Tuesday, 30 September 2014

What are the Five ‘P’s’ of Logistics? Part One

Over the next two days we’re going to be looking at the five P’s of logistics. Today our focus will be on three operational activities that add value to goods.

Place – This is when place value is added to items. This is achieved by relocating them to locations that have a higher value to the customers.

Period and Pace – This is a method that increases the time value to products. The way this works is by moving them when they become available to periods when they are in demand by the customer and also by improving the efficiency of all the processes.

Pattern – Adding order value to products by sorting them into their desired patterns and quantities.  This includes processes such as sequencing, picking and packing and consolidation.

Return tomorrow when we’ll be talking about the final two ‘P’s’ of logistics.

Monday, 29 September 2014

What are the Footprints and Opportunities of Logistics?

Over the past 20 years logistics has grown and become far more visible than ever before. The footprints can be seen in the vast number of printed publications, increased academic opportunities, business functions and positions within corporations.  With this rise there come multiple opportunities, which include the following.

Information and Communication Technologies
The use of technology provides logistics with the opportunity of transforming transportation and the way inventory is managed. Technology such as global positioning, shipping identification, data exchange, planning systems and more can all be used to overcome space and time.

Overcoming Bureaucratic Dictates
The deregulation of the transportation industry is making steps forward. The idea is to create standard rules and regulations so products can be moved without being held back by bureaucratic dictates.  Continued deregulation and the privatization of carriers and national infrastructures will serve to introduce even more players into logistics.

Friday, 26 September 2014

Best Practices at the Cosmetic and Skincare Shipment Part Two

Today we’re looking at the two final best practices at the cosmetics and skincare shipment.

Freight Consolidation – Freight consolidation is essential for cosmetic firms as this is required to cope with a variety of issues including: SKU variability, multi-channel requirements, transportation and different packaging and carton sizing. Manufacturers are able to improve the use of their assets and reduce costs in logistics using freight consolidation throughout the supply chain.

Packaging – Packaging is difficult for the cosmetic and skincare industry to master. On one hand the packaging provides essential information to the consumer, it’s also part of the branding and used to create appeal in consumers. However, as the world and consumers become more environmentally conscious reducing the material footprint is now a priority. It also plays a big role in the transportation needs and optimisation of loads. This is why it’s best for both marketing and logistics to work together to have an input on the packaging requirements.

Thursday, 25 September 2014

Best Practices at the Cosmetic and Skincare Shipment Part One

When it comes to beauty products the consumers have specific expectations and wants. There is a huge demand to fulfill and it’s down to the manufacturers and the producers of cosmetics to give the consumers what they want – the products they want, when they want it. In order to achieve this there’s a need for a strong and efficient supply chain is required and here are the best practices they use in cosmetics logistics.

Vendor Managed Inventory – This is a system that is used to reduce the risk of businesses having too much inventory and it’s a great way of avoiding problems with over stocking when there are shifts in demand. When suppliers are charged for inventory management the product is left in its least value added form down in the supply chain. Packaging can then be changed for different channels or inventory can be sourced from one point.

Inbound Logistics – One of the competitive differentiators in the cosmetics and skin care industry is demand sense and respond. Inbound transportation must be controlled so the product flows through the supply chain all the way from the manufacturing plants to the vendors. By controlling the flow it’s easier for businesses to pull inventory to meet with the demand. Point of sale captures the demand signals from consumers and this information has to be sent on to marketing and logistics departments along with the service providers.

Return tomorrow for two more best practices in the cosmetic and skincare shipment.

Wednesday, 24 September 2014

The Need of Logistics in Cosmetics and Skincare

Supply and demand is an ongoing battle in the cosmetics and skin care industry. One of the major problems is products that are flying off the shelves one day can be forgotten about and abandoned in a very short time frame. When demand is there the products need to be available to purchase and this requires excellent and reliable transport, storage and overall distribution.

Logistics is an important part of the cosmetics industry, 3PL need to provide high volumes of products, understand licenses and restrictions, consider temperature control and have the ability to use them and ensure that their prices are competitive and that the products arrive on time.  Logistics takes care of:
  • Visibility – trace and tracking is beneficial for the entire supply chain and the end customers
  • Warehousing – Taking the pressure off the warehouse regarding correct temperature storage and short life spans and the necessary licenses and compliance required for the regulations
  • Marketing Vs Logistics – Marketing must work together with logistics to complete their end goals effectively
Logistics has to be taken into account within the cosmetics industry in order to satisfy the huge and fast changing demand.


Tuesday, 23 September 2014

Cosmetic Supply Chain

The cosmetic supply chain has multiple ways that it can collapse as the goods are transported around the world. It is down to the supply chain to ensure the beauty products end up on the shelves and this requires efficiency throughout the chain, tracking and excellent management.  

A good supply chain needs to have the right steps in place that see the raw products all the way to the finished goods. Each cosmetic company has to know what is being shipped and what has already been shipped, what is currently in transit, what’s being shipped next as well as where the goods are in the supply chain and how it is performing in accordance to the timetable. It’s a complicated business.

Managing an efficient supply chain requires tracking. This addition will increase the strength of the entire deadline and help to avoid problems that could result in the company’s reputation from being damaged beyond repair.   The information must be precise and in real time, so any delays can be solved as quickly as possible with minimal to no impact on the end vendors.  By using an electronic tracking system the pressure and workload is reduced on the logistics department, it also saves time, money, improves the efficiency of the supply chain and company as a whole and benefits the end consumers.

Monday, 22 September 2014

How 3PL can help manage the 5 logistics challenges in the mining industry – Part Five

Last week we talked about how 3PL helps manage four of the logistics challenges faced in the mining industry. Today we’re looking at the fifth and final challenge, the lack of resources and systems.

Often mining companies leave the organisation of transport to their employees rather than in-house logistics providers or 3PL. By putting the added responsibility on the shoulders of their employees they increase the risk of negative results, such as:
  • Removing the buying leverage of the organisation
  • Missing details increasing the risk of errors and damaging customer confidence
  • Brokers are depended upon and this results in inconsistencies, inventory build-up and unorganised schedules
When mining firms fail to invest in their transportation management software there are problems with control and visibility. The firm fails to create historical data that would benefit them in the future. By outsourcing to a 3PL the companies benefits from their advance experience and systems without any capital investments required. The firm is only charged when their products are shopped and costs can be saved.


Saturday, 20 September 2014

The different environment in which a business operates

Stable environment
In this type of environment, there is not much change or the environment is not subject to unexpected change. There is a regular demand for the product with only slight fluctuations. In this environment, a functional structure is suitable. Top management will mainly make decisions.

Turbulent environment
Change is the only constant in this environment. There are a constant influx of new products and technological innovations. One such environment is the pharmaceutical industry. In this type of environment, product departmentalisation is suitable.

Technologically dominated environment

When a particular technology forms the basis for a business’s product, this organisation operates in a technologically-dominated environment. This type of environment will require an adaptable organisational structure based on some form of departmentalisation.

Friday, 19 September 2014

How 3PL can help manage the 5 Logistics Challenges in the Mining Industry – Part Four

Risk management is the fourth logistic challenge faced by the mining industry. Risk management creates challenges such as:
  • Remote locations increase problems surrounding theft due to the long distances travelled and the requirement for drivers to take breaks.
  • Reliance on broker services will mean you’re unable to build a relationship with the courier and often the firm doesn’t even know who the carriers actually are. There’s also the risk of the couriers not having the correct experience, authority or insurance required.
  • Time is required for all of the logistic processes to run well and this can be a huge problem.
If the staff is not focused on the management of freight it can lead to severe problems that could devastate the company.  These problems can be avoided by using an industrial freight specialist 3PL provider. The 3PLs will have the correct insurance, protect the firm against financial loss, save time and manage the carriers for you.


Thursday, 18 September 2014

How 3PL can help manage the 5 Logistics Challenges in the Mining Industry – Part Three

Controlling and using rail assets is the third logistic challenge that is faced in the mining industry. When buying isn’t an option the mining companies often lease or use free running cars owned by railroads. Managing rail fleets takes time and is a difficult job that can be made easier by using 3PLs. They provide services such as:
  • Analysis of the options regarding leasing or using the assets belonging to the railroads.
  • Improving the usage of the assets to increase revenue.
  • Tracking the movement of the goods.
Problems can be avoided by using the 3PLs services that will remove the risk of delays, maximise revenue from assets and improve the overall services to the end customers.


Wednesday, 17 September 2014

How 3PL can help manage the 5 Logistics Challenges in the Mining Industry – Part Two

The second of the five logistic challenges within the mining industry is managing the multi-modal fright requirements. There are several different modes of transport that are used throughout the mining industry.

Inbound moves can use a combination of flat beds, multi-axle trailers, LTL and full truckloads. The outbound transports to the processing plants and ports using trucks, barges and railroads. All of these transport options and equipment take a lot of coordinating and synchronisation and this can prove to be difficult. Fright management becomes a full time job and requires expertise.

Using 3PL will ensure there are no gaps in essential knowledge required to manage the multi-modal freight using strategies including:
  • Just in Time services
  • Low costs without negatively affecting safety and quality
  • Controlling the inbound supply chain
  • The optimisation of the different modes
As a result times savings and cost savings are made plus the mining companies benefit from the addition invoicing, trace and tracking and load tendering services.


Tuesday, 16 September 2014

How 3PL can Help Manage the 5 Logistics Challenges in the Mining Industry – Part One

The next five posts are going to be focusing on one of the five logistic challenges that are faced in the mining industry. Today we begin with remote locations. Mining sites can only be situated where there are minerals and this is only in remote locations, in most cases at least. Couriers on the other hand are situated in the heart of the action, close to people and businesses.  This can cause a problem as there can be several hundred miles between courier and the mine. The problems that arise are:

Not enough capacity – if couriers are unable to follow your schedule when it comes to the freight movement there can be delays, which in turn increase holding costs and the cycle time.

Freight expenses increase – If the mine is located hundreds of miles from the courier the company will need to pay for the costs to get to and from the mine on top of the actual cost of freight movement.

Inconsistencies in courier service – When using brokers the focus isn’t on building a long term solutions but on individual movements. It’s therefore difficult to make plans and create efficiency along the entire supply chain.

These problems can be overcome by using a 3PL with the experience and who specialises in the movement of industrial freight.  Capacity and cost can be addressed doe to the relationships that are already in place with the 3PL and trucking companies and the railroads. Service levels increase, reliability along with customer confidence improves rapidly as the 3PL remove the inconsistencies experienced when using brokers.

Monday, 15 September 2014

Chit Chat: What are the Big Five Personality Traits

The Big Five Personality Traits
Trait
Description
Openess
Curious, original, intellectual, creative, and open to new ideas
Conscientiousness
Organised, systematic, punctual, achievement oriented and dependable
Extraversion
Outgoing, talkative, sociable, and enjoys being in social situations
Agreeableness
Affable, tolerant, sensitive, trusting, kind and warm
Neuroticism
Anxious, irritable, temperamental and moody

Source: Goldberg, L. R. (1990). An alternative “description of personality”: The big-five factor structure. Journal of Personality & Social Psychology, 59, 1216–1229.

What are the Performance Objectives of the Supply Chain?

There is various performance objectives found in the supply chain and they need to work together and be managed in a way that will reach the end goals of the company.

Hard objectives – these are cost, speed and quality. These three hard objectives can be measured easily and are noticed and do effect the end customer. These are then supported by objectives that will help to control the variability, working and responding to change quickly and acting in a responsible manner and these are less easy to measure than the hard objectives.

The objectives are frequently augmented additional objectives from outside of logistics such as innovation and branding. However, logistics needs to be able to support these objectives too.  The importance of the logistics objectives will vary depending on each individual situation and it can also vary over time too. Prioritising the tasks is made easier by using order winners and qualifiers and key influences from the marketplace, competition, lifecycle and the requirements of the product in the marketplace.

The supply chain works on the base of the logistics strategy and this will include all partners across the network. The strategy focuses on ensuring goals are communicated across the network and that the plans and the policies are carried out.

Friday, 12 September 2014

What is the Trade Off in Logistics?

There are two strategies used within logistics that have different priorities. These are cost and time.

Cost is the focus commonly for products where there is a consistent high demand throughout the year that remains stable. The lifecycle is long, forecasts are relatively stable so errors are minimal and it’s usually on a small scale.

Time is often used for products that vary and designed for specific seasons of the year and redesigned for the following season. They have a short life cycle and there is a high risk of errors when it comes to forecasting.

Cost and time each have different implications on logistics and therefore they are the main trade offs in logistics. Ideally, it is good to have separate supply chain to focus on cost and on time.

Thursday, 11 September 2014

What Makes a Successful Logistics Strategy?

There are five principles that can be used to make a logistics strategy successful:

Unique Value Proposition – The unique value proposition identify the competitive advantage of the product or service, this help distinguish it from everything else on the market.


Tailored Supply Chain – The supply chain is tailored to meet the needs and criteria of order winning.

Identify Trade Off – It is important to understand and see the full picture on both what not to do and also focus on what needs to be done. According to Fisher, a responsive supply chain may not work well with an efficient supply chain.

Align Logistics Process – The processes involved within the supply chain needs to be aligned in order to reinforce each other  to achieve the same goals.

Continuity – Continuity and consistency are required in all the logistics processes so they continue to be improved.


Wednesday, 10 September 2014

How Can Logistics Strategies be turned to Different Product Needs?

When the supply chain does focus on different criteria the criteria must be recognized and incorporated into the business strategies of all the links in the network.  By doing so the network will be able to adapt its operations (often causing great implications for the various links) so the entire network runs efficiently.

When each of the links don’t incorporate and recognize the competitive criteria of one member, and the implications of the criteria on the service or product, the supply chain weakens and as a result becomes less efficient.  Effectively the links that don’t recognize and incorporate the criteria let the side down and cause problems for everyone.

Tuesday, 9 September 2014

How Can Competitive Criteria be aligned within a Supply Chain?

When organising the different links within a supply chain it’s vital that they are each working towards the same end goal. When the end goals differ it’s impossible to keep the end customer satisfied and for all the links to work together smoothly. That’s why there is a need to ensure that the inks each work towards the same priorities. Using focus that is aligned, having common competitive criteria for each of the links that are kept consistent the supply chain will be more successful when competing in the market place.

Throughout the supply chain the focus needs to remember that it’s impossible to be good at everything.  The individual products need to be focused upon so they chain is set up to be fluid. For example, it’s extremely difficult for high volume and low cost products in one channel to work at the same time with low volume products with a large variety where flexibility is required to reach the marketplace.

Monday, 8 September 2014

Happy Mid-Autumn Festival 2014

Royale International Group wishes you a Happy Mid-Autumn Festival! 
偌亞奧國際  各位 中秋節快樂 人月兩團圓 !

The 4 different ways organisations approach supply chain strategy

Accommodate
Strategic decision are based on maintaining the day to day mode while financial goals are not the center of focus

In this strategy the financial goal isn’t the primary goal that’s concentrated on. The strategy involves decision making based on the day to day mode but focuses upon the realities and the markets in which the firm operates.

Classical
The financial goals are the main focus and goal of the operations but in order to meet these goals a traditional planning process is used. This is given the term classical as it’s one of the most common and influential strategy that’s used.

Evolve
The evolve strategy is not a formal strategy; it main focus is on the financial goals of the company.  The ultimate strategy is base on not having one while operations decisions concentrate on whatever is needed at the time.

Systemic
By using the systemic strategy the conflict often experiences between the ends and the goals of the business are removed. The goals are set in other departments in the company, such as the marketing department and human resources, and these goals are then linked in order to ensure they are achieved during operations.

Friday, 5 September 2014

What is Logistics Strategy?

Strategy is about long term planning for the supply chain. It helps resolve any existing and potential problems that may occur on the daily basis of the supply chain while logistics strategy involves setting up the principles that will coordinate the goals and plans as well as the policies that are then reinforced throughout the network.

There are four approaches towards strategy that are often used:
  • Accommodate – The decisions related to the day to day running of the logistics of the firm and the markets it uses.
  • Systemic – focusing on the realisation of the goals of the business and is linked across all departments of the business to ensure they’re achieved.
  • Evolve – The strategy is often based upon what is currently needed and are focused on meeting the financial objectives of the company.
  • Classical – Formal planning processes are used to meet the principle target which is the financial goals.
Logistics strategy needs to come up with a strategy between all the network partners, who also have to communicate the order winners and qualifiers across the different segments in the market


Thursday, 4 September 2014

What are Order Winner and Qualifiers in Logistics?

The hard and soft performance objectives differ for each market segment. Two distinctions are used to show the differences found between order winners and order qualifiers, so what are they?

Order Winners
The order winners have a direct effect on helping products win orders. These factors are regarded by the consumers as some of the main reasons for buying a product or using a service. When a company is able to raise their performance on the order winners factors they are increasing the possibility of attracting more business and selling more products or services.

Order Qualifiers
The order qualifiers are factors that are considered to be entry tickets into the market place. These are the standards that the product is expected to meet in order to be accepted in the marketplace and taken seriously. One of these factors is quality accreditation, such as the ISO 9000 certification that is attributed to suppliers of major utilities in the EU. By losing order qualifiers the company would find it impossible to compete in the marketplace.

The order winners and qualifiers differ for different services and products and they can also change within the company over time.

Wednesday, 3 September 2014

How do Logistics Contribute to Competitive Advantage?

Making sure products are made available to customers for a low price is down to logistics management. The demands of the end customers include receiving goods in a very short time frame, having the correct orders delivered and therefore companies are able to use these additional yet essential services as a way of appealing to their market and taking more of the market share from their competitors.

Concentrating on the three hard objectives for creating logistics that will give the company an advantage in the marketplace is: quality, cost and time, along with taking control of variability in logistics, sustainability and dealing with uncertainty. The hard objectives are easy to measure and a traditionally used in logistics.

The hard objectives are ways of competing to provide the end customers advantages such as quick delivery and low costs. These are used alongside soft objectives that relate more towards customer services in order to improve the logistics used by the company. The soft objectives have to do with customer confidence and security of customer information and these objectives can be difficult to measure, often relying on surveys completed by the end customers themselves.

Tuesday, 2 September 2014

How do Products Win Orders in the Marketplace?

There are a variety of ways for products to dominate in the market and achieve higher orders. While some of these methods are concentrated on the product itself. There are ways that the product design and production can help to achieve excellent sales within the market. Some examples include:
  • Technical superiority
  • Lowest prices
These factors are generally managed within the marketing department along with research and development. Another important factor is the service the customers receive when purchasing the product itself. And this is why logistics plays an important role in increasing sales. The product itself is only part of the attractive prospect for potential customers, the service provided around the products are also important to the customers and this is how logistics makes a big impact when it comes to helping companies win orders within the marketplace.

Monday, 1 September 2014

What are the Relationship between Material Flow and Information Flow?

Logistics is the management of the flow of materials and information. The inbound logistics relate to the firm and the suppliers it uses. Outbound logistics relates to all the links between the firm and their downstream customers. It is the internal logistics that managers the planning and the control of the material flow within the firm.

Material flow moves through the company all the way to the end customer, and the information flow moves from the beginning of the supply chain to the end customer, but it also works its way back up the supply chain too. The information flow has to ask questions such as how long the product takes to move through the supply chain, how long it takes to move the product to the customer via the supply chain and this information can then be measured.

The information flow is then used within the company to monitor demand as well as customer satisfaction. The information gathered will be evaluated and monitored to spot problems with the material flow and come up with ways of improving the systems being used.