Logistics and Operations Management - Issues and Solutions

This report provides an analysis of the major features of intermodal company- ACFS in Australia. It evaluates the significant issues that ACFS faces at the current logistics network in New South Wales and develops suitable solutions for the organization. The report discusses the main issues with the current logistics network in NSW, how the issues might be resolved, and the involvement of the NSW government in the resolutions of the issues.

Running head: LOGISTICS AND OPERATIONS MANAGEMENT
Logistics and Operations Management
Name of the Student
Name of the University
Author Note

1LOGISTICS AND OPERATIONS MANAGEMENT
Table of Content
1.0 Introduction..........................................................................................................................2
2. Main issues at with current logistics network in NSW..........................................................2
Dynamic world economic geography....................................................................................3
Extending supply chain and demand pressure from the consumers......................................3
Increasing compliance requirements......................................................................................4
Increasing population in the metropolitan areas of New South Wales..................................4
Growing environmental awareness........................................................................................4
Emerging distribution models:...............................................................................................4
Influence of incumbent organizations:...................................................................................5
Extending levels of regulation’s making it difficult for ACFS..............................................5
3. How the issues might be resolved..........................................................................................6
Hiring from the global environment:.....................................................................................6
Actions of resolving the productivity issues..........................................................................6
Establishment of network of effective intermodal facilities..................................................9
4. Any involvement should NSW government have in the resolutions of the issues...........10
References................................................................................................................................13

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1.0 Introduction
This report provides an analysis of the major features of intermodal company- ACFS
in Australia. It has been identified that intermodal organizations utilize special standardized
containers to transport cargo on trucks, freight trains and ships and this is commonly referred
to as drayage. ACFS uses a specialized trucking that runs between ocean ports and inland
shipping docks (Auscfs.com 2018). The purpose of the report is evaluate the significant
issues that ACFS faces at the current logistics network in New South Wales and develop
suitable solutions for the organization. This research particularly describes the logistics
environment in Australia before moving on to describe the barriers that are present. It has
been observed that logistic network of New South Wales have achieved a great amount of
success in the recent past but the sector in which it operates is highly unpredictable as well as
competitive. Thus, the logistic operation of ASFS is often problematic. So, this report
provides the analysis of the issues and develop a suitable solution for ASFC which would
help to address the challenges.
2. Main issues at with current logistics network in NSW
It has been identified that in 2013, NSW Freight and Ports Strategy provides a
framework for the all organizations in the sector. Consequently, the government of NSW and
other stakeholders will guide the investment decisions to improve freight as well as logistics
in NSW (Ghaderi, Cahoon and Nguyen 2015). The major objective of this framework was to
maintain a suitable delivery of freight network which would effectively support the estimated
growth of NSW economy. However, the organizations ACFS estimates a significant skill gap
as current workforce of the company is not adequate to deal with the requirements of the
framework developed by NSW government. It has been identified that in order of model
labor demand, the organization will have to use an in-house microeconomic and computable

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general equilibrium models, which would help to company to estimate employment at the
state as well industry level. Particularly, Jiang, Hanson and Dowdell (2015) mentioned that
organizations in logistics sector of NSW is supposed to face a very tight labor market over
the coming years and this happens due to the larger demand of supply network. The
sustainability and anal record of the company indicates that the major skills that company
faces is that an ongoing skills shortage in the engineers and this shortage of skilled employees
create a significant long-term challenge. On the other side, Mankoo and Tabone (2014),
mentioned that Australia’s container landside logistic activities are arguably the most
complex as well as challenging supply chain in existence. It has become highly competitive
but the margins are low, with profitability depending largely on the strong operational
relationship as well as savvy business decisions which is big challenge. Thus, understanding
such highly regulated market, the CEO of ACSF requires a constant balance between safety
compliance, future innovation as well as productivity enactment (Wang, Jie and Abareshi
2015). The organization is in the need of an appropriate vehicle type such as higher
productivity freight vehicles and streamline intermodal. Furthermore, it is also identified that
safety of the container, risk management and compliance remains as the major challenge for
the container transport logistic company. The following are some of the major challenges that
organizations faces when dealing with the logistics operation in New South Wales.
Dynamic world economic geography
As put forward by Chow and Gorgievski (2014,), several manufacturing activities
have relocated to the low cost markets for the labor and other inputs. Moreover, in the
Australian’s economy is under fluctuation which affects the confidence of the marketers. This
is probably the reason that ACFS is not able to hire the desired workforce.

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Extending supply chain and demand pressure from the consumers
Koukoulas (2016) mentioned that distance and the number of links are rapidly
increasing which create the issues with respect to the collection of information and sharing it
with other members involved both up and down of the chain. On the other side, Tan (2015)
mentioned that short lead time but the “delivery in the fill time” is a big challenge for the
organization, Despite the operational challenge is in the sector, the customers expectation are
increasing. This happens because the market has become dynamic and industry trends are
changing rapidly (Wang, Jie, and Abareshi 2015). Therefore, the consumers do not
compromise with the delivery of the goods.
Increasing compliance requirements
As the numbers of players in the sector are rapidly increasing, the government has
become tougher. This happens because the security measures need increased information
about the cargo and the records of movement. In addition, the safety and environmental
regulations need enhanced monitoring as well as management.
Increasing population in the metropolitan areas of New South Wales
Aguezzoul (2014) mentioned that there are changes that large markets could demand more
freight but create more traffic and another has also mentioned that conflict and congestions
with passengers could increase in the metropolitan areas.
Growing environmental awareness
It is observed that increasing demands are currently placed on business to become
environmentally sustainable. In addition, logistic and freight organizations is a large
contributor to CO2 emissions as well as has a significant influence on the local air quality
(Ghaderi et al. 2015).

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Emerging distribution models:
It is observed that new distribution models are emerging, especially with respect to e-trading
through internet and long supply chain. However, the organizations in the sector such as
ACFS currently find it difficult to become flexible with models; hence, entire workforce of
the operation needed to be flexible which requires time.
Barriers mentioned by the stakeholders
As put forward by Jiang, Hanson and Dowdell (2015), beyond the traditional challenge to
innovation that influence all organizations such as cost and expenditure, issues related to
make and consistent skill gap, there is also large set of factors could remain as the significant
challenge to innovation within the freight logistics sector of NSW. These barriers are further
divided into three different groups
Restricted Co-opetition- It is observed that complex and fragmented supply chain as well as
unsophisticated end-users may act as the challenge to developing efficiencies.
Limited Interfacing-As put forward by Chow and Gorgievski (2014) transport operations are
considered as delivering a competitive benefit which could further prevent the organizations
from working together in a different market. Additionally, it has also been found that
increasing number of transactions along with the chain, poor implementation of technology
and unavailability of technology is a significant issue for the organizations in freight logistics
sector of New South Wales.
Influence of incumbent organizations:
As there is high barrier for new organizations and long-term contractual arrangements, the
organizations in the sector often find it difficult to apply innovation to the existing process
(Ghaderi, Cahoon and Nguyen 2015). In addition, the existing organizations in the sector

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have the observed the need for government leadership t guide the industry to respond to the
changing environment
Extending levels of regulation’s making it difficult for ACFS
It is true that multiple levels of government could make it difficult for one particular
organizations to guide policy in the field of freight and logistics. The inconsistence across
State and Local boundaries which increases inefficiencies (Demir et al. 2015). For example,
the accreditation as well as the load restrictions for transportation can be a challenge.
3. How the issues might be resolved
The above discussion helps to observe that there are set of issues which are affecting the
operational state of ACFS. In addition, the future needs of the sector is also concern for the
organizations. Thus, following are some of the solutions that have been suggested to ACFS to
address the stated logistics challenges.
Hiring from the global environment:
The current skill gap might create a long-lasting negative impact on organizational operation.
Therefore, it is necessary for the organization to hire talents from the global environment.
The current skills in Australia will not be adequate to meet the increasing needs of the
industry. In addition, technological needs and poor use of technology also indicates the needs
of hiring skilled people. Thompson and Hassall (2014) also mentioned that regional talents
often lack variation. Currently, the organization is in need of the candidates who are having
outstanding skills to manage the freight operation. In addition, to remain flexible with the
advanced technology the organizations also global expertise. Rezaei, Hemmes and Tavasszy
(2017) mentioned that the candidates that have worked in the global field of logistics and
freight operation have knowledge compared to the people worked in the same work

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environment for years. So these facts clarifies that the organizations ACFS needs to hire
people from the global environment.
Actions of resolving the productivity issues
Objectives Short-term Actions Medium-term actions
Improving policy making
through better information
The organizations nee to
develop a complete strategic
vision for the NSW freight
logistics sector with the
inclusion of the agenda for
further actions
2. Enhance a freight
databases for NSW and
examine which could collect
information on container
movement within NSW
The organizations enhance
the capability of freight
modeling and work with
other states to enhance
comprehensive integrated
freight for future trends and
planning
2. The organization needs to
investigate feasibility of
enhancing air freight hubs
outside Sydney.
3. ACFS can work with the
state as well as federal
government to enhance the
standardization of rail
gauges, enhance long-term
relationship for container
double stacking on interstate
rail. The organization can
also priorities development
of intermodal rail freight

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terminals
Increasing competitiveness
and productivity through
better regulations
1. The firm should
continue with
NSW’s Transport
Commission to
comply with the
freight transport
regulations and to
get the approval
schemes between the
states
2. The organization can
examine any regional
authority or the
government issues
which could impede
the operation of 24
hour supply chain
As the middle term plan, to
organization should work
with the state and federal
bodies to enhance the
standard of rail accreditation
Table 1: Strategies to deal with the production issues
Objectives or solution Short-Term Actions Medium Term Action
To receive back up from the
government in freight and
logistics operation , the
organization needs to help
the industry and make
1. The organization
needs to review newt
technology and
enhance the
suggestions on the
ACFS could develop a series
of quantitative and
qualitative indicators to
guide both sector and the
government to analyze the

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informed decisions capabilities
2. The organizations
needs to identify the
best practices and
program as well as
guide the sector with
the evaluation of cost
and benefits
influence of policies on
innovation and enhance
performance.
3. The organization
could develop a
framework for
regular measurement
of innovation and
productivity
development across
the sector
Table 2: Best practices to adopt technology in logistics and freight operation
Establishment of network of effective intermodal facilities
It is identified that intermodal terminal are relevant and critical to increase productivity and
efficiency especially in the freight and logistics industry. So, without intermodal terminals,
different states and national aspirations about the movement of the goods by rail may not be
fulfilled. The organization needs to develop a more effective intermodal facilities which can
enhance the productivity. Thus, to implement a sustainable efficient network of well-loaded,
optimally developed internal modal terminals will be required, which could further involve,
• Victoria: “Altona, Somerton, Dynon, Lyndhurst, Western Interstate Freight Terminal
(proposed)”
• South Australia: “Penfield, Islington, Dry Creek”
• Queensland: “Acacia Ridge, Bromelton (proposed), Ebenezer”
• Western Australia: “Kewdale, Forestfield”

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• Tasmania: “Brighton”
 New South Wales: “Moorebank, Enfield, Chullora, Minto Eastern Creek/Badgery’s
Creek (both proposed)”
4. Any involvement should NSW government have in the resolutions of the issues
The government of NSW has identified the freight logistics industry as the priority for
financial growth through innovation. In late 2014, the NSW Premier introduced the NSW
Government Statement on Innovation to:
 Enhance an innovation strategy to support economic development in NSW
 Pay more attention to industries that are significant to State Economy and that have
the largest potential for innovation
The freight logistic industry has been observed as the most significant and enhancing and a
necessary sector which represent the GDP around 14% in Australia (Hepworth 2014).
According to the new regulations imposed by the government, the productivity is measured
by both cost reductions and increase sales. The government imposed there regulations that
productivity should be targeted to the most significant and largest sector. The innovation
should begin with the identification of customers’ need but it needs support of infrastructure,
resource and capability. The profits of innovation should be scaled and the risk should be
shared. Furthermore, it has also been identified that the Freight Logistic Council of NSW has
commissioned such initiative to deliver foundation for a series of innovation strategies as
well as actions for the freight logistics industry.

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Figure 1: Government innovation project
(Source: Hepworth 2014)
The initial phased of the work should outline as the series of action that should be taken by
Government to excite innovation as well as importance within the NSW Freight Logistics
sector in both short and long-term. Furthermore, the image given above helps to observe that
this project is envisaged two further phases of work which could involve a detailed
benchmarking and policy development.
5. Conclusion

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In conclusion, it can be mentioned that as the market has become dynamic, the
organizations in the sector will also have to understand this dynamic needs. The current state
of the sector implies that organizations tend to face a significant labor challenge. It is
observed that with demands of service and customers, expectations have rapidly ben
increasing, but the marketers in the sector find it difficult to deal with those growing needs
because the organizations currently have a significant skill gap. Especially, ASFC faces the
long-lasing and consistent skill gaps among the engineers in the organizations. This is
probably the reasons of several delays of project in the sector.
ACFS can address the issues related to its functions and operation but the issues
identified the external environment such as the fluctuating economy, poor governmental back
up are still a challenge for the organization. Thus, the proposed solution of complying with
the regulations developed by the government can help the firms to gain control over the areas.
On the other side, skill gap in the internal and external environment can only be resolved
when the organization starts hiring people from the global environment. The global expertise
can be expensive but for current situation, the firm needs global expertise because in the
coming future, the consumption of technology will increase and to use those advanced
technology, the organization needs to global workforce who are in touch with the use of new
technology. Furthermore, it can be mentioned that the organization in the sector gain benefits
in the coming future because presently, the market is price driven and price-driven market
cold delivery a huge amount of incentive to minimize the cost in the supply and provide
product at the lost cost to the eventual buyers.

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