Analysis of the logistics management strategies that have brought about its success
Discuss about the Logistics Management In a Circular Economy.
Logistic management is one of the most critical subjects that ought to be given much attention and exploration by both researchers and business scholars. This fact explains the reason as to why the subject has drawn much attention to scholars over the recent past. Logistics management determines whether that particular organization will be in a position to achieve its long-term goals through business diversification and successful supply of its commodities (Baker, 2014). The most precise definition of the term logistics management is that it is the component of the supply chain management that is charged with the mandate of planning, control, and the implementation of efficient and effective flow of goods, services as well as other information from the origin point to the point of consumption. This duty is aimed at increasing utility of the products.
This paper will analyze logistics management of a selected case study company. The analysis of the logistics management of the company will involve preparation of a report concerning the logistics management strategies that the company embraces for its success as well as other strategies that the company does not use whose usage may increase efficiency. This paper will also look at the possibility of the application of the logistic management strategies in other companies for success as well as how the company can maintain its competitive advantages as far as logistics management is concerned. The study will then conclude and give recommendations based on the findings if the report.
In this report, Techno Company will be used as the case study company. The report will give a brief review of the company and discuss the logistics management strategies that have enabled it to have the success it is enjoying today. Techno is a high technology manufacturer of products which supplies product to original equipment manufacturers. These manufacturers bundle the products together with other commodities for sale to consumers.
Any organization would succeed or fail in its operations depending on the logistics management strategies it embraces. It does not matter whether the company is small or significant. Research has proven that logistics management strategies employed by any company determine whether it will fail or succeed (Liao, 2014). For the case of Techno Company, it has embraced poor logistics management strategies that at one point have threatened the revenue earning of the company. However, it is appreciable that the company later realized where it had messed up and corrected accordingly to ensure that it continues to maneuver and stand competition from its opponents. These strategies that have been embraced by Techno Company are analyzed below using different tools.
Swot analysis is one of the tools for analyzing the logistics management strategies employed by a particular company. This tool helps in determining the strengths, weaknesses, opportunities as well as the threats of that specific logistics and supply chain management. In developing logistic management strategies, managers use this tool to determine the strengths involved in the business to take advantage of them (Childers, 2017).There are various strengths of different businesses. Possibly a particular company is the only licensed firm to operate a certain business or maybe it has a well-known brand and good public image. These strengths act as competitive advantages for individual companies and help them reach their goals.
SWOT analysis
In the case study tackled in this paper, Techno has several logistic management tools that serve as its strengths. One of these strategies is the abolishment of the middleman. Intermediaries may negatively affect the business if present in the supply chain (Bing, 2014). According to the case study, it is evident that a problem encountered by one part of the supply chain would affect the whole chain. In this case, therefore, taking action of owning the entire process as Techno Company led to the recovery of the operations that were paralyzing.
Another crucial logistic management strategy that acts as its strength is problem identification and quick recovery. Some companies take too long time to discover a problem, especially in the supply chain. Others take too long to respond to the challenge hence maiming the supply process. Techno, when it realized that there was a problem in the supply chain that resulted in lower sales volume adjusted and closed the loopholes. This quick action led to successful recovery of the business operations as well as revenue generation.
However this company has some well laid out logistic management strategies, it still has some weaknesses. These are weaknesses that ought to be reduced as much as possible or wise enough is turned into opportunities. For instance, Techno suffered a period of low-income generation and possibly poor public image as a result of lack of direct contact with its customers. As mentioned earlier in this report, logistics management involves the movement of commodities from the origin point to the consumption point (Mowforth, 2015). Use of poor supply chains that negatively impacted the business was a significant weakness. Another major weakness was the production of more commodities than the company could sell. The company should have determined its market and known how much they are capable of selling and produce the required amounts.
The company has been faced with several opportunities. The company is in a position to diversify its market by conducting market research to know the taste of different customers across the world. The company can sell its products in the global market. It is also in a position to use its reputed brand and advanced production technologies as competitive advantages.
However, this company has several threats. One of these threats is long-term closure if it does not put much emphasis on the role of supply chain in product design. If it does not give attention to having direct contact with customers as a company, it may at long run end up making less volume (Crane, 2015). Making fewer sale volumes would imply low revenue and that would lead to business failure at the end of the day.
PESTEL is another primary analysis tool for logistics management. This tool explores the political, economic, technological, social and technological factors that may affect the business and in this case logistics management. The political aspect of this tool looks at the existing market and trade policies in the national and global market as well as the likelihood of the change in regulation. Luckily enough, Techno Company has not had regulation breaches or disputes with the existing global policies. It is operating in a market where its products are acceptable in any country due to their quality and conforming to the set standards.
PESTEL analysis
Economic factors also affect logistics management. Research has to be conducted on the same to know whether the products that the company deals with are affordable by the general public or a few people of a particular social class (Bloemhof, 2015). Techno Company encountered a scenario where the sales volume went down as customers opted for competitor’s products due to high prices of Techno products. However, the company adjusted the same, and it could now sell more products.
Sociocultural factors also have an enormous impact on logistics management. They dictate where and when the product will be sold. Some countries have a culture that is against the consumption of certain products. However, this company has not had problems or gotten affected by people’s culture. It deals with electronics which are common and universal gadgets and thus acceptable by any culture.
Technology also affects the supply chain and logistics management. Techno company had to change production technology by looking for materials with a higher hardness that would have fewer vibrations as opposed to the materials they were using (Mowforth, 2015). This move was in the attempt to improve quality and meet customer specifications as well as the current global requirements. Therefore, technology impacts project design so much.
The resource-based view is yet another analysis tool that can be used to analyze logistics and supply chain management in Techno company. This tool came into being in the 1980s and 1990s, and it is based on the achievement of strategic goals by the use of resources. It holds that one ought to look for competitive advantages within the business itself rather than sourcing them in the external competitive environment (Munguia, 2018). This tool helps business entities and organizations to attain their highest organizational performance and thus be able to outdo their competitors.
Based on the case study company, it was realized that solving the internal flaws in the company would enable them to cope with competition from their opponents. The company resolved to correct supply chain problems that lowered the sales volume, something that acted as a competitive advantage (Narasalagi, 2015). The company also used the strategy of improving the quality of its products to fetch a broader market. The company also has the opportunity to use its renowned brand as a competitive advantage.
The fact remains that stiff competition is one of the significant challenges facing business organizations around the globe. Due to this fact, it is essential to devise ways of gaining and maintaining competitive advantages (Oliveira, 2014). Techno Company has tried to acquire some competitive advantages. However, it needs to explore more to be able to grow and successfully outdo its competitors. Below are some of the ways that this company can maintain its competitive advantages.
- Collaboration with the customers.This company ought to interact with its customers by all means and make sure that it’s in close contact with them. This move can be on social media platforms such as Facebook, Twitter, Instagram, blogs, websites among others (Ong, 2016). The company needs to take advantage of the free advertising feature of social media. It also needs to monitor the feedback from its customers to weigh themselves and know how the public takes them.
- Offering understanding and insight.The company ought to continually communicate with its customers through phone calls, emails among others to give them an idea about the company. It is also obliged to training its stakeholders on the methods that have been used to attain the competitive advantages (Saenz, 2015). The stakeholders must be taught how to operate to safeguard the company’s already acquired competitive advantages.
- Being customer generic.The company should try to put itself in the position of the customers to know how they feel about the company based on how they are treated.
- Exploration of new ideas.The company should have an aggressive team that seeks to always come up with new ways in the effort to beat their competitors. Innovativeness will help the company remain to be the best and the best there will ever be.
- Loving its employees.The company ought to know that employees are the heart of any organization and that they should be loved and given a conducive working environment (Wood, 2016). Customers will always notice if they are served by unhappy employees.
Techno Company also needs to improve and acquire new competitive strategies. Some of the strategies it can embrace are proper choice of the units of carriage of its products, using the best packaging materials, coordination, and prioritization, the establishment of an emergency supply chain, transparency and accountability as well as a partnership.
Conclusion
Logistics management is a very crucial component of the supply chain management. It determines the failure or success of a business. From the discussions above it has been evidenced that organizations using proper strategies succeed as opposed to those that use poor and non-functional strategies. Right logistics management strategies serve as competitive advantages that help the company withstand stiff competition from their opponents.
Techno Company has not yet set out enough logistics management strategies. It, therefore, needs to consider exploring more tools that will enable to be better placed in the global market. The company ought to improve its logistics management tools so that it can match the other big brands as well as being in a position to outcompete them.
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