Describe about the Logistics Management for Woodcrafts and Antique.
Background:
Baan Tawai village is a famous centre of woodcrafts and antique, bespoke furniture located in the picturesque district of Chiang Mai of Thailand (“History : Baan Tawai – The Village of Handicraft”, 2016). The demand for the furniture originating in this village is unparalleled and hence steps are taken to ensure that people around the world can get the desired furniture conveniently. The village has been able to satisfy the evolving preferences of customers while maintaining the essence of colonial intricacies in the designing of their furniture. Baan Tawai specializes in the production of various kinds of wood carvings and handicrafts whose fame has now extended around the globe (“History : Baan Tawai – The Village of Handicraft”, 2016).
In the recent years, a rising trend of demand for antique and bespoke furniture has increased in Australia particularly those which were reminiscent of colonial tropics. Australia has seen the Europeans settle in their nation in the eighteenth century (“European discovery and the colonisation of Australia | australia.gov.au”, 2016). The Australians have shown a fond remembrance for the antique furniture that closely resembles those used in the colonial Australia. Records have shown that the demand of such antique furniture far exceeds the supply of the same. Hence, the Australians have relied mainly on the online stores and exported furniture from foreign countries like Thailand to satisfy their demands. The following report seeks to address the logistical issues following the establishment an online retail business along with a signature showroom in Brisbane and distribution of the goods pan Australia. The goods will be brought from Baan Tawai of Chiang Mai and exported through Bangkok to Australia.
James Street in Fortitude Valley in Brisbane is a foremost location for retail and lifestyle stores. It is considered to be a hub of stores for designer wears, high end restaurants, art galleries and home ware stores. The place attracts buyers from around Brisbane and tourists are often seen hopping from one shop to another in search of unique products that can be rarely found in other areas (“James St | About”, 2016). Surveys have shown that establishing a signature store of antique, colonial furniture store in James Street would reap benefits for the Company.
Retail store and Online shop order management and customer service
Order management refers to those activities which exist between the placement of an order and the shipment of that order from the warehouse (Christopher, 2013). (The order management of Retail store and Online-store experiences vast differences due to certain basic differences between the two. The order management of Retail stores is generally established to handle orders coming directly from resellers and not from customers (Christopher, 2013). Conversely, the Online-stores have to handle large quantities of orders compared to Retails. Hence the warehouse of Retail stores has to handle huge amount of orders due to the bulky products while the smaller products facilitates use of smaller cases and packaging.
The order management would include activities related to the order cycle which would again comprise four steps. The steps include order transmittal, order processing, order picking and assembly and order delivery. In case of both retail and online store, the time of order transmittal is narrow since it consists of direct Business to Consumer (B2C) interaction. Following the order transmittal, the seller would process the order to locate the exact position of the warehouse respective of the location of the customer. To do so, the seller needs to make an entry in the computer regarding the location of the customer and the inventory department locates the nearest warehouse to make the entire process cost effective. The accounting department keeps track of the financial transaction between the customer and the seller. Transportation would be arranged to arrange for the shipment of the products. The furniture would be exported from Baan Tawai through air cargo to the nearest warehouse. The requested order will be picked from the warehouse and assembled with the help of scanners and Radio-frequency identification (RFID). The order management will end with the delivery of the order to the customer (Dadzie, 2013).
Customer service refers to the satisfaction of the customers in terms of time, dependability, communication and convenience. The customer service is an important part of logistics management since it determines the loyalty of the customer (Famie & Sparks, 2013). On the basis of the customer profitability analysis, the company would determine the resources that it will allocate to each segment of customers. The company will ascertain which customers will ultimately prove to be more valuable for the company. In case of the exotic furniture, the company can hold the upper class consumers to be their reliable customers as the antique furniture would not prove to be affordable for the other customers. The company also has to determine how to measure customer satisfaction after using the furniture. When the furniture provided would fail to satisfy the customers, the company must ensure easy reverse logistics that is, returning of the goods (Famie & Sparks, 2013). The furniture may be lost or damaged, or it might arrive late. In case of retail store, the replacement order may be placed through calls or face to face interaction. For an online store, the complaint can be placed through mails or calls. After the order has failed, the company would provide either cash back or a suitable replacement. It is up to the company to make sure such complaints do not arrive as it leads to heavy loss for the company and may lead to loss of customer loyalty.
The location of retail store is James Street, Brisbane and hence the distribution centre has to be located accordingly. The warehouse has to be situated nearby Fortitude valley to minimize cost of transportation. The customer places an order electronically through mobiles or computers after going through the company website showcasing the different types of furniture. The placement of the order is followed by payment of cash and then the warehouse is located nearest to the customer. The bulk of customers of this kind of furniture can be found near the posh area of James Street. With the help of software, the density of reliable customers will be determined and then the number of distribution centers would be determined (Nettsträter,2015). The distribution centre also depends upon the availability of labor market which comprises both local labor and immigrant labor. In case of immigrant labor, the visa conditions have to be kept in mind. The Fair Work Ombudsman provides a list of rules and regulations and the Australian government also enlists the immigration laws (“Welcome to the Fair Work Ombudsman website”, 2016) . The furniture will be imported from Thailand and hence immigrant workers will be called while handling certain intricate pieces. Brisbane is located near the Brisbane River which is well connected to the sea and hence transportation can be convened easily. Air transportation is also available for importing the furniture from Thailand since the Brisbane Airport near the warehouse.
In the warehouse various steps are followed before sending the furniture to the customers. Warehouse activities consist of receiving the furniture from freights and then the condition of the furniture would be checked so as to check any damage it might have suffered during the transportation. The furniture would be checked against the bill received and then it would be stored with a stock keeping unit (SKU) number. The furniture would be sorted and stored according to the separate categories. After the warehouse is notified about a specific order, the required furniture is brought to the Marshall area for checking the order received. After the ordered furniture is checked, it is prepared (on the basis of the furniture) for packaging and then loaded on the vehicle. The kind of vehicle depends upon the kind of furniture chosen by the customer. This process of storing the furniture and then shipping to the desired location correctly is mostly dependent on the information technology (Famie & Sparks, 2013).
The warehouse keeps track of the bulk of furniture arriving from the freights and it helps in the sorting of the different kinds of furniture that have been imported from Thailand. The furniture may consist of antique beds, cupboards, tables and so on. When these shipments arrive in bulk, they are accumulated and then allocated to different parts of the warehouse after assorting them in to different groups (Pawlewski, 2013). The furniture is then sorted on the basis of its grades and quality (Pawlewski, 2013).
Recently, the logistics operations have been placing emphasis on sustainability issues as the impact of logistics management has an impact on the community and environment. Lowering of sustainability in the warehouse, for instance, renders it low in terms of productivity. The warehouse activities also fall within the precincts of Work Health and Safety (WHS) Regulations which clarifies the responsibilities of the employers to look after the safety and securities of the workers in the warehouse. According to The News Daily, the warehousing job is one of the most dangerous jobs in Australia (“Australia’s most dangerous jobs I The New Daily”, 2014).
The furniture would be imported from the village of Baan Tawai, North Thailand to Bangkok since it is the nearest harbor from the mainland. From the port of Bangkok, the maritime freight would be taken to transport the goods to Brisbane through the Port of Brisbane. Hence the transportation of the furniture takes place after passing through three important nodes – the furniture hub at Bana Tawai, Bangkok and Brisbane. This International logistics involves timely and smooth interventions of the government to enable smooth flow of goods from the point of production to the point of consumption (Dekker et al., 2013). In case of furniture, the maritime freight is best suited since the load is bulky in nature and it is cost effective as well (Goerlandt & Montewka 2015).
The movement of furniture from the village to Bangkok would be subjected to the laws persisting in the country of Thailand. From the port of Bangkok, the transportation of furniture enters the international logistics and is subject to international laws (“Australian export and import laws – Austrade”, 2016). For a proper understanding of the trade laws and regulations, a specialist who is an expert on these matters needs to be consulted to avoid delays as much as possible. As soon as the furniture enters the waters of Australia, the import and export laws of Australia will be exercised (“Australian export and import laws – Austrade”, 2016).
After the furniture reaches the Port of Brisbane, the trucks would be used to take the loads to the warehouse near the retail store in Fortitude Valley. This warehouse serves as storage for both the online as well as the retail store. The key point to remember in case of transportation is that it should be done at the lowest cost possible though transportation accounts for more than half of the entire transaction(Atkinson et al., 2013) . The goods also need to be carefully handled since any damage to the products may lead to reverse logistics which is costlier than the logistics involving delivering goods to customers (Dekker, 2013).
Figure 1: Map showing the important roads connecting Brisbane
Source: (www.aph.gov.au)
As shown in the map above, Brisbane is a well connected city with its highways touching important cities of Queensland and New South Wales. While the goods are moving from one mode to another, it should be fed into the computer system of the courier facility so that the customer can trace the movement of his product. Transportation management also involves documentation of the products that are being transferred and also the bills like the freight bill that have to be paid in the process (Kunaka,2013).
After the furniture is sorted and labeled regarding the shipment of the furniture to the target customers, they are again loaded in trucks to transfer them to the customers. In this second transportation also, the customers should be able to trace the furniture they have booked. The logistics does not end with the delivery of the goods to the customers; it also involves asking the customers regarding the experience and ensuring that the customer uses their service again (Lu et al.,2013).
Conclusion:
The logistics management is a complex process following different steps from the placement of an order till the order actually reaches the customer. The process seems smooth and convenient though it involves a number of phases to cross. The rules and regulations in a country have a significant impact on the policies of the company regarding its logistics management. At first the company needs to decide whether the goods in demand are available with them. If the products are not available then the required products can be imported from the other countries. The chosen scenario called for such an action since the supply of antique furniture was not adequate to meet the demands of the Australians. Then the prime location was chosen for the signature showroom and arrangements were made for the online business of the same. The customers would start choosing the products and place the order. It is from here that the order management begins, leading to warehouse operations and finally to the delivery of the products. What happens in between is the complex method of procuring the desired goods from the point of origin and then maintaining the international customs, the goods are transferred to the country of the customer. The goods should be handled in such a way that it does cause any transit damage to the product.
References:
ABC – Australian Broadcasting Corporation. (2016). Abc.net.au. Retrieved 13 September 2016, from https://www.abc.net.au
Atkinson, J., Bauer, J., Hunt, K., Mullins, K., Myers, M., Rensel, E., … & Taylor, R. (2013). Designing for Transportation Management and Operations: A Primer (No. FHWA-HOP-13-013).
Australian export and import laws – Austrade. (2016). Austrade.gov.au. Retrieved 12 September 2016, from https://www.austrade.gov.au/International/Invest/Guide-to-investing/Running-a-business/Understanding-Australian-business-regulation/Australian-export-and-import-laws
Christopher, M. (2016). Logistics & supply chain management. Pearson Higher Ed.
Dadzie, K. Q. (2013). Management education for physical distribution and logistics. International Journal of Physical Distribution & Logistics Management.
Dekker, R., Fleischmann, M., Inderfurth, K., & van Wassenhove, L. N. (Eds.). (2013). Reverse logistics: quantitative models for closed-loop supply chains. Springer Science & Business Media.
European discovery and the colonisation of Australia (2016). Australia.gov.au. Retrieved 12 September 2016, fromhttps://www.australia.gov.au/about-australia/australian-story/european-discovery-and-colonisation
Fernie, J., & Sparks, L. (2014). Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan Page Publishers.
Goerlandt, F., & Montewka, J. (2015). Maritime transportation risk analysis: review and analysis in light of some foundational issues. Reliability Engineering & System Safety, 138, 115-134.
History : Baan Tawai – The Village of Handicraft. (2016). Ban-tawai.com. Retrieved 12 September 2016, from https://www.ban-tawai.com/history.php
Home – Parliament of Australia. (2016). Aph.gov.au. Retrieved 13 September 2016, from https://www.aph.gov.au
James St | About. (2016). Jamesst.com.au. Retrieved 12 September 2016, from https://www.jamesst.com.au/about/ John Wiley & Sons.
Kunaka, C., Antoci, M. A., & Sáez, S. (2013). Trade dimensions of logistics services: a proposal for trade agreements. Journal of World Trade, 47(4), 925-950.
Lu, W., McFarlane, D., Giannikas, V., & Zhang, Q. (2016). An algorithm for dynamic order-picking in warehouse operations. European Journal of Operational Research, 248(1), 107-122.
Nettsträter, A., Geißen, T., Witthaut, M., Ebel, D., & Schoneboom, J. (2015). Logistics Software Systems and Functions: An Overview of ERP, WMS, TMS and SCM Systems. In Cloud Computing for Logistics (pp. 1-11). Springer International Publishing.
Pawlewski, P. (2015, June). DES/ABS approach to simulate warehouse operations. In International Conference on Practical Applications of Agents and Multi-Agent Systems (pp. 115-125). Springer International Publishing.
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