Logistic: Philippines-Australia Transportation - Case Study Example

TITTLE: LOGISTICS ESSAY By Introduction The term logistic refers to the controlling process of resources flow from the point of origin up to the destination with an aim of meeting some set requirements. Logistics originated from the military where it was concerned with personnel and materials movement during emergency times. It was then adopted later by businesses and became a commonly used terminology in academic programs and professional societies. According to the Council of Supply Chain Management Professionals (CSCMP), logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverses movement and storage of services, goods and related information between an interval of origin point and the destination or consumption point in order to meet customers-based or corporations determined requirements. The resources under control can be in the form of physical items, that comprise of equipment, food, materials, and liquids as well as items in the form of abstract that include information, energy and particles. On the physical items logistics, it usually entails information flow integration, material handling, production, packaging, inventory, transportation, warehousing, and mostly security. Exploring the study case of Philippines-Australia transportation of the large construction sub-assemblies, our interest is to analyze the existing logistic challenges that hinder the efficiency of this transport industry, the managerial chain that supervises the activities that take place in this logistic sector and the existing literature published by different authors. According to Christopher (1999 pg 232), global logistics networks acts as a cyclical channel for the corresponding value-adding chain where numerous components in that logistics network perform different functions in an organizational unity manner. In order to establish efficient and environment-friendly logistics networks in the 21st century, joint studies are necessary to understand the prevailing state of the logistics systems in and across different regions and to determine the specific problem in every region. Under these studies, advancement in logistics needs to be assessed not only from personal perspective of industrial/national competitiveness, but even from that of global social optimization taking account consumers, logistic service providers, shippers and government perspectives. Antwerp (2011pg 18) has analyzed the logistics in this area of Philippines and established various limitations. Under the study case where there is need to transport the large construction sub –assemblies, there will be several problems under the way of moving these vessels to the destination point in that; the major islands in Philippines are not inter-linked. This will create a connection problem to the transport means being used in transferring these sub-assemblies vessels. The only applicable means of transport will be road transports since it’s the cheapest compared to air transport and since the sub-assemblies are large thus making it difficult for air transport to be used. Talking of the roads means of transport, trucks will be used to carry this cargo, where there will be prevalence of delayed arrival to the destination and distributions of the goods since this mode will be slow with respect to ensuring the cargo is delivered safely. Under the same issue of transport, the area from which the goods are picked has shown dominance of poor infrastructure, where there are no roads connecting farm to markets and if any, they are poorly constructed. Therefore, the choices of transport mode will circum to a lot of difficulties finding Connecticut to the destination zone. Another limiting factor to logistics efficiency or a challenge is that in Philippines most of the local cities and areas do not have efficient communications and information systems. This factor will impose a low arrival probability of the cargo. This is because the personnel conducting this transportation process will not be in position to communicate to the personnel at the destination to alert them on their progress or of any unforeseen calamities on the way. Otherwise, the arrival of the sub-assemblies will be based on faith. This factor of poor communication can even to misinterpretation of information passed from person to another. The message may be portrayed in such a way that the listening party gets the wrong meaning, which may eventually lead to either delivering the cargo to the wrong destination or following a wrong procedure and thus not fulfilling the corporations or customers requirements. Ashgate (2003 pg 112-115) emphasized that Government failure to increase public investment on the side of infrastructure development has led to poor roads in this region under study. The governing body has overlooked other sectors compared to the transport sector. The trucks used to transport these goods will be going through rough bumpy roads which expose these vehicles to mechanical problems, which still increase the time taken to reach the destinations. Hence the motor vehicles are having expensive maintenance and repairs, which contribute to logistic operations cost. The increased cost limits the diversification of this sector operations and thus making it not to enjoy economies of scale. The transportation of these large sub-assemblies will also be confined to narrow constructed roads which make the trucks movement very hard. Safety risks to users and the community; the cargo under transport may victimize the locals in the different areas through which the trucks pass, more so if the goods carried are inform of petroleum products. In case of an accident, these tankers may cause fire tragedies if the oil is spilled out. If the cargo under transport is like that under question, then this poses a lot of safety risks to the people driving these trucks since the unbalanced bulky goods can overturn the vehicles and cause death. There is also the risk of damaging the goods under transportation. This can stem from the factor of poor roads which are full of potholes, hence making the goods shake heavily and break and even the metallic ones to deform into shapeless metal rods. In analysis of the authored work by Scary (1999 pg 34), we are able to see that transportation of these sub-assemblies will encounter a problem in that there is the issue of trucks weight limits. This will minimize the capacity that the trucks are supposed with respect to the set standard weights by the authorities. Thus the load has to be divided into groups and carried separately so as to adhere to rules and regulations of transport sector and traffic. There is also insecurity to these wide load cargo transporters on their way. They are prone to hostile group of locals in these areas in which they pass through since the people may be tempted to still from them. Hence there is safety risk to the truck drivers who are not provided with any security esc Springer (2010 pg 67) ascertained that in relation to logistics management principles, it is good to analyze the strategies that have been put forward to control this logistic sector so as to achieve its pre-determined goals. Under this topic of uplifting the logistic sector, the Philippines state has come forward to effect it through investing in the Information and Communication Technology (ICT) sector. Internet has rapidly changed in to a powerful tool of business due to its online commercial services and e-commerce capabilities. It offers full potential to upgrade the efficiency use of transportation systems through generating additional capacity from existing physical infrastructure. He also argued in his theoretical work that use of ICT use has improved exchange of supply chain information, leading to emerging of integrated production and logistics managerial channels and thereby improving supply chain performance via many ways. Physical flow and Commercial transaction distribution are separated. The availability of the Internet service providers avails a convenient way of gathering, organizing and information distribution on product, trade regulations and service in the global level. Inter-company trades of commodities over the Internet always keeps on growing and extend the globalization of trade, increasing the haulage distance. Many companies use Internet as an exchange mechanism for organizing the supply chain with their partners. The major freight service providers have resort to creating Web pages from the Internet to avail information to customers on their services, schedules and level of rates which can be accessed any time by the world market. Modernized freight transport providers enhance the possibility for interactive responses for cargo-tracking inquiries presented by shippers and forwarders. Contributing to modal shift and intermodal transport; Mentzer (1995 pg 32) elaborated that developments in logistics transport technology poses the potential to uplift the competitiveness of the intermodal transport. New developments in vehicles and handling technology contain the capacity to lower the operating costs in the different modes of freight transport and initiate development in the traffic pattern flows. For example, introduction of speedy ferries on short sea routes around Europe is availing competition to the established long-distance truck services in respect to these routes. Also rail provides shippers with an opportunity to conduct a rolling inventory along key corridors applying distribution points to redirect product on demand. The appliance of ICT in delivery chains enables data on transport shipments and orders to be made existence at an early phase. This means that passage times of transport functions can be better administered, thus creating new transportation opportunities, including intermodal transportation, which were not sufficient before. Efficient information knowledge has reduced processing cost and time and created seamless relations, thereby facilitating intermodal transportation. Third party companies have developed services that connect the various modal structures. The use of IT to track and identify cargo has been considerably applied to intermodal procedures. Improvements in intermodal transport through the appliance of ICT have promoted the idea of just-in-time inventory delivery and management. These improvements all raise the efficiency of intermodal transport. Logistics will influence the future development of intermodal transport, and yield both opportunities and challenges. Service requirements are the major challenge to intermodal transport. Logistics will lead to ever-stricter service requirements and an increasing number of small consignments (Less Than Truckloads) a market which intermodal transport has lost almost completely. Therefore, so as to comply with this severe service burden and to be capable to compete with road transportation, intermodal transport needs complicated logistics concepts, using sophisticated information systems. According to Sharma (2009 pg 52), he argued that the logistics of a country will be dependent on the level of government control over the public transport sector. If the authorities reduce their interventions in regulating the transport systems, then there will be a lot of smuggling of goods into the country hence promoting criminal acts. Government supervision makes sure that the traffic rules are not violated, the harmful materials are carried in a more contained way to avoid negative externalities to the society, and that security is maintained along the busy traffic roads. The author also said that there is need to formulate policies for private participation in development of logistics infrastructure. Logistics infrastructure should ultimately cater for the needs of the logistics industry, which in turn serves commercial needs. Governments need to develop innovative infrastructure financing schemes with private sector involvement, but at the same time ensure that such schemes are compatible with sustainable development objectives. Hence, policies should be devised that encompass all parties involved with the provision of advanced global logistics systems. Conclusion In the transportation of the large sub-assemblies case, although successful, the process will be delayed by the slow mode of transport, insecurity which makes the transport not to go on during the night, and the bulkiness of the cargo. Improvement in this sector is highly called for, so as to attain efficiency through upgrading the infrastructure levels. Logistics are essential in determining the economy of the unlucky landlocked countries since they have to rely on it for transportation of imports and exports in and out of the country respectively. References Antwerp, (2011). Current issues in shipping, ports and logistics. Antwerp: UPA University Press. Pg18. Ashgate, (2003). Logistics contributions to better health in developing countries: programmes that deliver. Aldershot, Hants, England Burlington, VT. Pg 112-115. Author (2009: Optimization and logistics challenges in the enterprise. Dordrecht New York: Springer-Verlag, pg 17. Author (2009): The report: Philippines. London: Oxford Business Group, pg 93. Christopher, M. (1999): Logistics and Supply Chain Management; Financial Times Pitman Logistics, Vol. 16 No. 1, p. 232. Springer, L (2010): Shipping and logistics management. London New York, Pg67. Mentzer, T and Kahn, K.B. (1995): A framework of logistics research”, Journal of Business Publishing, London, pg 36. Scary, Philip B., (1999), “Changing Scope and Direction: Managing Supply Chain” in Donald, pg 34. Sharma, Kunal (2009): Logistic management: a competitive advantage for the new millennium. New Delhi: Global India Publications, pg 52. Read More