How to identify the current logistics followed by the company and if it is benefitting the company to make profit?
This report will identify the current logistics followed by the company and if it is benefitting the company to make profit. As a manager of the company I need to identify the full utilization of resources to its maximum output.
This report will identify the requirements of the company, and if the current logistics information system used by the company is up to the mark.
In order to research on this report different Books, Journals as well as web pages were referred to get the information required.
The company deals with recycling of the papers, exports of live cattle’s and imports chemical.
The company’s logistics requirement should be flexible in terms of customer requirements; total control and dependability of the logistic chain, good coordination of all parties involved in import and export of the goods or products and ensure to provide possible conditions to the animals.
The company should provide the clients the facility of land transportation of livestock or any product by road by hiring a dedicated truck fleet. The company should even take care of the cattle yards; the cattle transport vehicles, and the transport routes. The cattle yard represent places for accommodating cattle’s and cattle transport vehicles and routes represent various transport modes, such as trucks and roads, cattle trains and rail lines, as well as livestock ships and designated sea routes. All these three activities require good coordination, transportation and a distribution warehouse.
Logistic activities include the process of planning, implementing, controlling, effective and efficient flow and storage of goods, services and related information from point of origin to point of consumption for the use of conforming to customer requirements (Health Knowledge. 2011).
The company is involved in a variety of products and services as follows:
Purchase of waste paper and recycling of the papers which is then shipped to Indonesia for pulping and creating rolls of print and then to be sold to the publishing houses or companies in Australia, New Zealand and South Africa. The company exports live cattle to Indonesia. It even deals with the waste paper and recycling. Imports chemical from Indonesia and sells it in Australia (Elsevier, n.d.).
The company uses two logistics information systems and they are LIS controls and LIS2 control to run the business.
The company manages these activities through 300 ERP software to control business operations across all divisions and countries. A detailed capability list for the logistic segment of this ERP system follows (Bondless. 2014).
This Control module helps to keeps track of stock levels and processes inventory receipts, shipments, returns and adjustments. Inventory Control includes extensive on screen inquiry and reporting functions to give the detailed, current information crucial for effective inventory management. Inventory controls involve the below mentioned steps.
Maintaining and reporting on six different costs per location, including standard, most recent, average, last unit, and two optional user-defined costs. And it even decides when to record the transaction cost and Allocate additional costs to transferred inventory items by quantity, cost, and weight, or manually specify the cost per item (Maheshwari, 2014).
The aim of pricing is to maintain separate price list for different customers as per their types, payment methods, regions or currencies. It even sets up pricing based on cost plus a percentage or amount, by weight, quantity or unit of measure and by customer type and identify if always to use the lowest of contract price, discounted base price, or sale price for specific customers. The other inventory control is Entering Transactions, Posting, Performing Inquiries and Reporting (BIFA. n.d.).
Order Entry integrates fully with Inventory Control and Accounts Receivable, so that the company always knows the inventory levels and the status of their customer accounts. The order entry involves Maintaining Customers, Entering and Managing Invoices, Posting, Performing Inquiries and reporting.
We can see the application of these steps in the companies day to day activities where the company buys all kind of papers for recycling and industrial waste paper or in the form of recycling in baled, skidded or rolled. These include Old Corrugated Containers/Cardboard, Old Newsprint, Sorted Office Waste, White Ledger, Colored Ledger, Computer Print-Out, Single Stream waste and Co-mingled and Other Paper Recycling Materials. The company exports approximately 50000 tons of waste paper which the company sells to Indonesia’s largest producer of newsprint (Ghiani, Laporte, Musmanno, 2013). The company’s major suppliers are AMCOR in Western Australia, SKM Recycling in Victoria and Trans Pacific Industries Australia-wide. The Suppliers with the help of large containers transport the waste papers and the company keeps changing the shipping companies to chasing spot rates for the consignments in attempt to reduce the company’s shipping costs to a minimum (Witkowski, n.d.).
The company deals with import of newsprint produced by PT Aspex which is Indonesia’s largest producer of newsprint. It imports approximately 50000 tons of environment friendly newsprint.
The company even imports chemicals from Indonesia and Thailand for plywood, newsprint, and for the agricultural industry that are sold in Australia. They import Phenol which is used in resins, plywood adhesive and lube oil additives, Melamine which is used in resins and plywood adhesive. The company’s major place for emptying the shipping is Fremantle and Melbourne where shipping companies are contracted on the spot. With the help of LIS controls the company is able to meet its entire requirement and the customer’s requirement (Logistics Degree. n.d.).
The third activity the company is involved in is exporting live cattle to Indonesia. The company manages to run its daily business with the help of LIS 2 – Live export control where the system automatically uploads the consignment information to the database for live exports to other countries such as Egypt, Indonesia, China and Russia. It even helps in tracing the animals from Australia to another country and efficiently processes each individual animal crush-side then exports the test data to the lab and sent the results for instant updates on animal export eligibility. Today company acquires 331,800 hectares of land for cattle station. The cattle station has a carrying capacity of 15,800 head of cattle which consists of Brahman-Drought master cross- breed which has a proven a track record of growing rapidly and being able to adapt to tropical climatic conditions (CSIRO. n.d.). The company exports about 20,000 head of cattle every year to Indonesia. The process of moving the cattle to the holding yard which is located in the outskirts of Darwin and after the carrier arrives the cattle are moved to the port, where they are transported to the vessel. Even in this process the trucking company is contracted on the spot. Hence these are the logistic activities followed by the company and they are effectively employed by the company.
Advantage of current logistics information systems used by IAJ
Yes the current logistics system used by IAJ is adequate as it covers all the functions of Inventory Control and Order entry and live export control which helps the business to run smoothly in day to day activities (Zhou, Higgins, 2013).
IAJ’s current policies and procedures covers all the logistics requirements as the company follows an ethical way of doing business and strongly believe in equality and treat all the employees equally. As per the code of conduct of the company any conflicts, dishonesty, stealing, not respecting co-workers, misrepresentation will not be tolerated and a strict action will be taken against the person. As per the policy no employee should share any professional information with media or on social sites without informing the company’s authority. All the employees are required to fulfil legal and contractual obligations within their scope of employment with honesty (Reyhan, 2013).
It is very important to take measures to make sure that the recommendation made is being followed strictly as the profit of the company depends on it. As a Logistic manager I need to check the impact of the recommendation and the outcome of the program at a certain level and correct it when required. Prepare to tackle the obstructions and constraints on the way to apply the recommended idea (Testi, n.d).
Stakeholders both internal and external
The internal stake holders are employees, manager and owners. External stake holders are suppliers, society, Government, creditors, shareholders and customers. To avoid conflicts it is important to involve the external and internal stake holders in organization, program and project. This way the company can win the trust of the stakeholders which significantly impact the success of the company. As a logistic manger, following the mentioned steps such as identifying and mapping the internal and external stakeholders, assess the nature of each and every stakeholders influence and their importance, by constructing a matrix to identify stakeholder influence and importance and by monitoring and managing stakeholder relationships we can overcome any potential conflicts (Reyhan, 2013).
The recommendation that I would provide to the owners it to route optimization systems, relocating truck fleets to regions with lower labor costs, prioritizing network-compatible shipments, implementing the latest technological innovations, and increasing their truck capacity utilization rates. Achieving profitable growth in the future will require logistic service providers to undertake a thorough repair of their traditional business designs. The company needs to develop industry oriented and innovative solutions and to think and act in terms of networks, and making core functions like tender management more professional. The logistics company should make sure to align the employee’s value and target with companies’ perspective. There should be coordination in the departments and strong team orientation to achieve the target of the company (Logistics Degree. n.d.).
References
Health Knowledge. (2011). Identifying and managing internal and external stakeholder interests. [online] Available at: https://www.healthknowledge.org.uk/public-health-textbook/organisation-management/5b-understanding-ofs/managing-internal-external-stakeholders [Accessed 8 May 2015].
Elsevier, R. (n.d.). Potential stakeholder conflict. [online] Available at: https://businesscasestudies.co.uk/reed-elsevier/corporate-responsibility-and-stakeholders/potential-stakeholder-conflict.html#axzz3ZXu8VWW2 [Accessed 8 May 2015].
Bondless. (2014). Business Stakeholders: Internal and External. [online] Available at: https://www.boundless.com/accounting/textbooks/boundless-accounting-textbook/introduction-to-accounting-1/overview-of-key-elements-of-the-business-19/business-stakeholders-internal-and-external-117-6595/ [Accessed 8 May 2015].
Ghiani, G, Laporte, G, Musmanno, R. (2013). Introduction to Logistics Systems Management, 2nd Edition. [online] Available at: https://as.wiley.com/WileyCDA/WileyTitle/productCd-1119943388.html [Accessed 8 May 2015].
Maheshwari, A. (2014). Driving Profitability in Logistics. [online] Available at: https://www.globallogisticsmedia.com/articles/view/driving-profitability-in-logistics [Accessed 8 May 2015].
BIFA. (n.d.). A Brief Introduction to Logistics. [online] Available at: https://www.bifa.org/_attachments/Resources/525_S4.pdf [Accessed 8 May 2015].
Testi, M. (n.d). The Role of Transportation in Supply Chain Management. [online] Available at: https://www.eyefreight.com/the-role-of-transportation-in-supply-chain-management/[Accessed 8 May 2015].
Witkowski, J. (n.d.). INTRODUCTION TO LOGISTICS AND SUPPLY CHAIN MANAGEMENT. [online] Available at: wgrit.ae.jgora.pl/kzsil/pliki/Logistyka/JW%20logandSCM.ppt [Accessed 8 May 2015].
LogisticsDegree. (n.d.). Business Logistics Definitions. [online] Available at: https://logisticsdegree.net/2012/logistics-what-it-is-and-why-its-important-to-your-company/ [Accessed 8 May 2015].
CSIRO. (n.d.). Livestock logistics. [online] Available at: https://www.csiro.au/en/Research/LWF/Areas/Landscape-management/Livestock-logistics [Accessed 8 May 2015].
Zhou, M, Higgins, A. (2013). Operational Modelling of Livestock Logistics for Simulation based Case Studies. [online] Available at: https://www.asor.org.au/conferences/asor2013/J8/zhou.pdf [Accessed 8 May 2015].
Reyhan, E. (2013). Logistics and Livestock. [online] Available at: https://morethanshipping.com/logistics-and-livestock/ [Accessed 8 May 2015].
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