Cardinal Logistics, New Zealand: Detailed Business Report Analysis

This business report examines Cardinal Logistics, New Zealand, a major supply chain and logistics management company. The report provides an overview of the company's background, including its mission, vision, and organizational strategy. It delves into the type of business, emphasizing logistics and supply chain management, and explores the company's operational strategy, focusing on cost-effective procedures and supply chain network management. The report analyzes productivity, calculating labor factor and multifactor productivity, and discusses inventory management, highlighting the use of ERP and WMS systems for optimizing inventory balances. The report also addresses service process strategies, stakeholder involvement, and the importance of continuous professional development. The report concludes with a reference list of sources used.

Business Report
Company Name
Cardinal Logistics, New Zealand
Auckland - Head Office
Auckland
General Business & Orders (All Hours) Ph:
Or 0800
EMAIL
WEB: :

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Table of Contents
Table of Contents........................................................................................2
Executive Summary......................................................................................3
1.0 Company Background..............................................................................4
2.0 Type of Business.....................................................................................4
3.0 Productivity...........................................................................................4
4.0 Inventory Management............................................................................4
5.0 Reference List........................................................................................4
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Executive Summary
The report was prepared to discuss about the most important aspects of operations
management considering the business organization Cardinal Logistics, New Zealand. The
company background illustrated the mission and vision of the company, which was to manage
the flow of goods and services properly and even aimed “To be the best 3PL provider in New
Zealand”. The operations strategy helped in managing the work processes along with
determining the cost efficient approaches to deliver the products to the stores on time. The
logistics planning had helped in overcoming the labor related risks and even reduced the costs of
managing the business operations, furthermore maintained proper supply chain networks. The
productivity was achieved by determining the labor factor productivity for both prior to the
changes and after the changes. To manage the inventories properly, the ERP and WMS were
considered as effective to optimized the inventory balances and improve business performances
too.
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1.0 Company Background
Values:
Cardinal Logistics, New Zealand is one of the major supply chain and logistics
management company that is specialized in the logistics planning and work with clients to
deliver the best service solutions for fulfilling the needs and requirements of the business
efficiently. The contract warehousing enables delivering the best quality services and even
manages distribution of products and services to the stores and shops all across New Zealand.
The nature of the business is logistics and supply chain management. The tem within Cardinal
Logistics boosts of a strong workforce consisting of 400 employees and is growing rapidly with
the company providing better learning, growth and promotional opportunities along with
competitive remuneration packages too (Cardinallogistics.co.nz, 2018).
Vision statement:
The goals and objectives of the organization are planning, implementing and
controlling the storage and flow of materials and information for meeting the needs and
requirements of the customers. Cardinal Logistics possesses a Warehouse management system
that has the goal of controlling the movement and storage of items within the warehouse and
furthermore manages the shipping, receiving and pickup of real time information and messages
all throughout (Krajewski, Malhotra & Ritzman, 2015).
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Mission statement:
The mission of the organization is “To be the best 3PL provider in New Zealand”.
The vision of the organization is to Deliver-in-Full, On Time, Undamaged through the
measurement and achievement of the highest performance standards and provide the customers
with tailored solutions for achievement of both time and financial management (Jacobs, Chase &
Lummus, 2014).
The organizational strategy is the sum of various actions undertaken by the
organization to achieve the long-term goals and objectives and furthermore develop a strategic
plan through the involvement of individuals from every levels of the organization. The
organizational staretgy at Cardinal Logitics has helped in managing the supply chain networks
properly and even ensured better finance management, enhanced customers’ services along with
the delivery of better marketing experience and advanced technological implementations (Slack,
Brandon-Jones & Johnston, 2013).
The operations strategy, on the other hand, helps in evaluating the effectiveness of
utilizing the various resources and ensures successful management of the work processes and the
human resources within Cardinal Logistics, New Zealand. The operational strategy is actually
the logistics strategy that defines the service levels and derives the most cost effective procedures
for introducing new products lines and even delivering those properly to the stores from where
the customers can access. The man aim of the operational or logistics strategy could be to deliver
what the customers actually wanted and even work with the logistics partners throughout the
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supply chain (Galindo & Batta, 2013). The rapid changing in supply chains culd also affect the
logistics management and to adapt to the change and maintain a flexible supply chain network,
Cardinal Logistics should develop the operations or logistic strategy for determining the impact
of imminent changes and enable functional changes to prevent reduction of service levels.
The major issues that the business might face could be the increase costs of
transportation, lack of outsourcing that prevent partnership with the Third Party Logistics
Company and high competition level in the market. Other issues include inaccurate data,
information, and not managing the flow of information properly. There could be various issues
related to the supply chain management along with prevention of business process improvement.
The costs incurred while retaining and training labor could be higher and thus the labor costs
should be reduced as well (Stevenson & Sum, 2015).
2.0 Type of Business
The company is a provider of services that facilitates the management of supply chain
and logistics with ease and effectiveness. Cardinal Logistics provides various benefits including
low cost of inventory management, improved customers’ services, and greater flexibility in
fulfilling the changing logistics requirements. The capital investment is also lowered along with
better inventory management. The planning for logistics has helped in working with the clients
and develops the best service related solutions for meeting their needs timely. The company’s
outsourcing of the warehousing process also helps in allowing the customers to focus on the core
business, which can furthermore overcome the labor related risks, reduce costs, improve the rate
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of return on investments and improve the customers’ services (Smith, Maull & CL Ng, 2014).
Cardinal Logistics also provides varied range of supply chain services that can be integrated in
the warehousing solutions or maintaining order appropriateness and integrity during the
management of inventories.
The service process strategy includes managing the services within the organization
properly and ensuring proper management of inventories and supply chain operations. The
operational technology could manage the inventories and check the accuracy of the orders
placed, furthermore manage integrity and ensure that the orders were distributed timely and with
convenience. The handling of large containers and consolidation of stocks along with the
management of better storage solutions are major services included in the service process
strategy too (Drake & Spinler¸ 2013). The handling of freights properly could reduce the costs of
shipping and enhance the level of security furthermore improve the level of customer
satisfaction. The service process strategy would also allow for maintaining a group or team
consisting of skilled, dedicated and expert professionals who could displace the items and ensure
successful contract warehousing as well (Agrawal & Smith, 2013).
Various stakeholders are involved in the workforce and the individuals shall possess
different skills, knowledge and expertise to enhance the production process and generate more
revenue for Cardinal Logistics, New Zealand. The members when attended meetings and
conferences cold continue with the professional developmental plan as well as ensure systematic
maintenance and improvement of the knowledge, skills and competence. The members would be
encouraged to develop the CPD plan, which would further assess their suitability or convenience
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to work for the company and furthermore maintain high level of coordination while working
(Dekker et al., 2013). The individuals must possess skills to analyze statistical data, know about
the various aspects of human resource management, impact of globalization and expertise in
managing the interpersonal relations too.
3.0 Productivity
first case current
supplier cost
new
supplier
cost
labor
productivit
y
multifactor
productivity
overh
ead
wag
es
Mater
ials
10 operators $11,000 $11,000 30 1.309090909 $2,00
0
$8,0
00
$1,00
0
14400 calls
per week
8hrs /day
6 days/week
second case 45
7 operators
15120 calls
per week
1.374545455
8hrs /day
6 days/week
a) The labour factor productivity for the current situation is 30 operator /
hour and the multifactor productivity is 1.31.
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b) The labour factor productivity for the current situation is 45 operator/
hour and the multifactor productivity is 1.37.
c) The organization can provide better service quality by increasing the
quality of the operational processes.
d) If the operator adopts the new system there will be increase in
productivity by 0.06% which means that the organization should adopt the
new system.
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a) Hours needed each month= 100,000*0.1= 10,000 hours/ month
Hours required each day= (10,000/20) = 500 hrs per day
Workers needed per day= (500/8) = 62.5 workers/ day
No of workers per shift= (62.5/3)= 21 workers/ shift [ no of shifts = 3/ day]
b) Productivity of each worker= 100,000 / (100*8*3*20) = 2.08 parts/hour
c) Multifactor productivity = 100,000/( 10*100,000+ 100,000 + 10,000*10)
= .083 parts in $1
d) New labour productivity factor = (150,000 / (100*8*3*20) = 3.125 parts/
hour
4.0 Inventory Management
The effective transportation system can optimize the transportation system of the
customer and at the same time, ensures the continuation of the production process, furthermore
manages uninterrupted supply of the finished goods and services provided to the customers. The
most effective approaches to inventory management are establishing an annual stocking policy to
determine the maximum and minimum level of stocks that are kept in the waregouses. The
inventory budgets are prepared to manage the fixed operational costs, costs of logistic and costs
of distribution and ownership too (Coelho & Laporte, 2014). The maintenance of a perpetual
inventory system could be another effective inventory management approach where the
Enterprise resource planning or ERP and Warehouse management system or WMS should be
combined to optimize the inventory balances. The products that should be fast moved must be set
up in the nearby locations to the shipping, receiving and staging areas.
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The Just in Time theory could be useful for controlling the inventories and store the
materials properly, furthermore reduce the costs of storing materials, shipping and carrying costs
too. The interest on credit is achieved to develop inventories properly as well as manage the
supply chain activities without interrupting on the ability to get labor or materials. The levelized
production theory would optimize the costs of labor management as well as fill the orders placed,
furthermore facilitate the ability to forecast demand by month, days or years (Song, Dong & Xu,
2014).
The demand forecasting is an effective way to manage the inventories through the
prediction of future demand for the product for the present as well as the future. The forecasting
could help in forecasting the market conditions as well as understand the scopes for market
expansion, furthermore revise the expectations for the future. The market forecasting would also
prevent little or more use of inventories and even forecast the sales by allowing the customers to
know about the business position and whether it is capable of satisfying the demands or not
(Cardinallogistics.co.nz, 2018). The forecasting has the potential to deal with the various
aspects required for inventory planning and management and even conduct surveys and tests of
products to gather important data.
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5.0 Reference List
Agrawal, N., & Smith, S. A. (2013). Optimal inventory management for a retail chain with
diverse store demands. European Journal of Operational Research, 225(3), 393-403.
Cardinallogistics.co.nz. (2018). Cardinallogistics.co.nz. Retrieved 28 March 2018, from
http://www.cardinallogistics.co.nz/
Coelho, L. C., & Laporte, G. (2014). Optimal joint replenishment, delivery and inventory
management policies for perishable products. Computers & Operations Research, 47,
42-52.
Dekker, R., Fleischmann, M., Inderfurth, K., & van Wassenhove, L. N. (Eds.). (2013). Reverse
logistics: quantitative models for closed-loop supply chains. Springer Science &
Business Media.
Drake, D. F., & Spinler, S. (2013). OM Forum—Sustainable Operations Management: An
Enduring Stream or a Passing Fancy?. Manufacturing & Service Operations
Management, 15(4), 689-700.
Galindo, G., & Batta, R. (2013). Review of recent developments in OR/MS research in disaster
operations management. European Journal of Operational Research, 230(2), 201-
211.
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