efficiency. When entry and exit are present, it will surely increase the efficiency with which the goods get into and out of the warehouse.

The drainage system of the area of location should also be good. Poor drainage will disorganize the operations of the company and make the delivery inconvenient. Poor drainage will also make it hard for clients to access the warehouse facility, as a result of impassable roads. Poor drainage also exposes the employees to health hazards which may render them ineffective. Ineffective employees will likely reduce sales. Individual as well as the   organization’s’ performance will decline.

The warehouse should be located in the main manufacturing area of the factory thereby making the warehouse processes rather easy. Transportation from the manufacturing point to the warehouse will take a short time when there are few hindrances in the delivery to the warehouse.  

The warehouse should be located close to main transport points such as railway stations, and communication centers. That will reduce the time wasted in getting to the vital transportation points

Section III: metrics to assess success

To assess the success of the logistics plan, Inventory turns, inventory accuracy, Cycle time, and performance to promise and fill rate will be used as the metrics or measurements. The inventory should be recorded accurately and calculations should be made to ensure the accuracy level (Rushton & Walker, 2007). The accuracy level should be ensured by assigning keen personnel who are accredited and suite the job description. Counter checking of the records should be done to reduce any kind of inaccurate entry. Internal as well as external auditors should carry out the task of auditing the performance regularly. They should carry out the task regularly and diligently so as to come out with a more accurate work.

A fill rate is the percentage rate of the customers satisfied with an inventory at hand. It is useful in calculating the service level that is existent between two parties. It is a measure of the shipping performance. Cycle time is the period which is required to complete a cycle of an operation. It calculates the days from when the supply begins to the day it ends. The calculations involve the days and the steps that take place in between. The performance to promise dates is the estimation of when the orders are expected to be filled. It is useful in differentiating the total duration of a process, from the process to the run time. Inventory turns is the number of times the inventory turns over in a period of one year. It is calculated by dividing the annual cost of sales by the average level of inventory. The average inventory level is calculated by recording the inventory level at the beginning and at the middle of the month. The same costing should be used for the average inventory and for the cost of sales.

Section V: Non Quantitative Factors

The tirelessness of transporting the products from a far region will not be preferable by the employees as opposed to having a same manufacturing and supplying point in the west coast. That will make the employees not satisfied with their jobs. The society of west coast should also be benefited by creating employment to its citizens and also build customer loyalty as they will be identified with the company. The social status of the people of west coast will also improve their livelihood since the infrastructure of their neighborhood is bound to improve (Dinitzen & Bohlbro, 2010).

The other companies around the west coast are should be improved and enhance the customers quality. The network coverage of the area around the west coast should be good. That will enhance the communication process due to network failure. Communication is an effective tool in ensuring that sales are timely and the customers are satisfied. The location where to place the ware house and build a manufacturing point should be strategic. The location of the shipping warehouse should be served with entrance and exit routes to the main road. That will ensure ease of flow and transportation of the warehoused products. Lack of entry and exit will cause a lot of jam and inconveniences by the truck drivers thereby making the delivery late and not as per the schedule. When entry and exit are present, it will surely increase the efficiency with which the goods get into and out of the warehouse.

Community relations should be good and free of confrontations. The society in which to locate the warehouse should be a friendly one. It should be consistent of with people who are willing to corporate and work hand in hand with the organization. Locating the ware house in a location with hostile dweller may lead to inefficiency since the dwellers may cause havoc and interfere with the organization’s warehouse operations. The storage area should provide the required capacity. The storage capacity should e able to hold the organizations inventory. The future capacity requirement should also be considered since the organization is mostly aimed at expanding.

The drainage system of the area of location should be a good one. Poor drainage may jeopardize the entire purpose of the warehouse, which is, timely delivery. Poor drainage makes it difficult for the clients to access the warehouse facility, as a result of impassable roads. Poor drainage also exposes the employees to health hazards which may render them ineffective. Ineffective employees will likely reduce sales. Individual as well as the   organization’s’ performance will decline. The warehouse should be located in the general area of the factory for ease of the warehousing process. Transportation from the manufacturing point to the warehouse will take a short time since there will be few limitations and the delivery to the warehouse will be enabled.  The warehouse should preferably be located close to railway stations, seaports or communication centers.

Section VI: Conclusion

The decision making process should be based on the economic feasibility of the options, the knowledge of warehouse operation and human resource management skills (Button, Hensher & Brewer, 2001). The option which is less costly and most effective should obviously be given the most consideration. the organization’s performance will likely by in harmony with its objectives. Knowledge of warehouse operations will make the organization‘s supply chain effective and give an edge to the organization. Good balance of personal and human resource management skill will make the organization’s operations effective and improve the human resource performance.

The advantages presented should be considered. For the manufacturers serving a large geographical area, a lot of money will be saved since large quantity of goods will move around the country cheaply. It would be expensive to move the goods from an industrial distribution centre then transport the goods again to a retail outlet. Having the multiple distribution centers also gives a company the advantage of easy inventory planning. The inventories arrive at the outlets fast to stock the emptied shelves. The multiple distribution centers will create employment opportunity and give an opportunity for the staff to be trained and operate the centers (Button, Hensher & Brewer, 2001).  

References

Dinitzen, H. B., & Bohlbro, D. (2010). Value-added logistics in supply chain management. Copenhagen: Academica.

Rushton, A., & Walker, S. (2007). International logistics supply chain outsourcing: From local to global. London: Kogan Page.

Taylor, D. H. (1997). Global cases in logistics and supply chain management. London [u.a.: Thomson.