Describe about the Logistics and Supply Chain Management for Existing Logistics.
Australia’s logistic industry chain is one of those sectors which are suffering for the regime’s remote location and relatively isolated position from the other domains of the world. Frequent issues in the logistic department of Australia cover various import and export challenges associated with supply chain management of both international and domestic logistic (Fahimnia et al. 2013). Issues in the logistic industry act as a curse as most of the business industries in Australia depend upon industries like logistics and transportation to some extent to hold cost-competitive and profitable business operations (Prajogo and Sohal 2013).
The concerned report aims to prepare an in-depth analysis of the current issues in the network of logistics in Australia. Additionally, it attempts to produce some useful mitigation strategies to overcome the problems. To identify the current frequent problems and before determining soluble method, the assignment initially starts with having a concise understanding of the background of the selected organization of Australia – Qube Logistics. The report after that follows to judge the stability of the existing logistics management strategies of the company.
Foundation history
Qube Logistics is one of the leading enterprises of the logistics industry in Australia which operates stevedoring facilities at 29 ports of Australia and specifically promotes freight services in between local domains of New South Wales, Melbourne, Victoria, and Adelaide. Foundation of the company is considered to be the eventual outcome of the acquisition of the stevedoring, automotive and both landside and marine logistics and transport operations by the fund’s management of Kaplan (Qube.com.au 2016). Kaplan group obtained this extensive range of business operations from the DP world and only kept DP world as a minor shareholder of the newly launched business of P&O in both stevedoring and transport. However, later this joint venture of P&O Company of navigation under the Kaplan group renamed as POAGS with 25% financial assistance from the DP world. Fortunate enough that after the process of rebranding, the POAGS found a large number of shareholders ranging from big head international investors to shipping companies with the facility of investment scheme of ASX worth of 200 million Australian dollars (Qube.com.au 2016). It has been in the year 2011, the ultimate formation of the logistic and infrastructure Association of Kaplan which is the new Qube Logistics settled after having corporatization of existing assets of logistics.
Aim of Qube
Qube Logistics aims to keep the commitment of giving a complete solution for the commercial property problems. In this context, it is significant to bear in mind that Qube Logistics has earned the capacity to ensure fruitful outcome for both the internal and external stakeholders as they possess an active assistance of the division of strategic assets. Additionally, the company maintains a brief knowledge about the demand and condition of the domestic market and business sectors. Qube, therefore, paves their way of achievement with the help of strategic asset projects which have been prompted by the increasing amount of investment in the joint business venture.
Assistance of vital resources of Qube
The division of strategic assets has been formed keeping in mind about the growing trend of capital and property investment and especially considering the increasing volume of business ventures of Qube. The division’s four major assets include Minto properties, the joint venture of Quattro, TQ and the logistic part of Moorebank. Minto properties are a 29.6-hectare industrial property that is designed in the location of the freight rail connection having potential transport infrastructure as well as favorable access to some major highways like Hume Highway (Qube.com.au 2016). The joint venture of Quattro has been established with the cumulated association of top grain exporters such as Cargill Australia, Emerald Grain and the noble group of Hong Kong. The consequence of this Quattro joint venture seems to provide benefits of cost saving supply chain management. It is a disagreeable fact that the venture only focuses on the handling depot of port Kembla which can turn negative for the profitable growth of the company as the enterprise should have given importance to Port Stephens and Port Botany.
The essentiality of the facilities of fuel storage in Australia has made Qube concerned to ingrain a joint venture between TonenGeneral and the holding department of Qube group. The decision to choose TonenGeneral is that the company has been considered to be the second largest oil refiner of Japan who is also renowned for grabbing the place of the greatest exporter of oil products to Australia. This particular asset strategy is supposedly designed to give fuel storage availability to Port Kembla near the port of New South Wales. Therefore, again it proves the company’s sole concern upon Port Kembla, while ports like Ulladulla harbor, port hunter are also in need of fuel storage availability.
Probably, the most valuable strategic asset of Quba is the inauguration of the largest and dominating intermodal zone of freight- the Moorebank Park of logistics worth of 243 hectares. It should be considered that this particular strategic asset have most fruitful possibilities for Qube as the development of the intermodal zone has been proposed to have the capacity to transport near about 1.05 million worth of import-export goods (Qube.com.au 2016).
Adopted technologies
Most importantly, the enterprise still has not found its competitor and the management believes that the credit must rely upon the cutting-edge style of technology taken by the Qube association. As per Lee and Wu (2014), the success of a logistic and infrastructure based enterprise’s depends on upon the strength of their mechanical system which is an essential aspect of logistic and infrastructure industry. Qube Logistics include four major technical aspects which are visibility system for warehouse and department of transport, real time, online and global tracking and tracing system and Geofence which is advanced GPS based.
Before understanding the strategic ways Qube utilize to manage supply chain management issues in Australia, it is necessary to identify the pivotal problems which are being most frequent in Australia and specifically in the New South Wales (NSW).
Chief dilemmas in the logistic industry of NSW
According to Guimarans, Harabor and Van Hentenryck (2015), difficulties in the logistic industry of Australia and specifically NSW includes several risks related to inefficient regulation policies, terrible urban congestion, constraints pertaining investment and planning. Most significantly, the ageing workforce and ambiguous investment strategies for infrastructures should not be neglected in this context. It is essential to consider that the national account of Australia has ignored a good amount of freight transport which is supposed to be conducted by the individual enterprise on their individual account (Gilmour 2013). Surprisingly there has been little account about these cargo transports as these have been long enlisted in the name of primary industries under the alleged companies for a national account.
As argued by Ghaderi, Cahoon and Nguyen (2016), the incoherent definition of ancillary transport which is the unaccounted freight transport business is supposed to be one of the main reasons for which the national account misses the chances for several logistic and supply chain activities. Unfortunately, due to the excessive practice of ancillary transport, there has been found the lack of opportunities to export and import beneficiary products for both the international and domestic customers. Recently, the rail freights are largely losing mode shares to the freights of the road on tiny hauls between cities like Sydney, Melbourne and Brisbane. It is fortunate to see that mitigation for the short haul road and rail services is being conducted with the help of infrastructure investments of supply chain and intermodal gates by companies like Qube (Fahimnia et al. 2015).
It should not ignored that the industry in general, is facing a challenge regarding those customers who are more risk-focused and is currently moving to those operators who have the blue chip containing multimodal facilities (Sutton 2013). It is not a ignorant fact that the traditional system of logistics and infrastructure services are suffering from the increasing demand of online shopping.
Online shopping is proving daunting for the probable growth of the mortar retail systems. It is unfortunate to notice that, in NSW recently the capacity of infrastructure is finding pressures due to the rising cost of industrial productivity (Coyle et al. 2016).
Similarly, rapid inflation in the cost of fuel and constraints in passing fuel levies are also proving detrimental for the overall logistic department of Australia. At the same time, the logistic and supply chain department of NSW is encountering one of the most crucial perils which are the frequent changes in the regulatory landscapes with the amenabilities in the workload (Waters and Rinsler 2014).
The most tenacious obstacles for the general freight transporters may be the current pressures they are facing due to the matter that freight handling for containers is grabbing the same expense required for long distance freight actions (Bichou, Bell and Evans 2013). Instead of all of these, the staple confrontation of being too reluctant to admit and take action for the impact of growing cost technical development should not be tolerated for too long.
Qube’s strategic approach to the current issues
Considering above mentioned major obstacles to the positive growth of logistic departments and supply chain management, Qube Logistics has already taken concern with the help of the division of strategic assets. Being concerned about the transforming regulatory landscape, the company has planned to build an easy and accessible rail connection to the Southern freight line of Sydney which will cumulate with the park of Moorbank logistics. On the other hand, considering the increasing rate of transport cost, Qube has designed and developed the Minto properties and has already submitted the application of development for the approval of state planning. The project seems prospective as its strategic location will give favorable accessibility to some of the major highways of NSW (Qube.com.au 2016).
However, it is assuring to see that the company is concerned about the rising customer demand of the local regime of New South Wales, for which Qube has established a new handling depot near Port Kembla of NSW. Significant enough, with the help of this strategic asset Qube possesses the hope of keeping a cost saving supply chain management. It is however quite unsatisfactory as unlike Minto properties, the new cost saving approach of Qube seems an act of partiality as there are many more other ports which needs help of joint venture like Quattro. Qube’s recently proposed consortium for providing complete payment to the dividends which are franked permitted (Carter 2016). Considering the strategic assets of Qube, the ground becomes clear that the company prefers to follow the model of logistic regression. As opined by Allison (2012), the regression model is the concept through which an enterprise can conduct a flawless risk assessment. The regression model is used for predicting any particular circumstance. Qube’s strategic assets are the possible results of Qube’s ongoing concern about the customer demand for the local place of NSW and less accessibility to some of the most important highways of Australia, which they have earned following the regression model.
Most recently, Qube has involved itself in the battle with Canadian Brookfield to take over the control of the Asciano group of Australia which is supposed to be one of the largest freight operators of rail chain in the Pacific National (ABC News 2016). With strategic projects like Moorebank intermodal, fortunately, the enterprise has won the battle as the board of directors of Asciano has suggested their stakeholders to grant Qube’s superior offer.
Considering the present challenges in the logistic industry of Australia and specifically of NSW, it is significant to suggest that leading and aspiring companies like Qube should procure the initiative approaches taken by the NSW government. NSW Premier proposed the statement of NSW government on Innovation, with the help of SAHA International to enhance the economic growth of Australia in general and for the development of the freight industry in particular. It will bring more fortune for Qube if the company will involve itself more strongly with this Innovation scheme as the NSW government’s main objective behind launching this scheme regarding logistics is to strengthen the innovative thinking in change management, innovative entrepreneurship and leadership to gain sustainable work practices.
Less attention has been paid to resolve issues among shareholders, bond holders and managers of companies of logistic industry which has affected the workplace practices. As opined by Zu and Kaynak (2012), the concept of Agency Theory is known for alleviating conflicts between management and shareholders. The theory chiefly focuses on to align individual goals of industry principles and therefore to make a reconciliation between the agents of risk and principles. It would help if Qube followed the action model of Agency theory though which they can appropriate choose potential agents and shareholders in future. Nonetheless, by the national objective of NSW which to make the tasks of freights by the end of 2031 to ensure the maximum financial growth of NSW, Qube should participate strongly to heighten the network efficiency.
Instead of TonenGeneral, Qube needs to collaborate with some of the major oil refineries in South East Asia to provide storage facilities to other major ports like Port Kembla. It is astonishing to see that the enterprise’s most of the strategic assets are more oriented with port Kembla, while there are several other ports which possess possibilities to prove beneficiary for NSW. Qube needs to give importance to ports like port Hunter, Botany, Jackson and should give effort to provide fuel storage or at least warehouse facilities to these ones.
Conclusion
The above report outlines that there may be a handful of issues and challenges frequently met by logistics companies like Qube however; the government of NSW has not shown any ignorance in this matter. The Innovation scheme of NSW government with the help of SAHA International is probably the most potential initiative taken by the government to enhance economic growth through developing the logistic industry. Nevertheless, it can be concluded from the assignment that instead of having four major strategic assets, Qube should strengthen their relationship with NSW government and take active participation in the Innovation project.
References
ABC News. (2016). Extended interview with Qube’s Managing Director Maurice James. [online] Available at: https://www.abc.net.au/news/2016-02-04/extended-interview-with-qube’s-managing-director/7142046 [Accessed 20 Sep. 2016].
Allison, P.D., 2012. Logistic regression using SAS: Theory and application. SAS Institute.
Bichou, K., Bell, M. and Evans, A., 2013. Risk management in port operations, logistics and supply chain security. CRC Press.
Carter, M. (2016). Qube gains upper hand in Asciano takeover battle. [online] Railjournal.com. Available at: https://www.railjournal.com/index.php/australia-nz/qube-gains-upper-hand-in-asciano-takeover-battle.html [Accessed 20 Sep. 2016].
Coyle, J.J., Langley, C.J., Novack, R.A. and Gibson, B., 2016. Supply chain management: a logistics perspective. Nelson Education.
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Fahimnia, B., Reisi, M., Paksoy, T. and Özceylan, E., 2013. The implications of carbon pricing in Australia: An industrial logistics planning case study. Transportation Research Part D: Transport and Environment, 18, pp.78-85.
Ghaderi, H., Cahoon, S. and Nguyen, H.O., 2016. The role of rail in the Australian port-based container market: challenges and opportunities.Australian Journal of Maritime & Ocean Affairs, pp.1-21.
Gilmour, P., 2013. Benchmarking supply chain operations. International Journal of Physical Distribution & Logistics Management.
Guimarans, D., Harabor, D. and Van Hentenryck, P., 2015. Simulation and Analysis of Container Freight Train Operations at Port Botany. arXiv preprint arXiv:1512.03476.
Lee, K.H. and Wu, Y., 2014. Integrating sustainability performance measurement into logistics and supply networks: A multi-methodological approach. The British Accounting Review, 46(4), pp.361-378.
Prajogo, D. and Sohal, A., 2013. Supply chain professionals: A study of competencies, use of technologies, and future challenges. International Journal of Operations & Production Management, 33(11/12), pp.1532-1554.
Qube.com.au. (2016). Qube | About Qube. [online] Available at: https://www.qube.com.au/about [Accessed 20 Sep. 2016].
Qube.com.au. (2016). Qube | Strategic Assets | Moorebank Logistics Park. [online] Available at: https://www.qube.com.au/strategic-assets [Accessed 20 Sep. 2016].
Sutton, D., 2013. The role of the logistics manager/director. International Journal of Physical Distribution & Logistics Management.
Waters, D. and Rinsler, S., 2014. Global logistics: New directions in supply chain management. Kogan Page Publishers.
Zu, X. and Kaynak, H., 2012. An agency theory perspective on supply chain quality management. International Journal of Operations & Production Management, 32(4), pp.423-446.
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