Logistics Service Quality For Conceptual Model: Yusen Logistics

The Introduction

Discuss about the Logistics Service Quality for Conceptual Model.

This report will take into account the broader perspective of logistics and how it functions in the Singapore market. The report’s focus will be on ‘Yusen Logistics’, a company in Singapore whose ways of working will be highlighted here. In simple words logistics can be defined as the business plan structure for the proper supervision of service, information, capital flows and substance. Logistics requires a lot of planning, control and implementation of useful and competent flow of information along with storage of goods and services from the origin point to the point of utilization in parallel to the requirements of the customers (Bowersox, Carter & Monczka, 2013). Logistics industry plays a huge role in emphasizing the reputation of business around the world whose stature rests on the quick delivery of goods and services with required excellence. Logistics gets better with upgradation of technology and business desires.

The company was established when Yusen Air & Sea services came together with NYK Logistics Japan. In the year 2010 October, Yusen Logistics Co. Ltd was launched. The company offer services such as International Freight Forwarding (by air and ocean), transportation and contract logistics such as providing storage or warehousing meeting global standards. The primary objective of Yusen Logistics is to build up a strong base of trust and relationship with its customers and ensuring them of a long term successful transportation program.

The company has a very well-managed supply chain team which has been putting together all the required processes to present a flawless distribution process to its customers. A supply chain which is well arranged and properly managed can develop efficiency immensely which in turn reduces overall cost through efficient processing of company’s inventory (Monczka et al., 2015). No matter what the customer requires, Yusen has answer for all when it comes to supply chain solutions. In Singapore, Yusen is positioned across 7 planned locations equipped with hottest computerized control and management scheme with each providing distinctive features that covers up all the needs of supply chain solutions required by consumers.

Back in 2015, Yusen succeeded in bringing in Japan’s finest foods to the Singapore shores. Yusen Logistics was chosen Oishii Japan’s (ASEAN’s largest exhibition for Japanese food and beverages) suggested freight forwarder.

There is fierce competition among the logistics companies in the Singapore market but Yusen because of its strong financial ability has stand strong in the face of challenge posed by other logistics firms, especially CEVA logistics.

Yusen Logistics

It is important for Marketing and Logistics to be on the same page while planning and accomplish short run function. However, developing intermediary and long term plans are also critical. Both Marketing and Logistics need to have collaboration between each other to establish the productivity and long-term worth of all promotional efforts. Inputs should be provided by Logistics and Manufacturing on cost and operations which are important from marketing’s perspective for correct evaluation of true costs of each promotion (de Souza et al., 2014). Marketing plays a major part in new product growth of firms. It works directly with a firm’s R&D group to add to a firm’s product line. The firm must take into account the possible costs involved in the initial stages of new product development along with the requirements involved in delivering a product to the consumers. Yusen requires shipping refrigerated food products from Japan to Singapore, which sometimes can be restricted to one type only, meaning the current product line, may require any other products to be shipped in refrigerated transportation. It can also happen in case Yusen logistics decides to ship a new product which needs refrigeration (www.yusen-logistics.com, 2016). A strong association among the Marketing, Logistics and R&D Department will ensure whether this new product needs to be developed with focus on the high incremental cost of delivering. A firm’s high-quality inter-departmental relationship guarantees proper utilization of information for best possible decision-making (Solakivi, Töyli & Ojala, 2013). Advance planning needs to be done or else Logistics will be handicapped to attain the profit margin forecast for a new product.

Production is the place where goods and services are finished and made ready for the market. Logistics is concerned with the movement involved in carrying the goods from house of the manufacturer to the retail counters or consumers in the most proficient way (Schönsleben, 2016). In recent times logistics has been boosted by the real time tracker technology which ensures a consumer to keep track of his belongings.

Finance department is an important section of a firm with whom proper communication should be maintained at all occasions. Logistics need to have a cordial relationship too with its decisions depending on the cost data they work with (Stadtler, 2015). Moreover finance department too needs to toil with logistics to assist them in predicting cash flows and needing information on the status of finished products. Finance department have the responsibility of allocating funds to other departments with providing capital budgeting pronouncement affecting logistics. The relationship of logistics and finance extends to the point of inventory with proper monetary value related to units.

Importance of logistics in the core areas of Production, Marketing and Finance of the firm

Yusen logistics follows a Japanese concept named Gemba; wherein the areas in operations are identified and pointed for enhancement and understanding the processes thoroughly. The company also relates the industry-proven Kaizen principles to their work process to make it more thriving in order to enhance the customer service that offers quality improvement and cost savings (https://www.yusen-logistics.com, 2016). Yusen Logistics have gone one step further in injecting these Gemba and Kaizen techniques into their corporate culture. It’s not about only performing them; it’s about living them everytime. It has lessened the operating costs and developed delivery performance along with improved practices.

The moment a customer processes an order, it triggers the logistics flow within the company. The time involved in order processing makes up the total delivery time. At Yusen Logistics, the following steps are being followed to process orders of customers:

Order transmission:

An order can be processed through telephone, mail or electronic data exchange web. To avoid any confusion or irregular use of logistics systems, the most apt means of transmission should be taken into consideration.

Preparation:

After the order is received, preparing the order to satisfy internal company requirements is important. It unites the order to logistics system’s planning which includes price check, delivery conditions, customer creditworthiness and checking the availability of material in warehouse.

Picking:

With the orders being prepared and processed, goods are then picked in the storehouse. Picking is done in accordance to the order size and the urgency of such orders.

Shipment:

For shipping purpose relevant documents are to be made. The best optimum mode of transport and route of delivery is chosen, keeping in mind the safety issue of the product and the time required to deliver the same.

Invoicing:

Invoicing can be done at various points, be it at a pre-invoicing stage or at post-invoicing. The strength of posy-invoicing lies in the smooth flow of order to the warehouse, whereas pre-invoicing takes care of the official procedure.

Making order to delivery lead time logistics focus:

Serving customers in the right way is an important factor in logistics. A customer is always concern about the amount of time taken by a logistics company between processing of order and receiving goods. The logistics company should focus on all the departments involved in the order completion process like credit control, production, warehouse and transport in tackling the problem (O’Connor, Derudder & Witlox, 2015). It’s necessary to look at the scenario of a logistics company from a customer’s point of view.

Order Processing in Yusen Logistics

Transport plays an important role in logistics but this factor is often sidelined or not taken proper care of. According to Thai, (2013), transport costs are generally kept low and are often bought from cheap suppliers which jeopardize the smooth work flow. Everything that a firm decides to do needs to be customer oriented. Many a times Logistics Company reduces cost through striking out next day delivery, but if customers want it that way, then the firm has to deliver it that way which may result in increased cost (Christopher, 2016). Logistics companies can offer different level of service to consumers where they can feel that they are taken good care of and can even result in premium charges.

Increasing stock with all the products proves that the firm is not aware about the needs and wants of the consumers. According to Rushton, Croucher & Baker, (2014), it is important to understand the needs and buying behavior of the consumers and act accordingly with a proper order fulfillment form that equals their demand. This will only result in a faster and a more responsive supply chain function.

Picking is involved every time a product makes its journey from one point to another. Logistics firm should be able to lessen the number of ‘picks’. With updated technologies, logistics firms do have the opportunity to allocate information and transmit it to where it is needed quickly with no involvement of cost (Prajogo & Olhager, 2012). It’s time to pick the right one and that too at a single time.

In any supply chain process inventory is seen as one of the main apparatus of cost. The cost of inventory is a determinant factor on how a company’s supply and distribution system is configured along with what inventory stockings strategies the firm has put into practice and where its inventory is being positioned (www.yusen-logistics.com, 2016). Today’s economy is more demand-constrained which results in companies lowering their cost structure and improving the operational process capacity of their supply chains through adopting the best practices with optimizing the inventory approach.

Yusen Logistics Inventory planning and control involves:

Improvement of forecasting accuracy

Reducing the purchase transaction and manufacturing costs

Improving the inventory performance on a regular basis

Assessing the practices of inventory management

Reduction of costs through managing cycle stocks

Sustainable relationship with Suppliers:

Success of a logistics company depends on how well it communicates and relates to the materials suppliers and manufacturers to get the best possible price. A logistics company should enter into long term relationship with its suppliers through long term contracts which will lower the prices of products.

Combining retail and Warehouse processes:

Every store should be attached with a warehouse on the premises. Customers should be given the privilege to browse items on the main showroom floor.

Cost per touch inventory tactic:

Every time a product is being touched it means the product is on its way from one point to another which in turn only increases the price of the product. Good logistics company should focus on fewer touches on the products at it automatically lessens the cost associated with it.

In-store Logistics:

In-store logistical personnel should be stationed to handle inventory management at its stores or warehouses. Their jobs will be to keep check of the delivery notices, record deliveries and sorting out the correct goods to the proper sales area for dispatch to designated areas.

Conclusion:

The report took into account every possible details of Yusen Logistics and the way it works in the Singapore market. The firm has reached several heights in the supply chain field with a few changes required in the way it deals with its inventory management and order processing to make it more effective. It is not impossible for a firm of this stature having its presence globally to be a bit flexible and make the necessary changes as and when required to serve customer in a better way. During the shaping up of this project it was witnessed that Yusen Logistics’ internal departments have been working with each other pretty well in achieving the organizational goals. Every department has collaborated with each other in the proper functioning of the firm.

Reference:

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