One of the most important factors in the success and profitability of a business in relation to its supply chain management is logistics management. Logistics incorporates the flow of raw materials and information throughout supply chain processes of an organization. In the past few decades, logistics management has gained significant attention because of the emergence of new technologies and strategic alliances that are geared towards enhancing an organization's competitive advantage. For global companies like Mcdonalds Corporation, logistics management is vital for gaining access to new markets, taking advantage of technological competencies for overseas operations, and enhancing production efficiencies. This paper examines the importance of effective logistics management with regards to smoothing material flow, lessening inventory costs, and enhancing responsiveness across the supply chain. This analysis is done using Mcdonalds Corporation and challenges in its modern supply chain.
Logistics encompasses all aspects of material and information flow in the supply chain process including management of incoming raw materials, production processes, storing finished products, and delivery of products to customers. In essence, logistics management is a component of supply chain management that handles the planning, implementation, and control of information and material flow within an organization. This process is geared towards ensuring efficiency and effectiveness in supply chain processes between the origins of raw materials to the point of consumption in order to meet the requirements of customers (Logistics Degree, 2012).
As a global corporation, Mcdonalds can significantly benefit from logistics management by enhancing production efficiencies and utilizing technological competencies to foster supply chain transparency. This is primarily because the corporation is experiencing delays in providing information and obtaining materials from trustworthy sources. Therefore, the company has been unable to provide inter-linked services and demonstrate flexibility based on the changing customer demands and requirements. As part of effective logistics management, Mcdonalds need to develop a suitable logistics structure, deal with logistic processes and activities, and enhance its information and reporting systems.
The first step towards effective logistics management for Mcdonalds is inventory management, which is crucial towards lessening inventory costs. The need for suitable inventory management emerges from the fact that Mcdonalds deals with different suppliers. The transparency issues relating to its supply chain have been centered on whether the company's suppliers are trustworthy with regards to the provision of healthy food products. Mcdonalds can address these concerns by establishing a logistics structure in which a well-developed system calculates and forecasts the quantities of inventory required in every restaurant chain (Fristedt et al., 2012). The establishment of such a logistics structure will help ensure that raw materials are obtained from trustworthy suppliers at the right quantities and at the right time. Additionally, the establishment of a well-develop system for calculating and determining supply needs will help in lowering the number of inventory checks carried out by the company. This in turn ensures that inventory levels are effectively maintained so that the restaurants can focus on customers, which helps in lessening inventory costs. This system will provide important information regarding raw materials' needs and ensure that inventory levels are efficiently and effectively maintained.
Secondly, Mcdonalds should enhance it vertical integration component of supply chain management. In this case, the corporation should ensure that its logistics management processes and activities are supported by forward and backward integration. According to Yuen & Cheng (2015), forward integration involves the flow of information and materials from the supplier to the manufacturer then to the…
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