Success Factors of Logistics Management in Jaguar Land Rover Company
Question:
Discuss about the Logistics Management for Jaguar Land Rover.
The use of management principles in operational logistics to enhance the effectiveness of the movement of goods and human resources is referred to as logistics management. Logistics at Jaguar Land Rover Company has contributed greatly to its recent rise in the automotive industry. This rise has been consistent in the recent past. Nevertheless, this has not been the case for a company which was on the verge of collapse was it not for the logistics team’s input and contribution. One of the major factors that can be attributed to this success is the supply chain of the company. Since the suppliers are in vast locations across the world, appropriate methods had to be put into consideration to all the sectors of the supply chain to ensure that they are in order. A number of activities take place through the supply chain of which some of them include: the inventory management, the outbound and inbound, the in-plant, the warehouse management, the packaging design and the freight.
In freight, inbound, outbound, and the modes of transport were vital elements that contributed greatly to the company’s success. Inbound transport includes the collection and transportation of the vehicles’ body parts while outbound includes transportation of finished vehicles. This has been done using three types of loads. Full track load; a full track is loaded at a specific supplier and transported directly to the plant; less than full truckload, this is where suppliers are located far apart and thus a truck is loaded with less materials. This takes place where specific materials are needed; milk run is whereby various suppliers located at close range, loads a truck and then transported to the plant which is then transported as full load at final stages. Apart from the road transport, Jaguar also utilizes the use of rail transport. This transportation of materials from the suppliers to the plants has enabled the company to have a consistent production of the cars. There is also the need of adopting a multi-modal transport system but in most cases, it seems not to be applicable. Due to the limitations in the supply terms, imports and customs regulations, inco- terms related issues, complexity in products and the differences in the product components, the applicability of multimodal system becomes a challenge. Additionally, the inapplicability of the multi-modal transport system can be attributed to infrastructure limitations. For example, some parts of the country are not serviced by rails, roads or cannot support sailing. Also, some ports have issues with capacity holding and this can be a limitation towards success of any automotive company. However, Jaguar having incorporated the three types of road collection and also railway collection has enjoyed the ease of ensuring that the raw materials as well as the final products reach the plant and markets on time. The company has used outbound operations though mostly these operations are faced with diverse. Maintenance of high levels of qualities without considering the intended country of destination poses to be a major challenge. The levels of customer service is constrained by time bounds is another emergent challenge. Such factors like change in weather conditions may affect the pre-determined freight sea route which may in turn derail the delivery duration. The size of some Jaguar that is larger than the standard thus not ideal to be transported using containers. The government transport regulations that vary between countries and the low environment impact are just but some of the challenges of inbound operations.
Challenges in Implementing Efficient Logistics Strategies in the Automotive Industry
Packaging is also another logistic that made Jaguar Land Rovers successful. This logistic is very critical in the automotive industry. The global growth of JLR led to increased use of expandable packaging. All parts that are needed to make a range rover equivoque require a specifically designed expandable packaging. However, introducing returnable packaging has more advantages than expandable packaging in that it has cost quality and operational efficiency. Design of a car has a direct impact on logistics operations. For example, some designs such as that of a Land rover defender are very specific. This vehicle possesses an internal frame to which other BIW parts are attached. Thus, this gives room for parts of a car to be shipped separately. In India, operations are LLA because neither the models possess an internal frame. This thus can have the body parts assembled and painted in the same locality.
The land Rover manufacturing process is also influenced by the Logistics service providers. They are helpful in various roles in the supply chain which has led to the success of this company from the collection of parts, to the in-plant material to the distribution of finished vehicles. Jaguar Land Rover has established a more strategic relationship with a specific LSP (DHL) that plays a critical role in its overall logistics operations. Its responsibilities in the supply chain encompass a much more expanded scope in contrast to another Jaguar Land Rover LSP’s. Managing the relationships with LSP’S is critical to Jaguar Land Rover as this helps it to achieve cost saving and increase operational flexibility. This has helped in the success of this company more so in relation to other companies as there are openness and trust between the company and it’s LSP’s. Finally, there is a willingness to oftenly share confidential information.
The company is one of the best automotive companies known globally can maintain its competitive advantage by maintaining some of the advantages it has. The unique competitive advantage enjoyed by the firm is the product line advantage where it manufactures a range of unique sport cars whose model usage is limited to lower geographical regions (William & Micheal, 2013). Thus, it can maintain its competitive advantage by having a vast line of products. Another way is by expanding its service advantage. The company lacks service advantage due to the limited presence all over the world. If the company can reach out to every corner of the world and with its current advantage over other automotive industries then it goes without saying that it can remain at the helm of the other automotive companies. Retail advantage can also be captured by Jaguar land rover since it has limited dealer network with even a few being companies owned (Thomas & David, 2013). The company needs to expand where it outsources its raw materials by having many dealers all over the globe so as to have a larger dealer base as compared to their rivals. It also needs to set up plants in various regions of the globe as this will ensure the company has reduced transportation costs of the materials to the various plants and this will reduce the cost of its finished products thus giving it the cost advantage of final product over other companies.
The jaguar company is characterized by the highest spending on research and development for it subsidiary segments. Technology is paramount to any company’s success; basically, a company with the best technology is on the verge of leading other companies. This is so because the world has become a global market and most of the activities including orders, purchasing among others are done online. Technology also calls for the various makes of machines to be very high-tech. thus this calls on Jaguar to be extra vigilant as far as technology is concerned (Chopra, 2012).
JLR knowing very well of the change in the marketplace has established against a backdrop an innovation unit to venture in the capital arm. The establishment of the innovation unit is mandated to deliver on the development on digital age products and to invest in the early-stage companies together with the mobility sector startups (John et al., 2015). This has given the company an advantage over other companies keeping it at the helm.
Supply chain advantage can be maintained since the company has only three factories in the UK. This has placed the company in an advantageous position to enjoy the monopoly of local production in the developed developing markets as compared to other companies (Shaheed, 2015). The recent performance has also witnessed a drop-in sale and thus the company has a chance to increase its sales, unlike other companies which have to maintain their increase in sales. Jaguar has also an advantage in the market of India where its mother company TATA is situated (Robert, 2015). This makes it easier to collaborate with this company.
Big corporate organizations such as JLR are in most cases reluctant to changes in their internal structures. This can lead to the flopping of a company as it operates in extremely dynamic environments that are constantly influenced and impacted by changes in technologies and marketing economic environments (Tom, 2012). JLR is one company that has embraced both internal and external changes as far as management and structure is concerned. This has enabled the company to get some of the best wits and thus best facts and decisions can be made within the organization. This has enabled it to keep soaring high and also enabled it to keep up with the change in technology (Salome, 2009). Basically, this company has seen itself on the verge of collapse to being one of the prolific automotive companies in the world. Adoption of different organizational strategies often results in the need to bring about significant, long-lasting and beneficial organizational change.
The company also needs to improve the production facilities so as to maintain its competitive advantage; currently, Jaguar has improved its manufacturing competence and has training programs that are inclined to developing the employee skills and problem-solving (Ray, 2013).
This competitive advantage can also be effective to other companies. This is so because they are all in one industry which is automotive industry. Thus, with the proper logistics management, any other company can be at the helm of other companies (Paul, 2012). Factors such as the supply chain are an integral part of the entire manufacturing process and a bigger part of the process is running millions of miles to hundreds of suppliers (David, 2012). Thus, this shows that if a company has the right channel of the supply chain and has a wide product line that will pull the customers towards its direction, it can have a competitive advantage over other companies (Christopher, 2011). However, it is not given that when a company utilizes the above factors is assured of an advantage in the competitive market; there are other factors which need to be considered by an individual company. For example, the economies of scale can limit a company to have an advantage over others despite it being one step ahead of other companies in other factors.
The concept sustainability can be described as a type of development where the future implication is looked on while meeting the needs of the current generation. It’s can simply be referred to as a future oriented development. Sustainability is characterized by the concept of need (prioritized essential needs) and the inbound limitations exposed by technological advancement and social organization on the environment’s ability to meet the present and future needs (David, 2012). Jaguar Land Rover depends mostly on its suppliers for the raw materials to build its automotive. Its significant impact comes from its products (Bob, 2012). The company should look to working hard so as to reduce environmental impacts throughout the entire life cycle of their vehicles and this can only be attained through product innovation. They have to ensure that the materials meet their clients’ needs as well as they do not have a negative implication on the environment (Gills, 2011). This is achievable only when there are methods such as recycling that will ensure materials don’t get depleted in the near future. Jaguar Land Rover company has gone to extent of using aluminum body parts and this can help greatly as far as materials to build the automobiles are concerned (Mengan & Laiwan, 2016). The future success of the company will be built on developing and delivering products and technologies that will meet the needs of the customers now and even tomorrow. Thus, investment on research, engineering and manufacturing should be very high to ensure that their products do not have byproducts that will pose danger to the environment (Paul & Micheal, 2014). On the verge of ensuring there is sustainable development, several factors should be put into consideration, such as how the company affects the community and environment around. If the company considers the set standards of environmental protection and also social responsibilities (Kathy, 2014). In its 2011 report, Jaguar Land Rover has been awarded several social corporate responsibilities awards and thus there is a reason for the company to keep up with the norms of conserving and preserving of the environment, ensuring it is minimal or no emission of hydrofluorocarbons (Henry, 2015).
Jaguar Land Rover has a very high prospect of success if only it maintains the competitive advantages and also a sustainable development agenda. It is a very rich company in terms of innovations, invention, and technology. These being the driving forces behind its success it thus needs to cultivate more on them so that it can enrich its customer base. It is also good if the company ventured into other automotive products other than cars only as its rival companies are dealing with a vast of products. By doing so, it can serve a greater geographical area.
Conclusion
Logistic management is paramount in any organization as it ensures smooth flow of operations. In our case study, logistic management has enabled Jaguar Land Rover Company to be successful in a number of ways. It has also enabled the company to have a competitive advantage over other companies due to various logistic factors that it has put into consideration. Packaging, freight, technology is just but some of the factors that cannot be ignored in the field of automotive. Sustainability has also greatly impacted positively towards the success of the company. This even though has not materialized fully, each and every company in this industry should put more emphasis towards a sustainable development agenda.
References
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