Logistics as a Function of the Supply Chain Essay

Introduction

Logistics is an important function of SCM since it entails the planning, management and execution of services, data and goods from a particular origin to the point of consumption. Logistics as a function of the SCM aligns complex patterns of transportation and traffic, receiving and shipping, exporting and importing, inventory management, purchasing, warehousing, customer service and production planning. As a result, organizations and companies view logistics as an important part and blueprint of supply chain management due to its operations of managing to coordinate and monitoring resource required to enhance the movement of products in an efficient timely and cost-effective manner that is reliable. Therefore, logistics is an important function of the supply chain management since it reduces costs incurred and increases efficiency (Witkowski & Kiba-Janiak, 2014).

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Due to the global movement to the 21st century, the logistics have been a crucial part of the SCM and the consumer demand. In less than a couple of decades, the Logistics management has affected positively the movement of products to satisfy the customer by meeting or exceeding the demand of the customers. According to (Witkowski et al., 2014), organizations and companies saw they could minimize cost and increase their efficiency by integrating and managing logistics the system theory and managing the company as a whole to enhance performance. This was through the creation of partnerships with shipping services, suppliers and the warehouse where these services were connected through automated systems ( now called logistics) of getting products to customers are enhances with the reduction of overhead expenses and quicker delivery. With logistics, there is the simplification of communication between departments that creates a steady flow of work blueprint that minimizes costs by visibility increase and understanding of the needs of the company. Warehousing creates the cost reduction and purchasing based on the forecasts, reliable shipping, enhanced inventory management and timely delivery to an end user. The presence of warehousing in logistics with the use of sophisticated systems will receive purchase requests from customers within seconds instead of days. This will be a factor that will enhance the operation of companies and organizations that are customer based in terms of products (Hofmann & Rusch, 2017).

Traditional vs. Modern Logistics

Traditional logistics entails the packaging, transportation, warehousing and handling logistics while modern logistics made the implementation of management and integrated system concepts. Modern logistics differ from the traditional logistics in several ways. Some of the differences are traditional logistics has passive logistic services whereas the modern ha an active service. The traditional logistics has non-uniform standards of logistics compared to the modern that builds on a standardized service. The traditional logistics focus on line-to-line or point-to-point logistics while the modern builds on a global network service that encompasses a large population or different markets (Wollschlaeger, Sauter & Jasperneite, 2017).

Modern logistics is an overall optimization of the logistic systems while traditional logistics is a single chain management. Other differences between the two logistics lie on orders and their cycle time, customer, replenishment, demand, destinations and finally the warehouse configuration. In traditional logistics, there are predictable orders with a weekly cycle time. It also has a strategic B2B customer service that is rigid and reactive. The replenishment in traditional logistics is scheduled, stable demand that is consistent with a bulk shipment that has concentrated destinations. The warehouse configuration in traditional logistics is either weekly or monthly. On the other hand, modern logistics has a continuously changing warehouse configuration, a widespread destination of products whose demands are cyclical. It has a demand-driven model of distribution with a real-time replenishment. The customer service in modern logistics is flexible and responsive based on a B2C strategy. The cycle time of orders is on a daily or hourly basis with orders fluctuating (Witkowski et al., 2014).

A brief about freight and transportation industry operators Integrated supply chain

Transport and freight industry operators in the supply chain have evolved over the decades with the demand for tracking and monitoring of goods in real-time emerging. As a result, the industry has adopted the VANET system. The Vehicular Ad-hoc Network (VANET) is one of the important wireless technologies that help in controlling and managing freight and the transport industry in terms of the road safety, traffic efficiency, logistics, transportation, and fleet. Since logistics entail many activities that ensure timely availability of right products to the right customers, these activities create a gap between consumption and production points (Wollschlaeger et al., 2017).

The product's availability to deliver and efficiency in time delivery of the products are two parameters that have a great impact on the distance that exists between production and the market. Therefore, to increase the efficiency in the delivery of the right product to the right customer, there has to be an up to date freight and transportation monitoring that will provide a real-time information on the condition and distance of the products from the market or company. With the integration of the systems into the supply chain, the freight and transport industry has grown and its operations of product delivery have been efficient.

Challenges, and risks Tasks of the current truck driver and how that changes in future

In the logistics and SCM, truck drivers play a critical role in ensuring the delivery of the goods to the right customer at the right time. However, in their daily operations, the truck drivers are faced with challenges that deter their efforts and output at work. Some of the challenges of the current truck drive include the shortages in drivers that lead to overworking of the available drivers. Due to this shortage, logistic companies are not able to meet the timely demand that has now grown to be a critical issue in the delivery of goods and products (Wollschlaeger et al., 2017). Therefore, the available drivers are subjected to an overload of work in terms of the hours and shifts made. This comes hand in hand with the mode of transportation (long meandering roads) that risks the like of the driver and delivery of goods on the right time to the consumers since poor roads will slow down movement.

To Hofmann & Rusch (2017), the shortage of drivers also comes in hand with the government regulations on the hours of service each driver should not pass. The most common risks to truck drivers are fatigue due to long hours of work and accidents due to visibility when fatigued. As a result, the logistics companies will have to venture into other modes of transportation like the electric trains and vehicles, and creation of delivery points that will ease the workload of the truck drivers. In this case, the drivers will have to drive for shorter distances that will enhance operations in terms of the delivery of products. In addition, application of artificial intelligence in truck driving will be necessary despite the challenges to fill in the gap created by the shortage of truck drivers.

Workforce situation

A deficit of professional drivers in the road transport sector

According to Wollschlaeger et al., (2017), in the recent years, there has been a toll on the retirement of the workforce in the road freight and logistics companies. This is because, in the developing world, many people or workforce are contemplating the time or age to retire. Due to the labor shortages because of retirement, there has been a toll that has made the existing drivers take the role of the retired workforce. This has led to work overload that results in under-performance of the workforce in the logistic companies. Therefore, the shortage of workforce affecting the transport and logistics companies that continues to enter and increase in the market. However, this pace is not matched with the available workforce that takes quite a lot of time to be introduced to the market. This is because the workforce has to meet the regulations, compliance, and requirements. Therefore, it is important for the logistics companies to position themselves strategically to handle this rising issue of workforce shortage.

Driver retention issues

Driver retention and the shortage is a major problem that continues to toll in the freight and transport industry. With the continuous changing of customer preferences on the delivery of goods on time, the logistics companies are faced with the problem of driver retention against the cost minimization aspect that enables the companies to make profits. The minimization process takes place especially in the recurrent expenditure like salaries, wages, and allowances of the drivers who are a major part of the workforce to enable the companies to make profits. When the expenditure exceeds the revenue collected, the companies will operate at losses and will soon shut down. However, with this aspect under consideration, retention of drivers is very important since they are the primary component needed for the transit of goods to the final destination (Hofmann & Rusch, 2017). With the rising number of freight and logistics companies, competent drivers are faced with lucrative offers of wages and salaries accompanied with better working conditions that aim at attracting more drivers and retaining the ones available to a particular company. This, therefore, creates a gap in driver shortage and competition to retain drivers. With the high demand for drivers compared to the supply in the market, companies have to strategize on how to retain their drivers.

Wages, working hours and social image

With the shortage of workforce, especially the drivers, coupled with the retention issues, the wages and working conditions of drivers have been on the rise. The increase in wages by logistic companies aims at attracting the available drivers in the market to fill or meet the company's demand. There will be an increase in wages to where the supply will meet the demand needed. However, with the current and continuous shortage of drivers, increase in workload has been on the rise since the companies have an obligation of meeting the customers' expectations (Hofmann & Rusch, 2017). The available drives will be subjected to long hours of work that will decrease their output and either delivery of goods at the right place and time or destruction of goods and trucks due to accident arising from fatigue. Truck drivers in the recent past have had bad societal reputation and image due to the demand of their work. Most do not have time for their families since they spend most of the time at work. In addition, they have a bad image due to the perception that they are under drug and substance abuse to enable them to keep up with the demands of work. This social image has led to a decrease in truck drivers.

Compliance and regulatory considerations

There has been an uptick in regulation s and compliance governing the logistic businesses due to the increasing number of logistics companies. This ensures that the parties involved get to enjoy better services and satisfaction from the available companies. In addition, the compliance and regulation that enables companies to be on par with the authorities in terms of their operations. Some of the compliance and regulatory considerations governing the com...