Logistics and supply chain management in shipping industry essay

Logistics and supply chain management in shipping industry

 

Introduction

Over the past decade, the traditional purchasing and logistics functions have evolved into broader strategic approach to materials and distribution management known as supply chain management. Research will review literature base and development of supply chain management in the shipping business into the modern era of strategic approach to operations, materials and logistics management. In addition, there attempts to clearly describe supply chain management since the literature is replete with buzzwords that address elements or stages of this new management philosophy and discusses various supply chain management strategies and the conditions conducive to supply chain management. The need to provide shipping managers with framework to be used in implementing supply chain management, instructors with material useful in structuring supply chain management course, researchers with set of opportunities for further development of the field.

 

Discussion

There evaluate global supply chain alternatives and determines worldwide manufacturing and distribution strategy, using the Global Supply Chain Model which recommends a production, distribution, and vendor network. There minimizes cost or weighted cumulative production and distribution times or both subject to meeting estimated demand and restrictions on local content, offset trade, and joint capacity for multiple products, echelons and time periods. Cost factors include fixed and variable production charges, inventory charges, and distribution expenses via multiple modes, taxes, duties, and duty drawback. GSCM is a large mixed-integer linear program that incorporates a global, multi-product bill of materials for supply chains with arbitrary echelon structure and a comprehensive model of integrated global manufacturing and distribution decisions. Furthermore, the fundamental stages of supply chain, procurement, production and distribution, have been managed independently, buffered by large inventories. Increasing competitive pressures and market globalization are forcing firms to develop supply chains that can quickly respond to customer needs. To remain competitive, shipping firms must reduce operating costs while continuously improving customer service. With recent advances in communications and information technology, as well as rapidly growing array of logistics options, firms have an opportunity to reduce operating costs by coordinating the planning of these stages.

 

Identification of problems

Shipping lines are under pressure to expand the geographical reach of their services and to invest in value added services. The former, addressed by number of strategies including slot charters, alliances and mergers and acquisitions, has been quite widely treated in the literature. The ways in which the lines are enhancing the range of their services has been subject to less study and is the focus of research. Viewed within context of economics of vertical integration, there reviews the organization strategies of lines in relation to terminal management, intermodal services and logistics services. There is only close integration with shipping in the management of dedicated terminals and intermodal services; the management of logistics services remains ostensibly quite distinct from shipping. In terms of pricing practices, this is reality but it leaves uncertain the level and ways of sharing information and resources related to logistics. The interest of lines in developing new relationships with shippers will place further pressure on collective pricing practices in liner shipping.

Applying solution and remedies

The process of choosing appropriate supply chain performance measures is difficult due to the complexity of these systems. There presents an overview and evaluation of the performance measures used in supply chain models and also present framework for the selection of performance measurement systems for manufacturing supply chains. Three types of performance measures are identified as necessary components in any supply chain performance measurement system and new flexibility measures for supply chains are developed. The need to provide strategic and operational descriptions of supply chain processes identified by members of The Global Supply Chain Forum, as well as illustrations of the interfaces among the processes and an example of how process approach can be implemented within the shipping business .

 

Indeed, main risk factors and security threats to ports are identified and analyzed, with focus on the risks stemming from non-tangible assets, flows and processes. Similarly, various economic approaches to risk management and cost control in shipping are reviewed, and their shortcomings highlighted from the perspective of port logistics and supply chain security. By adopting channel orientation to ports, the paper suggests that the subject of port security must shift from the current agenda of port-facility security to the wider context of port supply chain security, with a view to ensuring superior security standards and practices in ports and across their supply chain networks. Based on the rationale of logistics integration and supply chain partnership, conceptual framework to port security is proposed through integrating and optimizing three initial models relating, respectively, to channel design and process mapping, risk assessment and management, and cost control and performance monitoring (2004)

 

Conclusion

Increasingly, supply chain management is being recognized as the management of key business processes across the network of organizations that comprise the supply chain. While many have recognized the benefits of process approach to managing the business and the supply chain, most are vague about what processes are to be considered, what sub-processes and activities are contained in each process, and how the processes interact with each other and with the traditional functional silos. Review the literature addressing coordinated planning between two or more stages of the supply chain, placing particular emphasis on models that would lend themselves to a total supply chain model and suggest directions for future research.

 

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