Logistics Management document
The current competition in trade has made manufactures to work hard towards supplying their products to the consumers. Arguably, they perform such processes faster with the aim of keeping their competitors at bay. Through logistics management organizations have managed to plan, control and implement the flow of services and goods from the manufacturer to the consumers with minimal flaws. Customer demands can only be met if manufacturers and producers provide channels that are efficient and effective in the process of storing and transporting products. The paper makes use of Coca-Cola company and describes how it operates and manages its business operations while focusing on information technology and distribution which has often contributed to its competitive advantage. The logistic process that were found to be vital for the organization included but not limited to packaging, warehousing, inventory management and transportation. The soft drink industry was used because of its major distribution links around the globe. The company has been able to make use of different marketing and distribution facets that have enabled it to become one of the best around the globe. Information for the paper was retrieved from the company website, publications, journals and other internet sources. The paper found out that the use of synchronized strategies is profitable for retail organizations like Coca-Cola because of the various benefits achieved from supply chain management. The use of information technology and other centers meant for distribution often enhance the capabilities of supply chain. They also ensure dependability and reliability which are facets that lead to greater market performance and better provisions of goods and services. Lastly, they are known to be the main keys that usually facilitate the operations of retail stores around the globe.
Introduction.Logistics management is a facet of supply chain management that is involved in the planning, implementation and the controlling of effective all-sided flow and the general storage of goods and services. It also controls all the related information between the two major points of business. That is the information regarding the producer and that concerning the consumer for the purpose of meeting the requirements needed at the end point, the customers or the consumers (Solomon, 2013). It is the governance and control of functions related to the supply chain. The following report broadly discusses the whole issue of logistics management. It also focuses on companies and explains how these companies handle the issues related to logistics management.
Logistics management is comprised of a wide range of activities among them, management of the inbound and the resultant outbound transportation, warehousing, order fulfillment, management of the inventory, the overall planning of demand and supply patterns as well as the management of the service providers for the associate third party logistics. With logistics, the placement and movement of people or goods and the related support activities are planned, executed and controlled in an organized manner. These processes in the system are all geared towards the achievement of specific objectives that the company aims. To greater extents, logistics also includes sourcing and procurement, customer service, packaging, and assembly as well as production planning and scheduling. Apart from being part of the various levels of planning and execution, that is the strategic, operational and the tactical levels, logistics management also integrates it activities with others including those of sales manufacturing, marketing, information technology and finance (Christopher, 2012).
In the present world, it is a huge challenge for companies to streamline their distribution, transport and in general, their supply and logistic process in the course of achieving objectives and maximize customer satisfaction as well as efficiencies and profit margins. For that reason, various companies have taken to hiring logistics firms that aid the said companies in the management of their logistics and the activities associated with the whole process. These companies offer transportation solutions as well as logistics management solutions. Thus, they effectively manage the entire transportation process that is from strategies that are long-range to the execution of day-to-day operations and their planning. These logistics companies help companies in the implementation of transportation plans, which are for the most part driven by the demands of the consumers(Christopher, 2012). They also help companies in the controlling of costs and the streamlining the productivity of the subject companies. Logistics companies, in addition, help companies to leverage logistics with the purpose of supporting growth that is profitable to the company. They also help companies in the process of improving relationships with trading partners by ensuring effective collaboration.
Logistics management primarily focuses and deals with the whole organization as opposed to individual units or departments. That is so when making decisions regarding the allocations of resources. The aforementioned resources may take different forms such as machines, men, materials as well as money and time. As such, with logistics management, effective deployment and use of the resources, however, scarce they are, is ensured. Depletion of meager resources is possible in case effective logistics management is absent (Solomon, 2013).
The importance of Logistics Management.
The importance of logistics management to the business environments cannot be overlooked. Logistics management is beneficial to the organizations and companies as well as the general public as the customers and the consumers. Logistics management has significant impacts on the general performance of a manufacturing organization.
Lack of attention to the logistics of a company and management of logistics leads to the crumbling and failure of business or organization projects. Such a case of business or organization failure is common in developing countries. As a result, there is prolonged delay in the project implementation processes. Logistics management deals with the allocation of resources to the respective departments and units in the implementation process. If these resources are distributed or allocated for the purpose of completing a project without the consideration of the management of logistics a lot in the organization is bound to collapse. The project or projects set out for implementation have little chances of achieving the levels of success as originally intended by the organization or as would have been achieved if logistics management were incorporated (Solomon, 2013).
Logistics management greatly helps an organization or a company in the even, reasonable and relatively accurate distribution of goods and services to the public and the relevant markets. With logistics management, various negative elements of workmanship are eliminated regarding the distribution of goods and services. Firstly, the general inefficiency is in the providing of services to the public is for big margins eliminated (Christopher, 2012). Logistics management analyzes the business and its markets with the help of the units that deal with the marketing and sales aspects of the organization. If logistics management is absent, the distribution of the products including the services produced is bound to be disorganized, and inappropriateness might feature significantly. As such, uneven distribution of goods and services is possible, therefore negatively affecting the performance of the business.
In addition, logistics management is critical to an organization in that it eliminates uncertainty and instability in the process of rendering products of the company to the customers and the public as a whole. The management of logistics bails out a business from a pit of wavering stability and uncertainty. Distribution of goods and services is done with surety and accurateness thanks to the analyzes done in the process of managing the logistics of a company. With logistics management and the projects undertaken by an organization are implemented and completed with expertise and accurateness owed to the planning of the projects and the effective execution of the associated activities with regards to the organization. Planning, as done in the process of managing logistics, stipulates the paths that are to be followed towards the achievement of the organization’s goals and business objectives (Closs, n.d).
If adequate attention is invested in the logistics of a company, reduction of the expenditure and the general cost of operation in the various units and departments in the company can be made possible and may prove to be significantly helpful to the finances of the organization. That reduction in cost is made possible by the fact that the whole concept of logistics suggests the use of efficient and low-cost means of transport. It also helps in the spotting, identifying and locating of areas that provide cheaper raw materials and easily acquirable resources. In addition, logistics helps a company in the determining of correct and ideal quantities of products or amount of services to be dispatched to different markets in different areas.
Logistics management ensures that a company or an organization does not have cases of the scarcity of their products or services in markets while other markets served by the same organization experiences surplus (Christopher, 2012). That is because logistics studies the markets and makes informed decisions that affect the dispatching of goods and services to the various markets depending on size and the consumer demand for the company’s products in the area. Logistics identifies the strengths of markets and weaknesses associated with markets and areas in their making of decisions regarding the marketing of the products of the company.
Logistics management identifies and recognizes market chances and opportunities for growth in an area with potential markets. That is done to reduce the costs and expenses incurred by the company or the organization in the distribution of resources and products directed to discovering of opportunities. Logistics also helps in the identifying of areas in the market that come out as weaknesses all in the bid to reduce the costs incurred by the company regarding the investments of the company in these weak areas.
Logistics management is also of great importance to a company or an organization as it is significantly involved in the solving of problems associated with the company. As such, in case an issue or a problem comes up, logistics management investigates the issue and resolves the problem in the lines of costs and the resultant benefits to the company as a whole as opposed to benefits to a particular unit in the company or a department in the organization. An example of such would be, the production of non-defective products, which would subject the company to high production costs, which would translate to costly products, which the consumers might be unwilling to pay for. On the other facet of the problem, producing cheaper products would mean producing defective products that consumers will be reluctant to buy. In such a case, logistics finds out the allowed standards of products with regards to defects while ensuring there are no losses to be made in the market share of the company.
Lastly, logistics management eliminates the ambiguity found in the definition of roles of individuals and the responsibilities of departments in an organization or units in a company. With regards to the responsibilities, logistics focuses on the sectors that show signs of inefficiency and sees to it that all sectors are managed in an effective manner. As such, coordination between the departments and sectors is achieved.
Company of interest.
The Coca-Cola Company, an iconic beverage drinks producer, was selected for the completion of this report regarding the implementation of logistics management in a company. The company dominates the world market bent on the production of soft drinks. Coca-Cola is successful to the level that it is a number or one or an unshakable number two in all the categories that the company competes in. Named as Coca-Cola Enterprises (CCE), the company is just like any other typical company that experiences the same challenges as the other logistics businesses and manufacturing businesses. Below is a detailed outline of how Coca-Cola uses the logistics management in its operations.
Coca-Cola is a multinational organization and thus has subsidiaries in different nations of the world. Coca-Cola thrives by outsourcing resources as produced by other producers. The company has singled out producers and distributors of Coca-Cola branded products in the nations of the world. As such, every country in the Coca-Cola circle produces and distributes Coca-Cola products independent of other producers in other countries. Coca-Cola products are therefore supplied and distributed by companies in the same region. Transportation costs and expenses are, or the most part shared between parties. The company itself as the producer and intermediaries who are branded distributors of Coca-Cola products (Jimenez-Lutter, 2015).
Cutting the transportation costs, the company applies the strategy called backhauling. With backhauling, trucks used to make deliveries of the company’s products can reload at the nearest site owned by the company instead of making the return journey as an empty truck. This strategy, as a side advantage, reduces the emissions of carbon dioxide.
Serving a daily market of 1.8 billion customers worldwide, Coca-Cola ensures that the customers get the product at the right time and the right price. According to Jimenez-Lutter (2015), the aforementioned is the company’s supply chain priority. In addition. The company works side by side with its customers in a program identified as “brand, pack, price channel architecture.” That program determines the descriptions of the packages that should be ordered, the right equipment that should be used as well as the service requirements that can deliver the image of success that the client professes. Elaborating further, how the company serves a hypermarket is not the same way it would serve a mom who hails in a rural area.
For Coca-Cola, supply is planned and is driven by a customer demand input that is ideally forecasted. The supply by the company is also planned according to the seasonality of consumption. In addition, promotions are also included in the planning of the supply and distribution. The company operates a supply chain structure called segmentation (Jimenez-Lutter, 2015). That is due to the fact that the company has to offer a different level of customer care due to the huge market. The supply chain structure that is segmentation is that type of supply chain that is solely based on the needs of the consumer or the traits of the product. The supply chain is comprised of more than one supply chain serving different distribution needs owing to the differences in endpoints or consumer locations.
Conclusion.In conclusion, the above report discussing the logistics management with regards to the iconic beverage company Coca-Cola shows how a multinational company would carry out its operations. It is however slightly different with other smaller companies or businesses as the distribution aspect is simplified for the larger part since the market served is not as large as that of Coca-Cola. The company, for the most part, utilizes a rather complicated form of logistics that it uses to serve most of the countries of the world. This form of logistics is called global logistics and is to some point completely different compared to the localized logistics structured.
The difference between the global logistics and localized logistics is that global logistics features substantial differences that characterize its operations. First, with global logistics, as with those of Coca-Cola, the distance is usually greater since the company is a multinational and has subsidiaries in other countries. Reaching these countries requires crossing of international borders, which makes the distance be long. Secondly, the demand is always greater, with the example of Coca-Cola, reaching a daily market of approximately two billion customers, the company evidently enjoys a large customer base. The case is not the same for localized businesses. Thirdly, the other trait associated with global logistics is the documentation. With global logistics, documentation is a lot more extensive than in localized logistics. Coca-Cola company has to cope with the different documentation structured required by different countries regarding the operations of multinational subsidiaries in the host countries. Lastly, there is diversity in the requirements for operations and the conformity with the cultures of the countries that form a section of the market. As such, a company has to design logistics that would help the company blend in effectively and compete with competitors in a healthy way.
Logistics management, like every other aspect of life, has challenges that face it and its operations. One challenge that is associated with the logistics management is the challenge of maintaining the supply chain velocity of the partners (Closs, n.d).. As producers such as the Coca-Cola company try to increase the velocity of the products in the chain with the purpose of lowering the cost, border delays as with global logistics reduce the product velocity. The lowering of the cost by increasing the speed is ensured by reducing the storage time taken by the product and the damage that it is subjected to on transit. Logistics associated with the transportation of products are greatly challenged by that (Closs, n.d)..
The other challenge that faces the logistics is the increased variability of the supply chain. The variability is experienced globally and in the domestic environment owing to the production and times of transit. On the brighter side, operations across international borders increase the size of the variations in productions and the times of transit that results in larger inventories. (Supplychain247.com 2014)
Managing the logistics and the supply chain is one other problem that the companies face. Tracking is easier for transportation of products in the domestic environments since typically few vessels are used. However, with global logistics, as with Coca-Cola, the supply chain is characterized by many participants who leverage the visibility and the resolution of variations. Lastly, in as much as the logistics are met with challenges, the importance of logistics management to the success of a company or organization cannot be overemphasized.
References.Christopher, M. (2012). Logistics and supply chain management. Pearson UK.
Solomon, M. M. (2013). Logistics and Supply Chain Management. InEncyclopedia of Operations Research and Management Science (pp. 900-907). Springer US.Closs, D. (n.d.). Global Logistics: Benefits and Challenges. Retrieved May 30, 2015, from http://www.logisticsquarterly.com/issues/10-2/article1.html
Jimenez-Lutter, M. (2015). The Coca-Cola Company. Retrieved May 30, 2015, from http://scw-mag.com/index.php/sections/distribution/143-the-coca-cola-company
Top Challenges for Today’s Logistics Providers. (2014, November 18). Retrieved May 30, 2015, from http://www.supplychain247.com/article/top_challenges_for_todays_logistics_providers