Logistics Management and its Interfaces of 100plus drinks

This report discusses the interfaces between logistics and major functions of 100plus drinks, including production, marketing, accounting and finance. It also covers the current order cycle and inventory management system of the company, with recommendations for improvement.

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Running Head: Logistics Management
Logistics Management and its Interfaces of 100plus drinks
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Running Head: Logistics Management
Table of Contents
Introduction...........................................................................................................................................3
The Interfaces....................................................................................................................................4
Order Cycle.......................................................................................................................................5
Inventory Management......................................................................................................................7
Conclusion.............................................................................................................................................9
References...........................................................................................................................................10

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Running Head: Logistics Management
Introduction
Logistics management plays a significant role in the success of a manufacturing organisation.
Logistics management includes effectively managing the procuring the material, moving and
storing the materials as per requirement, production and dispatching the final products to the
customers (Singh, Gupta & Devnani, 2015).
In this report, the interfaces between logistics and some major functions of the organisation
named 100plus drinks will be discussed. The core sections are production, marketing,
accounting and finance. Current order cycle as well as inventory management system of the
same organisation will be discussed in detail. Based on various logistical concepts,
recommendations will be made to make further improvement in these two sections.
The 100plus drink is a popular isotonic sports drink mostly in Singapore and Malaysia. The
100plus drink is manufactured by a food and beverage company called Fraser and
Neave Limited that is headquartered in Singapore. The name of the drink indicates the
successful completion of hundred years of Fraser and Neave Limited in Asia. As mentioned,
100plus is very popular among the people of Malaysia and Singapore. Various survey reports
state that the drink is ranked number one in Malaysia since its launch in 1983. The company
has come up with different flavours of the drink: Tangy tangerine, Original, Berries, Lime
and Active. A non-carbonated version named 100 plus edge was launched in 2011 while
100plus Active was introduced in 2017. 100plus is sold in a lot of countries across the globe
such as Chine, Republic of Korea, South Africa. Sometimes the drink is also available in
some Asian speciality stores of UK and Australia. National Sports Council of Malaysia has
endorsed the drink. The drink also sponsors some major sports event in Malaysia including
Malaysia Premier League, Southeast Asian games 2017, AFF Championship 2018. Myanmar
Football Federation is also sponsored by the drink. The company has come to a distribution

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Running Head: Logistics Management
agreement with AirAsia as a growth strategy that allows the airlines to keep the drink for
onboard sale.
The Interfaces
The main aim of logistics management can be described by seven “R”s that are Right
product, right quantity, right condition, right place, right customer, right time and the right
price. As already mentioned, logistics consists of Order Processing, Warehousing, Inventory
management and transportation.
Logistics and Production:
Logistics can be divided into two broad categories called inbound logistics and outbound
logistics. Inbound logistics is made of activities like procurement of raw materials,
transportation, storing and handling of the raw material. In production different raw materials
are required to produce the 100plus drink. In this case, the ingredients required for the sports
drink must be available in the desired condition. Certain conditions must be met while
packing and storing the final product. The first and foremost criteria are to decide which
ingredients can be stored and which ones need to be procured just-in-time (Bowersox, 2013).
According to the requirement, a list of all concerned suppliers with the exact location, the
transportation channel of the ingredient and the people involved in the procurement process:
everything should be documented thoroughly. Proper storing condition and the quantity of
the ingredients to be stored can avoid any kind of wastage can be avoided. The main
functions of logistics include warehousing and transportation. If any issue occurs in any of
these three areas, the production can go for a toll.
Logistics and Marketing:
Marketing aims to increase the sales of the company through setting the correct price,
package design, promotion etc. One of the major categories of logistics i.e. outbound logistics
is responsible for delivery of the products to the customers (Fraserandneave.com. 2019). It
should be ensured that the product reaches the customer in perfect condition. In this case,
transportation, warehousing and inventory management are major areas that interface with
the marketing. The company should have enough drinks stored in the right condition to cater
to the next batch of demands. Transportation cost mainly depends on the quantity of the
products and the distance travelled. If these two can be controlled in an effective way, the

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cost can be optimized that, in turn, reduces the final price of the drink. The seven Rs of
logistics and the aim of marketing perfectly coincide. So, logistics can be used as a strong
marketing tool that can help increase sales.
Logistics and Finance and Accounting:
In a nutshell, logistics and finance possess the same information but they do the same in an
independent manner. For example, both keep track of the inventory and movement of the raw
material and product and cost throughout the process. If any problem arises in any of the four
areas of logistics, the price increases that means any issue in logistics affects the finance and
accounting of the company (Coyle & Coyle, 2009). For example, transportation needs to be
chosen very carefully. It is not always a good idea to go for cheaper options. Vendors
offering less price can end up in delay in delivery or damaged goods. Based on the past data
and reports, transportation vendor should be chosen or else the finance needs to spend more
money. Optimizing the inventory management cost has a great effect on the balance sheet of
the company.
Order Cycle
Order cycle refers to the routing or processing through which the order line moves forward.
With the help of the following diagram, the order cycle of 100plus drinks will be explained
thoroughly.

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Running Head: Logistics Management
 The first step of an order cycle is to receive an order from the customer. In the case of
100plus drinks, the order can be placed by a customer online. The customer can buy
the product from an outlet as well. In the case of an online store, an order request gets
generated by the customer. Based on the availability of the drink, the order gets
confirmed. If the drink is not available at the time of order, the date of availability is
mentioned on the website.
 After the order is confirmed, the order gets processed.
 Next step is to packing the drink so that it does not get spoilt when delivered. The
order can be packed from the outlet or it can be packed in the warehouse.
 Then the order is shipped to the customer. The order can be shipped directly from the
store or it can be shipped to the customer from the warehouse or any distribution area
Bowersox, Bixby Cooper & Closs, 2013)
 In any case, transportation has a huge impact on the shipping process. The company
tracks the entire outbound logistics process to monitor any inconvenience that might
occur in the process. A customer can edit the order before it is shipped. Once the
order status is changed to shipped, no modification or cancellation can be done to the
order. The customer can track the shipping process through the website of 100plus
drinks.
 Once the order is shipped to the customer with a proper invoice, the customer
confirms the delivery of the product. Once the order is successfully delivered to the
customer, the order status gets changed to delivered (Bowersox et al, 2013). In case,
the customer finds any issue in the order, he/she contacts the customer care services
of the company. They eventually take care of the issue.
100plus drinks can improve the order cycle in the following way:
Reducing Travel time:

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Running Head: Logistics Management
The company should decide optimized ways to reach the customer faster as travel is the
major portion of the order cycle. Another way to improve the order cycle by reducing the idle
time is by making slots of SKUs based on the picking
Shifting resources to the most active area:
The company needs to identify the areas where most of the orders are delivered. They should
distribute the resources based on the result. Moving resources from the underutilized area and
assigning resources in shifts in the active areas will increase the productivity of the resources
and improve the order cycle.
Understanding the nature of the orders:
Developing a clear understanding of the nature of the orders will help 100plus drinks to fulfil
the order more effectively. Utilizing wave pricing can be a great way to enhance the order
cycle as it will result in a workflow that will route the resources in a better way (Bateman,
Hines & Davidson, 2014).
Inventory Management
Inventory management includes all the activities related to developing and managing the
inventories of the procured raw materials and final products. Inventory management is
required to make sure that sufficient supplies are available and the costs related to under or
overstock is low.
Inventories of 100plus drinks include the following:
 Ingredients: Ingredients or the raw materials are the procured items that are in stock
but have not entered the process of production yet.
 Work-In-Progress: Work-in-progress or WIP is the raw materials or ingredients that
have entered the manufacturing process and are not converted into the final product
yet (Bateman, Hines & Davidson, 2014).
 Finished Goods: Finished goods are the packaged drinks ready to be distributed.
These drinks can be stored in the factory, warehouse, store outlets or various
distribution points.
 Distribution Inventories: These are the finished packaged drinks located in the
distribution system.
 Maintenance, Repair and Operational Supplies (MROS): These are the items or goods
that are part of the production process but not the actual product. Machines used in
productions, the cleaning tools and others that are used in the production to
manufacture the packaged drink come under this category.

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Running Head: Logistics Management
100plus drinks take help of automated system and inventory management software to manage
the inventories. The inventory management system of the company includes the following
elements:
 Item Descriptions: All the items in the inventory have a clear and proper description.
This way, it is easier to avoid confusion whether an item is in stock or out of stock
 Item numbers: Each item in the inventory has a unique item identifying the number.
Item numbers are used to refer the item while filling an order, searching the item or
generating reports.
 Units of Measure: The units of measures are clearly mentioned in the inventory.
The company also makes use of various types of inventories.
 Anticipation Inventory: Before the peak season in sales, a vacation shutdown etc., an
anticipated inventory has been set up. This inventory helps the company be prepared
for the season ahead and reduce the cost of changing production rates.
 Fluctuation Inventory: As inventory management aims to handle the fluctuation in the
demand for products. In this case, based on the previous data and report, packaged
drinks are stored to handle any fluctuation in the demand.
 Lot Size Inventory: The raw materials or ingredients procured but not entered the
production yet come under lot size inventory (Anad et al, 2013). Getting ingredients
in lot reduces the cost of procurement. That’s why the company keeps this kind of
inventory.
 Transportation Inventory: This type of inventory is used to keep track of the items
that are being transported through inbound or outbound logistics.
Recommendations to improve inventory management
The main challenge with the packaged drink is the contamination of the product. In this case,
the company cannot store a large number of products as the wastage of the contaminated
product cost high. Reports say that packaged drinks get spoils and add up to the cost. In this
case, the inventory should be kept in such a way that the number of products is just sufficient
to cater to the demands. The just-in-time inventory system will be perfect here. Another
wastage of this company is due to the low shelf-life of the products. The tracking system
should be made stronger to avoid wastage due to low shelf-life.

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Running Head: Logistics Management
Conclusion
As discussed, the functions of logistics management often interface with production,
marketing and finance. Logistics management is not a standalone system. The core function
of a manufacturing company has an effect on logistics and vice-versa. The dependencies of
logistics on finance, production and marketing have been discussed thoroughly. How
logistics has its effect on finance, production and marketing have been discussed with proper
examples. While explaining the order cycle of 100plus drinks with related diagram, the
recommendation is made to improve the current order cycle. Efficient order cycle can reduce
the order cycle time. It has been observed that the company can enhance the order cycle by
optimizing the route to reach the customer. Anticipating the type of orders in the most active
areas will help manage the inventory better resulting in better order cycle. Moving resources
to the most active areas from the underutilized ones will help optimize the resources and thus
creating a better order cycle. Finally, the inventory management of the company has been
discussed. Various types of inventories used by the company have been discussed with all the
items included in the inventory. Reports show that a significant amount of inventory wastage
is due to low shelf-life and contamination of the product. Recommendations are made to
avoid the wastage in inventory.
References

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