SUPPLY CHAIN LOGISTIC DESIGN (COMPETITIVE ADVANTAGE IN SCL DESIGN (VALUE…
SUPPLY CHAIN LOGISTIC DESIGN
COMPETITIVE ADVANTAGE IN SCL DESIGN
VALUE ADDED ROLES OF LOGISTIC
is highest when the goods/service are made available at the time when it is needed most. For instance, oranges can be kept frozen and sold much later during the low season.
created with the ability to move the cargo to where their value is greater. In other words, to places where it fetches a higher price. For instance, to send cheese from Australia to Malaysia where it fetches a higher price.
the result of raw material that has been processed and are ready for sale. The eventual result is the matching of value that the seller is willing to sell and the buyer is willing to buy. From a competitive advantage perspective, the price must be higher than what the market is willing to pay.
VALUE CHAIN OF LOGISTIC
In SCL Design, the ability to be different is important to allow sustainable customer loyalty towards a service provider/supplier. Being different can also mean having the upper hand in treating clients better and paying attention to their likes and dislikes.
The organization that can best control its operation cost will emerge as the most profitable company. Costs include logistics cost, production costs, human costs, IT cost and others.
Wealth creation and business sustainability are the main objectives of any business entity.
By creating a great design all costs, operating efficiency, sourcing capability, IT infrastructure and others are better managed internally and are more likely to be superior to the other competitors.
This is true even for a logistics company but the objective is further enhanced to include meeting the 7Rs of logistics.
Michael Porter defined competitive advantage as something you do exceptionally well when compared to others. This is the cornerstone in all SCM activities.
Major Factors Effecting SCM Decisions
Globalization has a deep impact on the business world today. Multinational companies today too do not seem to have nationalistic values as they will “invest” huge amounts of money in countries that can offer better facilities, cheap yet skilled workers and also lower tax breaks.
In SCL visibility is a mandatory requirement. Visibility is often assisted by a good IT system.
Network Design/IT System
A good IT system too will allow greater flexibility and would be able to revert to an alternative plan if the original plan faces challenges.
Component of SCL Design Decision
All these delays need to be factored into the plan and alternative solutions need to be made clear such as having suitable replacement staff whenever possible.
Managers should be able to calculate effects of delays and unexpected events. When dealing with human beings we are often exposed to unexpected events such as staff falling sick and coming in late to work due to emergencies.
Workforce planning refers to the human resources (HR) needed for production. Workforce can be permanent staff, temporary staff and even contractors.
Workforce planning also includes maintaining control and visibility of employees under the organization.
Full time staff
Part time staff
Sales & Operation Planning
For both the “pull” and “push” system, planning needs to be coordinated right at the beginning.
Among others the planning will allow improved performance in areas like product mix optimization, forecasting of demand, optimization of resources, scenario planning and also to be able to maximize profitability by selling the right product to the right customer at the right time and at the right price.
Sales and operation planning will assist the whole organization towards achieving its business objective.
Logistics planning involves all the factors related to logistics such as warehouse, forwarding and transportation which include freighting, trucking and rail.
It will also involve communication skills and the ability to find alternative solutions for immediate execution.
All the activities must fulfil the 7Rs of logistics.
An effective logistics planning will assist officers in managing last minute disruption and prevent mishaps.
Production planning is the process to find the efficiency level for procurement, purchase, acceptance of raw material and production.
This includes managing the inventory level and triggering the purchase alert whenever the raw material has reached safety stock levels.
At the same time production planning too needs to be aligned with other departments including human resources; to manage the manpower to perform the job.
Utilities too need further consideration as electricity and water is another mandatory production requirement.
Supply Chain Logistics (SCL) Design Decision
The SCL Design needs to match the strategies whereby the plans need to be converted to become more definitive.
To achieve the highest efficiency level of SCM, we cannot escape continuous analysis of the SCM strategies and operations.