Logistics Causes of Logistics Problems Companies Like Case Study

  • Length: 5 pages
  • Sources: 5
  • Subject: Business
  • Type: Case Study
  • Paper: #68658138

Excerpt from Case Study :

Logistics

Causes of Logistics Problems

Companies like Bradstar are not alone; many companies today experience logistics complications, the causes of which include growing supply chains, increasing demand for the products Bradstar provides to their customers, and an inefficient delivery system. Bradstar provides rush delivery which is not organized in a fashion that provides customers with guaranteed product delivery. There is no system of checks in balances in place to ensure customers get the products they requested. Customers require above all else on-time delivery (Macdonald 2007) and one of the reasons Bradstar's demand has grown is because they offer fast delivery of their products. However, that delivery is not always reliable, though the quality of the product is decent. The provider reacts to the customer's needs rapidly, which allows Bradstar to remain in business. However, Bradstar has outsourced delivery, which has raised the cost of delivering products significantly. This would ordinarily create synchronization of product supply and demand, but the company hired is inefficient which has raised the cost of doing business even more (Wallenburg, 2011).

From a fundamental or basic perspective Bradstar underestimated the complexity involved with domestic and international trade logistics (Piszczalski, 2002). This is a problem many manufacturers have. There is much involved with attempting to accommodate global transportation, which typically involves many players and more documentation than is required for domestic shipments alone (Piszczalski, 2002). There are longer shipment or "order-to-delivery" times associated with overseas deliveries, something that Bradstar likely did not account for, and certainly deliveries were delayed by the re-allocating of products to domestic customers. There is no real science behind estimating delivery times when dealing with overseas product deliveries.

There is no mention of Bradstar building relationships with its third party players. It is critical for any company doing business to form solid business relationships if it plans to succeed in any industry (Wallenburg, Cahill, Knemeyer, & Goldsby, 2011). Without a good relationship, gross misconduct can be expected, and the highest possible fees will be charged to the party being charged. However, the better the relationships that Bradstar builds, the less likely their outsourcing parties are to take advantage of the company. They will even work with Bradstar to help them streamline their services and reduce the costs associated with doing business. Errors do not simply cost Bradstar money, it will also cost the business partners the company works with money; therefore the more they work with companies to do better, the more likely other organizations will be to do business with them, as their reputation in the community and abroad will improve (Wallenburg, 2011).

Lastly, shipments must be consolidated in some way, as this is costing Bradstar a fortune in expenses. There are many ways the company can look to consolidate deliveries so they save money when shipping domestic products and overseas products.

Solutions to Logistics Problems

There are many plausible solutions that Bradstar can take to lower costs, improve delivery of Bradstar products and develop an overall improvement in customer service. First, a system of checks and balances need be established. This would require that Bradstar check to ensure the order they have is accurate and that nothing about the order has changed prior to transit (Macdonald, 2007). Next Bradstar should ensure the consignee understands what the window of delivery is and must ensure they can receive goods without any delay; this may require technology, meaning Bradstar may need to communicate via the web its needs to the consignee (Macdonald, 2007). Customers and their providers should be everything that occurs in the logistics chain in real time, rather than communicating after things happen. On-time delivery can only happen when forecasts are provided and real time communication occurs (Macdonald, 2007). Good relationships with all parties are also essential to lowering costs and ensuring on time delivery (Macdonald, 2007).

With regard to overseas transport, Bradstar should work with asset-based logistics providers, "fully integrated companies that deliver supply chain support at sea and online and manage their own vessel and terminal assets" which will ensure "first-train availability" for time-sensitive deliveries, expedited deliveries, tracking and tracing of shipments, and real time communication, just as is the case for ordinary shipments (Macdonald, 2007). Re-allocation cannot happen with regard to overseas deliveries. Bradstar has to make sure that their supply chain works efficiently. For this to happen, Bradstar has to work with providers that can assure them a solid warehouse management system. They have to be firm about allocating goods and services to customers and monitoring the delivery of products and services to the customers such goods are promised to . Packaged products have to be cared for and packaged carefully so that customers continue to value the services offered by the company.

A simple solution to many of Bradstar's problems also includes organization and documentation. If documentation does not occur in a proper manner, there is a strong possibility that at some point the company may face an audit. Documentation can also help limit costly delays associated with the loss of paperwork. A lot of what is wrong with Bradstar has to do with tracking their orders and placing orders in the right delivery "pocket" so to speak. This has to do with tracking inventory and getting it to the right customer (Lesonsky, 1999). With regard to this, IT solutions could benefit Bradstar immensely. There are many systems that could provide immediate relief for Bradstar. The company would have to do much in the way of research to determine what comprehensive system would benefit the company the most. This IT system or enterprise resource system could be aligned with strategic partners so that Bradstar could work efficiently with its partners to communicate product, shipment and delivery needs in real time as discussed (Wallenburg, et al. 2011). Essentially the company could organize documentation and for internal needs go "paperless" using an efficient IT system, producing invoices only for the purpose of customer service. This would help reduce the costs associated with errors and the costs associated with trying to organize paperwork on a daily basis. Administrative and overhead costs could be dramatically reduced in the long-term (Wallenburg, 2011; Lesonsky, 1999).

There is also a need at Bradstar for more flexibility with regard to the capacity in the warehouse. As the company continues to grow because of the low pricing offered, their needs to be greater flexibility with regard to warehousing. This will also accommodate any fluctuation in demand that may occur with customers, or development of new product or seasonal product offering. One way to accommodate warehousing needs is to share resources with neighboring businesses or campuses. The idea of value-added warehousing may include domestic and international cross-dock services and foreign warehousing for international purposes (Macdonald, 2007).

Alternatives

One alternative that has not been suggested that may save Bradstar money may be partnering with another company. Sometimes when a company is facing staggering losses, the best solution is one that is the last one a company may think of. Logistics may sometimes seem an impossible challenge to a company like Bradstar. There are many obstacles that Bradstar must overcome. These include securing reliable delivery, improving visibility, overcoming problems with overseas transport, streamlining and expediting railing to truck shipments, warehousing and land transportation issues. The company requires representatives on the ground and overseas to deal with many of these issues. One efficient way to manage some of these issues in various markets and overseas may be to partner with a company that could provide a reliable representative, such as a transportation provider that may have a strong influence and reputation in the domestic location or abroad to help assure reliable warehousing, transport and ensure lower costs associated with doing business (Macdonald, 2007). This could ensure that Bradstar had more leverage when conducting business; this person should be familiar with…

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