Global Logistics and Strategy - Coursework Example

Logistics To start with, the world economy has grown in recent years. International trade has been the motivating force behind it. But with the more recent technological developments as well as reduced trade blockades, growth in trade is definitely on the rise. Developing counties have also stepped on this bandwagon, extracting the best out of their own respective economies through trade internationally as well as locally - within the country. The integration of trade into the world economy has really proved helpful for the developing countries as they can promote economic growth, development as well as poverty reduction within themselves. World trade has been increasing at an average rate of six percent for the last 20-25 years, which is twice the rate of world output. The integration of the world economy with the help of trade has lifted the living standards of the people within these developing nations, which is a positive sign. However for the trade to occur in the first place, it is very significant to understand what goes behind to actually make supply chain management possible. Transportation of goods holds the key in the scenario of building competitive advantage which has been envisaged by the organization right from the starting. (Myers, 2005) It is a fact that sustained and consistent economic growth requires policies which can open trade and investment with the rest of the world provides all the more basis for having a proper logistical model in place within an organization. There has not been a single nation that has achieved economic stability without being open to the world for trade. (Ebert, 1990) International trade requires liberalization, i.e., openness to all and sundry within the world no matter what. The living standards are in direct proportion with them. Transportation holds the significance for connection between the channel members at the trading level as it swifts up the whole process of delivering goods from the manufacturer to the distributor who in turn does his best to provide the retailer with the goods after he stores the same for a while. In the end, at certain instances the retailers also give customers with the goods and products that they want through transportation service. There is a high need to promote and liberalize the manner in which trade is carried out within the world economy. It needs to be more generous to everyone and anyone as well as helpful for the developing nations so that more and more trade is carried out between the economic world markets. Agriculture is one such example of being more liberal for the international trade market. (Baldwin, 2002) Competitive advantage rests on the shoulders of logistics nonetheless and because of that trade liberalization proves very helpful for any country’s economy as it encompasses within itself a few negative factors, one of which is the increased food insecurity. Before trade was made liberalized, say for a particular country, the agricultural activities mainly emphasized on the production from local market but now all sorts of food products seem to enter in the local arena, which really has an insecure effect on the local man. Transportation has got its due share in the firm’s success as it literally finds out what is the basic need of the customer for which the company is striving for day in day out. It then tackles this need problem by fastening up the whole process of providing products and goods to the retailers who in turn sell them to the end consumers and thus the company is well known for its fast operations and there is no lapse of service as well. It has to be a constant interactive process between the retailer and the company or at times between the company and the different intermediaries who are known as the channel members in this whole equation. (Mourdoukoutas, 1999) Internationally, logistics and transportation play a vital role in forecasting, production planning and materials planning as it is the bridge for all these things to occur in the first place. If any of these supply chain processes need to occur and that too in a quick manner, the need of the hour is to devise ways and means through which the logistics amongst the channel members speeds up and this is only possible if there is goodwill and understanding between these parties who are at different levels of the trade structure. They have to comprehend that the other party will profit them and thus the whole transportation process would automatically fasten up as a result. One major perspective of the provision of logistics in the whole process of trade and supply management lies in the fact that the costs are drastically cut and there is a huge benefit for all the parties concerned and more than that the customers themselves as they are the ones who get the best value for money at the very end. If they receive a competing product with the same quality and value levels but at a low price, they will definitely go for it and make it their habit to buy it more and more and thus more usage would mean a lot of selling on the company’s part. This would reduce costs as well as improve customer service because then the company would think that if provides better value for money, people will throng the retailer for the goods offered by it and hence more sale will be made for it, both in the short term as well as the long run. Thus it benefits both the parties – at the logistics level and the customers who come back and forth to buy the products offered by the company which is swift in their day to day operations. (Lewis, 2000) The question here is as to how logistic activities could benefit the organization in the long run, we find that high level of service for the international logistic companies needs to focus on the aspects related with doing the things right rather than just devising what has to be done. Onus should be on doing what exactly needs to be done for the betterment of the trade activities. They must build strong and solid relationships with the different channel members that include the distributors, wholesalers, retailers and other third party vendors. In doing so they ensure that they build strong rapport with them and all of them are linked in a web with each other. The support for each other stems from the fact that one party understands the concerns of the other one and hence tries to do its best to make the goods available as and when the need arises. Their logistical facilitation only helps each other and thus cost effectiveness is also achieved as a result of the same. The measurement process of these services could be ascertained from the fact that these services rely on more than one variable, which are the essential ingredients of success. These variables need to be adjusted in line with each other in such a manner that the assistance is apparent for one and all in an easy and cohesive fashion. (Hoekstra, 2003) As for the examples of companies which have proper logistic activities set in the right manner include some of the biggest organizations like Unilever, P&G, Reckitt Benckiser, etc. The high levels of service that is employed within these organizations ensures that they know their work well and how to coordinate in a correct way with the channel members which is so very important since it has been seen at times that distribution is as and at times more significant than advertising because if the product is not available in the market, no matter how hard the marketing communications are, the result would be in the form of low sales figures. What these logistics companies need to do in such a situation is to evaluate their shortcomings and then work upon the very same with the help of its strengths and points which it considers assets. These are the areas which will eventually provide the appraisal for the logistics companies as they seek to build their respective businesses and also move ahead in a smooth and easy manner towards international markets and the like. (Sharman, 1995) Comprehension should be laid on the role of the logistic companies which must also set their specific houses on order so that the internal functions are carried out in a very easy manner and there are no ambiguities as such which could arise from the very same. Finally, it is important to realize that logistics companies must play their active role at the discernment of the supply chain activities and related measures since these form the basis for many a things to come in the future. The business aspects are clearly identifiable if there is clarity of purpose on the part of these logistics companies and also success is then part and parcel of their respective deliverables. (Paley, 2006) The companies should basically find their flaws and then address them in a manner which would improve their logistics processes both in the short term as well as the long run. Supply chain is a definitive sales management philosophy which requires within it the different chain members who are tied in a chain of command and there is harmony amongst them. The chain members include the retailers, wholesalers, distributors, manufacturers and the middlemen. As regards to logistics, it is a simple enough procedure of making things available through the distribution process with the active usage of transport whereas supply chain is a complete science to understand in real essence. Materials management is concerned with the raw data and the manner in which it is turned into the product form. Thus supply chain has an advantage over the terms ‘logistics’ and ‘materials management’ because it is a complete scientific basis for making products available right from the manufacturer level down to the retailers’ and indeed the end consumer itself. One finds that organizational structure includes the change in the organizations’ strategies as well as the structures that guarantee the company is willing to do more than just provide products and services to the end consumers. It wants to make the people realize that the company is there and wants to do its very best by tailoring its strategies in such a manner that can only benefit them nonetheless. After all, a company or an organization without the target people is nothing more than an office set up with employees and employers working for no one, at the end of the day. Also the fact that organizations need to evolve over a period of time is testimony enough for them to grow within themselves and thus adopt and hold on to a new path altogether, one that will be their torchbearer as well as reap rich dividends for them not only in the present times but also in the future. These strategies are so much in alignment with the future goals and tactical perspectives that they fulfill what is really expected of them, both in terms of short-term expectations as well as the long run. Competitive advantage is something that is built over time and requires synchronization between the tactics, activities and the overall strategy of the company which is producing the product(s). (Levy, 1995) Competitive advantage is developed when there is a differential undertaking on the part of the customer. This could be in the form of lower prices than the competitors, better quality, efficient sales services and support and a number of other features. Thus customer satisfaction is something which cannot be measured by a standard set of parameters. It has to be experienced always with different set of offerings that are made available. These offerings could be in the form of better quality products, higher and more efficient services or a bundle of both high class product and state of the art service, in which case it would not be categorized under either of them rather as a mixture of both. It is pretty true that the market dynamics suggest that the competitive advantage can only be achieved when the customer is given what he or she wants. The customer expects value for money and thus the best possible product at the most effective rate, thus it would be correct to understand his point of view and then go about changing the product offerings, prices and the value thus provided. However in this related equation, we cannot forget the stakeholders’ role since these are the people who have invested in the equities of the company and they are there for quick returns. Therefore the benefit point for the stakeholders is one that has to be understood in the proper contexts before we move any further. First of all, let us just define who these stakeholders actually are. (Coakley, 1955) They might consist of the stockholders, who have bought the stocks of the company in the stock exchange or these could be the governmental bodies that have some specific bodies working for the betterment of the public through the help and facilitation of the private sector and this company comes under the auspices of that very private concern. In all this study basis, competitiveness has to remain the key for the organization and the top management at the helm of affairs cannot deny the very same fact. An organization to function in vacuum merely dependent on its revenues over a period of time is just not the order of the day anymore. Organizational structure should mingle itself with the policies that are coming in every now and then in the business world and try to play its part in accordance with the very same. The usefulness of its resources can only be harnessed when there is a decent enough endeavor to understand the dynamics of the market, the overall industry and more than anything else, the logistical support which has invested huge sums of money within the realms of the organization and last but not the least the customers themselves for which the company strives to run a business in the first place. An organization which is willing to enhance its logistics support activities as well as boost up the operations hierarchy would surely receive favors from the clientele that it has established over a period of time and there would be orders received back and forth which would eventually increase the basis of sales for the business entities. (Varey, 2001) Thus in the end it is significant to comprehend that competitive advantage could only be built and built best when the organization is ready to provide better and more up to date services in terms of logistical support endeavors and has a provision for the best possible competitive rates that could be present within the related market. What this would do in the long run is to ensure that the company remains high on the customers’ recall mindset and thus the link with such a company would continue on a prolonged basis more than anything else. (Florida, 2004) All said and done, organizations need to take risks every now and then in order to have that competitive advantage which they so dearly require for their own good. BIBLIOGRAPHY BALDWIN, Laura H. (2002). Implementing Best Purchasing and Supply Management Practices: Lessons from Innovative Commercial Firms. Rand COAKLEY, Robert W. (1955). Global Logistics and Strategy. Office of the Chief of Military History EBERT, Ronald J. (1990). Expanding the "Global Awareness Gap" in Operations Management. Business Perspectives, Vol. 4 FLORIDA, Richard. (2004). Locating Global Advantage: Industry Dynamics in the International Economy. Stanford University Press HOEKSTRA, Thomas W. (2003). Supply-Side Sustainability. Columbia University Press LEVY, David L. (1995). International Sourcing and Supply Chain Stability. Journal of International Business Studies, Vol. 26 LEWIS, Barbara R. (2000). Internal Marketing: Directions of Management. Routledge MOURDOUKOUTAS, Panos. (1999). The Global Corporation: The Decolonization of International Business. Quorum Books MYERS, Matthew B. (2005). The Performance Implications of Strategic Fit of Relational Norm Governance Strategies in Global Supply Chain Relationships. Journal of International Business Studies, Vol. 36 PALEY, Norton. (2006). The Managers Guide to Competitive Marketing Strategies. Thorogood SHARMAN, Graham. (1995). Current Research: Making Logistics Alliances Work. The McKinsey Quarterly VAREY, Richard J. (2001). Marketing Communication: An Introduction to Contemporary Issues. Routledge Word Count: 2,538 Read More