developing a logistics strategy
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1.Consider a manager developing a logistics strategy. Discuss specific situation for which the best approach would be to
a.Employ internal logistics expertise.
b.Acquire a company with this expertise.
c.Develop a strategy, and then employ specific suppliers to carry out well-defined portions of the strategy.
d.Develop the strategy with a third-party logistics provider
2.Why is the third-party logistics industry growing so rapidly?
3.There are three types of retailer supplier partnerships: quick response, continuous replenishment, and vendor-managed inventory (VMI). For each type, discuss situations where that type would be preferred over the other two. For instance, compare quick response to continuous replenishment: under what conditions is one preferred over the other?
4.Consider the quick response partnership. Suppose the retailer places an order at the beginning of each month but transfers POS data to the supplier every week. What is the impact of the manufacturer's weekly production capacity on the benefit from beneficial: high weekly production capacity or low capacity? How should the supplier use the weekly demand data received from the retailer?
5.Discuss the various possibilities for inventory ownership policies in a VMI arrangement. What are the advantages and disadvantages of each of these policies?
6.Recall Example 8-13, the story of Spartan Stores' failed VMI effort. Discuss how Spartan might have done things differently in order to help the program succeed.
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1.Consider a manager developing a logistics strategy. Discuss specific situation for which the best approach would be to
a.Employ internal logistics expertise.
Internal logistics expertise is most appropriate when a large portion of the logistics system is within the company. For instance, in a situation where the goods are picked up from the manufacturer by the company's vehicles, stored in company owned warehouses and brought to the production facilities by own vehicles.
Such an expertise is very helpful also when the finished goods are delivered to the customer through owned vehicles and transportation.
b. Acquire a company with this expertise.
The acquisition of a company with this expertise is appropriate under two circumstances. First, when the acquired company has a well developed logistics network/system in a new geographical area in which the company wants to expand. Second, when the company is currently using a third-party logistics provider and wants to acquire this expertise to reduce costs;
c. Develop a strategy, and then employ specific suppliers to carry out well-defined portions of the strategy.
When the company is well-developed, makes large purchases, there are several suppliers competing with one another to supply goods to the manager's company, this strategy is helpful. For example, if the is a nationwide chain of departmental stores a, the departmental stores develops a strategy, and then employ specific suppliers to carry out well defined portions of the strategy. Such a departmental store can require its suppliers to mark its deliveries with RFIDs and track the deliveries from the time these leave the premises of the supplier.
d. Develop the strategy with a third-party logistics provider
This logistics strategy works when the logistics provider is a strong company. The logistics supplier plays an important role in the supply chain of the company and is instrumental in making/receiving deliveries. For instance, there are several online businesses where the delivery of goods on time is important and so a third party delivery system provided by say FedEx becomes important. In this case the third-party logistics provider has bargaining power.
2. Why is the third-party logistics industry growing so rapidly?
The third-party logistics industry is growing so rapidly because of the variety of services being offered and the extent of services being provided by third party logistics industry. For instance, there is a host of on demand transportation services available, like international expedited services, next flight out service, ...
Education
- BSc , University of Calcutta
- MBA, Eastern Institute for Integrated Learning in Management
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