Physical Distribution & Logistics Management Samples for Students

Question: Identify Logistics Management strategies that enabled the Company to become Successful. Answer: Introduction Medical Devices Company (MDC) is a multinational company that is successful and innovative in manufacturing and distributing sophisticated medical devices that is used by surgeons in the operation room to treat patients. The cost of the individual range of products is very high and is around 2000 for the devices that are used on a larger scale. The company has two manufacturing plants for the European market, which is present in Ireland and Poland. The other products that are bought from other companies are all sold under the brand name of the company in all over the European market, as they are first moved in to the manufacturing plants of the company from where it is distributed in the market. Reason for the success of the company The logistics strategy is defined in the service level of the organization as it helps in making the organization cost effective in nature. The constant change in the supply chain management has helped in developing strategies with respect to logistics management and specifically in product lines, with respect to the countries and the specific customers (Gilmour, 2013). In developing a logistics strategy, the company needs to examine the objectives and the supply chain decisions that it had taken earlier to change the strategies in a proper manner. The structural issue of the organization needs to be examined properly so that the number of warehouses and distributive channels can be identified and the products that will be manufactured in their plant. The strategies also need to be based on the organizational excellence, which should help in reviewing the separate functions that are present in the organization (Hajiesmaeili et al., 2016). Company like MDC has to examine the components that will help in developing the logistics strategy. The company needs to consider the transportation facility as they have around fifteen warehouses that help in acquiring the products after it has been shipped from the other countries. These warehouses act as distribution centres to more than forty warehouses that are present in all the urban areas of Europe. The outsourcing of the company takes place in another forty warehouses where the sales representatives and the agents of distribution meet together to gather the inventories (Spillan et al., 2013). The competitor of the firm is Johnson Johnson who follows a high level of logistics strategy as the employees and the workers of the organization are very efficient. The company has warehouses situated all over the places and it is divided in to different sections that help in organizing the inventories in a better manner. The vendor compliance program that helps the rival company needs to be followed by MDC as well, as it will help in manipulating the current logistics environment. This has helped the rival company in keeping the error margin low, which may disrupt the supply chain. This will help in avoiding the inefficiencies in managing the freight, which might affect the internal process and the customers as well. The use of technology in the transportation system of the company like the competitor will help in downsizing the departments within the organization (Goldsby Zinn, 2016). Competitive advantage The competitive advantage is the ability to differentiate itself in the eyes of the customer by the organization. This will help in fostering the competition, as it will lower the cost of the organization, giving rise to more profit. It can be said that the competitive advantage arising from the cost and value advantage helps in giving a upper hand over its rivals (Palsson Kovacs, 2014). The cost advantage of the company is that they have to increase the volume of sales, which will help in improving the market share of the company. It is because of the low economies of scale by increasing the volume of sales. It is seen that most of the cost of the company is outside the warehouse and in the wider network of the supply chain. It is seen that the company has to maintain a better logistics strategy and supply chain management that needs to be efficient so that it will help in reducing the cost per unit (Rushton, Croucher Baker, 2014). The value advantage is another form of competitive advantage that the company y may get following an efficient logistics management. It helps in seeking additional values, which further helps to stand out amongst the competitors. This differentiation in value can be achieved through the strategies that help in adding value by segmenting the market in a proper manner. The main benefit that can be derived from this advantage is that it creates many opportunities for the company to work in specific segments with respect to differentiated appeals. Differentiation helps in achieving an advantage in the market by giving proper service to the customers (Prajogo, Oke Olhager, 2016). On combining both the advantages, it can be seen that the company needs to be a cost leader and lead in the service as well, which will help the company to gain the advantages in the market. the company needs to develop different logistics that will help in offering the services that they provide to the customers. The management of the company needs to identify the challenges that will help in identifying the logistics that will be required by the company to support the supply chain management strategies so that the company can become the leader of cost and service respectively. It can thus be seen that logistics and management of supply chain has a potential to help the company in achieving the cost and value advantage simultaneously (West, Ford Ibrahim, 2015). Competitive advantage of rival company Other companies can maintain competitive advantage if they follow these strategies and the company such as Johnson Johnson, one of the main rivals of MDC, follows integrative marketing where they use innovative solutions to increase the sales of the company. the company followed a policy that if the customers are not willing to go to the stores to purchase the product, the company would themselves reach to the customers by allowing them to do online transactions so that it will help in increasing the sales and increase the profit of the firm (Fernie Sparks, 2014). The company maintains a pipeline management system, which helps in integrating the technological changes in the organization so that they can respond to the needs of the new customers. They have redesigned their entire business process so that the strategies can be effective with the nature of work that is done within the organization. The company has improved the location of the shipments so that it is able to track the location of the goods when it is in motion. The use of Radio Frequency Tags and responders in their supply chain has helped in keeping a track of the goods so that the loss can be minimized (Marchi, Maria Micelli, 2013). The company uses information technology as it gives them a competitive advantage because of the way the people in the organization works. The company uses a new management approach that is focused on customer satisfaction, which helps them in improving the process in which the company offers better service at a lower cost. The company has a particular discipline through which the employees of the organization know what to do and how to do it so that it can be done quickly and efficiently. This helps the organization to follow a higher degree of standardized procedure because of the training that the company provides to the employees before hiring them (Schilke, 2014). Sustainability The operation in the supply chain that is related to the internal structure and external structure of the supply chain helps in being sustainable in nature. The supply chain management is inclusive of the six modules that include reasoning, standardizing, approaching to management, resistance, profitability of the organization and the motivation that is given to the employees. Sustainable management of the supply chain helps in extending the analytical scope from a single industry to a multiple number of suppliers and retailers (Ross, 2013). The operation of the supply chain and the framework of the manufacturing supply chain are based on the services, which is limited to the environment, economy and society. The advantage that it provides in the competitive market is that it makes the supply chain adapt and guide the requirements that are needed in the market for the survival of the company, as it helps in serving better quality products to the customers. The influence of the custom ers help in serving the customers in a better way so that the core elements in the supply chain helps in undertaking the social pressure, which includes the pressure from the government and from the customers. The customers have to be satisfied, as the company needs to deal with their complaints (Heizer Barry, 2013). The provision of the services and the production quality are the basic features of a product that is used in the service. The supplier of the company has the control over the needs in the supply chain that is sustainable in nature. As an example from the case study, it can be said that the company has tied up with others who sell their products under the name of the MDC brand, which has helped in using the integrative strategy in the company (McKinnon et al., 2015). Another major factor is the intensification of the labor force in the supply chain related to service as it makes the core competencies important to be responsible in the society and especially with the risk related to the supply chain. The supply chain that it oriented towards the service helps in dealing with the problem of the employees with respect to unemployment and medical treatments. The company makes sure that the employees receive the basic requirements, which will help in gaining their service for a longer period. The employees that are active participant in the service chain helps by taking up their own responsibilities and corrective actions whenever necessary (Blome, Paulraj Schuetz, 2014). Recommendations To survive in the European market, the company has to cycle the stock so that the transactional cost is reduced, which will result in reducing the average inventory. The company needs to reduce the order of the transaction costs so that the purchase orders can be generated automatically and by the machine. This will help in reducing the expenditure by lowering the cost that is related with purchase. It will further help in pre-planning the materials that will be required by the manufacturing plants that the company has all over Europe (Winter Knemeyer, 2013). The company will also have to lower the holding cost of the inventory so that it will help in utilizing the space that is there in the warehouse by proper handling of the equipment and better modes of storage. The logistics strategy will help in forecasting the models that will be helpful in reducing the mismanagement of the over stocks. It will help in eliminating the promotions that are non-recurring by compensating the out of the stock situations. The products that are manufactured by the company or are in the process of being manufactured helps in reducing the total inventory. The components of the products have to be assembled by the company so that the customers can purchase the final product. The company should not stock all the products as it would lead to over storage in the warehouses. This would lead to congestion and misplacements of the stock. If the company wants to hold on to the products for a longer period, then they should have a proper space, which will not be mixe d with the other inventories. The company while purchasing the raw materials needs to negotiate with the supplier so that they can get the best possible extended time of payment. This will help the company by keeping the flow of cash, as they can manufacture and sell the products to the company and pay the suppliers as well. The reserves of the stock by the company needs to be evaluated in a proper manner so that the company can keep an estimate of the materials and at the time of shortage can supply those products in the markets, which will help the company in maintaining a competitive advantage over other companies. The balance between the stock and the inventories has to be maintained so that it will help in effectively identifying the efforts of the company. Conclusion Thus, it can be concluded that the company has to follow the logistics strategy that will help them in managing their operations in an efficient manner. The strategies will help the company in managing their inventories in the best way possible so that it does not go to waste. It will increase the profits of the company, as it will help in keeping a track of the inventories. This will help in better management of the operations by the company. The techniques that are being used by the rival companies have to be adopted such as integrative marketing approach that will help in dissecting the market. This will give a competitive advantage to the company, as it will help in better management of the inventories. The use of skilled laborers in the organizations and giving them proper training so that they can understand the nature of work will help in smooth outflow of the products all over Europe that are being manufactured by the company. The employees of the company needs to know what i s their role and should be fixed in those respective department so that the movement within the organization will be fast and in an efficient manner. Reference List Blome, C., Paulraj, A., Schuetz, K. (2014). Supply chain collaboration and sustainability: a profile deviation analysis.International Journal of Operations Production Management,34(5), 639-663. Fernie, J., Sparks, L. 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