Supply Chain And Logistics Management Essay

Question:

Discuss About The Supply Chain And Logistics Management?

Answer:

Introducation

DHL Express is German logistics giant and it provides international courier and parcel services (Dhl.co.in, 2017). A logistically linked system is used by DHL using two or more than transport methods with a single rate. The organisation follows mainly common handling characteristics that must be transferred between methods during movement. Transport management services are included procurement, strategic design, order management, track and trace, claims management and career management.

Figure: Supply Network

Identify and explain transportation choice

HL Express has a special facility as they have an extensive road network across the globe and it has its own terminal. The transport of commodities needs high coordination and organisation among different modes of transport (Dekker et al., 2013).

DHL mainly uses intermodal transportation. Intermodal transportation uses standardised containers in order to transport cargo on trucks, trains and ships. These containers are kept in rectangular boxes that are capable to shift in trailers. Intermodal can be described as the movement of cargo from the sources to the destination by using several transportation modes. Moreover, each of the transportation has different service providers and each has its own contract independently. Therefore, intermodal transport of supply chain has multiple carriers to be contracted in order to fulfil a single journey (Rushton, Croucher & Baker, 2013). DHL intermodal tends to be rail and air segments, however, in between trucks are used frequently in order to connect them. These trucks are named as ‘drayage' and these specialised trucks run between rail terminals and airports. These trucks are also run through inland shipping docks. First, a truck moves empty in order to load equipment and this equipment is loaded in the airport. These trucks then go to the railroad and this loaded equipment put into the trains (Christopher, 2016). The trains then go to destinations and the equipment is cleared off from the train. Then, the equipment is delivered by truck to the end customers. There are multiple parties involved in this system and each of the operation has independent contracts and each of the trucking system tries to meet customers’ expectations.

DHL organisation organised the intermodal transport in its way with following the quantity and nature of the transported cargo. DHL mainly uses intermodal transport for finished goods and intermediate in load units. Moreover, sequencing the transportation modes is important as combination in transportation must follow the frequency of shipments.

The process to increase the intermodal in its supply chains

As stated by Craig, Blanco and Sheffi (2013), in the transport industry, the companies have various ways to move freight, however, ships, trucks and railroads are the backbones. DHL Express can increase the intermodality in transportation by following the first step to making rectangle containers and it makes helpful to ship items easily in trucks. DHL needs to establish goals and these should be in line with organisational objectives. DHL must research about the potential providers of transportation services and choose accordingly. In recent time, fuel cost is increasing and trucking can be used to connect ‘line-haul' rail segments and airports of intermodal freight movement. Moreover, the trucking is facing the issues of the driver shortage and government regulations are another issue that is concerned with safety (Qu, Bekta? & Bennell, 2016). In intermodal transport, the provision of service is based on one ticket (for passenger) and one bill of loading (for freight). DHL is going to input Electronic Data Interchange that would help DHL to resolve the complex global transport process. In addition, DHL should leverage investment with technology and associated process in order to ensure a network of intermodality. DHL should contact with service providers and make clear about business requirements, scheduling, proof of delivery and en-route data. DHL can ask about the quality of transport, tight capacity and gravitate to the transport buyers. The intermodal network needs data integration from DHL and they should connect the pieces of the network in order to complete the work with consistency. Moreover, DHL makes the connection to service providers to the customers of the organisation; it is required to integrate data in both directions. The use of compartments demonstrates the complementarily between cargo transportation modes by offering a higher smoothness to developments and an institutionalisation of loads. The holder has considerably added to the selection and dispersion of multi-purpose transportation which has prompted significant transformations in the vehicle area (Woxenius, 2014). Through lessening of taking care of time, work expenses, and packing costs, compartment transportation permits impressive change in the productivity of transportation. Along these lines, the importance of holders isn't what they are - basic boxes - yet what they empower; intermodalism. Globalization couldn't have taken its present frame without containerisation. External and internal, both supply chain should be effective in order to make review lanes that DHL is going to use by trucks or rails. Shippers can determine in which direction and ways the trucks should be moving an opportunity to use intermodal cost saving. Lastly, DHL needs to develop lasting and strong relationship throughout the truck-based supply chain by using internet of things (IoT).

Critically evaluate the advantages and disadvantages of the new intermodal transportation choices

Advantages:

Intermodal transportation can influence the global economy by taking manipulative roles in goods management. Most importantly, DHL can get benefits to review the components of contract as intermodal transport allows making multiple contracts. In each contract, it is needed to review the reliability, schedule adherence, sustainability and punctuality of contract. DHL can have standard transport product and its dimension is ISO standard that must allow all vehicles.

Management of DHL needs to standardise the dispatch process with working together consistently and efficiently. DHL can have more access to transit schedule and equipment and management can take the opportunity of reverse logistics. Intermodal transportation is reliable and it provides safety advantages. Flexibility of usage is another important factor in variety of goods ranging that can be transported.

Freight intermodal transport provides benefits of saving the labour that takes responsibility in saving the time as well. Labours handle the trucks and goods from sources to destinations of the goods. DHL can use different types of containers in transportation like frozen goods, liquefied gases and mini containers for smaller trucks. Most importantly, truck transportation can provide help in carrying the heavy load in intermodal transport (Choong, Cole & Kutanoglu, 2012). DHL uses mainly European roads and rail freight combined transports that provide advantages in efficient combination that optimises the lead times and reduce inventory costs. DHL can benefit to control the costs in different levels and it can reduce the carbon footprint of transportation. Different modes of transportations support environmental sustainability.

Disadvantages:

If roads through which the trucks pass are not good, the goods can get damaged. The items and goods can get damaged while sending through trucks as containers do not provide safety benefits. Most of the containers are old and they are not maintained properly. In order to maintain the damage, the cost can be increased.

Truck transportation can delay the overall intermodal supply chain as DHL’s trucks use congested areas. Labours can ask for demands and logistics process can get delayed. Intermodal transport can enhance the time spent in waiting for the new carrier to arrive and trucks to be unloaded (Arnold, Peeters & Thomas, 2014). Different modes of transport require different materials and contracts in intermodal transport. Some of the trucks need refrigeration, chemical and larger loads, so the cost gets higher.

Using diagram to illustrate warehouse floor plans and product movement

Warehouse management should be good in order to provide best services to the customers. In each of the warehouses, Amazon keeps at least 10 thousand items and these can be delivered within an hour (Amazon.com, 2017). Amazon keeps these products in shelves and these shelves are organised. Sometimes, Amazon’s items are randomly stocked on purpose.

Figure: Floor plan layout of warehouse

Describe and examine the warehouse management

Amazon typically uses storage type of warehousing. There are mainly five types of storage, pallet racking, shelving, mobile shelving, multi-tier racking and mezzanine flooring (Mulcahy, 2014). Amazon uses mainly shelving types of warehousing and this type is self-explanatory. These are mainly static shelves rather than mobile pallets. Shelving gives the help in tracking the products easily and it gives the opportunity to access quickly. Anything that is heavy and that is light can be kept in different places. Amazon mainly uses two types of shelving, first one is short span shelving and another one is long span shelving.

Amazon mainly uses a warehouse in the US that is more than 10,000 square feet. Typical warehouses keep the similar products together and Amazon does the same.

Amazon uses the technology of Warehouse Management System (WMS) technology in managing warehouse with RFID technology (Radio Frequency Identification). WMS is a software application that is used for distribution. RFID uses to track the product tags through electromagnetic fields (Harmon, 2013).

Amazon stores raw materials of products such as chemicals, food grains and minerals in the warehouse. Sometimes, Amazon also stores MRO inventory like large machines in the warehouse. Amazon mainly stores finished products and merchandises that are going to be shifted.

Identify the company’s strategic and operational factors

Amazon provides delivery within just one hour of the orders in Prime Now services and it offers in 28 chosen cities in the US. Location of the warehouses mainly keeps near the airports and shipping dock. Physical locations of warehouses keep near the urban section and this place should have lease considerations. Amazon keeps their warehouses where labour forces are available.

Cost of warehousing is high for Amazon as storage cost is incurred with this and it is related to the operations administrations (Aikens, 2015).

Amazon’s warehouses are large and they are of 10,000 square feet. The capacity of warehouses is depended mainly set up of shelves for Amazon. All shelves are designed with 50”*45”*75”; the theoretical capacity of warehouses would be 1000 shelves 82 cubic feet. There are more than 1000 shelves in Amazon warehouse.

Service level is related to the expected probability of not hitting a stock out. Amazon daily sets the percentage to compute the safety stock (Staudt et al., 2015).

Communication in a warehouse of Amazon mostly depended on mobile devices, VoIP calls help to communicate in warehouses. Communications are made to fulfil the order. Mobile device based system of MAS 90 is used in Amazon to communicate.

Amazon uses WMS software based database in order to account stock movement through picking procedures and dock arrival times.

Propose different order picking principles to suit the company’s strategic and operational factors

Amazon can use simple ‘storage assignment strategy’ that is based on storage locations. Amazon can store better products in better locations and that would help in order picking system. ‘Golden Zone’ concept tells that products must be kept in direct front of order picker and it is better than bend down to reach (Ivanov, Pavlov & Sokolov, 2014). If one product is repeatedly needed, it is logical to keep the product near.

Critically evaluate how the proposed order picking principles link

Inventory types:

Storage-based strategy would be helpful for Amazon warehouse as Amazon deals with finished goods. Amazon just delivers the finished goods to the customers. Golden zone concept would be applicable to Amazon as Amazon employees need to pick each item when delivery is needed (Jahre et al., 2014). Ergonomic consideration of the employees is forefront in picking the products in Amazon. Finished goods are kept in shelves of Amazon warehouse, if the goods are kept in direct front of the employees, it would be easier to the employees to access these.

Utilisation space

Amazon uses small containers in the warehouse that gives the opportunity to use extra space in the warehouse. The items are stored in shelves and containers are small, that give extra space to the employees to work. The employees put the products if the products are not packaged before they are stored in shelves. Golden zone strategy will maximise the warehouse space utilisation through using more labourers in the warehouse. If the products required the small place, it should not be placed in ‘best' location just because it requires small space. Transit space can be used in terms of keeping the products for short time.

Stock movement

Employees of Amazon warehouse are responsible for the movement of the stock and goods. Management needs to establish operating stocks based on a rate of usage. Stock levels can be rechecked. The employees must ensure monthly stock in the warehouse. In assigning the products in each month and week, storage location must be good and easy to pick. Shelf dimension must be spacious and it would give a benefit of stock movement and it would help to keep monthly stock usage report.

If the storage of the items is good then, in warehouses of Amazon, RFID technology is most used and in previous time barcode technology was used. RFID solutions help to identify the products even it is far from the warehouse and electromagnetic field helps to us in easier, faster and cost-effective manner. Amazon is one step further in picking the technology and they are using Augmented Reality Picking. Employees use glass and it gives benefit to identify the products with tags. Amazon also uses RF handheld scanners with ERP system enabled to scan the product to have most important information about products (H?bner, Holzapfel & Kuhn, 2015).

Location of picking

Amazon uses Cube Matching technique that is helpful in storage the location. Location of picking is most important as it is related to the ergonomic consideration of the employees. Better location helps to employees in ergonomic access. The products can be stored in pick face of the employees that would give the advantage to pick the products smoothly.

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