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Economic impacts of logistics
Importance of logistics
Importance of logistics
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CHAPTER ONE INTRODUCTION 1.1 Background of the Study Today’s organizations are faced with increasing levels of global competition, customer’s demanding value for their money and high stakeholders expectations on investment returns. Gattorna (2003), notes that firms are now pursuing supply chain management as a strategy to competitive advantage. Firms in a supply chain relate, transact, and partner on different levels; from product design and development to product delivery. Through supply chain management a firm pursues value creation through timely product delivery, cost management, inventory control and customer service (Beamon, 1999).They do so individually or through synergies formed with other organizations to increase customer service …show more content…
According to Mentzer (2001), several organizations have made supply chain management a key competency, particularly inbound logistics to support company operations. This is because its impact on services and products delivery to end consumer. Through supply chain management companies coordinate inter organizational operations for mutual efficiency. According to Brar and Saini (2001) to achieve supply chain efficiency organizations must be keen on their inbound logistics operations. This is because inbound logistics is the starting point of all supply activities in a firm and has an impact on subsequent supply chain activities. A disruption on inbound logistics flow may bring a company to a halt if production lines lack materials to run. This may lead to losses to an organization due to lost opportunities. Companies must therefore integrate inbound logistics in their supply chain plans for material sourcing and final product …show more content…
As organizations move goods from source to place of utilization they enjoy utilities of place and time.According to Branch (2009) firms can choose one or combine several modes of transport to effectively move materials or products for scheduled production and smooth operation. Good transportation facilitates supply chain efficiency by delivering goods to the ultimate customer securely and in an economical way. Inbound transportation should plan for expected lead times to best manage delivery timelines. Baker (2010) states that organizations should have shipment visibility while managing inbound transportation. Additionally they should balance trade-off between imports costs and savings made at destination. This means keen focus on landed costs, customs clearance, shipments lead times and inventory holding costs. Supply chain performance is impacted by transport costs, speed and product delivery consistency. To achieve competitive performance Organizations must move materials in the right order, right quantity, right quality and right time (Bowersox,
Ignatavicius, D. D., & Workman, M. L. (2013). Care of Intraoperative Patients. Medical-surgical nursing: patient-centered collaborative care (7th ed.). St. Louis: Elsevier.
In the 1960s through the 1970s, companies realized strong engineering, design, and manufacturing functions were strong market strategy keys to create and capture customer loyalty. As the demand for new products rose in the 1980s, these market requirements were to increase their flexibility and responsiveness to adapt existing products and processes or to develop new ones in order to meet customer needs. As manufacturing improved in the 1990s, managers began noticing material and service inputs involving suppliers and their major impact on an organization’s ability to meet customer needs. As a result of these changes, organizations now find that it difficult to manage their own organizations. First, they must be involved in the management of their network of all upstream firms that provide directly or indirectly, as well as the network of downstream firms, which are responsible for delivery and market service of the product to the end customer. In order to succeed, managers have to realize that they cannot do it alone and they must work together on a daily basis with the whole organizations in their supply chains. Because supply chain management involves all functions within an organization, managers need to know what a supply chain is, why it is important, and the impact of supply chain management on the success and profitability of their organization. Today, Wal-Mart topped the list of the America’s biggest companies on the Fortune 500 list, “with sales of almost $345 billion — more than a quarter of a trillion dollars” (Forbs). Wal-Mart’s supply chain management is becoming recognized as a core competitive strategy.
In many instances, firms have not considered the impact of their actions on the supply chain and its long-term competitiveness and profitability. According to Wisner et al (2006), the “I win, you lose” silo mentality manifests itself in the form of using cheaper suppliers, paying little attention to the needs of customers, and assigning few resources to new products and service design. Eventually, these firms will create quality, cost, delivery timing, and other customer service problems that are detrimental to the supply chain. Cachon (2005), in his paper, describes silo mentality as the most significant barrier to overcome most of in supply chain management. Internally, the silo effect can also be exist among departments. The transportation manager for instance, may be trying to reduce annual transportation costs while inadvertently cause safety stocks to be higher, shortages, and to deteriorate customer service level. In order to overcome the silo mentality, the enterprise must strive to align supply chain goals and the goals and objective of the firm. Functional and decisions must be made while considering the impact on the entire enterprise profit and those of the supply chain.
Clear communication is particularly important when considering perioperative nursing assessments and miscommunication has the potential for adverse client outcomes. Ineffective communication within perioperative care can result in negative outcomes, such as medication errors or wrong site surgery. In order to reduce this risk, the Universal Protocol calls for a time out, which occurs immediately before a procedure and the surgical team reviews information such as identifying the patient, the correct site for surgery and reviewing relevant data such as patient medications and laboratory results (Burke et al., 2016). Nonverbal communication is a critical skill in nursing and can enhance assessments by confirming or contradicting verbal messages from clients (Pearson, 2015). Interpreting nonverbal cues such as posturing, gestures and facial expressions enhances communication between the client and nurse and can be particularly useful in postoperative pain
According to Boykin “Caring is the foundation of nursing” (Boykin et al, 2011), and it is the nurses’ responsibility to understand what it means to be caring toward patients, which can be achieved through having professional communication skills. Not only does not being able to communicate affect the patient, but also it affects how the nurse is able to do his or her job to the best they can. Smith and Pressman say that the Institute of Medicine has released reports, which stress, “good communication is critical to ensuring safe and reliable nursing” (Smith & Pressman, 2010). Bad communication skills have the potential to be more dangerous to the patient and can in tern make a life-threateni...
Rao, K., and Young, R. R. (1994) Global supply chains: Factors influencing outsourcing of logistics functions. International journal of physical distribution and logistics management. Vol. 24. No. 6.
Perioperative nursing is a specialized area of practice that works with patients before (preoperative), during (intraoperative) and after (postoperative) surgery (Potter et al., 2013). It is pra...
Unlike forward logistics, reverse logistics is planning, implementing and controlling effective and cost effective flow of materials from consumption point to its origin or source in order to bring back value or for effective disposal. This implies that reverse logistics basically entails events that are crucial to regain, transport, and dispose products. In this case, products are transferred backward from the customer and incorporate the flow of information linked to credit and tracking procedures. This means that a complete supply chain management system entails both forward and reverse logistics inventory management. Despite the difference from the conventional, forward or outbound logistics, reverse logistics is much wider and incorporates a series of assets, which have huge impacts on a company’s bottom line (Greve & Davis,
Hoover, E., Eloranta, E., Holmström, J. & Huttunen, K. (2002). ‘Managing the Demand-Supply Chain: Value Innovations for Customer Satisfaction.’ USA: John Wiley & Sons.
Shipping and Logistics Management by Yuen Ha (Venus) Lun, Kee Hung Lai and Tai Chiu Edwin Cheng (Apr 7, 2010)
Lai, K. H., Ngai, E. W. T., & Cheng, T. C. E. (2002). Measures for evaluating supply chain performance in transport logistics. Transportation Research Part E: Logistics and Transportation Review, 38(6), 439-456. Lee, H. L. (2000).
Transportation and warehousing important issues in Supply Chain Management (SCM) because transportation and warehousing is under logistics. Logistic plays vital role in Supply Chain Management (SCM). Logistic can be describes as an integration and management of the product value chain from suppliers to the customer. It includes all aspects of the chain of production, including design, suppliers, financing, information, energy, transportation, distribution, and sales.
This is the activity carried out by organizations that own production sites, and their performance has a major impact on product cost, quality, speed of delivery and delivery reliability, and flexibility [8]. As it is quite an important part of the supply chain, production needs to be measured and continuously improved. Suitable metrics for the production level are as follows. Order lead-time, the total order cycle time, called order to delivery cycle time, refers to the time elapsed in between the receipt of customer order until the delivery of finished goods to the customer. The reduction in order cycle time leads to reduction in supply chain response time, and as such is an important performance measure and source of competitive advantage [9]. It directly interacts with customer service in determining competitiveness. Range of product and services: According to [8] a plant that manufactures a broad product range is likely to introduce new products more slowly than plants with a narrow product range. Plants that can manufacture a wide range of products are likely to perform less well in the areas of value added per employee, speed and delivery reliability. This clearly suggests that product range affects supply chain performance. Effectiveness of scheduling techniques is another important measure of supply chain effectiveness. Scheduling refers to the time or date on or by which
Why Is Managing Inbound Logistics Important To An Organization? Inbound logistics relates to the movement of goods or the materials from suppliers and vendors into manufacturing procedures or storeroom facilities. Inbound logistics basically comprises of two functions that are the purchase of materials and the logistics that are the procurement and planning. The management of inbound logistics is important to organizations for two major reasons, one that relates to the organization and the other that relates to the suppliers and vendors. Of course, reducing costs by effective management of inbound logistics does not mean that suppliers and vendors are effective negatively. There got to be a way where both take advantage of effective management of inbound logistics otherwise there would be costs increment at other instances (Gonzalez, 2002). Managing inbound logistics is important because managing the expenses of movement of goods all the way through the supply chain is an enormous task for both the shippers and deliverers. A particular consignment comprises of both inter and the intra organizational dealings and exchanges. During this interchange and communication, data and information is required by different people in addition to customers, vendors, transporters, customer service agents, secretarial, acquisition, product management, inventory supervision, storehouse administration, and completion. Companies procure transportation services with specific carrier partners that both meet their requirements for price & service and have a solid understanding of the nuances of their business needs. Additionally, these companies establish business processes and rules of engagement to facilitate the efficient flow of information and m...
1. Inbound logistics focuses on the materials and processes coming in to the organization before it has been subjected to different value creation activities. “Inbound logistics represents the material flows from a firm’s suppliers to itself from the buyer’s perspective (Samaras).” An example is the food industry, such as a restaurant, in managing incoming food and supply shipments to arrive at the restaurants when they are needed making sure to keep in mind the arrival times and inventory levels necessary. One of the many issues is that the part may all come in at different times, thus inbound logistics handling activities becomes extremely important in coordinating and optimizing incoming materials and services to when and where they are needed. This is especially true of the food industry, where the majority of the time the supplier in question are perishable and have a much shorter shelf-life as well as different handling risks and regulations. “The goal of inbound logistics in a lean manufacturing operation is to reduce total costs (i.e., considering the operation as a whole) by managing deliveries from suppliers so that the correct and defect-free materials are at the assembly line at the right time in the right quantities (Holmstrom, 1994).”