Logistics and Supply Chain Management Paper Example

Question 1: Meaning of Logistics

This is the process of planning, implementing, and controlling the efficient and effective flow and storage of services, goods, and related information from the point of origin to the point of consumption. "Primarily, logistics (supply chain management) involves the movement of raw materials and finished goods from the source of supply to the beginning of the production line" (Christopher, 2016, pp. 18). It manages the flow of supplies to match the needs of producers. With the increase in the global consumer markets, the use of logistics to coordinate distribution and production is growing in significance. Normally, marketing managers need a suitable logistics plan that can satisfy the company objective of meeting the demand of the targeted customers.

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Question 2: How do Firms Go about Planning and Analyzing their Logistics Capabilities?

Supply chain management is one of the business areas where significant business improvement is still possible in terms of cost and customer-satisfaction (Christopher, 2016). Many companies focus on how to integrate logistics functions which in most cases are driven by the business forecast. The forecast determines what to produce and what time to meet the market demand. However, if the forecast is off, there is a possibility of low inventory turns, obsolescence, and low availability of the right product (Hugos, 2018). For any successful organization, the forecast must address capacity constraints, strategic objectives, future needs of the organization, competitors, outsourcing, and inventory and transportation constraints.

Since logistics can spell the difference between success and failure of a business, there is the need for entities to verify the customer requirements, track the competitor's performance, and have an internal assessment conducted. Entities are also obliged to conduct process re-design in an effort to meet the strategic and service level objectives. Firms also tend to factor logistics into strategy. This requires the management to adapt logistics programs to support corporate strategies and factor logistics into the design of business operating strategies. Typically, the slogistics team works to make sure that the organization obtains the raw materials needed to produce goods at a reasonable price and organizes the storage of products prior to sale (Hugos, 2018). In planning and analyzing their logistics capabilities, firms provide the level of data that is in line with their goals and objectives.

Question 3: Why is it Important for Firms to Focus on Global Procurement and Sourcing?

Global procurement and sourcing activities are critical in supply chain management. Global procurement involves purchasing goods and services from various nations around the world. It is meant to improve the organization's profitability in the sense that it helps to streamline processes and reduce raw materials prices and costs, and identifying better sources of supply (Kim et al. 2018). Firms should focus on global procurement because it is the best way to manage a significant proportion of the non-pay expenditure and ensuring that the best possible value for money is obtained when committing the expenditure (Kim et al. 2018). On the other hand, Outsourcing allows entities to purchase technology from specific vendors who would be more expensive to acquire internally. In this regard, it helps to reduce the overall cost in the long-run. It is always prudent for entities to inspect suppliers' facilities and integrate order management and inventory management systems.

Organizations should match their sourcing strategies with the needs of its customers. Generally, companies have to consider strategic sourcing to identify suppliers, cultivate relationships, continuously improve skills, and understand and embrace the possibilities (Kim et al. 2018). Various types of sourcing strategies can be used including network strategies, multi-sourcing strategies, and single sourcing strategies.

Question 4: What are Ways Firms Can be More Efficient through Improved Global Procurement and Sourcing?

To build a more efficient procurement and sourcing strategy, firms should focus on supplier reliability, competitive advantage, and total acquisition costs (inventory, supply chain interruptions, import fees, and making required adjustments to foreign produced goods). With improved global procurement and sourcing, companies will be in a position to implement a well-integrated solution for their supply chain.

When the firm can perform pricing negotiation, analyze transportation-related data by region, and analyze margin data by products and suppliers, it is highly possible to achieve a reduction in procurement costs of certain commodities leading to higher margins and improved merchandizing strategies. Normally, procurement processes are designed to make the procurement department more efficient rather than to make the internal customer more effective (Strange & Magnani, 2018). Many procurement entities have formal service level agreement for internal customers that are meant to address customer's needs and expectations.

Question 5: How Should Firms go about the Decision Whether or not to Outsource?

The decision on whether or not to outsource requires firms to consider costs, innovation, business reputation, calculated risks, the ability to meet deadlines, and communication and collaboration. Most companies view outsourcing as a risky option. However, the risk depends on the types of processes outsourced (Strange & Magnani, 2018). Entities should only consider outsourcing innovative processes such as software development. Since outsourcing is a viable option for everything from accounting, payroll, employee training, manufacturing, computer services, and property management, it is prudent to invest resources in more profitable activities.

References

Christopher, M. (2016). Logistics & Supply Chain Management. Pearson UK.

Hugos, M. H. (2018). Essentials of Supply Chain Management. John Wiley & Sons.

Kim, B., Park, K. S., Jung, S. Y., & Park, S. H. (2018). Offshoring and Outsourcing in a Global Supply Chain: Impact of the Arm's Length Regulation on Transfer Pricing. European Journal of Operational Research, 266(1), 88-98.

Strange, R., & Magnani, G. (2018). Outsourcing and the Global Factory. In The Routledge Companion to the Geography of International Business (pp. 78-95). Routledge.