Handbook Of Logistics And Distribution Management

Challenges in Achieving KPIs

Discuss about the Handbook of Logistics and Distribution Management.

Supply chain management refers to the methods involved in the management of goods and services, its flow from the manufacturing unit to the target customers. Nippon Express is a logistics company, which has many years of experience in transportation, warehousing, distribution and other services (Abbasi & Nilsson, 2016). The report highlights the global challenges Nippon Express faces in relation to cost efficiency, greener operations, highest possible quality level of services and global access.

The key performance indicators are the powerful tools which help in understanding the structure of the business. Keeping track of the key performance indicators and measuring those helps in the improvement of the business. To improve the efficiency and revenue, Nippon Express must eliminate its infrastructure from the dispersed tasks (Beske, Land, & Seuring, 2014). They can opt for the cloud system in order to achieve their aim as well as leverage information technology resource in a cost effective yet flexible manner. Such processes help in reducing the costs, hence benefiting the company. In addition to this, cloud environment can add more value to their distribution unit and improve their processing time. Data analysts can easily automate the processes and find the right tool for visualization, hence reducing time. Interactive dashboards of KPIs must be created for highlighting the differences of each month. Improvement in the distribution services would increase the customer satisfaction, which in turn will benefit the company (Green Jr, Zelbst, Meacham, & Bhadauria, 2012).

Nippon Express faces lots of challenges in achieving the cost efficiencies in terms of its supply chain management. The rising cost of fuel and increasing number of global customers is increasing the supply chain cost of the organization. Apart from that, with the advancement of technology, the organization always has to adhere to frequently changing technology and purchase highly advanced technological equipments for maintaining its supply chain. In such situation, it become quite challenging for the organization towards to achieve cost efficiency in its supply chain management (Ross, 2013).

On other hand, the organization also faces difficulties in achieving the greener operation in terms of achieving sustainable supply chain management. The organization has to use trucks, ships and other vehicles for transporting their goods the clients. It is always not possible for the organization towards using electric vehicles for transporting goods, as they are quite less speedy than the normal transportation vehicles. Therefore, the organization often fails to meet greener operation in supply chain management (Jacobs & Chase, 2013). Nippon Express also faces extreme difficulties in achieving global access in regards to supply chain. Moreover, the organization faces challenges in the integration of supply chain across the global boundaries. On the other hand, the organization faces the issues in terms of managing the quality of the products and services sent to the customers. The goods can often be damaged during its transportation through different vehicles. Therefore, it prevents the organization in achieving the quality of products to be delivered to the customers (Dekker, Fleischmann, Inderfurth, & van Wassenhove, 2013).

Cost Efficiency

Nippon Express a logistics company of Tokyo, Japan is taken as an example to explain the supply chain management’s process. However, the RFID technology application can benefit the company to a huge extent, which may vary from industry to industry. The Nippon Express has been established in the year 1937, which has a strong network over forty countries. Previously, all the operations of manufacturing, producing, washing and others were being performed manually (Ahi & Searcy, A comparative literature analysis of definitions for green and sustainable supply chain management, 2013). After the introduction of RFID technology, the tagging and counting of products are done in seconds. Moreover, it has applied several strategies like cost leadership strategies and others to improve its ratio of profitability. Among all those, the focus strategy of the company helps in improving its focus on their customer satisfaction (Stadtler, 2015). The industry uses scanner, which helps in scanning the tags automatically without any error. It helps in scanning multiple tags simultaneously. It reduces the work load of the labors and does the work more accurately and swiftly. It helps in reducing the costs of the manufacturers as the maximum work is machine-based (Brandenburg, Govindan, Sarkis, & Seuring, 2014).

Greener practices at different levels of the industry can build a corporate image, which in turn, will lead the industry to sustainability, in this competitive world of business. The management plays an integral part in such implementation of green practices. The Nippon Express company is changing their business pattern to reduce the carbon footprint. Ecological imbalances and global warming are one of the biggest problems; the earth is facing in modern days (Barney, 2012). The industrial sector however, can implement various environmental friendly measures in order to save the world from global warming and climatic changes. Furthermore, several initiatives are taken by the industry as a segment of the green practice in their supply chain movement. This includes; saving paper while carrying out their services, reducing the usage of water, reduction of carbon emissions, usage of alternative energy sources for production and manufacturing, eliminating the usage of plastics while packaging and saving trees (Seuring, 2013).

In addition to the greener practices, supply chain management of the industry benefits the distribution processes by maintaining the highest possible quality of the products as well as services. It accelerates the delivery management’s speed to a great extent, while improving efficiency and increasing accuracy in selecting and distributing processes (Ahi & Searcy, An analysis of metrics used to measure performance in green and sustainable supply chains, 2015). The company has assembled all kinds of logistics techniques to reduce distribution costs and keep a track of the items and products, by registering it in the distribution center’s computer system. The company has a network of large distribution centers and with the help of advanced technology; it can monitor its inventory levels and retain the quality of the products (Brandenburg, Govindan, Sarkis, & Seuring, 2014). It also helps in maintaining the quality of the services by putting the cartons properly in right places, sorting them quickly and also efficiently, dispatching of the cartons to its retailers in less span of time with accuracy. When the items reach their destination or store, at the entrance they get scanned as well as registered automatically. There quality is also taken care and kept intact. This in turn, helps in accelerating the delivery speed, while improving efficiency and quality, increasing accuracy and at the same time reducing distribution costs (Ahi & Searcy, A comparative literature analysis of definitions for green and sustainable supply chain management, 2013).

Greener Operations and Sustainability

The implementation of information technology in the supply chain management of the company helps in manufacturing processes by reducing the manual work, which in turn reduces the costs. It also benefits in managing the warehouse by improving visibility and planning (Beske, Land, & Seuring, 2014). Once the production is complete, the producers of Nippon Express pack the items in the cartons and then deliver those cartons to the buying company’s warehouse (Fawcett, Ellram, & Ogden, 2013). However, there are several challenges faced by the supply chain management of the industry. It is required to do a detailed research of the RFID technology before its application in the supply chain management. Managers must be well equipped with the handling of the technology so that they can train their employees with the utilization of the technology. It is important to understand whether its application is beneficial for the organization or not. Moreover, the technology can be expensive and requires proper maintenance. In addition to this, the RFID technology has a troublesome relationship with liquids and metals (Wisner, Tan, & Leong, 2014).

In a manufacturing industry, efficiency, compliance, automation and speed are necessary components for fulfilling the organizational goals. Nippon Express provides timeliness as well as greater accuracy, planning and forecasting, fulfilling orders, procuring materials and more (Tayur, Ganeshan, & Magazine, 2012). In addition to this, the industry’s supply chain management tools are designed well in order to meet the requirements. However, the industry faces certain challenges which can be handled and the recommendations given are quite feasible (Christopher, 2016). To achieve “Just in Time” management, the industry should be able to understand the needs and requirements of each and every client. Moreover, there should be a phase of preparation with each supplier for delivering the goods on time. In this manner, the production demands can be met easily. Furthermore, Nippon Express information technology solutions help in increasing the visibility and accuracy of their operations (Brindley, 2017).

The application of supply chain management helps in the smooth flow of products and goods. It helps in building a relationship between the customer and the organization by fulfilling their demands. However, it is important to do a detailed research before applying the technology.

The industry must adopt innovative technologies and top quality management. The seven concepts of top quality management includes; continuous improvement, employee empowerment, benchmarking and other concepts. The Nippon express must check whether their top quality management includes all parts and staffs of the organization or not. Therefore, to improve the quality of the supply chain, top quality management is essential.

Highest Possible Quality Level of Products and Services

In addition to this, proper planning and execution is necessary. Six sigma procedures help in analyzing the data and improve the process. Lean system also helps in educating the suppliers, developing the workforce and reducing the job classes’ number. Other strategies include JIT or Just in Time which promises to deliver rights goods with right quality to the right people at right time. Therefore, Nippon Express can implement such strategies in order to make their supply chain processes more effective and efficient.

Five different themes of current affecting Global Logistics and Supply Chain Management:

Designing the Supply Chain from the Shelf Back: Most of the time, the consumer goods retailers and companies thought that the supply chain management ended at retail or the delivery of items to the stores. They completely forgot that supply chain exists in the areas where the consumers make their decisions. Moreover, their focus on demand driven industries still struggles to push the products to the stores (Seuring, 2013). Companies like Wal-Mart, Procter & Gamble and others have senior level managers who are responsible for managing the supply chain. Managers are responsible for optimizing the processes with various retailers for streamlining the goods’ flow, in consumer goods’ company. This is done in order to manufacture floor to the retail shelf (McCormack & Johnson, 2016). This can lead to some significant improvements in delivery and transportation of the goods. Shelf level view also helps in creating other insights . For instance, Wal-Mart has changed their way of looking at the quality metrics. Previously, it was internally focused and tracked the quality of the products. It helped in changing the designs of the packages and thus, reducing damages from handling as well as stocking processes. It helped the manufacturers to look at the problems clearly and hence, providing them with opportunities for improving the procedures (Grant, Wong, & Trautrims, 2017).

Better Planning as well as Execution: In both retail companies and consumer goods, supply inefficiencies occur, which is created through the disconnection between the planning of supply chain and the execution of systems as well as processes. There are several reasons for this. Firstly, many companies have immature operations planning and sales processes. Due to this, it develops a strategy which drives supply chain management (Coyle, Langley, Novack, & Gibson, 2016). Most of the companies still have poor information flow. Both the consumer goods and retailers are looking out for new and innovative processes as well as systems to reduce the information latency. This in turn will allow them to keep a track of the store shelf happenings. Moreover, it will drive appropriate replenishment and manufacturing decisions, by closing the loops between planning as well as execution (Gereffi & Fernandez-Stark, 2016). In a recent study, it is found that, only eleven percent of the companies have highly integrated supply chain planning as well as execution processes. On the other hand, more than ninety percent companies are still planning to have a better planning and execution process in the next three years. This can be done by adopting several strategies like improving the visibility of supply chain, better integrating of existing software and collaborating with the suppliers as well as retailers (Govindan, Soleimani, & Kannan, 2015).

Transportation Costs: The main focus must be on the transportation costs as the fuel costs are raising rapidly. However, with innovative technology and measures, these issues can be solved. Efficient planning of production helps in the smooth movement of products and its raw materials in a less span of time. Previously, in companies all the works were done manually (Zhu, Sarkis, & Lai, 2017). It was necessary to count the products several times which includes the stages of manufacturing, production, washing of the products and its packing. Previously, all these operations were being performed manually. After the introduction of RFID technology, the tagging and counting of products are done in seconds. RFID scanner helps in scanning the tags automatically without any error. Moreover, it helps in scanning multiple tags simultaneously (Rushton, Croucher, & Baker, 2014). It reduces the work load of the labors and does the work more accurately and swiftly. It helps in reducing the costs of the manufacturers as the maximum work is machine-based. Most of the companies are embracing different strategies for lowering their transportation costs. For instance, Clarks Company found that it can gain substantial profit by replacing its center of consolidation in China, instead of shipping from Asian locations. It helped in reducing the shipping costs through the usage of larger containers (Myerson, 2016).

Proper Forecasting: Proper forecasting is essential for any organization or industry, as it ensures in having enough supply in hand, in order to satisfy the demands and desires of the consumers. Business analysts utilize the systems of logistics and supply chain management as well as some other tools, in order to forecast the demands in advance (Mangan & Lalwani, 2016). For example; Amazon uses forecasting techniques to increase the satisfaction of the consumers, reduce the inventory stock outs, schedule the production effectively, lowering the safety requirements of stocks, reduce obsolescence costs of products, manage the shipping better, improve price and promote management (Awudu & Zhang, 2017). The three major forecast types used within supply chain’s context are; demand forecasting to investigate the demands and requirements of the buyers, supply forecasting to know about the current suppliers and producers and lastly, the price forecast, which is the compilation of demand’s and supply’s information. Forecasting abilities of any business varies from organization to organization. In order to improve the forecasting abilities, one needs to understand the size of the demands and the uncertainty drivers. The demand planning and strategy needs to be kept simple. The organizations should always have backup plans as well as change their strategies when needed (McKinnon, Browne, Whiteing, & Piecyk, 2015).

Green Supply Chain: Consumer goods and retailer companies are taking the initiative of reducing their carbon emissions in order to develop a Green Supply Chain Management. Wal-Mart Company has announced several strategies and initiatives over the past years for undertaking green supply chain measures. This will not only help in reducing the carbon emissions, but also lower the transportation costs (Monczka, Handfield, Giunipero, & Patterson, 2015). The companies are changing their business pattern to reduce the carbon footprint. Ecological imbalances and global warming are one of the biggest problems; the earth is facing in modern days. The industrial sectors however, can implement various environmental friendly measures in order to save the world from global warming and climatic changes (Heizer, 2016). Green practices at different levels of the industry can build a corporate image, which in turn, will lead the industry to sustainability, in this competitive world of business (Coyle, Langley, Novack, & Gibson, 2016). The management plays an integral part in such implementation of green practices. For instance, Nippon Express takes several initiatives as a segment of the green practice. This includes; saving paper, reducing the usage of water, reduction of carbon emissions, usage of alternative energy sources for production and manufacturing, eliminating the usage of plastics while packaging and saving trees (Grant, Wong, & Trautrims, 2017).

Conclusion

To conclude, supply chain management helps in the smooth flow of products and their distribution. It compiles all the steps of distribution along with the decisions of marketing, desires of the consumers in accordance with the company’s goals and strategies. Moreover, it gives a brief explanation of the application of several technologies in the supply chain management. As per the findings of the report, application of such technology helps in the smooth movement of products and goods. In addition to this, the five different themes of global logistics and supply chain help in providing with useful insights.

Abbasi, M., & Nilsson, F. (2016). Developing environmentally sustainable logistics: Exploring themes and challenges from a logistics service providers’ perspective. Transportation Research Part D: Transport and Environment, 46, 273-283.

Ahi, P., & Searcy, C. (2013). A comparative literature analysis of definitions for green and sustainable supply chain management. Journal of Cleaner Production, 52, 329-341.

Ahi, P., & Searcy, C. (2015). An analysis of metrics used to measure performance in green and sustainable supply chains. Journal of Cleaner Production, 86, 360-377.

Awudu, I., & Zhang, J. (2017). Uncertainties and sustainability concepts in biofuel supply chain management. A review. Renewable and Sustainable Energy Reviews, 16(2), 1359-1368.

Barney, J. B. (2012). Purchasing, supply chain management and sustained competitive advantage: The relevance of resource?based theory. Journal of supply chain management, 48(2), 3-6.

Beske, P., Land, A., & Seuring, S. (2014). Sustainable supply chain management practices and dynamic capabilities in the food industry. A critical analysis of the literature. International Journal of Production Economics, 152, 131-143.

Brandenburg, M., Govindan, K., Sarkis, J., & Seuring, S. (2014). Quantitative models for sustainable supply chain management: Developments and directions. European Journal of Operational Research, 233(2), 299-312.

Brindley, C. (2017). Supply chain risk. Taylor & Francis.

Christopher, M. (2016). Logistics & supply chain management. Pearson UK.

Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. (2016). Supply chain management: a logistics perspective. Nelson Education.

Dekker, R., Fleischmann, M., Inderfurth, K., & van Wassenhove, L. N. (2013). Reverse logistics: quantitative models for closed-loop supply chains. Springer Science & Business Media.

Fawcett, S. E., Ellram, L. M., & Ogden, J. A. (2013). Supply Chain Management: Pearson New International Edition: From Vision to Implementation. Pearson Higher Ed.

Gereffi, G., & Fernandez-Stark, K. (2016). Global value chain analysis. a primer.

Govindan, K., Soleimani, H., & Kannan, D. (2015). Reverse logistics and closed-loop supply chain: A comprehensive review to explore the future. European Journal of Operational Research, 240(3), 603-626.

Grant, D. B., Wong, C. Y., & Trautrims, A. (2017). Sustainable logistics and supply chain management: principles and practices for sustainable operations and management. Kogan Page Publishers.

Green Jr, K. W., Zelbst, P. J., Meacham, J., & Bhadauria, V. S. (2012). Green supply chain management practices: impact on performance. . Supply Chain Management: An International Journal, 17(3), 290-305.

Heizer, J. (2016). Operations Management, 11/e. Pearson Education .

Jacobs, R., & Chase, R. (2013). Operations and supply chain management. McGraw-Hill Higher Education.

Mangan, J., & Lalwani. (2016). Global logistics and supply chain management. John Wiley & Sons.

McCormack, K. P., & Johnson, W. C. (2016). Supply chain networks and business process orientation. advanced strategies and best practices.

McKinnon, A., Browne, M., Whiteing, A., & Piecyk, M. (2015). Green logistics: Improving the environmental sustainability of logistics. Kogan Page Publishers.

Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and supply chain management. Cengage Learning.

Myerson, P. (2016). Lean supply chain and logistics management. New York: McGraw-Hill.

Ross, D. F. (2013). Competing through supply chain management: creating market-winning strategies through supply chain partnerships. Springer Science & Business Media.

Rushton, A., Croucher, P., & Baker, P. (2014). The handbook of logistics and distribution management: Understanding the supply chain. Kogan Page Publishers.

Seuring, S. (2013). A review of modeling approaches for sustainable supply chain management. Decision support systems.

Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.

Tayur, S., Ganeshan, R., & Magazine, M. (2012). Quantitative models for supply chain management (Vol. 17). Springer Science & Business Media.

Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: A balanced approach. Cengage Learning.

Zhu, Q., Sarkis, J., & Lai, K. H. (2017). Examining the effects of green supply chain management practices and their mediations on performance improvements. International journal of production research, 50(5), 1377-1394.