Logistics And Supply Chain Management For Manufacturing Company

Incoterms selection consideration criteria

Discuss about the Logistics and Supply Chain Management for Manufacturing Company.

Transportation is a very vital aspect of any manufacturing company. There are many companies which are totally dependent on the transportation service for get going. So, the importance and vitality of the logistic company increases due to this purpose. A manufacturing company should be equally conscious and responsible while carrying out any client’s job as a lot rides upon him.

Abbott is the leading nutritional manufacturing company in Asia, since its inception in 1970 it has come across many a miles. It is one such company which has used technology to its fullest. This logistic company does have many mobile and desktop based apps which help in coordination between its huge base of customers and its various logistic vehicles which vary from motorbikes, trucks and vans. Abbott has revolutionized technology at its best in this field. It does have GPS vehicle tracking, instant order matching, driver rating and also at the same time help the drivers get more and more opportunity of work. All these innovations did not only help Abbott to set its foot hold in the business but it has shown the way how these business can be conducted and be fruitful at the level best. Due to all these technology and customer servicing and as well as looking after the fellow workers, the manufacturing business was never so faster, easier or safer before.

Purpose of Incoterms

Almost all global companies that operate on a large scale need to enter into certain contracts that provide them with the rights to operate their trade. In this case, the trade is to buy and sell goods. While entering into such a contract, they are free to negotiate their terms and conditions. The terms are the quantity, price and specific characteristics of the goods. These contracts contain a section technically known as international commercial terms or incoterms. The incoterms provide the companies with the ability to select the parties that are to provide the various services for the supply and delivery of the goods.

To be a good manufacturing company the transportation strategy should have an effective part in the supply chain management which Abbott actually has in its management system(Bloomberg, LeMay, & Hanna, 2002). Abbott does not go after downing the rates but it is a strong believer that a company should be good responder to the dynamics of the business.

Carrier selection criteria

Abbott looks after the customer requirements, its supply chain management involves effective movement of product from its manufacturers to the customers or owners. Its service and time aspect plays a vital role in its operations(Burt, Starling, &Dobler, 2003). They make sure that their shipment reaches on time and also by the carrier preferred by the customer. The transportation program of Abbott gives it a competitive advantage over all its competitors.

The carrier selection of Abbott is of top notch and it makes sure that carrier relationship is right. The volumes in general create a forwarder attention(Chopra &Meindl, 2007). The carrier attention does attract interests to the business but Abbott makes sure that its business is not divided among many carriers thus creating a good supply chain responsive program.

A transportation strategy, to be effective in supply chain management, is not playing one carrier off against another. It is not beating down rates. Rather it is a way to respond to the dynamics of your business, its customers, suppliers and operation.

The strategy, regardless of whether you are involved with domestic or international, is much more and should recognize

Measuring/benchmarking. To know how well the system and its bearers are performing. This takes two systems. One is measuring. Measuring proposes looking at execution versus rules. What is the real development to client execution, on a full scale reason, transporter and client by client premise? A full scale measure can cover an issue paying little regard to the way that the general measure is magnificent (Hugos, 2011). Additionally, store framework association, Lalamove is concentrating on every client and development zone he has. It ought to gage the expenses to ensure they are controlled. Where the customer is spending vehicle dollars and how well? Payload cost information tied with courses of action and sending information makes an amazing information base for orchestrating and overseeing costs. It offers information to trades, creating unimaginable burden costs for courses of action and bookkeeping, for studies and unmistakable purposes. Benchmarking recommends recognizing what particular affiliations do- – the best practices. All the time benchmarking is not finished with a relationship in your industry. Contenders are not at danger to share data. Also, best practices are not the restrictive of one industry or affiliation.

Regulatory impact. Administrative changes can change, in any case, the firm’s method. The late destruction of the Interstate Commerce Commission wiped out a security net for shippers, particularly for little shippers (Kim, 2005). Shippers now need to work with bearers with whom they can make authoritative affiliations which mirror the new transport world as to risk, load class, rate changes, accessorial and different necessities. Potential administrative changes with the Federal Maritime Commission can additionally change your system. For example, if there is genuine oceanic deregulation, then steamship line get-togethers will lose their antitrust security with setting rates and most extreme. Shippers won’t bargain through or with get-togethers. On the other hand possibly they will bargain direct with steamship lines for association contracts and unmistakable needs.

Carrier mergers and affiliations and closings. This is a fundamental and troublesome issue. In the fifteen years or so since engine bearer deregulation, there have been indispensable changes. Different bearers left business. Others changed their center from truckload to LTL. New truckload transporters showed up (Mentzer, 2001). Sea has its issues. Massive steamship lines in the trans-Pacific and trans-Atlantic exchange framed affiliations. Immediately with the late merger of P&O and Nedlloyd, mergers are starting to happen. Lalamove have separated what is occurring inside every mode and adjust your structure to bearers who will at present be sensible in five years. A stunning system with a transporter who is normal control or lets business is well enough alone for the blue not a not all that awful method. Immediately there is need to make one with another transport, and that requires some certified essentialness.

Flexibility change is occurring. It is not an issue of paying little regard to whether it happens. The essential solicitation is the path by which rapidly it happens. New client, new things, new affiliations, new suppliers, and new corporate supplement. Each of these can basically change the system. Witness that change will. Keep an open ear and brain to different modes and bearers.

The selection of a carrier is generally done on the basis of cost effectiveness and speed of transit. Among these two, the speed of transit is given the prime importance while selecting the carrier. Abbott is conscious of the fact that it is one of the most sought after companies by the customers primarily because of the speed of delivery that it provides. It is considered to be one of the most preferred companies because it has time and again proved its capacity to deliver its services on time with a very high efficiency rate(Monczka, Trent, &Handfield, 2002). Manufacturing management needs the carrier selection criteria to be enforced with a high level of parameters. Manufacturing relies on supplying the right product at the right place at the right time in the right condition for the right cost to those customers consuming the products. Manufacturing is all about creating value through the factors of time and place. In such a case, the activities need to be coordinated in order to add value. Also, since international trade is on the rise, the manufacturing department is faced with ever increasing challenges along with the various opportunities it brings. This is because; the manufacturing need to operate on a much larger scale than it had to earlier. However, it also needs to be kept in mind that manufacturing deals with the choices and preferences of individual customers as well(Rushton, Croucher, & Baker, 2010). In such a case, the choice of a carrier becomes all the more important in this regard. In the current scenario, the transport options consist of railways, roadways, airways and waterways. However, we see that the waterways are the most preferred mode of transport owing to the cost efficiency associated with it. Abbott has also utilized this mode to deliver a huge amount of services all around its operational sphere. However, the problem has not arisen because the company has always been ahead of their deadlines. The work culture has been maintained as such that the services have always been completed ahead of time(Stadtler&Kilger, 2008). However, it must be noted that Abbott does not have much restrain regarding funds. So as such, the primary criteria for selection of a carrier depend on the efficiency of the carrier. In the case of normal deliveries, there is not much of a problem as the time and schedule is known beforehand and optimization is possible in such cases. However, recent times have seen a rise in the number of emergency services. In such a case, there is a need for a more reliable carrier who delivers the work on time. The criteria for a carrier selection are thus dependent on the speed and efficiency of the carrier(Supply chain management process standards, 2009). In such a case, Abbott needs to employ carriers who have an established standing in the industry for a long time and are well known for providing their services.

The selection of Incoterms can be understood through the analysis of another company, Driscoll, a leading fruit supplier of the United States. In this case, it needs to be noticed that fruits are a perishable product and need to be handled with extreme speed and caution. The slightest mistake would result in massive losses for the concerned company. The selection of the service provider can thus be one which would provide the necessary measures for the delivery of fruits. It is because of this reason, that Driscoll utilizes trucks that have refrigeration system in their carriers. The refrigerated trucks are extremely important as the company operates on a large landscape and as such, need to deliver products that are produced in one region in another. The company also utilizes airways carriers which provide the company with the essential time limit that is needed to deliver the fruits in a fresh manner. The carrier criteria also depend on the availability of refrigerated containers that would keep the products fresh until delivery.

Carrier relationship is one of the prime factors for the survival of any manufacturing company. The carrier relationship team, as such, must possess a strong network that successfully executes the various aspects of carrier relationship. Without the carriers, there would be no means as to provide the services to the various customers(Vollmers&Vollmers, 2010). In such a case, there needs to be good professional as well as personal relations with the carriers. Since Abbott utilizes top notch carriers in the various processes, the carriers are at the heart of their successful supply chain. The carriers also need to be made aware of their value in the organization in a manner that they are eager to prove their worth time and again. The carriers also use their expertise and skills to solve the various customer problems. To attain such a balanced coordination with the carriers, there is a need to include them in the various processes and schemes of the host organization(Wang, 2011). The underlying factor in all these is that the carriers need to know that the organization values their services and lays importance on the functions that they perform. The entire system runs on a framework of trust and the carriers perform all that they can do to uphold those aspects. In such a case, the organization needs to follow certain steps in order to make sure that the carriers are devoted to their jobs. First and foremost, the organization needs to negotiate rates and schedules in good faith. The next step is to work together in conjunction with the carriers in order to identify and implement time- and cost-saving innovations. The organizations need to share technology and data in ways that help your carriers improve their service overall – and, as a result, help them improve their own business strategies and become even more competitive. The competitive spirit helps the carriers grow to the level where they are almost flawless in the delivery of their services(Xu, 2011). Finally, the most important step for any organization is to work hand-in-hand with each carrier to ensure outstanding service, on-time payment and satisfaction at all levels: shipper, carrier, provider, worker, and customer. The resulting outcome of these methods are more than likely to work as towards the company’s overall growth. This is because customer satisfaction is one of the prime factors in this situation.

Conclusion

Manufacturing is one of the most important functions in the world. It has always been the most important sector in business. The manufacturing is concerned with creating value to its customers but it also takes into account the various factors that are necessary for maintaining the quality of the services delivered. In such a case, the manufacturing companies need to employ carriers who are efficient and dedicated towards their jobs. The carriers also need to possess good working relation with the concerned organization. In such a case, the carriers are more encouraged to work for the betterment of the company in a manner that it benefits both the company’s as well as the carrier’s reputation.

References

Bloomberg, D., LeMay, S., & Hanna, J. (2002). Manufacturing. Upper Saddle River, N.J.: Prentice Hall.

Burt, D., Starling, S., &Dobler, D. (2003). World class supply management. Boston: McGraw-Hill/Irwin.

Chopra, S. &Meindl, P. (2007). Supply chain management. Upper Saddle River, N.J.: Pearson Prentice Hall.

Hugos, M. (2011). Essentials of supply chain management. Hoboken, N.J.: Wiley.

Kim, B. (2005). Supply chain management. Singapore: John Wiley & Sons (Asia).

Mentzer, J. (2001). Supply chain management. Thousand Oaks, Calif.: Sage Publications.

Monczka, R., Trent, R., &Handfield, R. (2002). Purchasing and supply chain management. Cincinnati, Ohio: South-Western College Pub.

Rushton, A., Croucher, P., & Baker, P. (2010). The handbook of manufacturing& distribution management. London: Kogan Page.

Stadtler, H. &Kilger, C. (2008). Supply chain management and advanced planning. Berlin: Springer.

Supply chain management process standards. (2009). Lombard, Illinois.

Vollmers, C. &Vollmers, S. (2010). Manufacturing. Troisdorf: Bildungsverl. EINS.

Wang, G. (2011). Supply Chain Integration Based on Commerce Flow and Manufacturing. Contemporary Manufacturing, 91-97. https://dx.doi.org/10.5503/j.cl.2011.02.015

Xu, X. (2011). Quality Control and Management of Plum in Cold Chain Manufacturing. Contemporary Manufacturing, 28-31. https://dx.doi.org/10.5503/j.cl.2011.03.005