Logistics And Supply Chain Management Of Qube: Case Study And Analysis

Overview of Qube and its Logistics Management

Discuss about  the Logistics and supply chain management of Qube.

Logistics and Supply Chain are the vital departments of an organization. The effectiveness and the efficiency of the operations is determined by the successful implementation and proactive functioning of the logistics and supply chain management of the respective organization. In addition, individual logistics companies are instrumental in supporting theirs as well as operations of the other companies as well (Schönsleben 2016).

This report deals with the case study related to the logistics and supply chain management of Qube as one of the largest logistics and service provider in Australia along with the analysis of the main concerns related to the existing logistics network in New South Wales region. This report encapsulated the required remedies that can act as a viable solution to the existing issues as well as the probable contribution of the New South Wales Government in the resolution of the problems.

The main purpose of this report is to deal with the main concerns that are being faced by Qube with respect to the fundamental theories of logistics and supply chain management. This report further helps in developing the extensive analytical skills to help analyze the problems and recommend the viable solutions to the problems with the understanding of the logistics and the management theories.

Qube is considerably the biggest import export and logistics service provider in the whole of Australia. Qube Logistics is however, one part of the entire company that is fundamental in providing and dealing with various other services such as rail road transporting, warehousing, operations and distribution, container parks and much more. The company has expanded enough to become the best service provider in the whole of Australia in the past years, where only the Qube logistics department contributes to around 45-46 % of the total revenue generation by the company (qube.com.au 2018). The control over the railroad transportation of the containers along with the port and bulk contributes to around 50%, whereas the strategic asset carves around the remaining 5% of the total earnings along with its land holdings (Gonzalez-Feliu, Semet and Routhier 2014).

Qube Logistics in New South Wales (NSW) is a colossal import and export service provider and facility in the respective region with an effective strategy to incorporate the integration of the logistics and the smaller scale companies to consolidate and congregate into more effectual and proficient company. It can be justified by the fact that Qube has also undergone and implemented several acquisition and merger strategies to extend its operation networks (Jacobs and Chase 2017). In this manner, it can be considered as highly competitive in its nature. However, based on the case study, it can be justified that the mother company of Qube is the main structure behind the operations, nationally. Qube operates in the freight depots, parking of the empty containers along with warehousing. It possesses the longest rail terminal network in the NSW region with the rail fleet size comprising of around 65 locomotives and 750 wagons. Qube has an effective quality management team, which helps it to achieve around 17% of revenue from the importing of retail goods under the supply chain system and services of the company (Zimmermann and Foerstl 2014).

Challenges Faced by Qube’s Logistics and Supply Chain Management

Qube has achieved a lot of success based on its operations in the past activities however; the success of the company is highly subjected to risks due to the fact, that the industry beneath which the company operates is extremely unpredictable, uncertain and competitive in nature (Christopher 2016). It can further be elaborated that the operations are most often affected by some certain and uncertain factors that can tamper with the functioning of the company’s functions creating challenges for the same. Based on the topic the certain challenges that are faced in the NSW regions are due to the legal regulations by the government, lacks in the planning, internal clashes and lack of investment in the infrastructure and planning (Mangan and Lalwani 2016).  The main factors have been elaborated below.

• Multiple Model Transportation Accessibility – Based on the case study, the port activities have been changed and relocated from Prot Jackson to Port Botany causing the organization to modify and divide the route of the containers that moves towards and from the spot. The distinctiveness of the Port Botany enforces the transportation to be done with the help of rigs and the containers are escorted till Port Jackson by the railroads and it reaches Port Botany with the help of rigs. Post disposition, the trucks are directed towards the western side through Rockdale due to heavy traffic congestion in the other parts. Relevant to these factors, it can be justified that Qube faces certain conflicts regarding the legal regulations that enforces the logistic companies to comply with the rules related to the traffic and breaching of such regulations can give rise to serious consequences. This can be challenging since the local government would give permission to access and construct new routes for the freight and heavy load transferences. However, gradually the state’s railways authority did give permissions to transfer around two thirds of the goods through railroad transfer (abc.new.au 2018).
• Inland Dispute and Conflicts – It has been identified that Qube owns around sixty hectares of unused areas, within the industrial facility, which is in turn connected by the railways to the Port Botany. The respective area is considered to undergo development and conversion in the following years, to gradually convert it into another intermodal facility (Myers 2013). The main conflict arose when the government announced the development of this area, which in turned into a clash within the local government. The main reason for the clash can be justified by the fact that limited and lesser terminal storage facility for the containers would pose a greater problem since, the main business of logistics is done through the activities involving the containers. This is helpful for the company to keep a record of the transportation and dispatching, thus effectively reducing the incurring cost. The rising demands would require the company to expand the storage facility for the containers and with the limitation in the space, this would create bigger problems for the company (Brindley 2017).
• Asset Recycling and Privatization Conflicts – Port Botany is the second largest container shed owned by Qube. However, the lease of the land area is under the New South Wales Port Consortium. Privatization of this property is an asset recycling initiative of that has been undertaken by the respective government. It has investigated that the existing government has proposed to take up a plan of constructing a tunnel that needs to be done to effectively release the congestion conflicts of the traffic in the existing connectivity networks. Nonetheless, after the state elections and the replacement of the previous government, the ruling government changed the previous plan of constructing tunnel. This resulted in controversies and arguments since the construction also needed funding which divided the parties and initiated the imposition of toll taxes and other non relevant legal regulations.
• Commodity Market Disposition – Qube is a new player in the market of commodity rail transportation and in order to establish a better brand image for itself, it needs to keep the quality of the services to its extreme ends. The existing downfall in the commodity market segment would severely affect its operations and functioning. The demand for the iron and coal resources are weakening on regular basis due to the rising and emergence of economics, which is why despite getting ample contracts and assignments, the earning from these contracts are not adequate to bear or cover the incurring costs.
• Risks of Acquisitions and Merging – The Company has been growing since the time of the establishment. It can be justified that the main credit goes to the constant acquisitions and merger strategies that has enabled the company to be one of the prevalent logistic service providers. However, it can be assumed that some of the acquisitions have resulted in difficulty in integration, which has in turn triggered unfavorable outcomes on the company. The framing of creating more collaborations have produced weak transactions for the shorter time span, which has possibly given rise to unanticipated outcomes in the allotted period.
• Adverse Weather – It can be considered that the rough weather condition is one of the main reasons for delay in the operations of the company. The adverse weather conditions affect the logistic transference activities. Although, the company has prepared itself to face any kind of adversity and harshness in the climatic conditions, bumpy situations like extreme heat, rain, snow can possibly slow down the activities in the hauling process. Extreme temperatures can cause the melting and puncturing of the tires with the expanding of the railway tracks, eventually leading to catastrophic situations like accidents and property loss

The main purpose to manage the Logistics of the company is to take necessary steps to manage and reform the service to a better level at an effective cost. The logistics can be defined as the entire process involving the entire transportation process, beginning from the initial stage of retrieval of the goods from the pickup point until the dropping of the product to its assigned destination. It can be stated that the supply chain management of every company keeps on changing and improvising from time to time, hence it can be suggested that there is an utmost need to revise the strategies that has been used to manage the Logistics (Bai and Sarkis 2013). Another factor, which can be taken into consideration, is that Qube has customers all over the world and operates through different locations, which requires the necessity to make important changes in the strategy due to the constant changes in the market needs and demands (Dyckhoff, Lackes and Reese 2013). Based on the investigation as done before, it can be stated that Qube has been facing certain concerns related to it existing Logistics strategies, which ultimately calls for the need to change its strategies to improve the current situation. It can be connoted that the strategies are formulated based on certain factors that should be kept in mind, such as Structure, Function and Application (Waters and Rinsler 2014). The structural strategies refers to the designing of the strategies post analysis done one the structure of the company, which includes factors such as count of the warehouses, availability of the area, the distribution centre and the channels (Roh, Jang and Han 2013). The function element refers to the designing of the strategy based on the functional excellence of the organizational structures as defined previously. The application element refers to the main purpose of the strategy as well as how it is put into operation within the whole organization.

Strategies to Improve Qube’s Logistics Management

Based on the existing concerns and issue related the present logistics management, the company can be suggested with some of the potential strategies that can help improve the present scenario. The relevant strategies have been elaborated below.

• Collaboration or joint effort – The crucial decisions regarding the logistics management can be taken in an efficient manner if Qube can collaborate with another company offering the same service. It can be added that taking of independent decisions can somehow lead the company to adversities and crisis. As for the same a joint venture can prove to be beneficial for the same (Youn et al. 2013).
• Reverse Logistics Strategies – The term mainly signifies the management of the supplies that are no longer useful or needed (Dekker et al. 2013). These strategies are usually adopted to successfully counter with the excess supply or recycle them to gather effective value. The main elements that should be taken while adopting such strategy are reduction, reuse, recycling and replacement (Grabara, Man and Kolcun 2014).
• Just In Time (JIT) – This strategy is especially beneficial in case of deliveries of consignments of smaller sizes. The proper managing of the deliveries of the shipments are time consuming and complicated. However, this strategy would ensure a faster delivery of the products and guarantee a better customer satisfaction. In addition, managing of the quality and time are two main elements that should be taken into consideration when adopting this strategy (Ellram and Cooper 2014).
• Inter modes of Transportation – The idea of using different mode of transportation can be helpful. However, Qube has already been using this strategy for its service. It can be assured that this mode of transport not only ensures a faster transportation but also reduces the loss of the inventories (Yang and Wei 2013).

Governments can play an important role in the process of devising the strategies to improve the current crisis related to the logistics management of Qube. The following measures that can be taken by the government has been elaborated below.

• Universal Reformation – The main problem that arises is the lack of space in the defined area for the storage of the containers along with poor land accessibility. The initiatives that the local government can take are the construction of more efficient roads and expansion of the land, in turn helping Qube in the NSW region to operate more efficiently. However, it can taken into consideration that if the Government finance is not sufficient, privatized form finance can be potentially helpful.
• Improvising Legal Regulations – The road safety regulations and the heavy vehicle laws can have an adverse effect on the business. Instead of strengthening them, procedures should be executed to impart extensive training programs, improvising of the safety procedures, to prevent the regulatory bodies to halt the contradictory orders.
• Initiating of Efficient Infrastructure Projects – It has been observed that politics has been involved in all of the projects that has been initiated to keep a check to the progress, which eventually results in a failure. For this purpose the Infrastructure Australia Plan and New South Wales Plan has been devised to keep the politics out of the projects. However, in case of any definite concern, the main concern should looked into to find the relevant solution instead of recovering the cost by burdening the tax budget and the community. The correct and precise solution to the problem can ensure better results and returns on any initiated project. To meet this purpose, the public sectors should retort to cost benefit analysis to calculate the outputs and avert any kind of financial crunches.
• Improvising Railway Networks – Based on investigation, it has been found that the railway networks in the whole of Australia is supposed to get doubled by the year of 2020, henceforth it is an urgency to strengthen the railway network with relevant information systems from now onwards (Peppard and Ward 2016). Railways are one of the transport systems that can haul a huge amount of cargo with less investment and risk. The cost efficient nature of this transportation system amplifies with the increase of the final destination.. Shorter transportation systems can help transport the load between the two points. However, it can be justified that installation of proper rail tracks are missing which needs to be constructed if this issue is to be resolved quickly.

No major recommendation can be suggested to Qube since Qube has applied most of mitigation and logistic improving measures on a long-term basis. However, it can be suggested that the theories of Supply chain management can help Qube achieve a better sustainability if the entire company can be optimized with accordance to the same. In addition, it can be suggested that the steps to be taken by the Government can be considered as measures to help Qube perform better globally (Wisner, Tan and Leong 2014).

Conclusion

With the help of this report it can be concluded that Qube is one of the largest operating Logistics Service providing companies in Australia, which is ever expanding by the help of its acquisition strategies. However, like other logistics companies Qube also faces certain crucial issue that can hamper the business of the company. It can further be added that the company has followed most of the theories of Logistics and Supply chain management to help it in better performance. Nevertheless, it can be suggested that the mitigation measures to control the rising concerns along with the cooperation from the local government can help the company to achieve its mark and help it grow globally

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