Question: logistics function is the key competitive element in the market. The Company is seriously considering assuming full control of its inbound and outbound logistics functions
logistics function is the key competitive element in the market. The Company is seriously considering assuming full control of its inbound and outbound logistics functions which are presently handled by a third party. These logistic functions have a direct bearing upon the inventories, losses due to transit delays, transit time, service unreliability and terminal problems. The company however has to look into the cost implications of such changes and also cost implication due to a fragile global situation. The Company has been the leader in the manufacturer market in Jamaica for several years. Since the advent of globalization, the company entered a joint venture with a French company to expand its business in can foods. Despite the new joint venture, the company still continue the manufacturing of its products at the Industrial Terrace location in Kingston, near Greenwich Farm. The company has also invested in a new state of the art manufacturing plant in Miami, USA to compete with other market players. The company has planned to undertake the distribution of products made and packed in the plant in Kingston and maintain control over the design, quality, and service channel of its product. Globalization has pushed the market to have grown and matured with higher expectations of the customers towards the features of the products for which technology and the design have improved considerably. All the competitors have equally good quality product in the market. Presently the area of logistics, inventory, distribution, customer service and satisfaction are the areas of prime focus in order to have extra value added to the product. Product defects due to its nature, terminal, inventory and transportation are now under increasing scrutiny. From the cost control point of view, the amount of money held up in pipeline inventory is significant. The large variety of products now mean more raw materials and components are to be in stock. Presently, the incoming supplies are CIF (cost insurance and freight) which means arrangements are made by the supplier (vendor) who has to be persuaded to opt for jointly approved transportation (consolidation). Due to product variations, the order fulfilment and its processing are of considerable importance. The traditional information system has become inadequate. There are 50 retail outlets through which the finish products are distributed using 10 delivery trucks in the transportation network. Lead- time variability is creating problems of buffer stocks with distributors. The transit time fluctuations are due to breakdown of trucks, improper documentation, and terminal problems. Such variability must be reduced. Major portion of logistics cost was allocated in fleet management whereas warehousing, raw material management and information flow have insignificant cost. Based on the above case, answer the following questions: A. Explain the logistics flow of the product from the supply channel through the distribution channel both inbound and outbound. Include a visual representation (diagram or otherwise). Please ensure the full range of the logistics flow is covered. (Looking at the possible drawbacks due to the worlds current state) (20 Marks) B. Outline 5 possible terminal problems and 5 solutions. (10 Marks) C. Outline 5 possible trading and scheduling problems that can occur due to the global situation and 5 recommend solutions (10 Marks) D. Discuss 5 possible inventory problems and 5 solutions (10 Marks) E. State 3 strategies to reduce the cost of the inbound and outbound logistics function? (15 Marks) F. What could be the major problem in exploiting inbound and outbound logistics functions? (15 Marks) G. Discuss 2 advantages and 2 disadvantages of having a dedicated transport system to operate packaged materials mainly for the company? (10 Marks) H. What arrangements must be made to ensure the service quality for the customers? (10 Marks)
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