Logistics and Supply Chain Management Global Entrepreneurship

Question: Describe about the Logistics and Supply Chain Management for Global Entrepreneurship. Answer: Introduction. Warehouse refers to the space planned for keeping, storing and handling goods and materials as well as acting as an essential for product and information from primaries of supply and the intended customers. The global warehousing has popularized over few decade ago following strategies for making a timely response to emergencies (Mangan J., 2010). Inventory on the other hard consist of an enormous cost to the humanitarian supply chain. The supply involves the cost of the inventory, transportation cost of goods, managing cost of goods, keeping the goods in warehouses (Kiesel, 2014). For the big companies such as IKEA furniture company has two ways of inventory control in case of emergency situations: reorder level policy and reorder cycle system. The two of them are usable in humanitarian situations. IKEA has ranked the largest home furnishing retailer in more than forty-eight countries. IKEA group not only attract many consumers out of its affordable, high-quality furniture products but also known for its unique supply chain and the inventory management techniques the group has a very clear objective and vision- to produce well-designed, high-quality home furnishings at low prices that will enable many people to afford (Yew., 2013). IKEA warehouse facilities and inventories are strategized by: a) Maximum and minimum settings as a proprietary system For minimum settings, it involves the minimum amount of products available before making orders. On the other hand, maximum settings require the highest amount of an individual product to make an order. The fact of its minimum or maximum depends on the number of goods sold. The process makes satisfaction to the customer's demand and at the same time reducing ordering too few or too many furniture products. The strategy ensures that the clients demand, and lowering the cost of sales met through ready inventory.(Project, 2010) The IKEA proprietary system provides logistics managers know what is moving to the market through the point of sale data and how much inventory comes into the store via shipping and from distribution points all the way to warehouse management center. b) Usage of High-Flow and Low-Flow warehouse facilities The functionality of stores of IKEA-supported by both high-flow facilities and low-flow warehouse facilities. In high-flow installations, the group applies automated storage and retrieval system to bring down its costs, while the products stocked in low-flow warehouse facilities does not have high demand and the operations depend on manual processes that avoid employees to shift and move inventories. (Yew., 2013) Both strategies have of great importance to the IKEA and have it a very successful furniture retailer with high demand and low costs of operations. The approach also allows the company to remain in the competitive world of industries as it continues advancing ways to streamline supply chain management. c) Combining retail and warehouse processes All IKEA stores have warehouses on where they located. Customers choose items from the main showroom floor. The products also are kept in reserve racks. About 30% of the lower level contain warehouse off limits to customers. The lower level includes items too bulky for customers to load without help from the IKEA workers since the company needs customers to serve themselves which works to reduce the number of products in this bulk storage place. (Network, 2013) d) Cost-per-touch inventory tactic The customers select the furniture products and get them from showrooms themselves in a cost-per-touch inventory management strategy. The IKEA discovered that the more hands touch the products, the higher the cost associated with that product. For instance, when a customer selects a certain furniture to purchase, the product may be ordered, transported (shipped) from the source company, and moved from the delivery truck. Then from delivery truck, the product is taken to storage in a warehouse, to the furniture retailer to customers home. It translates that all these processes it costs a lot of money. IKEA ensures that the costs of items at a minimum by adhering to the guiding principle of minimizing touches to cut off the cost. (Network, 2013) Intermodal choice IKEA has built an integrating model on the different factors among them include cost, on-time service, risk and the environmental effect within the framework of intermodal logistics to help the idea of most practical mode choice. Intermodal Transportation The intermodal transportation refers to the movement of the container by using a various form of transport, that is, truck via rail, ocean and truck, ocean and rail or all of the three modes. Now, the idea of the usage of both rail and trucks is gaining momentum for a diffusion of reasons, which includes financial cost savings, environmental advantages, and motorway protection outcomes. In our case IKEA Company embrace intermodal transportation. The choice has gained fame due to its cheap, safe most reliable and most available. For the IKEA group, the domestic inter-modal has grown much faster than any other multimodal choice. The modern Intermodal transportation also gives shippers with greater get right of entry to ton system and standardized transit schedules. The process translates into reliability, ability, and protection advantages. As agencies move their freight to intermodal, they will additionally be able to streamline their opposite logistic. (Franz, 2012) When rethinking IKEA Group Company logistic techniques to cope with tightening truck potential, employer executives want to noticeably have a look at how inter-modal transportation can gain their enterprise. It gives significant fee financial savings, improved reliability, greater potential, and offers large inexperienced and safety advantages.(Christopher, 2011) Some of the benefits accrued from the intermodal transportation include: i) Consistent of access to capacity where the strategy gives shippers, for example, provides another choice. ii) The policy offers reliable service since the intermodal transportation, for instance, rail is equal or faster than the road transit. iii) Increased security since the intermodal containers remains secured due to the time is taken when in motion The link between the warehouse, inventory, and intermodal choice, therefore, can draw from the fact that, in the supply chain management the three are equally important. The three are entitled to have an efficient flow of goods from the production stage to the final stage where of meeting the customers. The efficiency ranges from analyzing, planning, setting up reviewing and progressively enhancing each step of the process. On the other hand executing working processes in the daily activities of the company. (Mangan J., 2010) The warehouse, inventory, and intermodal choice enhance transparency in each and every processes in supply chain management. The three link many activities among them include physical distribution, materials supervision, transportation services, order processing, purchasing, procurement, and warehousing itself. They elaborates on how to create customer relationships and effectively carry out supply, logistics and transport functions. The long procedural stages make it complex for employees to engage in corruption activities. The bottlenecks also ensure the right procedures are adhered to as per requirement of the company. (Patrik, 2013) The logistics virtuous and vicious cycle Introduction A business located in the right location become a key factor in a business success. Likewise, when a company chose a wrong location, it faces much detrimental as well. IKEA Group Company for our case the company situated in a suitable location that has enabled the company to achieve a lot. The location determines how to access the customers, employees, transportation factors, and raw material needed for the enterprise. The location also determines the overall profit of the company. The site approach defines the plan for getting the optimal position for a company by identifying needs of the organization and the primary objectives and looking for a place where needs and goals will accommodate. In other words, the company tries to maximize profit while minimizing costs and risks. (Klose., 2012) IKEA Company for Home Furniture is an international firm that requires putting warehouses and establishing plants in regions suitable for its approach and that are conveniently located tom serve global customers. The executives and leaders of the IKEA determine a location to stage their regional companies which they must consultants to undertake the task of developing a location strategy. Facility location refers the appropriate location for the manufacturing plant, and it will enough access to the clients, employees and transportation, costs, competition and similar related outcome (Kulwant., 2015). The following include reasons and objectives for locating a business: a) Marketing strategy Marketing strategy involves both important short and long-term activities in the marketing field. These events describe first approaches situation of the company and formulation, evaluation and looking at the functionality that brings practical objectives of the enterprise. The strategies may include exporting marketing strategy. The approach works where there limited sales potential in the targeted local market, small production and distribution methods are closer to the company. Some of the related benefits include nurture mature relationships with customers by enhancing good feedback from the parent market.(Tsan-Ming., 2010) b) Cost of business operation. Any business must value the impact of the cost of production in their primaries beginning of the company. The costs may include labor costs, which varies from place to places. Land costs, the company, have determined whether to purchase property or rent a place for business operations. Energy costs, which differ from countries depending on the price of the energy. Transport costs include the cost of transporting raw material for production and transporting finished goods to the market (Spee, 2013). IKEA for example, locate the furniture firm near the source of supply. c) Demand factors The main aim of many companies location includes reaching to the customers in a very easy and quick and cheap to access the goods provided to them. IKEA Company selected a product which seems too needed in every household, therefore, making it available to meet the market demand. d) Community factors. Community and site can determine the location of business. The costs incurred in a business can influence by various non-financial reasons. For example, cultural amenities may determine whether a company and community are compatible in the both short and long term. The government is willing to support the establishment of enterprises through increasing subsidies and financial aid. Also, political stability influences the decision of investors to set up business in particular locations. They balance attribute to the potential revenues achieved from the location.(Seon-Chan., 2013) Factors to consider when selecting business location a) Political risk Every company should consider the effect of the political arena in a particular area or country. For hostile countries, investors will avoid putting industries in those countries. IKEA Company its headquarters located at Netherlands and other forty-eight countries across the world. The company considers political stability before setting the local company. However, some countries have political upheavals, and the companies should prepare for the unstable political environment if they have long term strategy in such countries.(Margaret, 2014) b) Government policies For instance, the IKEA Company had to adhere to some government regulations before setting up a regional company. The company encounters not only government barriers but also large bureaucracies and bottlenecks. They intend to bar the company from expanding. Its imperative, therefore, for every group to examine administration policies when establishing location strategies.(MacCarthy B L, 2013) c) Environmental factors Every company must look at the laid environment regulations to avoid affecting the businesss operations in different regions. Similarly, the environmental control may have effects on the relationships between the company and the surrounding community (Mario F., 2015). IKEA Company deals with furniture which requires woods, and then this means that it must consider environment hazards. d) Infrastructure development Every business must need proper support which may include modes of transportation and the types of telecommunications services. Good roads, for example, means easy access to the market and quick transportation of raw material for production. Every business must have good communication systems to enhance management.(Seon-Chan., 2013) e) Labor IKEA group Company have analyzed labor in terms of seeking different type of skilled of personnel. The analysis have also determines the whether the selected locations can meet a companys labor requirements in both short-term and long-term objectives. f) Free market zones Many companies especially global companies considers to set the business in to the countries where they get benefit out of free trade zones. The zones usually closed blocks monitored by customs facilities where goods move from one country to another without charged tariffs and quotas. IKEA Company has established region companies to many free customs blocs across the world hence enjoying the benefit of free trade zones.(Tsan-Ming., 2010) The location of a business can determine the companys future expansion. IKEA Company in our case has expanded for the last twenty years. The development may range from marketing, production and establish other businesses across the world. Favorable government policies have attracted investors in various countries. IKEA has taken advantage of these policies. Another desirable factor that supports the future company expansion involves hitting the right demographic. The population factor resonates with the youth since the product is ravishing with very attracting designs. The company not only pay her employees well but also enhance transparent about the production. Again the environmental factors determine the expansion of the company concerning adding structures in the enterprise premises. The well evaluated environmental analysis will bring all factors that need attention and which involves the community and the company. The countries where they enjoy political stability will obviously attract many investors than a state which have political upheavals. IKEA has established businesses in the countries with less political changes. The strategy has enabled the company to earn a lot including creating stable market across the world. The company also has been looking for all kind of skilled workers across the globe which translate expansion in terms. (S, 2014) References Christopher, M. (2011). Strategy for reducing cost and Improving Service. London: Financial Times. Franz, A. . (2012). Advances in computational Intelligence in Transport, Logistics and supply chain Management. Berlin- London: Springer. Kiesel, J. (2014). Dictionary of Logistics and supply chain and MAnagement. Erlangen: Public Corporate . Klose., M. G. (2012). Quantitative Aproaches to Distribution Logistics and Supply chain management. Berlin-New York: Springer. Kulwant., A. P. (2015). Development in Logistics and Supply Chain Management. Basingstoke-Hamphire: Palgrave MacMillan. MacCarthy B L, .. W. (2013). 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