Traditional Focus on Outbound Transportation Logistics, Why

¶ … traditional focus on outbound transportation logistics, why are more organizations taking a closer look at the savings and benefits that can be generated from greater efficiency on inbound transportation logistics? The biggest reason why a number of corporations are placing more of an emphasis on inbound logistics is because of: globalization and improvements in technology. These elements are important, because they are providing firms with the tools they can use to: increase their productivity and profit margins.

At the same time, the addition of new competitors in a particular industry has meant, that there is a greater focus on finding ways to be able to maintain their market share. (Chatur, 2006) (Gourdin, 2006, pp. 185 -- 202) As a result, a number of different corporations have begun to concentrate on just in time inventory management (JIT). This is when manufacturers will use a host of different tools to objectively determine how they can be able to monitor what products are in demand.

While simultaneously, being able to control their costs of producing different goods and services they are receiving through inbound logistics. Those firms that are focusing on these areas can effectively adapt to the changes that are taking place. (Chatur, 2006) (Gourdin, 2006, pp. 185 -- 202) These different elements are significant, because they will allow a company be able to control their costs. As, this will have a dramatic impact on their overall profit margins and the ability of the firm to: offer products that address the needs of consumers.

Once this takes place, it means that they can be able to realize the biggest benefits of maintaining their dominance in various sectors. Over the course of time, this concentration on inbound logistics helps a firm to be able to: evolve with these changes and remain a viable entity inside the sector. (Chatur, 2006) (Gourdin, 2006, pp.

185 -- 202) Why are more and more organizations viewing 4 PLs as solutions for helping to optimize inbound logistics? The reason why most companies are viewing the 4 PLs as a solution to optimize inbound logistics is because they are helping to: improve efficiency and control. This is based on the fact that this approach is adding an extra layer to the structure of the business itself. As, it is allowing executives to see the impact of their supply chain on: costs and their ability to adapt to changes that are taking place.

The way that this helps to control their costs is by providing: an effective way of monitoring their supply chain and analyzing what kinds of resources are being utilized. Once this occurs, it means that managers can be able to determine what elements in the production process are leading to dramatic increases. As, a firm has the ability to: more effectively adapt to changes in the marketplace.

This is because the 4 PLs are telling them what specific adjustments they need to make in their production process and the kinds of goods that are being produced. Over the course of time, this allows a corporation to become more competitive and respond to the needs of consumers. (Dutton, 2009, pg. 20) These elements are important, because they helping a firm to become more alert. As, the 4 PLs are telling them on real time basis what is happening with: their organization and its supply chain.

For managers, this means that they have the capability of understanding the needs of their customers and the marketplace better. At which point, they can make adjustments to their supply chain and the resources are being utilized to manufacture the final product. Once this occurs, it means that a firm is able to respond to numerous changes and they can maintain their dominance in a host of different sectors. This allows them to be able to adapt more quickly to various shifts on a global scale.

At the same time, this is helping them to expand into new regions. When you put these different factors together, the 4 PLs allows a firm to be able to achieve these different objectives and to increase their overall bottom line results. This is the point that they can improve their earnings dramatically, while ensuring that they are controlling costs as much as possible. (Dutton, 2009, pg.

20) How did Penske Logistics help Ford optimize its inbound logistics? Penske helped Ford to optimize its inbound logistics by focusing on several different elements to include: consolidation, training and accountability. As far as consolidation is concerned, the company worked with Ford to implement 10 order dispatch centers. The basic approach that they used was to have 1,200 trailers available to the various manufacturing plants. Once they arrived at these different locations, is when the trucks were filled to 95% capacity.

This allowed Ford to be able to reduce their inventory by 15% at these locations. This is important, because it is showing how Penske helped Ford to optimize their inbound logistics by: concentrating on those areas to ensure that every tractor trailer was filled to near capacity. This prevented them from having numerous trucks delivering the all of their products to the same location. Instead, they consolidated their logistical needs by ensuring that they have less available.

This made certain, that everyone utilized the space in each vehicle as effectively as possible. ("Ford Motor Company: Six Sigma Initiatives Streamline Operations," n.d.) When it came to training, Penske took this approach one step further by making sure that all of the 1,500 suppliers were on the same system. At the same time, they helped them to develop a protocol that worked well with the various Ford plants around the country.

They then established strict guidelines that everyone must follow as a part of the logistical approach that they were using. Once this took place, it meant that any kind of issues surrounding miscommunications were eliminated and that everyone was utilizing the same system to increase productivity as much as possible. This is the point that waste was eliminated, by having all the different suppliers focus on maximizing their logistics to those of Ford. ("Ford Motor Company: Six Sigma Initiatives Streamline.