Logistic Goals and Objectives

Discuss about the Logistics and Supply Chain Management for Products and Information.

Logistic management refers to a supply chain management that is used to meet the demands of the customers with the help of planning, implementation of effective movement and storage of products and information from the point of source to the point of destination (Abbasi & Nilsson, 2016).  Logistic management is an important element for a business and the importance of logistic management has transcended the sky. In the age of international trade, it is important that logistic management is given special attention and stress to ensure smooth functioning of the business. Logistics decides the smoothness of the flow of the goods from the point of source to the point of destination.  The following report critically analyzes the challenges faced by OMEGA for transporting refined products from Singapore to Townsville, Mackay and Bundaberg. The application of logistics management and concepts are useful and critical in analyzing the challenges faced by a company regarding logistics.

The goals of logistics are to efficiently handle materials and reduce cost. It intends on reducing the variable cost, which is related to the movement and storage of goods.  Another objective of logistics is to reduce the level of investment involved in logistics and at the same time it intends to increase the return on the assets of logistics. At the same time it intends n improving the service to the company and the firm. The evaluation of the goals and objectives of logistics paves the way to the challenges faced by logistics of OMEGA.

The purpose of the logistics is to plan and manage the movement and storage of refined products from one place to another. In the age of globalization the logic aspect of OMEGA has to face various challenges in order to survive in the competition. There are various factors that affect the logistics of OMEGA, especially the macro environment factors. Some of the elements that pose a challenge to the logistics to OMEGA are:

Tariffs are a tax or duty that is imposed on import and export of goods. They are macro environment element that affects international trade. They restrict trade as they limit the volume of flow of goods across the borders. From the viewpoint of OMEGA, tariffs are a major source of hindrance for the company. It includes the charges of the product for OMEGA. It affects the overall growth of the company and impacts the smooth flow of goods from the point of source to the point of destination (Selviaridis & Norrman, 2015).

Logistic Challenges faced by Omega

In the age of globalization and international trade, one fact that needs to be noted is that there is increasing demand and the need of customer satisfaction is integral and critical. In the case of OMEGA, one of the challenges that the company has to face to meet the increasing demands of the customer. In addition to this, the company also has to provide value to the customers so that it meets the customer satisfaction level. As OMEGA is trying to reduce sourcing cost and component cost, the customer’s interest will only be pertaining to the landed cost and the quality of the product and its overall value (Caunhye Nie & Pokharel, 2012).  So the major challenge for OMEGA is to reduce the cost involved with logistics and at the same time maintain the quality of the product that it provides. Therefore, one of the major challenges is to provide value and reduce landed cost.

Another factor that needs careful evaluation and understanding is the need to maintain the various elements in a supply chain. The company tries to increase the velocity of the product and at the same time tries to reduce cost by reducing the storage time and the damage that could be caused before the dispatching of the good. However, the extended time taken in transit has an adverse effect on the supply chain management of the company. The distance between Singapore and Australia is a long distance and in such circumstances border delays and unnecessarily extended time while the goods are in transit increase the perils of damage to the goods and it reduces the product velocity that the company aims to achieve. It makes the maintenance of the velocity of the supply chain difficult in such circumstances (Schulenberg, 2014).

Visibility in the supply chain is a major requirement for a company. It is important for manufacturers and companies to keep a track of the product that is in transit and which goes through multiple channels. It is important to track the time of arrival of product. Since OMEGA deals in international trade, one of the things that will be noticed is that there will be multiple carriers and it will got through multiple chains after its dispatchment from Singapore until it reaches the ports of Townsville, Mackay and Bundaberg. Therefore, since it involves multiple channels, it becomes important that tracking of shipment is done in a more proactive way. The increased supply chain variations present fresh challenges for the company.

Tariffs

Documentation is an important element in international trade. The flow of documents is an important feature in international trade. There are various documents that are required for international trade and more than 100 documents are required for cross border shipment. Some of the important documents that are required are “Certificate of origin”, “commercial invoice”, “shipper’s export declaration” and “shipper’s letter of instruction.” Australian Biosecurity follows the document requirement policy. As per this policy, there is minimum number of documents that is required to be submitted to the AQIS (Dekker Bloemhof & Mallidis 2012).  The failure to do so could create hindrance in the transit. The increased number of documentation makes it challenging for the company to discharge smooth functioning of the flow of goods and adds increased layer and wastage of time involved in documentation. The logistics will have to have through excess level of regulations that will constrict the functioning of the company.

At the same time there are significant roles of government in international trade. The policies are made by the government. In the case of OMEGA, there is a significant role played by the Australian government. There are standards and requirements set according to the Australian biosecurity requirements. There are two regulatory acts as per the biosecurity requirements. These are Quarantine Act 1908 and the Quarantine regulations. As per the requirements, the goods need to be packaged and careful inspection and scrutiny of the good is required. Inspection if good is compulsory as per the biosecurity requirements. The Quarantine Act puts special emphasis on avoiding all those elements that may cause adverse effect on human beings and the surroundings. According to the biosecurity requirement, if there is a specific treatment of goods that is required, then it should use an accredited provider before the product moves for shipment (Zijm, 2016).  A lot of stress is given on the quality of product. The terms of sale, also known as incoterms also analyses the various logistics channels. The role of government is important in logistics. Government shutdown adversely affects logistics. The lack of funding of road highways and airports or ports might obstruct the smooth functioning of these strategic points. Border crossings of trucks could become difficult because of “custom border patrol” that would create priorities between the products and cause unnecessary delays. The Singapore government shutdown could pose a major hindrance to the security of air and traffic control due to the lack of funds of the government (Selviaridis & Norrman, 2015).  Legislations and rules of the government also affect the logistic process. The recent cases of Oil spills have resulted in stringent laws and regulations been implemented to offset the adverse impact and implement conservation practices. These might spring up challenges for logistics, which they need to tackle.

Increased demand and customer satisfaction

Wave management is another challenge that OMEGA has to face in the logistics sector. Wave management refers to the arrangement of freight in an order that would allow the company to meet the requirements of the customers in an efficient and economical way and would utilize labour in an effective and efficient way. There are 72 cities in South Australia, with more than 100 companies in the arrangement of freight and cargo. OMEGA might face certain challenges regarding wave management.

Another fact that needs to be kept in mind is the economy of a country. Cyclical trend of economy has a major impact on logistics. Australia is in the grip of a major global financial crisis. This could heavily impact the import of refined products (Christopher, 2016).  As a result, logistics might have to adjust their supplies accordingly and the product in transit could be majorly impacted. As a result of global financial crisis, there could be major fluctuation in the currency value and consequently the market size would be adversely impact by evil of negative cyclical trend.

The vulnerability related to supply chain is another factor that needs to be evaluated. The perils of destruction of goods during transit can result in loss for the company and major obstructions for the logistics. The supply chain vulnerability is an obstruction for the company (Fernie & Sparks, 2014). 

Conclusion

On concluding the report, it can be seen that OMEGA has certain objectives and goals to fulfil. There are certain challenges that OMEGA has to fulfil. Vulnerability of the product, economic factors, tariff issues, visibility and velocity of the product in the supply chain are some of the issues faced by the company. The company has to overcome these issues so that the operations can be carried out smoothly and without any hassle. The company has to identify these issues regarding the economic issues and the government regulations that hinder the process of the logistics of the company.

Some recommendations to overcome challenges in logistics are:

• The supply chain needs to be assessed and the network should be maintained in a more optimum and intricate details need to be noted.
• To company needs to focus on more fulfilment of order in a more efficient way and it should be done without increasing the cost of operation
• The process involved in the logistic department should be assessed to secure reduction in the cost and increase efficiency of operation
• Wave management and lean management should be practiced in amore better and effective way.
• Better technology and warehouse management should be done efficiently.

Reference List

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