Logistics and Supply Chain Management Report: Forecasting, 3PLs, IKEA

This report provides a comprehensive overview of logistics and supply chain management. It begins by examining the importance of forecasting for organizations like Dell, detailing demand, supply, and price forecasting methods, and suggesting ways to improve forecasting abilities. The rep...Read More

Running head: LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Logistics and supply chain management
Name of the student
Name of the University
Author Note

1LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Table of Contents
Introduction......................................................................................................................................3
Section 1..........................................................................................................................................3
1. Forecasting...................................................................................................................................3
a. Why is forecasting essential for a organization to improve its logistics and supply chain
management?...............................................................................................................................3
b. Describe the three main types of forecasts used within the context of the supply chain.........4
c. How can a business improve its forecasting abilities?.............................................................6
2. 3PLs.............................................................................................................................................7
a. What is a 3PL?.........................................................................................................................7
b. What is the information you would seek from a 3PL to demonstrate its ability to meet your
company requirements?...............................................................................................................7
3. Humanitarian logistics.................................................................................................................8
a. What is humanitarian logistics?...............................................................................................8
b. In general terms describe the roles of six key players in the humanitarian aid supply
network identified in the lectures that should collaborate to provide humanitarian support in
the times of disasters....................................................................................................................8
4. Using Information Technology in Logistics and Supply Chain Management............................9
Identify and briefly describe five ways that Information Technology is being used to improve
supply chain and logistics efficiency and effectiveness............................................................10

2LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Section 2........................................................................................................................................10
Case Study 1 Questions.................................................................................................................11
a. Describe four activities that IKEA is using to ensure its supply chain is sustainable and
describe the ways that IKEA is influencing all elements of its supply chain to adopt
sustainable practices..................................................................................................................11
b. Discuss the effect that IKEA’s sustainable sourcing and supply practices are having and are
likely to have upon the entire furniture industry now and into the future.................................12
Case Study 2 Questions.................................................................................................................12
a. Describe some of the ways that IKEA uses its customers to improve the efficiency and
effectiveness of its logistics and supply chain management.....................................................12
b. How does IKEA collaborate with its suppliers and logistics partners to ensure end-customer
satisfaction with its products?....................................................................................................13
Conclusion.....................................................................................................................................13
Reference.......................................................................................................................................15

3LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Introduction
In certain businesses, multiple promotions functioning in a concurrent manner might be
resulting in cannibalizing both promoted as well as non-promoted SKUs. To integrate
distributor-level promotions as well as associated forecasts will be allowing Dell towards
improving the flow of products as well as actualizing better outcomes regarding availability as
well as stock fill rates. In the same manner, to improve the capability of forecasting the impact
regarding price changes will be taking place on both revenue as well as gross margin dollars,
when it is effectively timed. As per the 5 Levels of Planning Hierarchies, majority of the
organizations are having the requirement for a strong SIOP as well as Master Scheduling to
schedule production in a more effective way.
Section 1
1. Forecasting
a. Why is forecasting essential for a organization to improve its logistics and supply chain
management?
1. To increase the satisfaction of the customers – For keeping the customers satisfied, Dell is
required providing them with the product they desire and when they need it. This forecasting
advantage in business will assist in predicting the demand of the product so that there is the
availability of adequate product for fulfilling the orders of the customers with short-lead times,
on-time. The significance of forecasting is much higher in Made-to-Stock (MTO), JIT Supply
Business or Assemble-to-Order (ATO) (Seuring 2013).

4LOGISTICS AND SUPPLY CHAIN MANAGEMENT
2. To reduce the inventory stockouts – Organizations such as Dell are required realising the
significance of forecasting, even when the organization is working in JIT Process or with
suppliers having long lead time. When Dell will be purchasing from long lead time suppliers
then the organization is required sending a demand forecast so that suppliers can do the
arrangement of raw materials in expectation of actual orders from customers. Regarding the case
of JIT Processes, forecasting will assist Dell for timing the organization’s purchases for
corresponding to when there is the requirement for fulfilling the sales. The less time inventory
will be spending in the warehouse, the less amount Dell will pay for letting it simply sit there
waiting to be sold (Fawcett 2013).
3. To lower the safety stock need – An effective method of forecasting will be having a direct
influence to plan the levels of inventory. This will assist in the development of production
requests in respect of manufacturing functions, to plan in respect of launching new products, to
plan the activities of promotion as well as to plan the seasonal variations regarding demand.
When an organization does the utilization of forecasting for planning any of the aforementioned
aspects, then Dell is not required carrying out high safety stocks for the management of those
events (Fawcett 2013).
b. Describe the three main types of forecasts used within the context of the supply chain.
The three main types of forecasts used within the context of the supply chain are
considered being demand forecasting, supply forecasting as well as price forecast.
Demand forecasting
This is regarded as the investigation of the organization’s demand in respect of a product
or SKU, for including the current as well as estimated demand by industry as well as product end

5LOGISTICS AND SUPPLY CHAIN MANAGEMENT
utilization. The importance of demand forecasting in supply chain delves with the aspect of
making predictions regarding the demand of customers in respect of a product, increasing the
customer satisfaction significance, reducing the significance relating to inventory stockouts,
scheduling production in a more effective manner, reducing the safety stock needs as well as
product obsolescence expenses and also, developing the pricing as well as management of
promotion (Ahi 2013).
Supply forecasting
This is considered being the process of data collection in respect of the present producers
as well as suppliers, and also technological as well as political trends that might be affecting the
supply. The supply forecasting is associated with the aspect of making an estimation regarding
supply of human resources considering the evaluation of present human resources inventory as
well as availability in the future. The primary step regarding supply forecasting is taking a stock
of the current inventory of human resources such as head count, job family inventory, age
inventory, inventory regarding skill, experience, values as well as abilities and so on (Ahi 2013).
Price forecast
This is depending upon the information collected as well as evaluated regarding supply as
well as demand. It will be providing a forecasting of prices that are considered being short-term
as well as long-term and the primary reasons in respect of those trends. Price forecasting is
considered being an essential analytical method in the present competitive as well as unstable
market. Price forecasting can be broadly classified into Fundamental Analysis processes as well
as Technical analysis processes. Fundamental Analysis does the establishing of a methodical as
well as official process to explore supply-demand in original markets. It will be attempting to do

6LOGISTICS AND SUPPLY CHAIN MANAGEMENT
the anticipation of changes as well as information relating to supply or demand as well as
evaluating the range as well as direction of price movement that results from the new
information. Certain methods in this regard are considered being market research, anticipation
survey as well as panel consensus. Technical analysis processes are used when relying upon
historical data can be done for predicting the price in the future (Seuring 2013).
c. How can a business improve its forecasting abilities?
1. Flexibility regarding forecasting – Through the aspect of creating flexibility into the
organizational forecasting will be assisting in allowing better precision as well as improved
outcomes within the organizational business.
2. Implementing rolling forecasts – The rolling forecasts will be allowing the organization in
better alignment of the organization’s budget with the stated plan of the company while making
improvements regarding the precision of the organizational estimations (Gleghorn 2015).
3. Communicating early as well as frequently – Since forecasting is affecting every business
aspects, the organization is required maintaining an open communication line with every
department all through the overall process for assisting in minimizing the concerns as well as
ensuring the alliance within Dell’s functional as well as organizational strategic aspects (Seuring
2013).
4. Involvement of the overall team – Forecasting is considered being a team effort so that the
departments as well as units are having a better understanding of their requirements. Also,
through the utilization of the overall team will be allowing Dell in having multiple traits of
stating where the organization presently is and where it will be later.

7LOGISTICS AND SUPPLY CHAIN MANAGEMENT
5. Having clarity about the goals – The forecasting objective is doing the prediction of Dell’s
financial future. Forecasting supports in the making of decisions regarding business and to
understand their influence prior to their implementation. Hence, Dell is required having a clear
understanding of what is driving the forecasting predictions regarding the organization.
6. Tracking of everything – There is the requirement for taking into account everything in respect
of forecasting regarding the next financial year. It is required being alert regarding the trends in
the market, behavioural aspect of the clients, and what the nature of the competition is when the
finalization of the business forecast is being done (Seuring 2013).
2. 3PLs
a. What is a 3PL?
A 3PL is the provider of outsourced logistic services. Logistic services do the
encompassing of anything that is having the involvement of the management of the manner by
which resources are being shifted to the places where they are having a requirement. In
organizational businesses, 3PL is having a broad meaning whose application can be made to any
service contract that is having the involvement of storing or shipping things. A 3PL service
might be regarded being an individual service like transportation or warehouse storage or it can
be considered being a system-wide collection of services having the capability to do the
management of the overall supply chain in an organization (Gleghorn 2015).
b. What is the information you would seek from a 3PL to demonstrate its ability to meet
your company requirements?
1. 3PL’s Level of technological sophistication – The organization is required conforming that the
capabilities of the 3PL’s processes are having the ability for integrating with the organization’s

8LOGISTICS AND SUPPLY CHAIN MANAGEMENT
automation needs like the company’s order routing as well as tools regarding storefront
inventory management (Gleghorn 2015).
2. Financial strength of the 3PL – A 3PL that is not having financial stability might be having
focus on its individual economic circumstances rather than assisting the organization in
improving its business. Therefore, it is required to find out whether the organization’s 3PL
partners are having the financial stability for weathering major distractions, particularly when
there is more restrictions toward capital accessibility. Strong flow of cash is the most significant
indicator of financial health.
3. Preparation of 3PL for disasters – Disruptions relating to supply chain will be having a
significant impact of the organizational bottom line, therefore the organization is required
knowing in what way the positioning of the 3PL is done for dealing with them on the logistics
side. Irrespective of the growing threat of supply chain disturbances, many organizations are
presently underfunding the planning of disruption-mitigation (Gleghorn 2015).
3. Humanitarian logistics
a. What is humanitarian logistics?
This is explained as the method to plan, implement as well as control the effective, cost-
efficient flow as well as storage of products as well as materials and also information that is
related, from the origination point to the consumption point in respect of doing the alleviation of
the suffering related to the individuals that are considered having vulnerability (Waters 2014).

9LOGISTICS AND SUPPLY CHAIN MANAGEMENT
b. In general terms describe the roles of six key players in the humanitarian aid supply
network identified in the lectures that should collaborate to provide humanitarian support
in the times of disasters.
1. Governments – The host governments, governments from neighbouring countries, as well as
governments from other countries within the global community are considered being the
activators of the steam regarding humanitarian logistics post the striking of a disaster as because
they are having the power to do the authorization of operations as well as mobilizing of
resources.
2. Military – Military plays a very significant role as because soldiers are called upon for
providing basic support due to their better planning as well as logistic abilities.
3. Aid Agencies – They assist the governments in alleviating the suffering that the disasters are
causing (Wisner 2014).
4. Donors – The donors are providing the funding bulk in respect of significant relief activities.
In general, donations are consisting of providing financial means for supporting the humanitarian
functions or offering free products as well as services while performing logistics functions
(Wisner 2014).
5. NGOs – These are including various roles that range from global players like CARE to small
as well as micro-organizations that are developing within domestic communities but are having
the ability for operating at the global level as well.
6. Logistic and other companies – The existence of private-sector organizations such as logistics
as well as other organizations is having an increasing growth in the humanitarian relief

10LOGISTICS AND SUPPLY CHAIN MANAGEMENT
environment. Within the humanitarian logistics, organizations can perform the roles of donors,
collectors as well as providers (Waters 2014).
4. Using Information Technology in Logistics and Supply Chain Management
Identify and briefly describe five ways that Information Technology is being used to
improve supply chain and logistics efficiency and effectiveness.
1. Electronic Commerce – It take into consideration the process of electronic data interchange, e-
mail, electronic transfer of funds, electronic publishing as well as shared databases.
Organizations are having the ability for automating the method of moving documents
electronically within the suppliers as well as customers.
2. Electronic Data Interchange – Electronic Data Interchange is providing the advantages of
providing fast process regarding information, improved customer services, lesser paper work,
better productivity, cost effectiveness, competitive advantage as well as enhanced billing (Voss
2017).
3. Bar coding and scanner – These are having major visibility in the super-market’s check-out
counters. This code does the specifying of the product names as well as the name of the
manufacturers.
4. Data warehouse – Data warehouse is a consolidated database whose maintenance is done in a
separate manner from the production system database of an organization. The organization of a
data warehouse is done around informational subjects rather than particular business methods.
5. Enterprise resource planning (ERP) tools – Many organizations are viewing the ERP process
as the essential element of their IT infrastructure. They assist in capturing the data as well as

11LOGISTICS AND SUPPLY CHAIN MANAGEMENT
reducing the manual procedures as well as task related with processing inventory, customer order
as well as financial information (Coyle 2016).
Section 2
Case Study 1 Questions
a. Describe four activities that IKEA is using to ensure its supply chain is sustainable and
describe the ways that IKEA is influencing all elements of its supply chain to adopt
sustainable practices.
1. IKEA does the adoption of a demand-driven planning as well as business functioning model
that is depending upon real-time demand insights as well as demand shaping.
2. IKEA has built an adaptive as well as agile supply chain with dynamic planning as well as
integrated implementation (Fernie 2014).
3. IKEA did the optimization of the product designs as well as product management to supply,
manufacture as well as having sustainability for doing the acceleration of profitable innovative
aspects.
4. IKEA does the aligning of its supply chain with goals of business through the integration of
sales as well as operations planning with corporate planning of business (Fernie 2014).
The E-Wheel tool is considered being an effective communication vector with partners,
particularly suppliers of raw materials as well as manufacturers, resulting in improved
acknowledgement, accountability as well as sensitivity on their part.

12LOGISTICS AND SUPPLY CHAIN MANAGEMENT
IKEA did the creation of a code of conduct called IWAY that will be including rules as
well as guidelines, which will be assisting the partners for reducing environmental influences.
This code does the influencing of the IKEA partners towards following national as well as global
laws, not using child labour, reducing waste as well as emissions, following the health as well as
safety needs, caring for the environment as well as taking care of the staffs (Dekker 2013).
Also, to adopt sustainable practices, IKEA formed a partnership with UNICEF for
preventing child labour and as a result, assist its suppliers to manage the aim as well as with
WWF for promoting sustainable utilization of natural resources and as a result, supporting the
suppliers to manage sustainable resource utilization (Coyle 2016).
b. Discuss the effect that IKEA’s sustainable sourcing and supply practices are having and
are likely to have upon the entire furniture industry now and into the future.
All the suppliers of IKEA are following the IWAY code of conduct stating that they are
applying it when supplying to customers other than IKEA as well. As a result, these sustainable
activities are having a positive influence on other entities, connected to the IKEA supplier’s
individual supply chain. This is a type of striking impact regarding the various supply chains
(Stadtler 2015)
Another impact is because of IKEA’s strong market condition. IKEA is considered to be
one of the furnishing industry’s leaders in most of the countries where it is conducting business,
as a result, influencing its competitors. Since, customers are having a keen interest to purchase at
IKEA due to its sustainable activities, competitors are having the influence of doing the same. As
a result, over a longer period, the entire furnishing chain will be having sensitivity in respect of
sustainable practices (Rushton 2014).

13LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Case Study 2 Questions
a. Describe some of the ways that IKEA uses its customers to improve the efficiency and
effectiveness of its logistics and supply chain management.
1. Cost-per-touch inventory tactic – This process assist the customers in selecting the furniture as
well as retrieving the packages themselves. This is considered being an inventory management
tactic. In regard to the rule of thumb, IKEA has found out that the more number of hands are
touching the product, the more costs are related with it (Rushton 2014).
2. Inventory Management and In-store Logistics for IKEA – This strategic aspect will be
ensuring that IKEA is having ready inventory for meeting the demand of the customers as well
as reducing the expense of lost sales (Mangan 2016).
b. How does IKEA collaborate with its suppliers and logistics partners to ensure end-
customer satisfaction with its products?
The organization does the focusing on the aspect of making sure there would occur
customer satisfaction via the condition of enormous convincing as well as value during the entire
experience related with shopping. Accordingly, products that are meeting the needs of the
customers are offered in addition to services that assist the customers for easily identifying,
purchasing, transporting as well as using the products (Christopher 2016). In addition, IKEA did
the establishment amenities like parking facilities, a food court, supervised play area of children,
the mini cinema and so on for providing the high convenience of the customers relating to their
activities for shopping as well as adding value to their brand (Mangan 2016).

14LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Conclusion
To conclude it can be stated that the forecasting is considered essential for a company for
improving its logistics as well as supply chain management. In this regard, the major kinds of
forecasts are being described in the context of supply chain. A description of 3PL has also been
given and the humanitarian logistics has been discussed and there has been the identification of
the key players in the humanitarian aid supply network. Through the process of repurposing,
identifying as well as removing inventory that is considered being obsolete, the inventory
volume on hand will be decreasing. Through this, both direct as well as indirect expenses to
maintain the obsolete inventory will plummet. To have a standardized steadfast means to forecast
demand will be stating that there isn’t any excess ordering of stock and this will be reducing the
option of obsolete stock.

15LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Reference
Ahi, P. and Searcy, C., 2013. A comparative literature analysis of definitions for green and
sustainable supply chain management. Journal of Cleaner Production, 52, pp.329-341.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Coyle, J.J., Langley, C.J., Novack, R.A. and Gibson, B., 2016. Supply chain management: a
logistics perspective. Nelson Education.
Dekker, R., Fleischmann, M., Inderfurth, K. and van Wassenhove, L.N. eds., 2013. Reverse
logistics: quantitative models for closed-loop supply chains. Springer Science & Business
Media.
Fawcett, S.E., Ellram, L.M. and Ogden, J.A., 2013. Supply Chain Management: Pearson New
International Edition: From Vision to Implementation. Pearson Higher Ed.
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan page publishers.
Gleghorn, G.D. and Harper, A., 2015. Logistics and Supply Chain Management and the Impact
of Information Systems and Information Technology. In Technology, Innovation, and Enterprise
Transformation (pp. 295-301). IGI Global.
Mangan, J. and Lalwani, C., 2016. Global logistics and supply chain management. John Wiley &
Sons.
Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and
supply chain management. Cengage Learning.

16LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Rushton, A., Croucher, P. and Baker, P., 2014. The handbook of logistics and distribution
management: Understanding the supply chain. Kogan Page Publishers.
Seuring, S., 2013. A review of modeling approaches for sustainable supply chain
management. Decision support systems, 54(4), pp.1513-1520.
Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and
advanced planning (pp. 3-28). Springer Berlin Heidelberg.
Voss, S., Sebastian, H.J. and Pahl, J., 2017. Intelligent Decision Support and Big Data for
Logistics and Supply Chain Management: A Biased View. In 50th Hawaii International
Conference on System SciencesHawaii International Conference on System Sciences (pp. 1338-
1340).
Waters, D. and Rinsler, S., 2014. Global logistics: New directions in supply chain management.
Kogan Page Publishers.
Wisner, J.D., Tan, K.C. and Leong, G.K., 2014. Principles of supply chain management: A
balanced approach. Cengage Learning.