Assignment 1
Strategic Logistic Alliance
express. freight. logistics
GROUP
Sohail Rahim 7576
Mirza Anas Baig 7565
Hafiz Hassaan Pirzada 7566
Submitted to: Sir SOHAIL MAJEED
Logistic Alliance
In literal meaning logistic alliance is providing transport services to organizations. It is a formal relationship between the organization and logistic service provider providing a number of services and activities relating to transportation to the organization. Hence, they establish a long term relationship between each other. This may starts from small set of activities but there is potential as the set of activities may increase both in size and number creating value for the organization. For example, packaging, supply chain integration etc.
The need for logistic alliance starts from the point when a manufacturer or service provider needs to transport its product or service respectively over vast distances to the actual buyer of that product or service. They find it difficult to acquire vehicles, resources and perform management activities required to establish an effective supply chain and manage cost at the same time. Hence, these companies approach logistic provider and establish logistic alliance with them which help them in complementing their business functions by providing them supply chain operations.
The logistics provider not only help companies manage and deliver their products but also provide business advice essential for moving ahead of their competition in the market.
Critical success factors to Logistic Alliance
• Trust
• Cooperation
• Communication
Types of alliance
• Opportunistic alliance
• Complementary strategic alliance
• Third-party logistics (3PL)
• Fourth-party logistics (4PL)
• Retailer-supplier pa...
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...iances. Therefore, the primary objective of this research was to gain a better understanding of logistics alliances by examining the roles of trust and commitment in such relationships. A model of logistics alliances from a buying firm's perspective is first proposed and then empirically tested. The following specific research questions were addressed:
1. To what extent are trust and relationship commitment important elements in logistics alliances from a buyer's perspective?
2. What factors affect the development of a buyer's trust and relationship commitment in logistics alliances?
TERMINOLOGY
Logistics alliance relationships are described in various ways. To provide some continuity in reporting research results, a definition of a logistics alliance was developed by drawing from previous research on inter organizational exchange and logistics relationships.
I assumed that the purchasing agents are partnership oriented with the customers due to the large and profitable account that they offer. Since it is a large customer, more effort ant collaboration is suggested to maintain their relationship and capture all possible profit. Since Large Regional Distributors are extremely price focused, partnership oriented would be able to offer more flexibility by offering more long-term benefits and add value. Assuming that Valley Steel had been doing repeated transactions with the customers, it would be more effective to have collaboration instead of only having pure transactional exchange.
Suppliers must maintain good relations with the companies in the industry. This is low because there are multiyear service contracts and the delivery industry uses items such as vehicles, employee benefits, general goods and airline contracts associated with overhead of running business, but all contracts are rewarded through an RFP process. There are enough players in the market and had high fixed cost and thus have substantial buying power.
Through these acquisitions and creations, UPS serves its customers by providing unique supply-chain solutions. UPS allowed its customers to better serve their own customers, and focus on core competencies. UPS has a Logistics Group to provide global supply chain management solutions and consulting services based on customers´ individual needs. UPS has a mission to provide a list of options of integrated financial products and services that enable companies to grow their business.
Employees, investors, suppliers and customers alike eventually reach a decision point in a relationship when they decide where to place their trust and with whom. Leaders are judged on what they do to win trust, and the sincerity and consistency of their effort to retain it. Leaders win trust by communicating openly and often, having a clear and committed communications policy, strategy and processes, initiating formal and informal communications programs and regularly assessing their own communications effectiveness and that of their team and their organization.
Our Logistics unit is driving for synergistic growth, developing and securing its links to Container Shipping
Kersten, W., & Bemeleit, B. (2006). Managing risks in supply chains: How to build reliable collaboration in logistics. Berlin: Erich Schmidt.
‘Supply chain management integrates supply and demand management within and across companies. It encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, thir- party service providers, and customers’. (Web: Council for Supply Chain Management Pr...
Quickly becoming apparent after only a few rounds of play was in the absence of coordinating direction the individual supply chain links immediately focused upon acting in their own best interests much more so than the organization as a whole. Whether the end use customer was satisfied became secondary to avoiding stock outages for the next link in the chain, or their specific “upstream customer”. The real world application of this example is that focus on the end use customer must be consistent and maintained throughout the process up to and including delivery. Undoubtedly internal customers, such as retailers to wholesalers and distributors to production, must be serviced along the way for the transaction to ultimately occur. However, unless an end use customer is involved no profit can be realized by anyone.
Both from the customer and the company point of view, each customer interaction is part of an iterative learning process (Ballantyne, 2004). Further, Yau et al. (2000) advocated that the relationships between business firms and its customers have been constantly encouraged as successful business practices worldwide. The strategy of relationship marketing is of high relevance particularly in the service industries because of the intangible nature of service and their high level of customer interaction (Al-Hersh, Aburoub, & Saaty, 2014). Relationship marketing is defined as the process of engaging in proactively creating, developing and maintaining committed, interactive and profitable exchanges with targeted customers (Haker, 1999). Furthermore, Gronroos (1990) asserted that relationship marketing is to establish, maintain, enhance and commercialise customer relationship so that the objectives of the parties involved are met which can be done by a mutual exchange and fulfillment of promises. Moreover, the implementation of the relationship marketing concept at the operational level refers to relationship marketing orientation (Hau & Ngo, 2012). Relationship marketing orientation indicates the firms’ philosophy of doing business concerning relationship building by propagating developing trust, empathy, bonding, and reciprocity between a firm and its customers (Sin et al., 2005a, b; Tse et al., 2004). Trust is an important element for a successful relationship between the firm and its customers (Berry, 1995). First, trust is an essential component for a successful relationship between the firm and its customers (Berry, 1995). Trust It refers to a willingness to rely on an exchange partner in whom one has confidence (Morgan & Hunt, 1994). Empathy, as a dimension of business relationship, enables the two parties to see the situation from
In logistic industry, they have been through lots of challenge in worldwide market. As the containerization of the global economy scopes, a phase of development and explanation, ports find themselves inserted in ever changing commercial environment where logistics is the forefront. Thus, this industry reaches a phase of maturity and rationalization due to the process of logistic on land.
In other words, it aims to link all the supply chain agents to jointly cooperate within the firm as a way to maximize productivity in the supply chain and deliver the most benefits to all related parties [2].
Generally, a superior supply Chain is an important and unique source of competitive advantage. Its importance is especially illuminated in Multinational companies such as Toyota. Putting this into consideration, the question that now begs for an answer is whether Toyota’s supply chain is effectively serving the organization. Without a doubt, Toyota ha...
Suppliers are the parties that will supply goods and services to the company in continue basis while alliance are the parties that provide the skills and capabilities to a company. AEON has many suppliers from different places and countries. They built a strong trust relationship between the company and suppliers. This can ensure that AEON will be source by quality and quantity products and services all the time. By this, the variety of stocks in Aeon is enough to be offer to their customers. Besides that, this can also ensure the products and services of AEON are in good quality in order to maximize the satisfaction of
Coyle, J., Langley, C., Gibson, B., Novack, R. and Bardi, E. (2008).Supply Chain Management: A Logistics Perspective. 8th ed. Cengage Learning, p.366.
Customer Relationships is about building a relationship of trust and convenience. A customer wants the company they are working with to be intuitive. To know their needs before they do. They want to feel respected, they need to believe you are honest and have integrity. This relationship breeds comfort and familiarity and causes the consumer to continue to do business with your company. This relationship that is built develops a personal relationship, like a friendship and it is one that the consumer cannot get from the store down the road and it is that personal touch of sincerity, of knowing their needs, of servitude that will turn them into lifelong branded customers.