Inventory Management and Transportation

Running Head: TRANSPORT & INVENTORY MANAGEMENT
Transport & Inventory Management

TOPIC 1
A. Evaluation of the warehouse facilities
In this topic, we will be discussing and evaluating VAPC warehouse facility. The warehouse
facility is located in North West of Singapore. The current function of this warehouse is to
handle incoming material from suppliers and customers, processing of parts, as a storage area for
receive parts and stocks, packaging area and finished goods area for delivery to the customer.
The warehouse is an important part of the supply chain operations. A warehouse can help to
store goods to be used in manufacturing and transform into the finished product to meet
customer demand. Moreover, storage in the warehouse is considered as a backup of the
company, which can help the company in meeting demand supply ration of the products (Genin,
Lamouri & Thomas, 2008).
The warehouse is considered as a significant component of the Vallourec because it offers
innovative global solutions to its customers to meet the advanced level energy challenges of the
contemporary world. The warehouse further comprises a varied range of products such as
seamless tubes, acquaintances for drilling operations and line pipes. VAPC use Just-In-Time
approach to manage the functionality of its warehouse. The warehouse incorporates a customized
system for order processing and receiving. However, material movement and inventory
management are carried using manual tracking practices through excel. Furthermore, VAPC
also uses web-based ERP system running on NIX, Mac or Windows platform (Genin, Lamouri &
Thomas, 2008). Considerations of inventory are highly influenced by the lead time from the
customers. Therefore, MOQ for raw materials is controlled using JIT approach. Most of VAPC
inventories and stock movement that are used as parts of the finished good components are

managed by excel manual tracking. Conversely, SQL Ledger is only used for managing the
purchase and receiving of components or parts. In the simple context, type of system used in
VAPC strictly depends on the type of product purchased or received by the warehouse (Vieira,
Requena, de OP Junior & de Araújo, 2010).
The evolving technology within the company is centrally aligned to offer a variety of tubes
for petrochemical installations in refineries, for automotive industries, for construction of
stadiums, complexes, buildings and structures and for mechanical engineering applications such
as hydraulic cylinders, machining tools, etc. Even more, the company is also functioning to
support the growth in the energy markets by availing new production facilities to Brazil, the
USA, China and the Middle East. These assisted the organization in providing a close solution to
the customers and advance its competitiveness in the market (Act & Arabia, 2011).
B. Identification, explanation, and justification of the intermodal/multimodal choice
The transportation of Vallourec is quite complex due to the variety of products and services.
For instance, tubes of large size will be dispatched accordingly, however; tubes of smaller size
can be transported through any mode. The majorly used transport modes are land transport, sea
transport, and air freight. Product type, size and weight play a crucial role in determining the
mode of transport for the vehicle. Bulky items will have an impact on the cost and lead time to
customers, whereas, small and lightweight articles are contented to transport in any part of the
world (Brasil, 2013).
As the business is expanded to a great level having a huge customer database, Vallourec
undertakes various transport choices such as intermodal and multimodal transportation. In
Intermodal transportation, the cargo is elated from the origin to destination by using different

means of transportation, which all have different transport carrier responsibilities. The contracts
and liability of transportation also vary for every separate transport carrier due to multiple
transport bills of lading. However, the Multimodal choice is defined as transportation of cargo
from initial to final position by multiple modes of transport having different carrier
responsibilities under a common bill of lading. In the simple context, it can be inferred that both
modes of transport are imperative for Vallourec. The only factor differentiating the two is the
centralization of transport carrier responsibility and bill of lading (Zhong, 2015).
Thus, transportation of the Vallourec can be considered as an adaptable practice of improved
technology. The company has entertained all sorts of transport modes and choices. Flexibility in
the transportation of goods as per their qualities makes it more cost efficient for the company. It
exclusively depends on the type of products deliver to the customer. For instance, pipe with 40-
43ft length will differ with shorter parts; therefore, its packaging and transportation will also
differ (Bernardi de Souza & Pires, 2010).
C. Critical evaluation of the link between the warehouse, inventory and the intermodal/
multimodal choice
The warehouse of the Vallourec is considered as a moral fiber of their business due to its
contribution to the overall business practices. The warehouse is potentially used to store raw
materials, which will facilitate the requirements of the company in the future engagements.
Along with this, it also stores finished products of the company to meet the market and customer
requirements in the upcoming future. Overall, the role of a warehouse is highly conscientious in
the execution of the overall business practices and inventory management of the company
(Grijalva, Perozo, Holzmann, Paz & Oppelt, 2017).

Along with this, the inventory and transportation of the goods is relatively associated to the
warehouse management practices. The administration of the Vallourec’s warehouse is sternly
commanded to scrutinize the inventory management, warehouse practices and
intermodal/multimodal transport choice. Moreover, the flexibility of the operational practices in
Vallourec’s warehouse can be estimated by the consideration of various transportation and
inventory management policies, solely on the basis of types of products and services (Binmore,
2015).
Such implications for the management of the organization potentially present the
organizational perspective for the overall and sustainable development of the company. The
objectives of the management heads towards warehouse management and inventory management
are centrally surrounded to provide better customer service and gain competitiveness in the
market. Moreover, the transportation facility of Vallourec is also intended to enhance the overall
efficiency of the company. Consideration of land transport, sea transport, air transport,
intermodal and multimodal choice contributes to providing quality service to the customer as per
their compatibility. Overall, the strategies and orientation of Vallourec have justified the
associations of warehouse, inventory, and transport in all perspectives (Campbell, Butler &
Raiborn, 2014).
TOPIC 2
A. Identification, analysis, and rationale of the location decision
Vallourec Tube-Alloy, a parental association of the Vallourec subsidiary, which is into the
business of producing and repairing the components of Oil & Gas well started a new industry
known as ‘Vallourec Tube-Alloy Asia-Pacific’ in the region of northern Singapore. The new

venture is projected to support the OCTG activities of the group by escalating the market venture
of Vallourec Tube-Alloy, which was limited to only 4 production facilities in the USA till now.
This part of northern Singapore is a specialized plant to thread VAM premium connections on
wellhead and completion equipment. It also manufactures turnkey OCTG accessories with an
annual capacity of approximately 25,000 threads (Sun, Huang, Liu & Liu, 2016).
The location of the company is justified by the fact that this unit is fully qualified to perform
the actions of VAM premium connections. The associated manpower of 50 engineers and
technicians are positioned to facilitate the business of Oil and Gas industry of Singapore, which
necessitate high added-value tubular solutions. After the successful accomplishment of the
strategic importance in the market of Asia, Olivier Mathley, Vice President of Vallourec Tube-
Alloy Asia Pacific has targeted the market of Singapore due to emergence as a major Oil and
Gas hub. Vallourec is ready to develop its policies and practices in order to meet the market
standards and customer expectations of Singapore (Gardner, 2012).
In Asia-Pacific, there are approximately 2000 employees allied to Vallourec to provide a full
range of service and products of oil, gas and electricity market. The production is accomplished
by Valinox Nuclear Guangzhou, Vallourec Changzhou and VAM Changzhou plants in China, 2
plants in Indonesia, Vallourec Tube-Alloy in Singapore, a Malaysian plant for Serimax tube
welding and many other sales and marketing offices in Vietnam, Korea, Perth, Jakarta, Ho Chi
Minh and Beijing-Shanghai (Bullinger, 2012).
B. Factors influencing the location decision
There is no denying the fact that the modern era is a world of Asian economies. Emerging
financial system of India, China, and Asian countries clearly indicate towards the movement of

multinational companies to this region in order to take advantage of large domestic markets,
available resources, cheap labor and advancing infrastructure. Considering the similar influence,
Vallourec also moved to Singapore with an objective to expand business in emerging and
profitable market. Excellent connectivity to the world is the most crucial factor in the location
decision process. Strategic location in the heart of South-East Asia near the emerging economies
of India and China facilitates the business ventures in making more connections and easy
transportation of goods across the borders (Willard, 2012).
Along with this, due to established bank regulations of Singapore, the country has always
sustained the start-up businesses, which is also an imperative factor in deciding the location to
Singapore. Surrounded by the environment, which nurtures start-ups and business-friendly
ecosystem considerably facilitates the organization in gaining overall and sustainable
development for the future. Moreover, the country has also provided the advantage of attractive
tax frameworks and extensive trade agreements for the business organizations to make the
market more profitable (David, 2011).
Another vital factor, which contributed to the location decision process, is the availability of
strong judicial regulations. This ensures a high degree of personal safety and other benefits by
the legal system of Singapore. In South-East Asia, Singapore has the most stable judicial system
to assist the sense of security and comfort for the entrepreneurs and investors, which further
leads to enlargement of market opportunities and competency in the market. Even more, it also
facilitates the organization to access the local talent pool of highly skilled labors, which will be
cost-efficient for the company. Singapore is considered as a giant competitor in terms of the
labor force for the industries. Effective policies of the multinational companies, attractive living

conditions, and adaptable working environment have made the employees motivated to work
(Lee & Lings, 2008).
C. Examination of the impact of location on the future expansion of the company
On the basis of discussions made above, it can be inferred that Vallourec has chosen
Singapore as their business location after a certain investigation on the market conditions. The
company has made a crucial understanding of the opportunities from the market of Singapore
along with the strategies for future expansion. In case, Vallourec expands their business venture
in Singapore, it will experience various benefits from the market, such as easiness of starting a
venture due to Singapore’s unique position in the global economy and its pivotal contribution as
a business epicenter in the competent market of Asia (Piekkari, Welch & Welch, 2014).
Various economist and economic forums have explored that Singapore presents a great
market for the emerging business organization. The policies and attributes of the country
engender a business-friendly ecosystem, which supports start-ups as well as expansion policies.
Thus, future expansion of Vallourec in Singapore will make the parental organization profitable
and more competent. Along with this, the air connectivity of Singapore is a crucial factor
justifying the future expansion plan of Vallourec to Singapore. The extensive air services from
Changi International Airport serves approximately 100 airlines to 320 cities of around 80
countries and territories. This will provide a worldwide connectivity and transportation of goods
to Vallourec (Ahmad & Kitchen, 2008).
The regulations of Singapore also afford people with the best IP protection around the world.
According to the World Economic Forum’s Global Competitiveness Report 2015 – 2016,
Singapore offers great services to comprehensive intellectual property protection, which further

authorizes the location decision of Vallourec. In addition to this, the Economic Development
Board (EDB) of Singapore also offers incentives to the organization that relocates their regional
headquarters (RHQ) and international headquarters (IHQ) to Singapore. Thus, future expansion
of Vallourec in Singapore will possess the likelihood of getting incentives for headquarter setup
(Gabrielsson & Pelkonen, 2008).

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