Monday, 29 February 2016

How Can Time-Based Practices Be Implemented?

A systematic approach is necessary for any company looking to become time-based. This approach will improve measures of quality, cost and time. The approach as explained below will remove the sources of waste in the supply network.

Six Steps Approach
  1. Understanding the need to change. Work out if you need to change, which is dependent on how important your customers view responsiveness. You’ll also need to know the D-time target that your customers have set, whether officially or unofficially, along with the P-time – the time it takes for an order to arrive in the company until it’s fulfilled and leaves the company.
  2. Understand your processes by creating a simple flow chart. Start where the customer places an order and write down the steps up until the order is delivered to the customer. Ask each department or individual about the time each step takes to complete and compare the P time with the D time. If the p time takes longer than the d time you have a challenge ahead of you. If your p time is smaller then you have an opportunity to improve the responsiveness of your company.
  3. Identify the unnecessary process steps and where the time is wasted in the flow chart you created in the second step.
  4. Understand what the causes of waste are in your company and work out why they exist.
  5. Change the processes to remove the causes of waste. Make sure everyone understands the changes and why they are happening.
  6. Review the changes you’ve made in your operations by measuring the performance of the processes to see where you’ve become more responsive. Identify problem areas where you haven’t become more responsive and try again.

Sunday, 28 February 2016

Chit Chat: 2016 HR Trends According to Industry Experts

What HR trends are expected to rise up in 2016? Let’s take a look.
  • A move away from working at home. Working in an office promotes closer bonds, it’s easier to work in an agile way and connections can be made. Working at home can be very lonely, so even if people don’t want to work in the office full time, businesses will be encouraging more meetings, lunches and activities for their staff.
  • The scope of talent management increases, so talent pools will grow within organisations.  Accepting that not all talent wants to be employed on the terms of the firm only will be of huge benefit to more companies. Offering freelance and outsourcing opportunities may be a way of increasing the talent pool and offering more incentive to the desired talent.
  • Real performance measurements will be sued to detect those hyper performers. Knowing the top performers is beneficial to the business and has a big impact. Work will be done to come up with effective performance measures to provide that data quickly when it is required.
  • Artificial intelligence is entering HR and machine learning will definitely advance this year, even if the movement is slow, it will be there making an impact.
  • Removing complications and keeping things simple in HR is going to be a focus of 2016. HR will have a big impact on coming up with simple solutions that will have a big impact on the organisations.
  • Reducing the amount of external benchmarking and focusing more on the internal differences.
  • Moving from big systems and investing in finding HR solutions that focus on being able to deliver HR reporting and people analytics using data from selected best of breed solutions and different systems rather than investing in expensive information systems that have previously been used in HR.

Friday, 26 February 2016

What is the Role of Time in Competitive Advantage: Using Time in Logistics Management and Strategy? Part Three

One of the main elements found in time-based competition is reducing cost and improving productivity. This is achieved through the removal of non-value-added time in processes. Tasks that are not necessary can be identified and removed, removing wasted time and reducing costs by:

  • Reducing need for working capital – Reducing money tied up in the system is achieved by increasing the speed of flow thanks to removing unnecessary steps that don’t add value to the customer. Inventory levels can be lowered, releasing working capital.
  • Lowering development costs – Processes become more visible over time when focusing on time based initiatives. Equipment that isn’t used to add value will be removed, inventory storage equipment will be reduced and office stores will be reduced. These items can be sold or skipped if they offer no resale value.
  • Reducing the cost of quality – The lead times are shortened in product development thanks to improved efficiency and better use of development resources. Costs are reduced as the time spent on projects is reduced when reworking and un necessary projects are removed.
  • Reducing equipment and plant capital - One aim companies have is to reduce the amount of time between an error occurring and the time it takes to detect the error. The quicker an error can be detected the smaller amount of products will be affected. Lead time reduction does improve the speed of feedback and therefore quality costs can be reduced. The defects can be spotted quickly, resulting in faster solutions being implemented, so fewer products have the same defects.

Thursday, 25 February 2016

What is the Role of Time in Competitive Advantage: Using Time in Logistics Management and Strategy? Part Two

Time Based Opportunities to Add Value
The most common examples that show how companies can use time to meet the needs of their customers are:

Increased responsiveness to customer’s needs – Many parts of customer service depend on time, such as: on-time deliveries, responding to customer questions and complaints, how long it takes to deliver to a customer etc. Being responsive to customer needs correlates to customer loyalty and increase customer lock-in.

Managing increased variety – Factories can deliver more product variety thanks to shortening lead times in product development, supply chain and manufacturing. Services can also benefit from shortening lead times and being able to respond to the changes in the needs of the market.

Increase product innovation – Innovations can be capitalized on when product development lead times are shortened. Companies are able to respond quickly, increasing their competitiveness and producing faster designs.

Improved return on new products – Products get to market faster if the product development time is reduced. The advantages of this include: charging higher prices, extending the sales life of the product, attracting new customers and increasing market share.

Reducing risk by relying less on forecast – The further into the future a company tries to forecast, the more likely they are to make mistakes and the forecast to be incorrect. Time based initiatives reduce the need to rely on forecasting as heavily. Production lead times are reduced, the demands become shorter and so do the forecasts, increasing their reliability. Finished good stocks are also reduced, freeing up working capital.

Wednesday, 24 February 2016

What is the Role of Time in Competitive Advantage: Using Time in Logistics Management and Strategy? Part One

Quality improvement and cost reduction are at the heart of many business improvement attempts.  Most of the improvements have been achieved, but there’s still a way of making cost reductions and improving quality using time. Customers want companies to respond to them in a timely fashion. Responding timely means responding not too late and not too early. This definition of timely response means that businesses need to become responsive to customers.  It was previously thought that you can’t have both low cost and high quality, you can have fast delivery and high quality and you can have a low cost and fast delivery. It has always been believed that a trade off was necessary, but times are changing. The trade-off between quality and cost can be achieved by ensuring defects are prevented from happening in the first place.

Time Based Initiatives

When a business focuses on taking on time, they  see benefits in the faster inventory turnover and shorter cycle times first. Then they experience reduced overhead costs and costs from delays and breakdowns can also begin to vanish from the system. Making time reduction a goal provides these rewards. By attacking the causes of delays the quality defects are reduced. Time can then become the focus and customers find their needs are met quickly, further benefiting the business.

Tuesday, 23 February 2016

What is the Lead-Time Frontier?

Today we’re looking at lead-time frontier. What is it?
  • One of the ways companies are able to compete in their marketplaces is by providing a fast and responsive service to their customers. Time based approaches focus on speed and these strategies helps the network to deal with product innovations and variety. They can also be used to improve returns and removes a lot of dependence on long term forecasting.
  • Costs can be reduced by improving the speed of response times. The lower costs are achieved by reducing the need for working capital, equipment and plants.  Development costs and quality costs can also be reduced.
  • P-time is reduced to less than a D-time with the lead-time frontier. P-time is the time it takes to produce a service or product, while D-time is the time that the customers are happy to wait for the product or service.
  • The time difference between the D-time and the P-time are known as the lead time gap. The lead time gap has implications for marketing, process and product development strategies. There is a process that can be used to reduce P-time that involves six stages: control, simplify, compress, integrate, coordinate and automate.

Monday, 22 February 2016

What are the Corporate Social Responsibilities (CSR) in the Supply Chain?

Social responsibility needs to be incorporated into the supply chain design of companies that operate in international supply chains. Corporate social responsibility in supply chains has to deal with the environmental and social consequences of their supply chain operations. The CSRs are plentiful, but they can include the following:
  • Contributing to the society and community and promoting positive CSR activities
  • Ensuring product safety and quality
  • Considering the environment through many factors including controlling hazardous chemicals, reducing greenhouse gases, waste reduction, minimizing pollutions and applying an environmental management system
  • Securing computer threats and protecting data and personal information
  • Fair trading
  • Applying health and safety measures
  • Considering human rights through actions including the prohibiting of forced labour and child labour, prohibiting discrimination and introducing fair pay.

Saturday, 20 February 2016

Chit Chat: 2016 Talent Management Trends According to Industry Experts

The ten trends in talent management, we're expecting to see in 2016 are as follows:

  1. Give talent a broader definition - not limiting the organization with specific definitions of talent
  2. Creating more customized programs that will appeal to the talent and immediate needs in the market - it could be a strong training program, the option to work abroad and so on.
  3. Looking for general profiles, people that have proven traits relative to the success of organisations. Other skills that are being looked for include learning agility and intelligence.
  4. Becoming more transparent, even though organisations are not keen. More transparency allows organisations to become clearer about what they expect from the talent.
  5. Offering specific skill training rather than general training. Training that is offered is closer to the real work scenarios, clearly providing skills and knowledge to be successful, training, observing, providing feedback, further training and observation and more feedback until the skill is acquired.
  6. HR analytics become increasingly important and more accessible thanks to new technology and big data.
  7. Provide more regular feedback rather than annual feedback, possible moving to real time feedback.
  8. Gamification is now entering the world of talent management. Games are being used to test social and cognitive skills.
  9. Pay more for the best. The best performers get more money for their skills and dedication.
  10. Broad talent pools, making lists of potential successors for key positions so they have a talent pool to pick from when the position becomes available.

Friday, 19 February 2016

How to manage risk readiness for international logistics?

Disruptions in the supply chain because multiple impacts such as empty stores, goods being stuck in the supply chain, loss of sales and revenue, loss of customers. Disruptions can be caused by breakdowns, geopolitical, plant shutdowns and bottlenecks. There are at least two levels that companies are responding to international logistic risks, preparing for immediate risk response and preparing for risks structurally in the international supply chain.

Immediate Risk Readiness
Immediate responses to risks can include the following four things:
  1. Increased inventory levels provide a cushion for the disruptions in the supply chain key parts and supplies
  2. Putting supplier hedges in place
  3. Global sourcing and rationalization efforts are actively reconsidered
  4. Redesigning the transportation scenarios considering the possible meltdown of the global trade routes
Structural Risk Readiness
Risks require ongoing attention and many companies now have dedicated teams that manage risks in the supply chain. The teams have lots of tasks
  • Auditing how prepared the company is
  • Creating contingency plans and the risk protocols
  • Training staff
  • Reporting to senior management

Thursday, 18 February 2016

What are the reasons why reverse logistics are often only partially incorporated into the international network design?

Reverse logistics is when the flow of goods go back up the supply chain, from the end customer back to the supplier or manufacturers for example. The reasons for the use of reverse of logistics include repairs and maintenance, end of life returns, product returns, recycling and so on. Reverse logistics are a service and also an environmental component. Reverse logistics are often only partially incorporated into international network design because of the following reasons:

1.     There's no infrastructure in place and companies try to use the outbound distribution system for their returns
2.     Not enough resources are provided to the reverse logistics
3.     Reverse logistics are not seen as a business value, it's often only given attention because of legislation
4.     Reverse logistics are seen as a cost of business by focal firms
5.     Reverse logistics and the reverse flow are difficult to forecast

6.     The reverse logistics is not popular as it often means something has gone wrong

Wednesday, 17 February 2016

How can supply chains be better organized to meet the challenges of international logistics?

Organising international logistics involve layering and tiering, evolving role of plants and reconfiguration processes.

Layering and Tiering -Internationalisation needs to look at the organization and not just from the view of the asset centralization and localisation.  Global coordination and local operation relate to the laying out of the information flow and coordination differently from the physical operations map. Firms for example, may run final manufacturing and central distribution centres in the US, Europe and Asia. The operations of each of these are run in the same way, but they have different regions and customers. The tiers of players in the supply chain are often widely outsourced.

The Evolving Role of Plants - The growth of performing activities within individual plants/factories changes the location requirements. For example, a traditional warehouse could possibly develop into a semi manufacturing operation with many responsibilities, including product finalization. The warehouse can then become a flexible facility so it's able to respond to the local market.  Factories may also become downgraded, perhaps because of an inability to reach the objectives of the supply chain or because of a poor location.

Reconfiguration Processes - Research has found that there are large differences in reconfiguration paths across companies, even when the same supply chain structure was targeted. The differences include the supply chain scope and activities involved, the focus, tendency and timetable, pace and authority. The differences in the reconfiguration process depend on the starting point, which could be global or local and the tradition of the company.

Tuesday, 16 February 2016

What are the risks in international logistics in terms of time & inventories, and how can they be addressed?

The main differences between international logistics and localized logistic pipelines are:
  • Extended Lead Time of Supply
  • Extended and Unreliable Transit Times
  • Multiple Consolidation and Break Point
  • Multiple Freight Modes and Cost Options
  • Extended Lead Time of Supply
International businesses will often use a particular factory where most products are produced; these products will be sold in multiple countries. To manage the interface between the sales team and the production within each territory, which often causes in long lead times. The lead times give the factory a buffer so they're able to deal with variations that emerge in the different markets. 

Extended and Unreliable Transit Times

The international pipelines increase the level of uncertainty and length times and the inventories, planned and unplanned, can be higher than what's considered to be ideal. The variations in the time the international transport takes will lead to increased inventory holding, aiming to provide safety cover.

Multiple Consolidation and Break Point

The cost of pipelines can be lowered with consolidation. Economies of scale are achievable when the produced goods from multiple facilities are put together for transport to market.  The locations of the consolidation points are dependent on lots of different factors and the consolidation is then broken down at different breakpoints on the way to the market.

Multiple Freight Modes and Cost Options

There are different freight mode options on the journey of the products as they move from manufacture to the market. The modes are air, seal, rail and road, each with different options of transport. When multiple modes are chosen the interface between them becomes more complicated.

Monday, 15 February 2016

What are the two commonly used approaches to improve the efficiency and effectiveness of the supply chain?

Lowering costs is one of the ways that companies try to remain competitive internationally, along with providing an enhanced customer service. There are two ways that companies approach improving efficiency and effectiveness of the supply chain, focused factories and centralised inventories.

Focused Factories

Originally, many international companies organized the production nationally with factories in each country, providing the full product range for the country they're located in. Gradually, the company would consolidate the factories into a single site. The focused factory strategy is when the company consolidates production of the products in specific factories. Each of the focused factories supplies the products internationally, while focusing on a limited area of the product assortment.

The advantages of focused factories are the reduced production costs through the economies of scale and increasing lead times as specialised equipment can sometimes manufacture quicker. The disadvantages are increased transport costs and increased lead times when there is a longer distance to market.

Centralised Inventories

The consolidation is also used to bring cost benefits to the company. The inventory is consolidated together into a reduced number of locations rather than using multiple local distribution centres.  The savings are made by coordination the inventory management over the supply pipeline. Duplication can be eliminated using this method and safety stocks reduced, lowering the logistic costs and the cycle times of the inventory.

Saturday, 13 February 2016

Chit Chat: 2016 Small Business Trends and Predications According to Industry Experts - Part 2

Today we're continuing to look at the small business trends and predictions that have been compiled by experts, professionals and small business owners.

  1. More small businesses will begin using video ads in order to gain a competitive advantage.
  2. Small businesses will continue to be affected by online ad-blocking software.
  3. Remarketing is proving to be an affordable way of targeting the market audience, small businesses will continue to experiment and encourage more engagement with people who have already visited their website.
  4. Social media marketing and public relations are here to stay and will continue to play a role in progressive small businesses.
  5. All businesses need to have a website and be focusing on their online marketing, including social media and online reviews.
  6. Customers want a personal relationship with the brands they use, small businesses need to market and promote their business in mind.
  7. Aim to become a part of something that is bigger than yourself through collaborations.
  8. Social responsibility remains a trend that small businesses cannot afford, including going green and focusing on social justice.
  9. Small businesses and vendors will need to become more transparent and committed to working together.
  10. Don't ignore technology, adapt or risk losing your place in the market.
  11. Transactions will continue to evolve, changing the ways customers pay for your services or goods.
  12. Cloud companies will play a huge role in improving security and growth.

Friday, 12 February 2016

What is the Risk in International Logistics?

There are risks found in international logistics, inventory and time to market risks are not the only ones to take into consideration. In order to deal with the risks, companies are coming up with new risk management approaches, resulting in new risk profiles. The two risks we're covering today are geopolitical threats and transportation breakdowns.

Geopolitical Threats

Major events happen that have massive impacts on the continuity of supply chains, sometimes making execution impossible. Some examples of this are the SARS crisis in 2003 and the Gulf War. To deal with these events, new trade routes needed to be identified in order to cope with disruptions and limited travel options. Security measures that are heightened also have an impact on the supply chain.

Transportation Breakdown

Transportation can breakdown, strikes can cripple economies and shipments stuck in transit until a solution found. The ripple effect of transportation breakdowns can be disastrous, with factories closing and stores having nothing on the shelves to sell to their customers. Global trade can also feel the effects as other routes cannot be served as usual due to the breakdowns and returns get stuck on the routes, causing shortages in other regions. Problems like these need continuous risk management because:
  • Around 61% of US firms have disaster recovery plans while only 12% have a total organisational recovery.
  • Not many plans include operating the supply chain.
  • 43% of businesses that have fires or other damage are not able to reopen after the event.
  • 28% of firms have crisis management teams or supply chain security teams.

Thursday, 11 February 2016

What are the Features of Global Consolidation?

When managers want to find reduce cost resources and make the best use of their assets they commonly turn to global consolidation. By going down the global consolidation route, managers are able to make the best use of their facilities and capital equipment and other assets, maximising economies of scale. The features of global consolidation include:

Sourcing or Commodity Items from Low Wage Economies
Consolidation the purchasing of company divisions, companies and finding solutions in economies of low wages are common. By consolidating divisions and the operating companies help the firm to reduce costs, increase their bargaining power and seeking the economies of scale. They may also source other things such as raw materials from one source. Companies that operate internationally will continuously try to find ways to save money acquiring labour and materials.

Concentration at Specific Sites
Consolidation can also be applied to high value or hard to acquire resources, such as research and development skills. As skills like these are hard to find, companies often look at certain areas in order to find these skills. A good example of this is Silicon Valley in California, where you can find a pool of IT talent.  Having a strong presence in areas such as the Silicon Valley does help the firm to become more influential, which can be helped further if the global research is consolidated on one site. A downside to this is that the firm could be missing out on other talent pools. However, young talent can be drawn to the company due to its influence.

Bulk Transportation
Companies are often sold on going global thanks to the savings that can be made by consolidating transportation. Consolidating goods so that deliveries are coordinated together will make a huge difference, especially for firms that ship huge amounts of products.

Wednesday, 10 February 2016

What Particular Significance for Global Logistics Management does Time-to-Market Have?

Time-to market is a significant factor in global logistics.

Product Obsolescence

One of the problems is that the product may become obsolete while it is still in transit to the end point of the supply chain. This is a particular problem for industries that have rapid demand changes and are tech based, such as PCs and fashion goods.

Inventory Holding Costs

Delays while in transit, along with the lead time in the logistics pipeline does increase the inventory holding costs. International logistics may come across multiple delays, increasing the costs at consolidation points including warehouses. The goods are stored in the warehouse until a time when they can be consolidated into a full load. Delays are also common as the goods enter a country, due to the custom and excise procedures.

Tuesday, 9 February 2016

What are the Logistical Implications of Internationalisation?

Choosing to use internationalisation logistics networks have implications in the following policies:

*         Inventory
There are advantages of centralising inventories across different countries including the reduction of inventory costs and reducing inventory levels for products of high value. The downside of centralisation inventories is that products need to be localised and companies need to be able to respond quickly to local market opportunities and opportunities in the market, which isn't possible with a centralised inventory.

*         Handling
Different countries might provide different logistic services practices and regulations on the transport or storage. This means there is a need to adjust the handling practices for the international supply chain. Internationalisation can also be assisted by implementing best practices.

*         Transport
Transportation needs to deal with different infrastructures in the different countries but also ensure they deliver within the set time to market. As a result of this, localisation is often preferred. Global consolidation can be a driver for international centralisation. Companies need to decide if the trade-off between being able to consolidate operations globally or deliver in a timely manner is most beneficial for their circumstances.

Monday, 8 February 2016

What are the Trade-Offs Between Responsiveness to Local Markets and Economies of Scale?

Internationalisation is now a lot more common, but as yet there aren't any universal patterns in place when businesses approach internationalisation.

Today we're assuming that at present that internationalisation does not:
  • Imply there's a universal global approach of the supply chain as implied by internationalisation
  • A global presence isn't required in every market
  • Doesn't differentiate between companies sharing knowledge globally and those that don't
Inform approaches to the supply chain are not as popular as they may have once been. Localisation is the approach that businesses take in order to improve local relations and marketing and to take on competition from local sources. Regional variations in the supply chain are seen in large firms already, including Coca-Cola, Procter & Gamble and McDonald's. 

However, there are firms, including Unilever, that are moving away from localisation and at the moment they appear to be sticking with this concept. There are different drivers of internationalisation:

  • Searching for low supply costs, land, materials and labour
  • Following the customers internationally to provide supply quickly and locally to them
  • Searching for new markets
  • Seeking out knowledge and learning

Saturday, 6 February 2016

Chit Chat: 2016 Small Business Trends and Predictions According to Industry Experts _ Part 1

Today we’re looking at some of the small business trends and predictions expected in the next 12 months, according to experts, professionals and small business owners.
  1. Analytics will be more cost efficient and will prove to be beneficial to small businesses.
  2. Businesses have to secure data and introduce mobile strategies.
  3. Changes in mandatory sick leave and paid sick leave policies need to be watched and adhered to.
  4. Changes made in the workplace will be influenced by existing and upcoming public policies.
  5. Cloud computing will sky rocket.
  6. Customers’ expectations will continue to increase and small businesses will need to work harder in order to meet them.
  7. Cybersecurity is essential and cannot be ignored due to the increase in cloud based services.
  8. Hiring the right people will become more difficult and human resources will need to change to adapt to the changes in the workforce.
  9. Human connection remains of paramount importance in order to retain customers.
  10. Location marketing is going to be one of the areas that are highly concentrated on for businesses with brick and mortar locations.
  11. Mobile is being driven by the Millennials and small businesses need to ensure they are on board and working to create services that meets the needs of the mobile mentalities.
  12. Predictive analytics will include external data sources and continue to im prove over the next 12 months.
  13. Prices will increase as a result of the increase of the minimum wage.
  14. Small businesses will begin to take advantage of on demand delivery and logistic services.
  15. Same day deliveries will expand along with cross border selling.
  16. SEO cannot be ignored in marketing the business website and websites have to be mobile friendly.
  17. The baby boomers will start their retirements, resulting in the sale of more businesses.
  18. The business climate will continue to grow in 2016, with small businesses continuing to invest in the future.
  19. The Jobs Act will be put into place for Startups and Small businesses.
  20. The US congress is working on patent reform and the changes may put small businesses at a disadvantage.

Friday, 5 February 2016

Logistics Strategy – Part 3 (How can logistics strategies be tuned to different product needs?)

Supply chains can decide to compete of different criteria. All of the criteria have to be recognised and used in the business strategy of each of the supply network members. The following are five principles of strategic positioning:
  1. The unique value proposition deciding what separates a product or service from the competition
  2. The unique supply chain that is governed by continuously winning orders and order qualifier consistency
  3. Identifying the trade-offs, deciding what to do and what not to do.
  4. Align logistic processes so they all reinforce each other.
  5. Continuity meaning all the logistics processes is improved continuously over time.
Two of the two most common strategies with different logistic implications are as follows:
  • Cost – the high volume production with stable demand throughout the year. The life cycle is long and the demand forecasts accurate.
  • Time – A product that varies designed for seasons and redesigned for the next season. The life cycle is short and it is hard to forecast the demand.

Thursday, 4 February 2016

Logistics Strategy – Part 2 (How can competitive criteria be aligned within a supply chain? )

Strategies need to be aligned over the supply chain. When the different links are all focused on different competitive priorities the chain will fail to meet the needs of the end customers as efficiently as a supply chain that has the same priorities across the board. That is why aligning the supply chain is considered to be the best way forward. The links in the supply chain need to have the same competitive criterion to compete efficiently in the marketplace, they need the same focus.

The focus concept is based on the fact that you can’t be good at everything. The development process has a variety of demands and some areas are better at meeting the demands than others. Getting the best from each link and working together , being aligned, improves the strength of the supply chain and satisfies the end customers.

Wednesday, 3 February 2016

Logistics Strategy – Part 1 (What is strategy?)

We can define strategy as creating a long term supply chain plan that involves solving the day to day issues along with any problems that will occur along the way. Goals, plans and policies are continuously reinforced through the behaviours of the different partners across the supply network.

A logistic strategy can often be created without the above characteristics. There are four approaches to creating a strategy that have been proposed and the first motivations for setting strategy are:
  • What are the goals of setting strategy?  Goals can include focusing on profit growth.
  • How deliberate are the processes? Various processes such as planned and defined to ad hoc day to day decisions.
There are four options for crafting strategy, they are as follows:

Evolve – A typical viewpoint is ‘our strategy is not to have a strategy’ – the operational decisions are taken based on the current needs and the main principle is the financial goals of the company.

Classical – The main principle is the financial goals and these are the achieved using the formal planning processes. This is the oldest option out of the four.

Accommodate – Decisions that are made have gone back to the day to day modes but this time the primary concern is the markets in which it operates, not the financial objectives.

Systemic – All of the goal settings made across all the departments of the businesses and they are linked to the means of realising business goals by how they are going to be made in practice.

Tuesday, 2 February 2016

How to compete through logistics? Part 4

Order winners are the factors that have a significant and direct impact on helping products to win the orders in the marketplace. These factors are the main reasons why the customer will buy a service or a product.  Improved performance on the order winners will improve the chances of increasing business. A way of improving a product that competes on price is to make improvements in production to reduce prices further.

Order qualifiers are the factors that are considered to be an entry ticket by the market. The factors will only be taken seriously if the service or product meets the basic performance standards. Quality accreditation is one of the factors that will only be taken seriously if it comes with ISO 9000 certification.

Different products can have different performance objectives but still move through the same distribution channels.  It’s also possible for service and products to change from order winners to qualifiers over time and the life cycle of the product. Competitive actions influence the logistics performance objectives.

Monday, 1 February 2016

How to compete through logistics? – Part 3

Logistic advantages can be gained through soft objectives, objectives that cannot be easily measured when compared to hard objectives. A couple of examples of soft objectives are:

  • Confidence – when questions are answered quickly, efficiently and politely
  • Security – when the information customers share and their property and account information is kept secure and confidential

Soft objectives are measured differently from the hard objectives, using methods such as customer surveys. Logistics isn’t the only area where product competitiveness can be gained. The two soft objectives above can be combined with other methods used to win orders, including marketing and design. If the design and marketing aren’t up to scratch the logistics won’t be able to save the product. Logistics plays a supportive role in these areas and play a role in gaining advantage in the marketplace.