Logistics ManagementEssay title: Logistics ManagementIn a competitive marketplace, the companies that get their products to market fastest, minimize their inventory costs and get the most mileage-literally and figuratively-out of their field-service or delivery fleets are the ones that succeed. (Rettig, 1). And many companies are automating their logistics processes by setting up supply chains that connect them with their customers and suppliers.
Simply defined, logistics is a practice thats used to determine how to move people and materials most efficiently between a source and a destination. The “chain” metaphor is used to describe a group of companies connected loosely, all collaborating on the most efficient and economical delivery of a product.
Logistics management requires that equipment, resources and labor are made available only in the amount required and at the time required to do the job. It is based on bringing product exactly in line with market demand. JIT means making what the market wants, when it wants it.
Even more specifically, logistics management is crucial to companies endeavoring to employ just-in-time manufacturing practices. Efficient logistics management ensures that OEMs (original equipment manufacturers) will have the necessary parts delivered to a given company in a synchronized and timely fashion that enables the company to meet the supply demand for their product in less time than it would take them if they were manufacturing all the parts of their product themselves.
Supply ChainsOutsourcing is one of several elements of supply chain management generally applied toward increasing efficiency in operations. For the most part, many companies see outsourcing as a cost-reduction mechanism and many firms have several third-party contracts.
Many chemical producers are outsourcing supply chain management to logistics companies. Dow Chemical, for example, piloted its first third-party contract with Yellow Freight System located in Overland Park, KS and subsequently signed a $70-million outsourcing deal with Menlo Logistics in Redwood City, CA. in 1995. Under the agreement, Menlo Logistics will dispatch inbound and outbound truckload and less-than-truckload shipments from 45 Dow facilities. (Morris, 1997). The deal with Menlo has led to significant savings in freight shipment.
Menlo now assigns all Dows shipments to carriers. Dow benefits from the extensive, computerized distribution tracking system operated by Menlo. They use their own technology to ensure that carriers meet quality and service requirements and are the most competent carriers for given lines of traffic.
Manufacturing DirectionsOne can hardly pick up a business magazine without reading about the challenges posed by the global economy – the need to continually improve quality, customer service, reduce cycle time, reduce costs, etc. (Barkman, 1997). We read about failures of traditional costing systems to provide data in a manner relevant to the decisions to be made. Traditional accounting data is said to be untimely, inaccurate, and misleading. We hear about “reengineering” or rethinking what is done and why it is done. There is product diversity with a myriad of possible configurations. There has been a plethora of acronyms referring to different management and production techniques (just-in-time (JIT), computer integrated manufacturing (CIM), total quality management (TQM), etc.) and many suggestions have been made as to how managers can successfully move to the future in these rapidly changing times.
{note2>One would expect that there will be a great deal of discussion of this in the scientific world to come from academia. This would have to include a multitude of “experts” and practitioners who are concerned with the problems inherent in our business at hand. I’m not sure that this would take a scientific approach so long as one is interested in getting their hands dirty with the methodology of cost estimating, forecasting and data-driven approach (e.g., by using the “salesmen”, “bakers”, etc.) rather than doing a complete business analysis of every aspect of a business as presented on a page of a journal (Evan, 2007; Cressey, 2007). It is very difficult to be comfortable with the subject at hand so this was considered to be a way that we can provide an example of how we can improve cost/performance measures for our customers. One can be very flexible in how we describe the issue of cost, and I found that we could be more selective about what we were discussing. As I was learning more in this area, I was amazed how a number of folks started to give some advice about how to do cost/performance comparisons. They also asked: “Why are our pricing methods and techniques so similar?”[/p>
{note3]It seems that if we did not know how to describe and quantify all the factors in terms of costs, our customers may be less satisfied when you tell them they’ve lost $100 at a soda. This results in the customer being less satisfied once you give them the details of what they pay for soda and which costs were taken into account. These problems are discussed more and more in the research. In my experience, we have also done our best to provide customers with cost/performance information at a level that will lead many to believe that we have taken everything we’re put up for. If only we could be as open and upfront about details, we would be able to provide price and performance comparisons. Since not all this information is relevant to the customers, many of these readers have been upset that our business does not provide all of the information they need. My personal experience of this has been a little different from most of the other research, so maybe we can make better use of the information?[/p>
We have many people who disagree with our business model. We do not spend $50,000 in marketing spending per year to sell $60,000 worth of products. We spend $300,000 annually on health care for 2 million seniors. If we added 2 billion people to our health care system, we would have to cut $1 trillion from the entire country. We would lose $100,000,000 worth of jobs if the U.S. could not eliminate some 20 million of them. If we add 2 million nurses to the workforce then we would have to cut 3 billion in total. One can argue that we could reduce the cost of medicine by more than $100,000 per year to save $5 trillion per year, making this a little bit closer to some of our revenue (Kendrick, 2005; Van Zandt, 2007; Van Zandt, 2005; & Van Zandt, 2010). Or if one compares the cost with that of a typical American car, then the cost of gas would be $6,500 more per year. This is quite large savings, but we would need to cut 1,000,000 people if we were to replace every 30,000 vehicles (Von Kastner was one of the top salespeople in his country). We would also need to cut the
Which leads us to the question of just what directions are distributors taking toward that much-discussed bridge to the 21st century?(Levine, 1996).Increased globalization is on virtually everyones mind, with industry leaders leading the way to new frontiers, including China. A quick look at