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Examples and Samples

Essay on “Components of Logistics Management”

Table of Contents

  1. Customer Order Processing 4
  2. ICT system 4
  3. Benefits and challenges of the system 4
  4. Location Analysis 5
  5. ICT system 5
  6. Benefits and challenges of the system 5
  7. Inventory Control 6
  8. ICT system 6
  9. Benefits and challenges of the system 7
  10. Material Handling 7
  11. ICT system 8
  12. Benefits and challenges of the system 8
  13. Packaging 8
  14. ICT system 9
  15. Benefits and challenges of the system 9
  16. Transportation 10
  17. ICT system 10
  18. Benefits and challenges of the system 11
  19. Warehousing 11
  20. ICT system 12
  21. Benefits and challenges of the system 12
  22. Customer Service 12
  23. ICT system 13
  24. Benefits and challenges of the system 13
  25. Bibliography 14

Customer Order Processing

Customer order processing is the most significant component of logistics and operations management. This is because the component aids in attracting customers and comprehending their desires, as well as crosschecking on the availability of what they need. The process involves filling of an order form, which outlines product specification, delivery schedule and location, and quality checklist of the product. As such, this component deserves extensive consideration of the cost to be incurred, specification lists, and the ability of the company to provide the required product by the customer. In addition, the component aids in comprehending different needs of customer and ensuring that the company has the necessary resources of satisfying such needs. Ineffective customer order processing results in a reduction of the sale output of the company and overall failure of the logistics and operation management. Therefore, this component should be effective and run efficiently.

ICT system

The most significant ICT system for this component is the Electronic Data Interchange (EDI). EDI provides a platform for business organizations and individuals to exchange business documents through the use of computers (Covalent Works 2012). This technology acts as a replacement of the common mailing and faxing of paper documents. EDI documents are in the form of record formats in computers, which are accepted as standards for the company.

Benefits and challenges of the system

One of the benefits of EDI system is that it enables effective exchange of information via the computer, which is a less expensive means of handling business documents. Further, the technology demands less labor time, business transactions occur fast, and minor errors occur since computer systems are used in the processing of documents. Inventory levels reduce, freight costs reduce, and warehouse space is used effectively. Unfortunately, EDI has a drawback in that business organizations, which have to adopt the technology, have to ensure that they have adequate resources, which will ensure effective running and operation of the EDI system. This indicates that business organizations may have to hire or outsource these resources, which increases the capital base for the organization.

Location Analysis

Location analysis is a component of logistics and operations management, which aids in establishing the suitability of a location to running the supply of organization products. This component is essential since it aids in determining the taxation and government regulation measures, which may hinder the business from attaining its desired success as it runs its business activities within a given locality. Further, the component presents an opportunity of determination of the available resources, which will facilitate effective movement of goods to and fro the organization. This includes the consideration of proximity to suppliers and customers. This is essential in order to determine the cost of the supply chain, as well as ensuring that the supply chain incurs minimal costs. In addition, this component is critical since it aids in determining the shelf life of various products and ensuring that the operation costs of the organization is minimal. This contributes towards increasing the revenues, which an organization earns from running its business activities.

ICT system

The technology, which suits this component, is the statistical computerized methods and artificial neural networks (ANN). Multiple linear regressions and generalized regressions and ANN are effective methods of determining the shelf life of products (Goyal 2012).

Benefits and challenges of the system

The benefit of this technology is that it aids the logistics and operations management to predict shelf life of its products in an effective manner. This creates room for this component to ensure timely delivery, so that the organization does not incur any loss as result of decline in shelf life of a product. This is because shelf life of a product is highly associated with the quality of a product. Unfortunately, the technology has inherent challenges, which include the demand for experts who are able to develop the prediction models and programs of product shelf life. This is essential since poor development of the models and programs may result in poor prediction of shelf life, which has a consequence of contributing towards attainment of a loss in an organization.

Inventory Control

Inventory control is a valuable component of the logistics and operations management. This is because this component focuses on ensuring that the correct product or material is obtained and delivered to the customer with respect to customer specifications. The component further focuses on analysis of the inventory process, so that quality and quantity and timing elements for the materials are obtained in an effective manner. As such, this component is significant in ensuring that the lead-time for the logistics and operations management is attained. This includes control of the inventory during the planning stage and considering both the significance of the raw materials and their costs. Therefore, organizations have to ensure that they have an effective and efficient inventory control system, which has the ability of ensuring that quality and quantity of materials is maintained throughout in an effective manner.

ICT system

The suitable ICT system for this component is the Distribution Requirement Planning (DRP) and replenishment order control. This technology creates a room for the logistics and operations management to ensure that movement of goods from one store to another is effective (Manuj, and Mentzer 2008). Moreover, DRP facilitates in adding efficiency to distribution of goods among warehouses.

Benefits and challenges of the system

The benefits of this technology are that it contributes towards lowering the average of stocks, in this component. Further, the technology creates a room for automatic replenishment of the stock irrespective of the fluctuations trends in demand of products. In addition, the technology is suitable for types of inventories, which may be existing in a particular organization. However, the technology has a limitation in that several items or products may attain re-order level at a single time; a situation, which may lead to overloading of the re-ordering system. Moreover, a set sequence does not exist since items are available for re-ordering in a random manner. Finally, some instances may emerge in which variable demand may exist, which may limit the ability of the re-ordering process to attain the desired success due to errors of EOQ calculations.

Material Handling

Material handling is an essential component of the logistics and operations management. This is because poor handling of materials may result in damages and breakages and consequently, losses on the materials. This indicates that this component has to take into consideration of various factors, which include the number of handlings for each product, material breakage, and cost of handling such materials among others. However, these are dependent on the type of material to be handled, available resources for handling materials, and material traceability, identification, and location. Logistics and operations management cannot attain success if its material handling component is not effective and efficient. This is because as materials moves in and out of the organization, they have to be handled in an effective manner in order to ensure that quality of the materials remains intact and no losses are experienced.

ICT system

Considering the significance of this component in an organization, the most suitable technology would be the advanced storage and retrieval system (ASRS). According to Wise Geek (2012), ASRS is a system, which relies heavily on robotics and computers for its operations.

Benefits and challenges of the system

ASRS accrues several benefits to an organization, which include the improvement of the inventory tracking and management, reduction of time loss, cost saving, and effective use of the storage space in the organization. This aids in improving the performance of the logistics and operations management of an organization. Furthermore, ASRS contributes towards reduction in the number of personnel who are involved in handling of the various activities in an organization. This saves the organization labor cost and improves the overall performance of the organization. However, like other technological systems, ASRS has inherent limitations, which include the demand for continues maintenance and inspection. This calls for addition cost to an organization since it will have to hire mechanics and experts who are competent to ensure that the system is functioning effectively. On the same note, installation of the system is costly with the cost ranging from the acquisition of the software and hardware.

Packaging

Packaging is critical component of the logistics and operations management. This is because this component involves determination how the product will be handled, the safety level or protection of the product, and satisfaction of customer specifications on products. This indicates that logistics and operations management has to allocate adequate resources on the packaging component in order to ensure that all the requirements of the packaging process are met in an effective manner. On the same note, there is a need of focusing on reduction of the packaging cost in order to ensure that the organization does not incur additional costs in running of its business activities. This may be done in recycling of the packaging materials for various products.

Packaging is highly influenced by the type of material, as well as the storage means of the material. This is because fragile products would call for different packaging procedures and methods in comparison to non-fragile products. Further, the state of a material (solid, liquid, or gas) also influences the packaging, which has to be adopted. In addition, some products may demand repackaging. As such, logistics and operations management has to focus on ensuring that the packaging method or means, which is adopted for the various materials and products, is effective and efficient in order to meet the desire of the customers and enable effective material handling and protection.

ICT system

The proposed ICT system for this component is the Radio Frequency Identification (RFID). This technology uses receivers and transmitters in form of RFID tags (Bonsor 2006). These tags aid in communication information from transmitter to receiver ends.

Benefits and challenges of the system

This technology has benefits in that it easier to install and the security level of the product is very high. Further, the technology reduces the running cost of an organization since the reader does not need to have sight lines since communication is via radio waves. Unfortunately, the technology has a limitation in that is complex to read information in areas or cases where the RFID tags are in metal surfaces and liquid products. This is because metal surfaces and liquid products tend to reflect radio waves. As such, it is difficult to read the tags. Another limitation is that the installation cost for this technology is high, which may contribute towards increasing the capital cost for the organization. Finally, poor read rate may lead to attain of negative results from the use of this technology, which may impact the success and performance of the logistics and operations management of an organization.

Transportation

Transportation is one of the essential components of logistics and operations management, which enhances effective movement of goods and materials from one location to another. This component adds to time delivery of materials and components from suppliers and to customers. Transportation has to be effective and efficient in order to ensure that loss of products and materials does not occur through breakages or spillages. However, the adopted means of transport has to be cost effective and ensure time delivery of materials and products. This includes the provision of ambience environment for the materials and improvement on the speed of transportation.

During the selection of the transportation means, there is a need to consider the urgency of the products to be transported, cost of transportation, and cost of the product. These are the essential considerations in the transportation of goods and products from one location to another location. Actually, without a transportation component the logistics and operations management cannot achieve its objectives in running the affairs of an organization.

ICT system

The most suitable ICT system for this component is cross docking. This technology involves the coordination of the movement of goods in warehouse; that is, movement in both supply and delivery instances. The system enables direct movement of goods without storage of the goods, which aids in improving cost saving and reduction of inventories (Janvier-James 2012). Computerized record of received goods aids in determining the goods to be supplied directly without storage.

Benefits and challenges of the system

Cross docking technology uses computerized systems, which determine the supply and link such supplies to delivery demands. This aids in direct movement of supply to delivery without the need for storage. Consequently, material handling inventory cost is reduced significantly. Further, product obsolescence and damages are reduced since focus is shifted from supply chain to that of the demand chain. Unfortunately, cross docking has a limitation in that it demands application of strong IT resources and use of real-time information sharing equipment, which includes bar codes on cartons. These may be limiting to an organization due to lack of accessibility to the same and addition of acquisition costs for the technology.

Warehousing

Warehousing is an integral component of the logistics and operations management. This is because this component determines the ability of an organization to store its materials for immediate use, as well as future use. As such, the warehousing facility, which is adopted by an organization, has to ensure higher safety of the products. This includes maintaining the quality of products. This is because failure of the warehouse to protect products makes it complex for the logistics and operations management to achieve the desired goals and objectives.

Warehousing demands consideration of various factors, which include the location of the warehouse, packaging and repackaging facilities, space for loading and offloading, material handling facilities and an effective inventory level. These contribute towards improving the performance of the warehouse and ensuring that material storage occurs in an effective manner. On the same note, material storage requirements differ to some extent (Dolgui, & Proth 2010). Therefore, there is a need for integration of various material requirements in the design process of the warehouse. This will ensure that the warehouse has the capacity to store all materials safely and enhance products shelf life.

ICT system

For warehousing component, third party logistics is the suitable ICT system. This technology involves outsourcing of distribution and logistics service firm to service provider of logistics services, so that the service firm focuses more on new product development and manufacturing, as well as marketing (Chan et al. 2006).

Benefits and challenges of the system

Benefits of this technology is that the organization is able to lower its costs, expand on its market segments, have an increased flexibility, the management of its inventory is improved, and resource constraints do not hamper the organization from attaining its desired goals and objectives. However, the technology has a limitation in that it needs establishment of an effective infrastructure, which will enable efficient and reliable collaboration among the two firms engaged.

Customer Service

Finally, logistics and operations management has to have an effective and efficient customer service. Customer service is integral in creating the relationship of organization customers and management team. This component has to ensure that it provides quality services to clients, so that satisfaction level of customers improves and customers develop an urge of organization products. This contributes in improving the overall performance of the organization. As such, service centre for the logistics and operation management has to located in a place, which is accessible to all customers such the customers can access quality service and the cost of providing such services to customers is minimal.

ICT system

The most suitable technology for this component is the Customer Relationship Management (CRM). CRM is a software, which adopted by managers and individuals involved in the sales process, so that it becomes easier for them to manage the sales process (Toni et al. 1994).

Benefits and challenges of the system

CRM is a software, which enhances attainment of efficiency and quality in provision of customer services. This contributes towards improving the satisfaction level of customers and increasing the sales output of an organization. This includes provision of better customer services and simplified targeting and marketing of the organization products. Moreover, the profitability level of an organization increases as the costs decrease (Storey et al. 2006). Unfortunately, CRM has a limitation in that it provides considerable challenges to users in terms of development, implementation, and support of the running process. This may lead to attainment of a big loss to an organization. This indicates that…

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