Logistics Challenges In Supply Chain Management For Railway Construction

Aim

Discuss about the Business Logistics and Supply Chain Management.

The Supply Chain Management is one of the important functions of an organization that is concerned with the administration of the flow of the services as well as products of the particular company (Christopher 2016). It is concerned with the inventory and transport as well as storage capabilities of the raw materials. This report deals with the logistics challenges faced during the process of transporting the locomotives, thermal coal and wagons for the construction of a railway line from “Central Western Queensland” to “Abbot Point Port” located in the Northeast Queensland. The challenges of the logistics are discussed in detail with focus on two key areas.

The objective of this report is to identify the logistics challenges during the process of transportation of the raw materials from initial point (Germany) to the final destination (Abbott Point Port). The raw materials are required for the construction of a railway line and hence must reach the final destination in a timely manner. It is also important that the raw materials reach the international mining company in proper condition, thus minimizing any damages or risks in transit.

The report will outline the primary challenges faced in the supply chain management. It will also focus on details like port activities, inland details, sea freight details and various logistics activities. It will also discuss the “Australian Quarantine and Inspection Services Requirements” in order to understand the issues in a better manner. The major deliverables of the project include the identification of the major issues in the process of logistics and strive to seek suitable solutions for it.

The range of activities which deals with effective and efficient transfer of goods as well as services from the “point of origin” to the “point of consumption” is known as Supply Chain Management (Monczka et al. 2015). It involves the process of raw materials storage, inventory management and the movement of the goods from one place to the other. The process of logistics deal with the right products delivered in right quantity to the right customer at the right cost (Christopher 2016). The products must be delivered in right time and at the right place. The process of logistics usually deals with the transport activities of a single organization, however, the supply chain management, deals with the transport activities within a network of companies that work in a collaborative manner (Wisner Tan and Leong 2014). The integrated logistics deal with the customer service, production planning, purchasing, transport and the warehouse activities (Christopher 2016).

Scope

There are important supply chain activities that must be undertaken by the company for the purpose of successfully delivering the materials to the final destination. There are three broad logistics activities that can be carried out by the company- Inbound logistics, outbound logistics and Conversion operations (Christopher 2016).  Some of the important activities are described below-

• Transportation- This concerns with the physical movement of the goods from origin point to the final destination (Christopher 2016). The raw materials such as locomotives, wagons and thermal that is required for the construction of the railway line. The transportation activity must be economic as well as responsive (Waters and Rinsler 2014). It should also analyze the probable options of risk and cost involved in the movement.
• Inventory Management- The process of managing the inventory is essential for balancing the supply and demand of the market (Fay and Xie 2014). The firm needs to handle increasing customer demands and manage the intricacies of supplier exchanges.
• Facility structure- There must be adequate storage facilities for the purpose of safely keeping the raw materials during transit (Bowersox 2013). It is important to gain knowledge regarding the various geographical locations in order to plan the facility structure (Christopher 2016).
• Materials handling- It is important to ensure proper movement, protection and control the raw materials so that they can be distributed to their final destination without any damage (Rushton Croucher and Baker 2014). It is important to perform functions such as resource allocation, forecasting and production planning (Christopher 2016).
• Information and communication- It is important to maintain proper communication with the clients during the transport of the raw materials (Stadtler 2015).This can be done by the efficient utilization of the technological advancements (Christopher 2016).

There are two important areas in the process of logistics management. They are discussed below-

Transportation- It is important to focus on the transportation of the raw materials. There are several reasons for efficient transportation of freight. The specialty and the surplus is responsible for the purpose of trading. The trading enhances the specialty as well as aim for greater surplus options for the companies (Christopher 2016). The process of transportation is required from the process of delivery of the raw materials to the manufacturing process (Christopher 2016). The transportation accounts for one-third of the total logistics costs. It is one of the most important factors that influence the efficiency of the logistics process (Christopher 2016). The companies must aim for maintaining economic transportation facilities in order to control the expenditure of the company (Christopher 2016). The cost of the transportation should be controlled so that the company maintains high market share and the logistics costs can be kept under control (Jensen and Bergqvist 2013). The transportation costs consist of various expenses such as vehicles cost, cost of terminals, pallets, containers, time and labour (Christopher 2016). The logistics specialist must take into account the operation of transport system in the country so that the highest efficiency can be achieved. The process of transportation is an important step for the purpose of the conversation of the raw materials into finished goods (Eskandarpour et al. 2015). The complexity of the transportation is an important consideration in the total quality management. It acts as a bridge between the consumers and the producers (Christopher 2016).

Materials handling- The Company must pay attention to the materials handling department of the logistics management. There are four dimensions in the materials handling job such as movement, time, quantity and space (Alanjari Razavialavi and AbouRizk 2014). This task requires the management of the raw materials from procurement to transport. It is important to increase the effective capacity of the logistics process and reduce the malfunctioning in the product handling process. The company must ensure that the raw materials are delivered to the clients using an excellent cost-effective carrier and at the right time (Rushton Croucher and Baker 2014). It should also be ensured that the products are not damaged in transit and it is important to maintain the optimum quality of the raw materials (Alanjari Razavialavi and AbouRizk 2014). There can be several factors such as premium freight, production shortage, inventory adjustments and others (Alanjari Razavialavi and AbouRizk 2014). There can be issues with the materials handling managers such as incorrect material bills, shipping errors, production reporting errors, incorrect cycle counts and others (Alanjari Razavialavi and AbouRizk 2014). It is also important for timely release the products so that it can reach the clients in a timely manner.

Meaning of Supply Chain Management and Logistics

There are a number of issues in the logistics operations that can be faced by the company. The challenges are described as below-

• Infrastructure- The Company often find it difficult to set up the infrastructure required for carrying out the transportation of the goods. There can be lack of transportation services in the specific area of the country where the logistics function needs to be operated (Fernie and Sparks 2014). There can be congestion issues in the roads and there may not be sufficient terminals for receiving the items. The lack of technological advancements may also pose severe problems for the logistics process (Fernie and Sparks 2014).
• On time delivery- There can be significant delays in the delivery process of the goods. There can be delay in the container pick up time and there may be cancellations in the pickup process (Mentzer 2015). There can be uncertain climatic conditions too that can delay the process of transportation (Fernie and Sparks 2014).
• Changing customer needs- The client may change its requirements regarding the raw materials (Fernie and Sparks 2014). There can be significant alterations in the customer preferences which may affect the logistics operations.
• Security- This is a major concern for the logistics specialists. The logistics process is an extended process that requires the involvement of the cargo operators, local truckers, local warehouse and others (Dekker Bloemhof and Mallidis 2012). This process often lacks the diligence of the stakeholders which results in severe logistics issues.

The company should pay attention to the excellent transport of the commodities so that it reaches the final destination safely. The company should pay attention to the transportation of the goods through the sea containers (Davenport 2013). The company should focus on the logistics process through the utilization of sea port terminals. An alternative to the sea freight can be “inland carrier” (Talley 2014). This implies that the company must utilize carriers other than the ocean modes. These can be water, land or air, depending on the budget as well as convenience of the logistics company (Davenport 2013). There should be different considerations that should be considered such as cost, time, convenience, nature of goods and others (Davenport 2013).

It is important to consider the important port activities that are an important part of the logistics process. There are many disparate activities in the port such as movement of the containers, movement of the ships, cargo management, custom activities, loading as well as unloading of the ships and others (Bichou Bell and Evans 2013). There are other important factors such as channels, anchorages, human resources, berths, tugs, warehouse and others (Bichou Bell and Evans 2013). The logistics specialist needs to gain knowledge regarding the efficient management of the port (Bichou Bell and Evans 2013). These include managing the resources as well as the flow of money. There should be combination of efficient cargo handling services and the reduction of the unit costs (Selinka Franz and Stolletz 2016). It is important to check the application of technology in the cargo handling services. An efficient cargo handling services should ensure minimum damages of the goods (Bichou Bell and Evans 2013). The logistics specialist should take into account the efficiency of the ports before dealing with them regarding the transport of the goods.

The Australian Government has formulated a strict security inspection and quarantine measures for the inward as well as outward movement of goods entering a particular state in Australia (Weng  An and Hu 2015). The quarantine measure checks all the cargo entering the state for possible contamination by microorganisms (Weng An and Hu 2015). The AQIS is a government agency in Australia which is responsible for quarantine laws, on behalf of the Department of Agriculture (Australia.gov.au 2016). This activity would minimize the threat of severe pests and protect the agriculture industry in Australia. The logistics specialist should consider the AQIS specifications so that there can be smooth functioning of the logistics process (Weng An and Hu 2015).

Supply Chain Activities

Conclusion

The logistics company should aim for finding a solution for the logistics challenges. It should try to maximize the transportation efficiency of the company. It should focus more on the creation of dedicated shipping partners which would make the transportation process hassle free. The company should ensure the timely delivery of the raw materials. The company should also focus on the security of the goods that are transported. The port activities and the sea freight details must be considered by the logistics specialist. The detailed processes in carrying out supply chain management as well as logistics function of the company are elaborated. This report would enable the CEO to understand the intricacies of the logistics function. This report is to be submitted during the planning phase of the supply chain management process that would give a clear picture to the senior management of the company.

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