Discuss about the Principles of Logistics and Supply Chain management.
The purpose of this concerned report is to prepare operational design for a company in context to logistics and supply chain management by evaluating the individual company’s background and current supply chain framework. In addition, the report is aimed to elaborate the impact of the suggested operational design in terms of the particular objectives and the risks related to fiscal aspects. A logistic inference related to the planned design has been also discussed to reach to a considerable and convenient conclusion at the end. For the entire assignment the Progressive Enterprise Limited has been chosen which is a leading company of New Zealand for controlling a wide range of supermarket outlets in the territory.
Located at the hub of New Zealand, Progressive Enterprise Limited is among the dominant global enterprise of the domain, which operates near about 183 supermarkets of Countdown in the country. The company is renowned for providing quality products to the supermarket outlets, as the organizational aim is provide convenient product on time (progressive.co.nz, 2016). The long running success of the company is indicative of the fact that it holds a strong logistic and supply chain management. From the initial stage the company designed a well-formatted distribution and production system that includes pallet labeling, pallet stabilization and possesses a potential replenishment centre for distribution (progressive.co.nz, 2016).
Based on Christopher, (2016), manufacturing facilities play a key role in the entire management process of supply chain management. If a company pursues to manufacture products low cost efficiency then it becomes easy for the enterprise to reach to a satisfactory revenue margin. Progressive enterprise limited prefers to manage their supply chain and logistics sections in terms of production and delivery by following few important steps. For the distribution process, the enterprise holds a replenishment centre, which is responsible for replenishing stocks in all the distribution centre of the company.
In bound level of service is another name of the organization’s delivery tactic to distribute products on time. Following this method, Progressive enterprise consider recording the arrival time of the products and advise their drivers to approach the gate house to supply details of the exporting materials. Moreover, according to the “on time” concept of the organization, the delivering agency supplies production order near about 30 minutes earlier (progressive.co.nz, 2016).
Most significantly, packaging strategies of the company is worth noticing as Progressive enterprise provides a visual manual of reference and has implemented the model of pallet transfer. Based on Dyckhoff et al. (2013), the pallet transfer method is helpful in case of giving more easy and quick turnaround along with low cost truck queues and consistent management of pallet labeling. Furthermore, there is a distinct management system of transport whose chief purpose to send freights to the distributors from the vendors. However, the enterprise’s policy of having NDC (National Distribution Centre) in time of dealing with regional distributors who rely on the slower moving tracks.
It is nevertheless significant enough that the entire production system of the company runs with the assistance of a food safety agenda that helps to manufacture and supply safe food to the customers. In addition, the scheme supports the organization’s in-service sustainment as the program has registration with the New Zealand authority of food safety. The in-service sustainment initiative of Progressive Enterprise is pursued through the enterprise’s engagement with the department of Assure Quality and the implementation of programs like pallet labeling and pallet Stabilization.
After recognizing the supply chain design of the company, it should be considered that the company long running success relies upon their firm management on production and supply chain department. However, considering the company’s chief concern to give on time delivery and supply safe food, a new design of operational facility can be approached. Initially, it should be considered that, a well-built supply chain management always starts with segmentation (Song & Yao, 2013). It may help Progressive, if they would like to start by having a clear view about the profit profiles of the clients. Suggestion for segmentation seems important for the enterprise keeping in mind about demand variability. Instead of having strong schemes, the company often suffers through demand fluctuations. There would be less wastage of food and most importantly the cost of transportation will be less (Wisner et al., 2014).
Nevertheless, decision regarding facility location is another essential strategic design that helps to form supply chain integration (So & Lam, 2014). Along with segmentation, layout facility decision for location will help to reduce extra cost for logistics (Islam et al., 2013). The enterprise is well concerned to keep the quality of their goods therefore; it seems an efficient workflow can help the organization to gain firm control over the aspect. To have an integrated supply chain management, the company needs to follow the optimizations models. The conceptual framework of optimization model supports an organization to gain capabilities for evaluating a large number of numerical databases (Prajogo & Olhager, 2012). As per this concept, Progressive Enterprise should implement a system for optimization modeling to hold the decision database of supply chain management in an apt manner. With the help of this system, the organization will have rigid information about cost relationship of both direct and indirect field.
Considering the principle of keeping the entire logistics and supply chain management safe, the supposed operational facility plan should design a specific team for safety management. Instead of providing safety manuals and authorization with the food safety department of New Zealand, the company may construct a particular safety department. The sole responsibility of such a department is to acquire up to date data regarding safety and equipments of safety (Gimenez et al., 2012). Along with that, the team will be accountable for submitting an assessment report of safety on a frequent basis. This strategy will help the enterprise identifying any hazards prior to export anything, as the team will both assess risks regarding production and delivery process.
HFE (Human factors engineering) is a necessary factor for which a plan for program management to enable a reliable operation overall. An integrated HFE plan helps to gain an integrated supply chain management (Wisner et al., 2014). The most important to consider is with this design, Progressive Enterprise will not have the burden to resolve operator errors and will maintain a vital interface between production department and distributors. The principle and necessity to reduce complication between the distributors and manufacturing section is the main instigators to mark out this design.
The chief aim of this organization is to supply quality, valued and convenient products to the distributors. The proposed operational plan on the other hand concentrates on building a safety team, a HFE plan and segmentation plan for demand variability. It can be expected that the safety team and HFE plan may influence the prime organizational goal as the safety team will reduce chances of probable hazards in case of maintaining a convenient distribution. HFE plan on the other hand will make it easy for both the distributors and production employees to have fare connections, as the HFE team will work as interface between them. However, the organization’s plan to maintain an on time delivery policy will be successfully pursued with the HFE team as with the help of this team, manufacturing department will gain more valid information about the time schedule and expectations of the distributors.
In this context, it is necessary to be concerned of that Fiscal policies of New Zealand government may influence the operation facility plan. Government implemented fiscal policies impact upon the macroeconomic productivity of a particular country (Wanna, 2015). Based on the proposed operational facility design, the company may need to project a HFE plan program, which will merge the relationship between distributor and manufacturers. The complication between these two parties deteriorates more in time of demand fluctuations. The sole priority of the fiscal policy of New Zealand government is to reduce the level of debt and control the prudent level (treasury.govt.nz, 2016).
The priority of the HFE plan on the other hand is related with to reduce risks related to demand variability, which instigate wastage of production and affect on transportation cost (Parkyn & Vehbi, 2014). Therefore, the HFE plan may support the fiscal policy of NZ government though contrary outcome may increase fiscal risks by giving differ outcome from the forecasts.
The sole concern of logistic management is to reach to customer demand and satisfaction fruitfully. In other words, logistics management helps for successfully pursuing strategic designs for supply chain management. The proposed operational plan engages a safety team and HFE team whose motive to control risks and employ a safe environment. On the other hand, proposal for optimization plan will help successfully to gain all the numerical database and information on time. As per (Christopher, 2016), logistic management enables an effective movement through which required information about new technologies, service time and customer demand becomes easy to acquire. The responsibility of the HFE team to maintain the technical operational department will be assisted well with the system of optimization model as the system will provide all time necessary information to the HFE department.
On the other hand, it is a key need of every customer to have quality product whereas the distributors expect to have a safe delivery. Therefore, the safety team on that ground has possibilities to work fruitfully. However, the design gives more attention towards reducing risks and having convenient management over the numerical supply chain database, therefore the concept of logistic management, which is to reduce expenses and meet consumer demand may not sound well apt with the design. However, it has been pointed out that the HFE team will make it easy for the production employees with the distributors; therefore there is chance that the plan may work to reduce transport expense.
Conclusion
The report proposes an operational facility plan that mainly includes a HFE and Safety team along with the implementation of a system based on optimization model. The plan will considerably decrease occurrence of probable risk and support to manage the numerical supply chain data. The chief aim of the considered company is to deliver products on time and supply quality products for which they possess a handful of convenient policies and equipments. The plan hence seems apt enough to accomplish the strategic attributes of the company.
References
Christopher, M. (2016). Logistics & supply chain management. Pearson Higher Ed.
Dyckhoff, H., Lackes, R., & Reese, J. (Eds.). (2013). Supply chain management and reverse logistics. Springer Science & Business Media.
Fiscal Policy – New Zealand Economic and Financial Overview 2016 — The Treasury – New Zealand. (2016). Treasury.govt.nz. Retrieved 27 September 2016, from https://www.treasury.govt.nz/economy/overview/2016/14.htm
General Information. (2016). Progressive.co.nz. Retrieved 27 September 2016, from https://www.progressive.co.nz/our-suppliers/logistics–vendor-information/general-information
Gimenez, C., van der Vaart, T., & Pieter van Donk, D. (2012). Supply chain integration and performance: the moderating effect of supply complexity.International Journal of Operations & Production Management, 32(5), 583-610.
Islam, D. M. Z., Meier, J. F., Aditjandra, P. T., Zunder, T. H., & Pace, G. (2013). Logistics and supply chain management. Research in Transportation Economics, 41(1), 3-16.
Parkyn, O., & Vehbi, T. (2014). The effects of fiscal policy in New Zealand: Evidence from a VAR model with debt constraints. Economic Record,90(290), 345-364.
Prajogo, D., & Olhager, J. (2012). Supply chain integration and performance: The effects of long-term relationships, information technology and sharing, and logistics integration. International Journal of Production Economics,135(1), 514-522.
So, R. H. Y., & Lam, S. T. (2014). Factors affecting the appreciation generated through applying human factors/ergonomics (HFE) principles to systems of work. Applied ergonomics, 45(1), 99-109.
Song, J. S., & Yao, D. D. (Eds.). (2013). Supply chain structures: Coordination, information and optimization (Vol. 42). Springer Science & Business Media.
Wanna, J. (2015). 4. Australian and New Zealand responses to the ‘fiscal tsunami’of the global financial crisis: preparation and precipitous action with the promise of consolidation. The Global Financial Crisis and its Budget Impacts in OECD Nations: Fiscal Responses and Future Challenges, 92.
Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: a balanced approach. Cengage Learning.
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