Discuss about the Logistic Management Strategies to Performance.
According to Waters (2003), logistics refers to the making of plans, implementation, and the controlling of the activities that are to ensure effective and efficient transportation and the storage of goods from one place to another. The logistics industry is vital for the performance of a country’s economy. This is because the logistics industry plays an important role in the business arena. Australia as a country benefits a lot from the logistics industry because it is the major means of movement of commodities, and hence, it facilitates trade activities in the country. Despite this, the logistics industry is rather complex and is full of challenges. All the states of Australia have sufficient logistics networks; however, the state of New South Wales (NSW) has the most efficient and reliable logistics network in Australia. The state of NSW focuses on the movement of goods in Australia through various means of transport. There are several logistics firms in the NSW, for example, Qube Logistics, ATS Logistics, RPM Freight, and PACE Logistics. Qube Logistics was established in 2007, and since then it has emerged to be the most reliable logistics firm in NSW. However, according to the extended interview with Qube’s managing director Maurice James, Qube faces a lot of challenges as a logistics firm. In line with these aspects, this report is going to highlight the main problems with Qube and the logistics network in NSW. Also, it is going to present solutions and recommend appropriate measures that should be taken to overcome these challenges.
According to the case study provided, both Qube and the entire Logistics industry of NSW faces a lot of challenges that are interfering with the efficient performance of logistics firms as discussed below:
Distance
According to the extended interview with Maurice James, Qube and the larger logistics industry of NSW faces a major challenge of distance issues (Fullerton, 2014). There are extremely long distances between the major Australian cities where goods and services need to be moved by the logistics firms. For example, it is 800 kilometers from Sydney in NSW to Melbourne by road, and this takes up to ten hours to move products between these two cities. From the city of Perth to Sydney is also almost 4000 kilometers, and hence, it is time-consuming for Qube and other logistic firms in NSW to move goods from one place to another by road (Sydney Motorways, 2011). In addition to the long distance by road, there are a limited number of petrol stations for the trucks and lorries to re-fuel when their tanks run low (Sanchez-Rodrigues, Potter, and Naim, 2010). This is a major challenge to the logistic firms, particularly the drivers who move goods and services via road because they are required to carry large volumes of extra fuel.
The issue of geographical location is a major challenge that has been causing a lot of problems to the firms that provide logistics services (Andreas and Carl, 2012). The geographical location of places such as mineral mining sites in the NSW are in very remote areas, and hence, the involved long distances complicate the entire process for the logistics firms. In addition to this, the conditions of the roads in the remote areas in the NSW makes the transportation very difficult for the truck drivers who need to plan well in advance. Due to the long distance journeys road, the truck drivers get fatigued along the way; however, due to pressure to deliver the commodities on time, they become vulnerable to accidents leading to deaths and destruction of valuable commodities.
The state of NSW and the entire population is affected by the incessantly aging population (Hair, Sarstedt, Pieper, and Ringle, 2012). The majority of the country’s population are old adults, and hence, the work force is forced to work even up to 65 years, which is way beyond the retirement age. This has emerged as a major problem in the logistics industry of the NSW. The performance of the aged workers in the logistics industry of NSW is way below the required standards. The old workers lack the energy, and hence, they are not sufficient or reliable. It is also difficult for the aged workers to adapt to a new working environment, and this is a major issue of concern in a fast paced economy and technology-reliant logistics industry (Hult, Craighead, and Ketchen, 2010). The aged workers in the NSW logistic industry are not able to perform at the dame physical level as compared to the young employees.
The environmental conditions of the NSW and the climatic changes of Australia as the country also presents major challenges to Qube Logistics and the entire logistics industry of the NSW.
The call for green logistics due to the changes in climate over the recent decades have been a problem the logistics industry of the NSW. There has been a lot of pressure from both the Federal government of Australia and other global bodies for the players in the logistics industry to ensure that they promote environment sustainability through green logistics. According to Leonard (2009), the logistic industry is known to be among the largest emitters of greenhouse (GHG) gasses into the atmosphere. As a result, very strict policies have been introduced by the Federal government of Australia to curb the emission of GHG gasses into the atmosphere, for example, logistics firms are charged financial fines according to the amount of GHG gasses that they emit into the atmosphere (Leonard, 2009.).
In addition to this, there are widespread calls that the firms in the logistics industry should adopt the renewable sources of energy in order to promote environmental sustainability. As a result, some sources of fuel such as diesel has been discouraged, and as a result, the players in the logistics industry such as Qube Logistics incur major financial cost in their effort to reduce the emission of GHG gasses and in the promotion of green logistics.
The NSW logistics industry also faces the problem of seasonal weather conditions, for example, the environmental disasters that occur during winter and summer seasons (Faure and Peeters, 2008). Cases of natural accidents resulting from snow that fall during winter season in the Blue Mountains near Sydney results to the closing of roads due to the risks that are associated with snowfall (Australian Associated Press, 2004). This is a major issue of concern to Qube and the entire logistics industry of NSW as it results in delays which contribute to the destruction of perishable goods. During winter, the NSW region also faces severe storms that interfere with transport activities. The snow does not only interfere with road transport activities, but it also affects the railways. During summer periods, the NSW region is also vulnerable to the occurrence of natural disasters such as bushfires (Australian Bureau of Meteorology., 2011). The high temperatures also result into the buckling of railways metals as a result of conduction of heat. The high temperatures also result in the contamination of perishable goods like fish and meat products, and hence, the players in the logistics industry such as Qube Logistics are forced to invest in coolers to ensure the longevity of these products.
Qube Logistics and other logistics firms in NSW face a lot of problems with regards to the prevailing legislative laws in the state and the country (Environmental Defense Fund, n.d)). According to the managing director of Qube Logistics Maurice James, some of the major forms of legislative challenges that the players of the logistics industry face in NSW are as follows:
There are disagreements in the funding of projects in the major public sectors such as transport, education, health, and energy. This is because of the stringent budget that the state and federal government possess, which limits their spending, and hence, very often, there emerge cases of disagreements as to who should fund a project such as the construction of roads and railways that are so vital for the effective performance of the logistics companies. As a result, the roads and railways, particularly in the remote regions of the NSW remain in such poor conditions that limit the performance of companies like Qube. Also, the construction of roads and railways are not completed in a timely manner, a further hindrance to the transportation activities.
The fast movement of goods by the logistics companies is also hindered by transport regulation that requires the companies to possess permits to pass certain geographical areas. Laws regarding work safety is another form of regulation affecting the logistics industry of the NSW, for example, all workers in the industry must have a high visibility safety vests, which is an additional cost to the logistic companies (Patil, Shrotri, and Dandekar, 2012.).
In the given case study, it emerges that the Qube and other logistics companies in NSW face problems with regards to technology. The tremendous enhancement of the level of technology has made many industrial sectors to rely on technology, and this has introduced new challenges to the logistics industry of the NSW. The implementation of new technology is costly to the logistics companies because they become obsolete very fast and hence need to be replaced over and over (Simangunsong, Hendry, and Stevenson, 2012).
The successful integration of ERP systems of the customers and suppliers is difficult, and hence, the clash that occurs between the systems interfere with the effective communication. In addition to this, the over-reliance on technology to store information becomes a major challenge when the technology fails.
Fluctuating Fuel Prices
Across the globe, there are fluctuations of fuel prices, and this is a major issue of concern among the players in the logistics industry not only in the NSW but across the globe (Wang and Abareshi, 2014). According to the statistics, the charges rates for freight and roads increased by 5% and 9% respectively, an increase that has been attributed to the incessant fluctuations in the global prices of fuel. The rise in prices of fuel has direct impacts on the cost of transport. This has significant negative impacts on the performance as well as the profit margins of the logistics industries in NSW.
Security Issues
Logistics companies in the NSW face a lot of safety and security challenges, for example, as mentioned by the managing director, Maurice James in the extended interview, companies such as Qube Logistics suffer from theft and damage of goods in storage places and even during transport (). Some of the goods that are at huge risk of being stolen are electronic equipment and jewelry, and this has contributed to significant losses in the logistics industry.
The given case study reveals that Qube and other logistics companies in the logistics industry of NSW face a lot of challenges. Challenges, for example, the regulations for work safety cannot be solved; however, the other challenges discussed in the section above can be dealt with in several ways.
Security
From the case study, security issues have emerged as one of the major challenges to the logistics industry in the NSW. However, to improve or overcome these challenges, I recommend that the logistics companies like Qube should take the following actions. Firstly, the logistics firms in the NSW should increase their use of surveillance systems in their storage and transport equipment (Mayhew, 2001). The incorporation of CCTVs will reduce instances of theft of properties because it will enhance the monitoring of property. The companies should also engage in the strict supervision during the loading and offloading of goods to prevent instances of stolen properties. The government of the NSW can also play a significant role in improving security in the logistics industry. The government can ensure safety and security along the roads and railway tracks, for example, by deploying security officers as the police or traffic marshal to patrol the major highways so as to prevent the theft of goods during transportation (Bureau of Infrastructure, Transport and Regional Economics, 2010). The government of the NSW should also deploy heavy security in the storage areas such as ports to prevent theft.
The case study has revealed that the issue of distance and poor conditions of roads has incessantly presented major challenges to the players in the logistics industry of the NSW (Australian Department of Infrastructure and Transport, 2011). However, to overcome these challenges, the following actions should be taken by the government of the NSW. To ease traffic congestion, the government of the NSW should make changes in the roads to allow for faster movement of goods. Because it is the role of the government to construct infrastructure, the government of the NSW should collaborate with the Federal government of Australia to construct new warehouses away from congested areas to avoid traffic delays and accidents. In addition, the government of the NSW should improve the conditions of roads and railway lines to prevent the damage of goods through accidents (New South Wales Roads and Traffic Authority, 2011).
Geographical distances between states and cities have emerged as one of the major challenges to the logistic company of NSW, and therefore, to overcome these challenges, the government of the NSW should take the following action steps for appropriate solutions to the logistic companies. The government should introduce the use of electric trains in these regions for the purpose of transportation of goods involving long distances. This will contribute to the fast movement of goods and also prevent damage to the roads that are caused by large trucks.
To overcome environmental challenges that have incessantly interfered with the smooth process of transformation of goods and services in NSW. The government of the NSW should introduce new transport systems that are friendly to the environmental conditions in Australia. This includes the use of electric rails that are built in tunnels where seasonal weather conditions such as winter snows and summer heats cannot interfere with (Waters, 2011). To avoid delays in delivery, the government of NSW and the players in the logistics industry should monitor the weather patterns and to effectively schedule transport activities during the appropriate time. The companies should employ efficient and effective cooling technologies to conserve perishable goods during transportation.
The companies in the logistics industry of the NSW should adopt new technology in all their operations; however, they should ensure that there is sufficient back-up for all the forms of technology adopted to avoid inconveniences in the case of technological failure. The government of the NSW should support the companies by subsidizing the technological equipment to these companies to ensure that full technological adoption in the NSW logistics industry.
Conclusion
In summary, the logistics industry if the NSW faces a lot of challenges that prevent the smooth operations in the industry. The challenges include safety and security issues, long distances, poor road conditions, lack of sufficient technology, and poor weather conditions. This has resulted in delays in delivery, loss of goods through theft and damages during accidents. The accidents also lead to the loss of lives. The collaboration between the government of the NSW, the Australian Federal Government and all the players in the logistics industry can help overcome these challenges. The government should provide sufficient infrastructure, security, and technology assistance to the industry, and this will ensure smooth operation in the logistics sector.
Reference list
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