Understanding International Shipping and Logistics Operations

The provided content discusses various aspects of logistics, including reverse logistics, demand management, and supplier collaboration. Reverse logistics involves the process of moving goods from their final destinations for value addition or disposal, whereas demand management deals with forecasting customer demands and managing orders. Supplier collaboration is beneficial as it leads to increased sales, referrals, cost savings, innovation, risk sharing, and market growth. Additionally, the content touches on supply chain operations, service recovery, CRM, possession utility, form utility, time utility, and place utility.

Answers to Contemporary Logistics
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1. 3PL Companies are Third Party Logistics companies employed for processes of
warehousing, inventory management, transportation and the host of other value added
services (Lieb & Kendrick, 2002). The key benefits of such actions are as follows;
 3PL providers generally contain a vast network which typically are more
advantageous than the in house supply chains and post outsourcing the company can
leverage on each step of the supply chain in most cost effective and efficient way
 Outsourcing helps the company in focusing more on its core business rather spending
resources in getting logistics sorted etc
 Outsourcing the logistics and management to 3PLs helps in saving effective time and
provides convenience
 Outsourcing helps in gaining industry expertise and also in achieving scalability and
the flexibility
 Lastly, continuous optimization is achieved once logistics and specific management
functions are outsourced
The key disadvantages of such outsourcing are as follows;
 The loss of direct control over one’s logistic chain and depending on the 3PL
operations
 Convenience comes at a price, therefore, a company can safe manpower and time in
outsourcing its logistics management, but it is a costly affair
 Risk of loss of reputation
 Choosing the wrong 3PL partner can prove to be detrimental for the company
2. The main functions for which companies use 3PL are for – transportation functions,
warehousing functions, global services, information technology solutions etc.
Namely, in the case of transportation, 3PLs help companies by providing solutions to
– transportations outsourced to that of asset based carriers; management of private fleets;
services of small packaging and big boxes; transportation solutions outsourced to brokers
which are non asset based; consolidation services; improvement of services and management
of transportation costs; bill payments of freight and auditing; reverse logistics, green logistics
and the host of sustainability services. Similarly, examples of warehousing management
when outsourced consist of the following examples – basic functions of warehousing,
fulfilment of orders, processing of returns, cross docking, recruitment and management of
labours etc (Lieb & Lieb, 2010).
3. ERP or Enterprise Resource Planning is an integrated framework of management of core
business processes, conducted in real time and mediated by technology and software
(Harwood, 2017). The main advantages of ERP lies in – complete visibility of all the key
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business processes; automatic as well as coherent management of work flow; unified
reporting system done in real time and connected to every business process; business
intelligence functionalities provide overall strategic insights into the problem areas; e-
commerce integration helps in live tracking and processing; customization is possible as per
the nature of business operations; manpower can be focused on doing core businesses and
helps in an improved reporting, mobility and streamlining of processes.
More than being a benefit, ERP’s connectivity to other SW acts as a need and depends
on the philosophy of the company. If an integrated and pervasive ERP is present in the
system of the company, then the level of talking to other SWs is minimal and can be limited
to mere downloading and summarizing. Manual entry of data should be avoided as that can
result in unintentional errors. Having an ERP makes the data very fast, less creation of errors
and business running becomes more nimble and flexible.
4. Shrinkage refers to the loss of inventory (physical) through theft or inadequate
management of inventory information. RFID helps in real time tracking of all items under it,
and thus helps in preventing shrinkage as real time, automatic information reaches the
company the moment any inventory item is moved from its place (Attaran, 2007).
The main advantages of RFID are as follows;
 RFID tags are easily installable, and are small and hence can be used to track the
smallest of goods
 RFID tags cannot be easily replicated and hence is more secure
 RFID enables the supply chain management of the company in maintaining real time
updates and also facilitates the transportation and logistics of products
 RFID tags reduces theft, shop lifting and mis-placement of inventories
The key disadvantages of RFID are as follows;
 It is a very costly affair to install RFID system in an organization operations
 When tags are installed in metal / liquid products, reading becomes a problem as these
items reflect the radio waves
 Interference occurs when forklifts and walkie-talkies are operated
 The frequencies of RFID are not globally standardized which makes it difficult for
international shipping and other organizations to be aware of individual country
operations
 It is an invasive technology
5. Reverse logistics is defined as the process of movement of goods from their final
destinations for value addition or disposal and includes remanufacturing as well as
refurbishing activities. The process flow of reverse logistics starts from obtaining the product
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from its final destination, then reusing it, repairing it and finally remanufacturing it
(Chaudhuri, Mohanty, & Singh, 2013).
6. Reverse logistics is about refurbishing and remanufacturing and deals with up-cycling of
end products, which helps in lowering of wastage and carbon footprint, thereby making the
company more environmentally and socially responsible and consist of greener operations.
Service recovery in the form of warranty recovery, repairing, value recovery, product
recalls, redistribution, refurbishment, returns of product/service contracts and end of the life
recycling occurs (Cousins, Lawson, & Squire, 2006).
7. Demand management is the process by which the organization conducts environment
scanning and forecasts the potential demands and thereby undertakes actions by which such
demand can be managed. Therefore, demand management is about determining what the
customer wants. Order management occurs when the customer has already placed the order,
and now the organization is undertaking actions by which the customer obtains the product
whose order has been placed. Lastly, customer service is the act of delivering the product to
the customer and taking care of servicing / maintenance or after sales issues if they arise
(Chase, 2016).
8. Independent demand is the demand for finished products. Dependent demand is the
demand for component parts or the subassemblies. Derived demand is the demand for a
specific service or product which is a consequence of a specific demand for something else.
CRM is linked to demand management, as it is an integral part of the latter. Demand
management is conducted by a company through customer order management and supplier
management and finally customer delivery (Boyer & Verma, 2009). CRM helps in demand
management in obtaining information about such customers, conducting customizations if
required, delivery of the product / service to the customers and finally after sales service.
9. Possession utility refers to the usefulness which a customer gains from possessing that
product. Eg – credit cards
Form utility refers to the product exists in the form which can be used by the customers and is
valuable to him. Eg- Pizza
Time utility refers to possessing the products when it is required by the customers. Eg –
Movie tickets
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Place utility refers to possessing the products in places where they are needed by the
customers. Eg – food items in a supermarket chain
10. The four specific service related elements chosen for superior logistics quality of service
are – information quality, order accuracy, order quality and order timeliness (Mentzer, Myers,
& Stank, 2007). These aspects are chosen as – if information quality is wrong or defective,
then the order produced would not be as per the choice of the customer; order accuracy
ensures that the right customizations pertains to the right order; order quality depicts the
quality of the server product/ service and lastly timeliness is another important aspect which
makes the process complete. Hence, as a result of this, a prospective customer obtains the
right item, right customizations, high quality and timely delivery.
11. Bonus Answer
Supplier collaboration and integration are beneficial, as such helps in increasing the volume
of sales from downstream buyers, increase in the number of referrals, lowering of the
operational costs, new process and products innovations, risk sharing and cost sharing,
improved efficiency and effectiveness, growth of markets and lastly, increase in the market
shares.
Supplier collaboration results in the joint development of specific capabilities for both
the market as well as the supplier in order to reduce the costs, improvements of processes and
further innovations of products/ services and this has what exactly happened in the case of
Levi Strauss, the iconic denim-wear manufacturer. Levi’s started the program “race to the
top” for creating sustainable supply chains and it entered a partnership with World Bank, to
rewards its suppliers by providing low cost financing options when the suppliers improve
their corporate responsibility and sustainability. This benefits both the partners as suppliers
get access to vast raw materials and Levis produces sustainable, greener and low cost
products (Rao, 2015).
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Bibliography
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Chase, W. (2016). Next Generation Demand Management. US: John Wiley & Sons.
Chaudhuri, A., Mohanty, B., & Singh, K. (2013). Supply Chain Risk Assessment During
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Cousins, P., Lawson, B., & Squire, B. (2006). Supply Chain Management: Theory and
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manufacturers- the 2002 survey. Supply Chain Forum : An International Journal , 3 (2), 2 -
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Mentzer, T., Myers, B., & Stank, P. (2007). Handbook of Global Supply Chain Management.
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Rao, L. (2015). What Surprising Thing Do Levi’s and Patagonia Have in Common? US: GT
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