Logistics And Supply Chain Management: Evaluating Business Issues At Ingersoll Luxury Hotel

Introduction to Supply Chain Management

Question:

Discuss about the Supply chain management and reverse logistics.

Various eminent scholars have expressed their opinion while defining the concept of logistics. Before giving an in-depth overview about logistic the study provides a brief introduction on supply chain management and its various concepts. Supply chain management primarily encompasses a method involved in sourcing and procurement along with logistic management activities. The role of an efficient supply chain managers are to collaborate and coordinate with the channel partners such suppliers, intermediaries, third party service providers and so on. However, logistic can be defined as one of the most integral parts of supply chain management that primarily controls the flow of storing goods and services and transports those goods to proper destination. In other word, logistic can be considered as operational component of supply chain management which includes quantification, procurement, inventory management and transportation. In order to maintain an effective balance between supply and demand the logistic sector has to be proactive.

This very specific study has focused to evaluate the problems of Ingersoll Luxury Hotel mentioned in this case study. After identifying the issue faced by the business experts the study provides detailed overview on how the organization should use various transportation policies as well as logistic theories for overcoming the crisis happened at workplace. A qualitative analysis by involving the employee of this hotel has also been conducted for analyzing the findings based on the issue. In addition, the study has focused to provide some major recommendations as well based on which the issues faced by food manufacturer can be overcome.

As per the case scenario, it has been observed that Ingersoll Luxury Hotel runs their all over North America. Suppliers like to provide foods and products from various locations such as Spain, Ukraine and so on. Due to the limited storage space, the managers fail to purchase the products in bulk. After the information is delivered to distribution manager that specific individual has faced innumerable difficulties while storing the material as no excess company storage is there. Managers are very well equipped with the flow of supply and demand. The entire operation process of Ingersoll Luxury Hotel is very much systematic. The primary issue that this organization is facing includes lack of sufficient storage. However, the organization at that very specific time has faced some of the major issues that are as follows:

As already stated that no excess company storage is there within the organization based on which the distribution manager can maintain an effective inbound logistics. As a result, after purchasing additional products such as furniture for hotels, toiletry: soap, towels etc, the distribution manager of this Ingersoll Luxury Hotel had to hire a outside storage space which costs additional amount of money. In this kind of situation, the company has to invest certain amount of money for storing their products in outside. This is certainly a major issue for any organization if the business experts have economic barrier.

In order to transport the goods to the outside storage destination the supply chain managers have to pay additional amount of money (Christopher, 2016). This particular expense may be a burden for Ingersoll Luxury Hotel. As a result, the profit level of the organization is getting affected ultimately. In this kind of situation, both the internal stakeholders and the external stakeholders are facing challenges in being associated with the organization.

Brief Overview of Logistic Management

Cost of money has become major concern for every supply chain managers associated with this organization. In order to hire an individual storage space the organization has to invest large amount of money that actually affecting the operation cost highly (Govindan, Soleimani & Kannan, 2015). On the other hand, transportation of goods from destination to the outside storage is a major factor for distribution managers. They have to bear the cost of money as well as time. In this kind of situation, distribution manager has to face immense difficulties to maintain the entire process of supply chain.

It has been observed from the case scenario that Ingersoll Luxury Hotel has to invest huge amount of money for maintaining their entire procurement effectiely. As a result, the distribution manager has to pay additional amount for outside storage, trucking goods to the stipulated point, work forces for maintenance (Sweeney, 2013). As a result, the organization has lost the opportunity of investing their money for improving supply chain process. As a result, customers are getting deprived of improving their business process.

However, due to these issues faced by Ingersoll Luxury Hotel, the distribution manager has faced huge loss of amount for additional purposes. The primary problem that Ingersoll Luxury Hotel is facing for running their entire process of business includes problem in business expansion and oversees. Due to the frequent shipment delivered to same time, Ingersoll Luxury Hotel had to face immense challenges in managing the products properly.

 

Figure 1: Four Key Business Issues

(Source: As Created by the Author)

A particular logistic department is constituted with supply chain managers, purchasing managers, distribution managers and shipping heads primarily. The role of purchasing managers is to maintain a proper balance between the supply and demand of the products as well as services. Purchasing managers have to keep a constant track on the overall storage of products. If the products are not sufficient for fulfilling the demands of customers, purchasing managers have to take an immediate step (Dyckhoff, Lackes & Reese, 2013). On the other hand, an efficient purchasing manager has to make an effective future analysis about the inflation rate of market. Based on that analysis, the managers intend to store their products in warehouses.

Distribution managers are primarily concerned for inbound logistics. The role of an efficient distribution manager is to maintain the entire process of inbound logistics to outbound logistics. Most importantly, the distribution manager has to take a constant track about the stored precuts and the way of dispatch. The employees associated with shipping process have to keep a constant contact with the distribution managers (Ahi & Searcy, 2013). As a result, the manager can give an effective feedback to the customers about delivery of products and services.

Shipping head is primarily concerned about the delivery of products towards proper destination. The shipping executives control the entire transportation system. In addition, the role of an efficient supply chain manager is to keep a constant control over the entire operation process. Supply chain managers primarily tend to focus on delivering the products towards proper destination within stipulated time. The managers tend to keep a track on the overall performance of employees along with customers’ needs and demands (Mellat-Parast & Spillan, 2014). After collecting feedback from the customers regarding the delivery of products and services, the supply chain managers provide necessary suggestion to the employees so that they can improve their competency level.

1. Necessary policies applied for controlling operation process:

• Using proper mode of transportation:

Issues Faced by Ingersoll Luxury Hotel

There are three modes of transportation methods that a particular organization can use for maintaining their entire logistics. The three primary methods of transportation include air, surface and vehicle. Ingersoll Luxury Hotel primarily uses vehicles for delivering their products and services (Turrisi, Bruccoleri & Cannella, 2013). It can be suggested however that the organization can use water transport system in order to reduce the cost of shipping. Transport through vehicles such as rail or road is very much time consuming. In this kind of situation, the customers may not get proper services within the stipulated time. Water transportation is not very cost effective. Therefore, the organization can save operation cost.

• Pros and cons of regulating public transport:

Public transportation is very much liberal and deregulated. The government controls it. As a result the business experts do not have to bear large amount of money for shipping their orders through public transportation system. It is undeniable at the same time that public transportation cannot deliver products within stipulated time. Business authorities do not have any control over the entire shipping method in public transport. As a result, clients have to wait for a long time in order to receive the order. Winter & Knemeyer (2013) stated on the other hand, the organizations while maintaining the shipping process should maintain a proper regulations of road transportation so that the business experts do not have to face any barrier regarding while shipping the products and services.

In order to maintain the entire logistic process systematic the organizations tend to follow several theories among which the value chain analysis is most prominent. This particular model is constituted with five major steps including inbound logistics, operations, outbound logistics, marketing and sales and services.

• Inbound logistics:

Inbound logistics signifies the process of receiving, storing and distributing inputs internally. The distribution manager has to pay the major role for maintaining the products in inbound logistic method (Manzini & Accorsi, 2013). Large numbers of employees are associated in warehouses for maintaining their entire method of logistic process effectively.  

• Operations:

Operation is considered as the entire method from inputs to outputs. The supply chain managers in this specific step are responsible from storing the product to delivering it towards appropriate destination (Wisner, Tan & Leong, 2014). The business managers are very much responsible in delivering the products to the customers within stipulated deadline. Customers’ satisfaction level is highly dependent on operation managers.  

• Outbound logistics:

Outbound logistics is the process of delivering services to proper destination. The supply chain managers by appointing certain number of employees in the shipping process deliver the products within stipulated deadline (Khajavi, Partanen & Holmström, 2014). As a result, the communication between service users and service providers become very much effective. 

• Marketing and sales:

Maintaining superior quality of products and services is not the primary aim of a business organization. The managers have to focus on making an effective making plans and policies so that customers tend to show their interest in purchasing products. After the emergence of technology the consuming behavior of the customers have become very much advanced. Customers of now a day before using the services from organization tend to give an in-depth overview about products as well as services (Prajogo, Oke & Olhager, 2016). As a result, both the service providers and the customers get equal benefits and facilities. Consumers’ purchasing behavior is highly influenced due to this very specific reason.

• Services:

Recommendations for Overcoming Business Crisis

Along with maintaining the quality of products, the business experts have to follow the service quality as well. Customers should not wait for a long time in order to receive the order. As a result, the shipping executives have to be very much concerned while transporting the services.

However, every business organization should follow Porters’ value chain analysis in order to control the entire operation process of business. As per this very specific case study, the organization is facing immense difficulties in maintaining business image and reputation due to the lack of proper distribution policy (Chen, Sohal & Prajogo, 2013). However, the company can implement value chain theory at the workplace so that the business managers do not have to face challenges in maintaining the entire shipping process effectively.

After evaluating the case study of Ingersoll Luxury Hotel, some of the major findings can be analyzed. It has been observed that company does not have sufficient space for storing additional materials. Due to the lack of sufficient workforce strength, the organization is not able to maintain the operation process from inbound to the outbound (Melnyk, Narasimhan & DeCampos, 2014). On the other hand, it has also been observed that the organization is facing difficulties in improving their entire service process due to economic barrier. This organization has spent large amount of money for hiring outside storage, transport cost and so on. As a result, the business profit level has been highly decreased due to the lack of supply chain management.

            After evaluating some of the major problems faced by food manufacturer, some of the major recommendations have been provided:

• Managing supply chain structure:

As per the case scenario, it has been observed that Ingersoll Luxury Hotel is not able to manage the entire shipping method properly due to the lack of managing skill among the employees. The employees should have proper competency of delivering the products to different distribution centers. The organization can use water as the most effective mode of transport. As a result, the managers would not have to pay huge amount of money for receiving the goods trough water transport. Ingersoll Luxury Hotel generally uses private warehouse for storing their products and services. However, it can be recommended that the business experts can use automated warehouse from where the entire distribution method will be controlled with the help of technology.

• Expanding space for storing products:

In order to expand the entire process of business the business experts should expand the space of storage. As a result, the organization would not have to hire any space from outside in order to store products. Automatically, the business experts would not have to invest large amount of money for buying a space outside (Yu et al., 2013). In addition, along with enhancing storage space the organization would have to increase their infrastructure as well. As a result, customers would like to show their interest for purchasing products from this organization. Moreover, in order to dispatch the products the employees would not have to go anywhere after building own warehouses. The entire method of operation would be more systematic. Employees would not have to face difficulties in keeping a track on their services. Both the employees and the employers would get equal benefits.  

• Use technology for reducing operation cost:

Qualitative Analysis of the Issue

In order to reduce the operation cost the food manufacturer can use the advancement of technology. The organization can render ERP within supply chain process in order to make the entire process systematic. ERP helps to reduce the labor cost as well. Enterprise Resource Planning helps to consolidate all business operation in one particular system. With the help of ERP business executives would be able to connect front end customer service to back office activities in together (Nagarajan et al., 2013). From manufacturing division to inventory management can be processed together with the help of ERP. Moreover, Enterprise Resource Planning helps to accommodate huge number of goods in limited space.

In addition, the company should use RFID (Radio Frequency Identification) in order to keep continuous track of the transport. Based on the data identified from RFID the business experts can understand the movement of vehicles. As a result, the business managers do not have to face any kind of difficulties to provide necessary feedback to the customers. It can be recommended that this Ingersoll Luxury Hotel can use GEO tagging as well in order to track the geographic identification metadata.

• Invest money for improving entire supply chain process:

In the case scenario, it has been observed that the business experts are intending to invest their money for outside purposes such as outside storage, transportation for trucking goods and so many. As a result, business experts are facing immense difficulties to improve their entire supply chain process (Manzini & Accorsi, 2013). Therefore, it can be recommended that the supply chain managers should focus on investing their money for improving business process. Automatically, they would not have to hire any additional space for storing their products. The distribution managers would be able to store additional products like furniture for hotels, toiletry, soap, towels within their own storage house. The entire business method would be very much systematic and technical. The organization would not have to face challenges in maintaining a proper balance between demand and supply.

• Increase more workforce strength:

As per the case scenario, it has been observed that large numbers of employees in Ingersoll Luxury Hotel is very less. Under the distribution manager, very few employees are there for giving effective help and support. As a result, the distribution manager has to face immense challenges for controlling the entire flow of business. In this kind of situation, it can be recommended that the organization would have to increase their number of employees so that people do not have to face challenges in controlling overall business process.

• Increasing the level of communication among employees:

The case scenario depicts that managers do not maintain an effective communication with each other before taking a decision. It has been observed that the purchasing manager without consulting with other businesspersons regarding storing products like furniture for hotels, toiletry: soap, towels have decided to purchase it. As a result, the distribution manager had to hire an outside storage space for accommodate goods (Winter & Knemeyer, 2013). The company had to invest additional money for hiring that space. Ultimately, the primary purpose of stocking goods and services became meaningless. In this situation, the business experts can be recommended to make an effective communication with each other. As a result, managers would be able to exchange their views and thoughts. Sharing information can make a good rapport with the managers.

Roles of Different Managers in Logistic Department

On the other hand, the supply chain managers should make an interactive approach with the employees as well. They should follow participative form of leadership style. With the help of this particular leadership style the managers do not impose own decision on employees. Employees have every right to share their views and thoughts regarding the success of business. As a result, employees can gain an enthusiastic attitude for performing well towards the service process.

• Maintaining proper communication between service users and service providers:

This particular Ingersoll Luxury Hotel should increase the level of communication with customers as well. Due to the lack of advanced technology, supply chain managers could not track properly about the movement of transports (Ahi & Searcy, 2013). In this kind of situation, the business experts have to face immense difficulties in providing any update regarding the shipping of goods. However, by emerging technology within business process the managers would have to maintain effective communication with the service users for gaining their trust.

Conclusion:

The study has provided detailed overview about the importance of integrated logistic planning for running an organization successfully. The case scenario mentioned in the study has depicted that an organization of food manufacturing is facing challenges in maintaining an effective operational process due to the lack of planning in the logistic sector. In quest of avoiding inflation, the purchasing manager has decided to store additional goods. On the other hand, the company does not have sufficient space for storing goods and services. As a result, the business experts have hired additional space for storing goods, workforce for maintaining inbound logistics, trucks for making transportation system smoother. Automatically, the organization is facing immense challenges in rendering the entire business profit.

After identifying the business issues, the study has presented a theoretical analysis on how the organization could have maintained the entire logistic method systematically. In addition, some of the major recommendations have also been provided. Based on those recommendations the organization can improve their entire operation process. The profitability level would be increased only when the business experts would overcome this particular crisis.

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