Challenges and Concerns With Transportation and Logistics, Essay Example

Even though, a global supply chain has assisted companies leverage lower costs in manufacturing, several challenges still exist. There are several obstacles that logistics manager face in the process of delivery. They have to ensure their products arrive on time, and they are delivered to the right client. Transport and logistic costs typically account for 5% to 6 % of a company’s revenue. It is the primary cost that often inflates the overall price of the product. Prudent transportation and logistics management help firms enhance their overall supply chain efficiency.

Whether your company uses air, rail, sea or land for logistics, stochastic variable will at one time come into play. These include fuel price fluctuations, longer lead times when dealing with global suppliers, and unfavorable weather conditions. Such situations make time and cost estimation related to TLM complicated. As a consequence, companies experience high inventory and expedite costs (Samson, 2011). Under typical conditions for logistics, departments will often use the same quantity that is supplied during a specified time. This occurs between shipments or transport of large bulks of newly manufactured products. This theory is evident in almost all areas of logistics, including merchandise sales and production.

Unfortunately, logistic manager finds it challenging to predict expected demand for a given product. As a consequence, inventory is used to compensate for times when supply is lower than the supply. In order to reduce transportation expenses and ensure that the correct items reach the right location on time, transportation and logistics managers need to employ a centralized view in relation to the entire transportation schedules (Luo, 2012). Furthermore, the ability to analyze the impact of logistics and transportation on inventory fluctuation is vital.

Theory and Politics in Transportation and Logistics Management

Managing Overheads

Companies usually have global suppliers, and the expenses of positioning and acquiring vital materials can become expensive in supply chain management. One of the greatest obstacles to product transportation is not defining the route but rather containing the costs. The ultimate objective for the manager is to finish all logistics tasks in the most efficient way (Samson, 2011). The manager does this by utilizing pre-installed systems (software applications) that analyze, simultaneously, cost estimates for transporting through an array of carriers. Depending on the duration, the manager can choose either shipping, air or road transport.

Forecasts and Plans

TLM involve moving between points within a supply chain system. Planners/ managers are responsible for controlling and making sound judgment regarding viable transport routes the company should use at each site. Coding, routing, staging and validation is done using a real-time system (Wang, 2010). The application used should be able to analyze and predict the most efficient routing the minimize cost and time constraints.

Quality

Quality in TLM is made of three things: the safety/performance record of the carrier, the proportion of deliveries completed on-time and the condition of the material upon arrival. Firms often investigate the state of the product prior to signing acceptance upon delivery from the supplier. One reason for this is that problems can arise from their operation lines later that are not easy to discover during packaging (Wang, 2010). Substandard quality over time always leads to invoice cancelations. As a result the company makes losses.

Reverse Logistics

It is the process of regaining value from finished product, creating additional value in the process and reducing waste. Approaches for reverse logistics include the return of unsold items, repurchasing sold products and remanufacturing of returned items for the purpose of reselling parts (Luo, 2012). Reverse logistics has overheads, like cost of transporting goods back to the facility and addition expenses in paying truck drivers.

References

Luo, Z. (2012). Innovations in Logistics and Supply Chain Management Technologies for Dynamic Economies. Hershey: Business Sciwnce Reference.

Samson, R. M. (2011). Supply-Chain Management: Theories, Activities/Fuctions and Problems. Hauppauge: Nova Science Publishers.

Wang, J. (2010). Innovations in Supply Chain Management for Information Systems: Novel Approaches. Hershey: Business Science Reference.