Discuss about the Avago Technologies and Broadcom Announce.
Broadcom is a company that has been dominating the market by providing the required technology and engineering that ascribes to the world standards (Corporation, 2017). The company boasts of various innovations that have seen it work and collaborate with other businesses such as the Hewlett-Packard in providing the necessary technology in the market. One of the primary objectives of Broadcom is to provide technologies and infrastructure that join and connect the world (Corporation, 2017).
The purpose of this report is to analyze the effectiveness of these three aspects of transportation management, namely incoterms selection consideration, carrier selection criteria and carrier relationship management for Broadcom Limited Company. The factors named above are critical to the success of companies such as Broadcom in facilitating the appropriate mode of transport thus reducing the costs in the long-run.
Broadcom has a heritage of supplying technologies that are either analog or digitally based on semiconductors majoring in communications that are wireless, wired infrastructure and providing digital storage for data enterprises(Smith, 2016).The company began in 1961 as a division of the Hewlett-Packard that specialized in the production of semiconductor products. Today, the company has facilitated innovation of technologies such as the optical sensors, microwaves, and the fiber optics. The company has headquarters in both Singapore and California providing for two major markets. Broadcom merged with Avago Technologies, and the two became one in 2016 (Team, 2015).Broadcom limited has mastered the world in creating innovative technologies that are required by manufacturers of items such as Smartphones and the optic sensors used in various industries. The mobile technology has grown immensely from the efforts of companies such as Broadcom. In 2015; Broadcom was forced to exit the market as a result of stiff competition in the cellular market with companies such as Qualcomm dominating the market. Other significant players in the market who provide stiff competition include companies such as Applied Materials among others (Smith, 2016).
In the publications of the international chamber of commerce, there are rules for various modes of transport and the rules are suitable for both the inland and waterway transport. However, the ICC made some amendments that were meant to ensure that the terms that were multimodal were used appropriately instead of using a repeat of the maritime conditions. In using the right term requires the seller to choose some elements that are fundamental (Malfliet, n.d.). One of the factors that are critical is the nature of the goods that is whether the products are manufactured or containerized. The mode of shipment is also crucial where the goods may be shipped or uses the multimodal.
The nature of the products that Broadcom transacts with such as the wireless communications, the fiber optics, the LEDs and the optical sensors are items that can be shipped in containers for exportation. The products can also be packaged in boxes that make it convenient for shipment by the seller and sent to the buyer. However, the mode of transfer is the biggest problem. Broadcom should adopt the Delivered at the place; this is because this method of shipment allows the seller to bear all the risks till the commodities get delivered at the buyer’s destination. The buyer pays for all the costs associated with the customs duty and the taxes in such a place (Strong, 2013). Countries often tend to have different customs duties and taxation fees, and as such it will relieve Broadcom of such costs that have the impact of increasing operational costs. Delivered at a place is convenient as it allows the buyer to inspect the goods and see if there are any damages, whether the goods are of the required amount and the right standard. As opposed to the other Incoterms such as the Free on Board, Delivered at a Place reduces the possibility of shifting the blame on the seller in case the products get damaged it is easy to know where they got damaged from as the products are checked at the point of entry by the buyer (Malfliet, n.d.).
The goods that Broadcom sells are more of electronic and in most cases the chances of getting damaged are high. It is due to the nature of the products that makes it convenient to use the Incoterm DAP; the method also allows the buyer to have access to all documentation regarding the commodities once the goods arrive at the point of entry (Strong, 2013). The seller in this case only incurs the exportation costs. Shipment of products by air is one of the most convenient and fastest means that gets goods delivered at the buyer’s premises (Malfliet, n.d.). In this case, the goods that Broadcom trades in are items such as fiber optics and the silicon hardware can be shipped through the use of air. In such a case it ensures that such products are delivered on time, and as such serve the market demands though the costs with the air transport are expensive, it is the fastest. Broadcom as such can serve many markets at a go with the use of the air travel.
Shipment companies and the customers both strive to achieve their goals but in different mannerisms. Insurers are also important as they over the goods against risks that may arise in the process of transportation. The need for speed is a factor that is important for both the shippers and their clients (Coyle, Langley Jr, Gibson, & Novack, 2012). With Broadcom, geographical coverage is an important factor more so where the customers for the products are spread in the United States which means the market served is large. The carrier thus chosen should be in a position to access the traffic across the markets with easiness so as to supply the clients with the silicon made hardware (Coyle, Langley Jr, Gibson, & Novack, 2012) .
Most of the Broadcom products are electronic in nature and therefore require better handling to avoid or minimize damage as most of the products are expensive. It is, therefore, important that the carrier chosen should have experience of handling such commodities with little chances of damaging the products. Availability of facilities and equipment to handle the goods that are supplied by Broadcom is another key element to consider. The carrier should have the equipment that can accommodate the hardware to be transported (Donney, 2010). Equipment such as the fork lifters for loading the packed electronics in the cargo and also the containers for both the shipment and domestic purposes are an asset for a carrier.
Ability to have information shared by the carrier is also necessary more so in the case of products that Broadcom engages with which require frequent monitoring due to purposes and the functions they serve. As such it is important that the carrier have an Electronic mapping to view the cargo on transit and there should be communication between the people transporting the cargo and the carrier officers providing information on the progress of the consignment (Donney, 2010).
The strength of the carrier regarding financial stability is critical for Broadcom. There is need to check documents such as the balance sheet and the income statements so as to know the future carrier prospects regarding continuity and also to assess the capability of the carrier to pay the cargo in case of damage or loss of the consignment (Donney, 2010).
The freight should also charge fees that are fair as compared to other carriers in the market. It is important to note that in case the costs of a carrier are high it means that the operating costs of Broadcom will increase which has the effect of either making their products expensive as compared to the competitors (Mukherjee, 2016). On the other hand, it may have the effect of reducing the profits of the company. The carrier should also be reliable regarding delivering the cargo on time. In most cases, Broadcom would always want to deliver on time to their esteemed clients so that their customers on the other side can serve their markets and needs on time. As such Broadcom should choose a carrier that is efficient in keeping time. Carriers that have a history of being unreliable should be avoided at all costs (Donney, 2010).
Outsourcing is very common for most companies due to the nature of services it offers and the convenience it provides. Broadcom should outsource with the aim of reducing the transportation costs associated with its fleet. With outsourcing, there is the effect of reducing costs of transport thus lessen the cost of production (Robbinson, 2015). Broadcom outsourcing a carrier means that the company can concentrate on the manufacture of the silicon hardware where it has expertise thus specializing more in the production.
At times the damage of cargo on transit happens because Broadcom lacks the know-how and skill of handling such cargo. On the other hand, when a carrier is outsourced, it means that the carrier company specializes in transporting and handling the cargo and as such reduces the chances of damage or loss (Robbinson, 2015). Outsourcing is also often used in new markets where the company has limited knowledge of how the markets operate. Broadcom in such a case where it is serving a market that it barely understands would outsource so as to avoid the risks and uncertainties associated with transporting cargo in such a market (Nandi, & Ganapathi, 2015).
Type 2 partnerships would be appropriate for Broadcom particularly when its line of production is defined; it manufactures silicon made hardware for various uses. In this type of relationship, it is based on a long-term basis which means that the appropriate infrastructure gets developed over time to accommodate the nature of products produced by Broadcom. With this kind of partnership, more activities are handled, and it is an advantage to Broadcom since it means that more services get provided along the way and thus strengthens the transport infrastructure for Broadcom. In building the relationship between Broadcom and the partnership, some factors are important (Chikwava, 2012).
Planning is fundamental for partnerships so as to ensure that both parties perform as per what has been planned. It is the role of Broadcom to ensure that there is a plan as to how the transport system will work for it to avoid inconveniences in future. The role of communication is important for Broadcom and the partner. The need for sharing information that is critical for decision making cannot be ignored if partnerships are to work efficiently. In such associations, it is also important that the risks be shared equally and also the same should apply for benefits. As such it ensures that burdens do not fall only on one party which may ruin the success of partnership (Chikwava, 2012).
Trust is a virtue that strengthens partnership; Broadcom should act in the best interest of the partner. It is trust in most cases that facilitates proper functioning of partnership as both parties believe each other in their operation knowing that there is nothing that is hidden. In transportation, there is the need for immense trust and cooperation as at times there may be a breakdown of the system and it is the role of the parties to have tremendous faith in each other.
Conclusion
Broadcom limited has been in the market for more than 56 years in providing semiconductor technologies (Corporation, 2017). However, some aspects are important in operating such a company such as the Incoterms that it uses in moving its cargo to various destinations. The appropriate choice of an Incoterm such as the Delivered at the point ensures that the cargo is safe and facilitates inspection while air transport ensures that the product is delivered faster where urgency is necessary (Malfliet, n.d.)
The selection criteria for a carrier is also required where factors such as the availability of equipment to accommodate the goods in transit and also the experience of a carrier to reduce chances of damaging the products. The flow of information is also required for the carrier in the process of transporting the cargo to the destination so as to keep the client at bay on the progress of the load (Donney, 2010).Outsourcing is considered sufficient by most companies due to the specialization it offers in providing customized services to the customer outsourcing. For a company such as Broadcom, it is vital to outsource transportation is it reduces the cost of transport which on the other hand reduces operating costs. However, with outsourcing, there is the need for partnerships designed to reduce the expenses in the long-run and also providing other many services to Broadcom limited.
References
Chikwava, K. (2012). Sustaining contractual business (1st ed.). [Place of publication not identified]: Xlibris Corp.
Corporation, B. (2016). Avago Technologies and Broadcom Announce Preliminary Election Results of Broadcom Shareholders. GlobeNewswire News Room. Retrieved from https://globenewswire.com/news-release/2016/01/26/804526/0/en/Avago- Technologies-and-Broadcom-Announce-Preliminary-Election-Results-of-Broadcom- Shareholders.html
Corporation, B. (2017). Company History. Broadcom.com. Retrieved from https://www.broadcom.com/company/about-us/company-history/
Corporation, B. About Us. Broadcom.com. Retrieved from https://www.broadcom.com/company/about-us/
Coyle, J., Langley Jr, C., Gibson, B., & Novack, R. (2012). Supply chain management (1st ed.). Mason, OH: South-Western Cengage Learning.
Donney, T. (2010). carrier selection criteria (1st ed.). Retrieved from https://www.agcs.allianz.com/assets/PDFs/risk%20bulletins /ARC_RB17_en_Carrier_Selection_Guidelines.pdf
Malfliet, J. Incoterms 2010 and the mode of transport: how to choose the right term (1st ed.). Retrieved from https://www.cutn.sk/library/proceedings/mch_2011/editovane_prispevky/malfliet-163-pdf
Mukherjee, K. (2016). Supplier selection criteria and methods: past, present and future. International Journal Of Operational Research, 27(1/2), 356.https://dx.doi.org /10.1504/ijor.2016.078470
Nandi, S., & Ganapathi, S. (2015). Logistics management (1st ed.). New York [u.a.]: Oxford Univ. Pr.
Robbinson, A. (2015). 4 Core Benefits of Outsourcing Transportation Management. Transportation Management Company | Cerasis. Retrieved from: https://cerasis.com/2015/07/29/outsourcing-transportation-management/
Sikka, P. (2015). Avago Announces Acquisition of Broadcom Today, a $37-Billion Deal – Market Realist. Marketrealist.com. Retrieved from https://marketrealist.com/2015/05/avago-acquire-broadcom-37-billion/
Smith, L. (2016). Avago Completes Acquisition of Broadcom | StorageReview.com –Storage Reviews. Storagereview.com. Retrieved from https://www.storagereview.com/avago_completes_acquisition_of_broadcom
Strong, S. (2013). Incoterms-2010-DAP-DAT-or-DDP-Is-it-D-for-Dangerous. Strongandherd.co.uk. Retrieved from https://www.strongandherd.co.uk/international-trade-articles/april-2013-incoterms-2010-ndash-dap-dat-or-ddp-is-it-d-for-dangerous/
Team, T. (2015). Forbes Welcome. Forbes.com. Retrieved from https://www.forbes.com/sites/greatspeculations/2015/06/02/broadcom-to-be-acquired-by-avago-in-record-tech-deal/#31962bdf3e13
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