Distribution Systems: Transportation and Workforce

Distribution Systems

QUESTION: Which is more important to a distribution center, a good transportation system or a plentiful workforce?

1) What is your opinion on GREG's ANSWER to the Question above? Be sure to make a good argument for your position and support your response with evidence from a resource.

GREG's ANSWER:
When it comes to an organization's most important resources, I will always make the argument that people are an organizations most important resource and must be cared for. You can have all of the latest technology and facilities, all the best equipment, and the latest streamlined organizational structures however it is people that make the difference in your organization. Without a highly competent, trained, and motivated workforce, all systems fail or at the very least are inefficient in some way. Having the right mix and right number of people is very important too.

A good transportation system is critical too. Take Amazon for example. One of the top driving business operating cost at Amazon is Transportation cost and for a variety of reasons. Nearly 9 percent of Amazon's net sales were tied up in shipping cost or about $5.5 billion in the 12 months preceding Sept. 30, 2013. Additionally transportation costs are increasing at a rapid rate as customer services levels increase. (Clark & Young, 2013) Early distribution strategies sought to take advantages of sales taxes thus creating an over dependence on transportation systems. In recent years, Amazon has revamped their distribution network strategy to locate fulfillment centers closer to metropolitan areas. Amazon is also developing their own fleet of delivery vehicles to reduce transportation cost and provide Amazon more flexibility in delivering product. Bottom line is a poorly managed distribution strategy can significantly erode profits!

Clark, Y., Young, M., (Dec 2013). Amazon: Nearly 20 Years in Business and Still Doesn't Make Money, But Investors Don't Seem to Care. Retrieved on 18 Oct 2014 from
http://www.ibtimes.com/amazon-nearly-20-years-business-it-still-doesnt-make-money-investors-dont-seem-care-1513368

2) What is your opinion on MANUEL's ANSWER to the QUESTION above? Be sure to make a good argument for your position and support your response with evidence from a resource.

MANUEL's ANSWER:
I believe that both of them are equal important and vital to the operation. We must have a good transportation system as well as having a plentiful workforce. If we have a good transportation system but not a large enough workforce to run it, it won't work out because we need those employees to work the good transportation system we have. If we have plentiful workforce but not a good transportation system, we can't be successful because we won't have the how to experience to manage the system. Without a good transportation system, we won't be able to have good visibility of our shipments. We will have stockpile of shipments waiting to be shipped or having shipments going to the wrong places. If we have a good transportation system but shortage of personnel, it will be difficult to manage because we don't have enough employees to run this good transportation system. We would eventually have to hire more employees that means spending more money because we would have to pay for their salary.

http://www.inboundlogistics.com/cms/article/choosing-a-dc-location-keeping-success-in-site/