Business Logistics Systems - Essay Example

Running Header: Business Logistics Systems Assignment Student’s Name: Name of Institution: Instructor’s Name: Course Code: Date of Submission: Table of Contents Table of Contents 2 Introduction 2 Business Logistics Systems Introduction The Que Corporation has been faced with a number of challenges over the past few weeks. Despite the desire and efforts that have been used to reach new foreign markets and to increase its sales, the Corporation has faced a lot of difficulties that it had not anticipated. The gross sales figures of the Corporation have greatly increased but there are still major issues that need to be resolved. Even though the customers expect faster and timely deliveries, Que Corporation has been experiencing difficulties in these expectations of the customers that relate to product delivery. These problems have been attributed to the slackness of the suppliers. The sales and marketing department had earlier promised to ensure that the deliveries would be done on time. Having failed to do this, all eyes were now on the purchasing staff. They had not been successful in sourcing for new suppliers. The current suppliers were also unable to meet the ever increasing production requirements. The new suppliers that were doing business with the corporation had been experiencing difficulties in ensuring that the quality of the goods, the time for delivery and volume were up to standard. Something therefore has to be done to ensure that the situation at the Que Corporation does not remain the same. This essay comprehensively presents some of the immediate issues faced by the Que Corporation. The paper also provides a comprehensive summary of the problems and issues faced by the company and the strategic potential to solve these problems. All alternatives and options are identified and explained. This paper finally provides recommendations for the company concerning what it can do to ensure that it continues to thrive in the global market economy. It also provides an implementation program that can be used to execute the strategic plan. 1. Immediate Issue Que is a mid-sized company that manufactures industrial products that are to be used in exploiting mineral resources. The corporation is based in Brisbane, Queensland. It has been experiencing slow but steady growth since its beginnings in the mid 1960s. Three years ago, the sales of the company stood at $ 18 million dollars. This figure has significantly grown and is said to stand at $ 30 million this year. The company’s sales have increased have gone up by an overall of 40%. There are many immediate issues facing the Que Corporation. One major issue is that the customers expect their deliveries to be made promptly and on time. Que Corporation has been experiencing problems with fulfilling this requirement. The Corporation has not been delivering the orders made by customers on time and this has led to the disappointment of many customers. The lateness has caused many disagreements with customers over the past few days because most of them were not happy with the company for its late deliveries. Another immediate issue facing the company has been the problem with suppliers. The company has been trying to source for new suppliers but has been unsuccessful. The process of getting the new suppliers has proven to be difficult for the company. There have been a lot of efforts directed towards this but none has been successful so far. There is also a problem with the current suppliers who have not been fulfilling their promises of delivering the goods to the Que Corporation on time. The company also has some issues with the quality of goods being received from the suppliers. The quality of goods has been below standard for some time and this has affected the trust of the customers. The volume of goods being delivered is also an issue. Que Corporation is also planning to expand its operations to Africa. This is in line with the Corporation’s strategic plan of expanding their customer base. Que Corporation therefore has the challenge of ensuring that it is able to make the break to Africa successfully as stated by Ronald (1999). 2. Basic Issues a). The suppliers have been delaying the supplies to the company and this has been making the company delay its supplies to its customers. b). The volumes been supplied have been inadequate because what the suppliers have been delivering have not been what was ordered. c). The quality of the goods being delivered by the suppliers are of very low quality to such an extent that the low quality could be noticed by the customers. When the customers notice these issues with quality, they are discouraged from doing business with the company. d). Getting new suppliers has been very difficult for the company because the process of sourcing for these suppliers has been very difficult. e). The current suppliers have not been very cooperative with the Corporation and that is why there have been a lot of issues in terms of delays, inadequate volumes and poor quality of goods. f). The expansion into African markets is an issue that needs a lot of planning and resources in terms of time, finances, energy, dedication, research and commitment. g). The company’s sales and marketing department has not been fulfilling its promises of delivering goods on time. These delays have been affecting the relations with the customers because the customers have been displeased with the services they have been receiving. h). The purchasing staff have been facing challenges with the suppliers over the supply of goods. These challenges have been transferred to the customers in the sense that they are the ones who suffer in the long run when goods are not delivered to them on time as argued by Handfield & Nichols (1998). 3. Strategic Perspective: Among the strategies being used by Que Corporation, the company has maintained one of its founding engineers, Doug Wilkinson, as the president of the company for very many years despite the fact that he is past the age where one is required to retire. This has been because Doug Wilkinson has been effective in the way he has been managing the corporation. For many years, he has been able to resolve technical issues and challenges with the clients and other stakeholders of the business. These challenges have been addressed regardless of whether they pertain to single customers or a much broader clientele. This strategy has been able to solve many problems and issues that have been there in the company. The experience, knowledge and skills of Doug Wilkinson, the president of Que Corporation, have been invaluable in ensuring that the company remains effective and efficient according to Pooler (1997). Que Corporation also offers a wide range of products to its customers. This variety in products has ensured that the company has had continuous market. In the case where on product fails, there are other products to make up for the failed product. Relying on a single product can be detrimental, especially if it does not bring in profits as expected. When a company has many products, it has diverse areas where it can bank on for its profits in case one or two products do not sell as expected as illustrated by Wallenburg et el (2011). This strategy has proven to be effective especially because the company has had a lot of problems with the suppliers. These problems with the suppliers have caused the quality of some goods to go down. This does not augur well with the customers. The problems with suppliers have also resulted in late deliveries and this has had a negative effect on the customers. There have also been problems with the volume of goods being delivered by the suppliers. All these problems would mean that the company makes a lot of losses. This is however not the case because the company has been recording a lot of sales which have translated to high profits. This is because of the diversity in the products that it offers to the clients which ensure that if one or two products fail, there will be other products to take care of the ones that have failed. This strategy of diversifying the products has proven to be successful over the years. That is why the company has been able to record high sales and profits despite the many problems that it has been facing. It would have been expected that the company would fail because of these problems. The products of the company range from specialized mechanical machines and equipment, pneumatic equipment and machinery, unique drilling products and other processing materials and machinery. This therefore means that the company has a very diverse range of products that put it ahead of its competition as stated by Handfield & Nichols (1998). Even though other major companies that manufacture similar products as Que do not see the company as a threat, Que Corporation has been able to build itself a good reputation. This has been through the ability of the company to combine engineering products well and offer reliable after sale services to its customers. The company also believes in the overall good value of the smaller producers and has managed to remain successful in the business environment. The investment risks involved in the mining industry are quite high. For this reason, the company has devised the strategy whereby it uses small scale suppliers to distribute their moderately priced products with the overall aim of remaining reliable and effective. The clients and internal focus group of Que Corporation have attributed the success of the company to the innovative research and development group of the company. The research and development group has been involved in the improvement of the already existing products of the company. The research and development group has also been involved in the seeking of innovative ways to add to the product line of the company. This has been done after thorough and extensive market research was conducted. The research and development group collects feedback from the customers so that the company can know where it stands with the customers. The feedback is also used to a make strategic management decisions. For example, if the feedback shows that the customers are not satisfied with the products of the company, the company uses this information to do things differently so that the customers can be more satisfied with its products. The company also uses the feedback provided by customers as a basis for improvement. The research and development group works well with the customers of the company to ensure that any technical issues are handled on time through its engineering capabilities. The efforts of the research and development group therefore go a long way in ensuring that the customers are satisfied and that all technical issues are solved on time. The purchasing department at Que Corporation collaborates with the research and development group at the same company to resolve new challenges that may arise. They anticipate any future problems or challenges that may occur and lay down strategies that are meant to deal with these problems. They also engage the customers by trying to find out their problems so that they can come up with the best ways to solve them. The research and development group at Que Corporation has developed a product named the Q-10SD. This is a multipurpose sensing device that gives operators the opportunity to monitor if the environment has any hazardous substance before exploring a particular area. This unit propels itself and can be easily operated by remote control. It is also very compact and therefore portable and easy to use (Coyle et el 1996; Coyle et el 1994; Coyle et el 1998). Another strategy that has been used by Que Corporation is that the purchasing department has come up with measures to ensure that it only picks suppliers who are the best in the market. Only the suppliers who best fit the corporate strategy of Que are allowed to supply for the company. This has come after the company has had problems with its current and previous suppliers. These problems included problems of poor quality, irregular volumes of goods and lateness in the delivery of goods as illustrated by Nerseian & Swartz (1996). 4. Issues Analyses Even though the customers expect faster and timely deliveries, Que Corporation has been experiencing difficulties in these expectations of the customers that relate to product delivery. The company has a diverse range of products which it promises to deliver to customers on time. However, the company has on many occasions failed to do so. The main reason behind this failure has been attributed to the delays caused by the suppliers of these products. These problems have been attributed to the slackness of the suppliers. The suppliers have not been keeping their promise of delivering goods on time. These delays have also been passed on to the customers because the company cannot deliver goods to them if it has not received them from the suppliers (Leenders 1992). The sales and marketing department had earlier promised to ensure that the deliveries would be done on time. The department was however let down by the suppliers who keep on failing to deliver on time. Having failed to do this, all eyes were now on the purchasing staff because they were responsible for liaising with the suppliers to ensure that they provided the needed materials on time. It appeared as though the purchasing department was not doing its work well. They had not been successful in sourcing for new suppliers either. The process proved to be very difficult because very few suppliers were able to meet the requirements of the corporate strategy at Que Corporation (Orsburn 1991). The current suppliers were also unable to meet the ever increasing production requirements. They could not do it on time because the demands for these requirements were very high. The new suppliers that were doing business with the corporation had been experiencing difficulties in ensuring that the quality of the goods, the time for delivery and volume were up to standard. Something therefore has to be done to ensure that the situation at the Que Corporation does not remain the same. Small suppliers did not have the degree of flexibility that is required of suppliers for such a company like Que as argued by Langford (1994). 5. Alternatives or Options The Que Corporation has managed to maintain a good reputation despite the major challenges that it has been facing. Other major companies have not been taking the company as a threat or a major competition but it has managed to thrive and remain successful in the highly competitive market. The Que Corporation has a well established customer base and it has alliances in many different countries and regions. The company has also put in a lot of strategies in place to ensure that it continues to thrive and be successful in the highly competitive business world. All these factors have made Que Corporation to be a leader in the business it engages in despite its size according to Bowersox & Closs (1998). Que Corporation will be faced with a couple of issues if it accepts De Oro’s proposal to manufacture and distribute in Asia. The pros of doing this include the fact that the company will have a wider market even in Asian countries. Its products will become popular in Asia and it will attract a lot of customers from these Asian countries. Apart from its worldwide presence greatly increasing, the company is likely to realize higher profits since it will have a wider market and therefore rake in more profits. The cons of manufacturing and distributing in Asia include the fact that capital might be difficult to raise considering the fact that the company also wants to expand its markets to Africa. The idea of teaming up with another company might also have led Que to lose its own identity on top of creating room for misunderstandings and disagreements, as characterized by some partnerships. Que would also have to share its profits with De Oro since the two companies would now be operating jointly. Accepting the proposal by De Oro with changes also had pros and cons. The pros include the fact that the products of Que would be more widely accepted as compared to how they are at the moment because De Oro was already well established in the Asian markets. The cons include the fact that Que was risking being overshadowed by De Oro in the Asian market because De Oro was already well known and established there as argued by Jones (1998). The additional suppliers in Asia would be convenient because they would be in line with the company’s corporate strategy. Investigating them would be an expensive and time consuming venture but it would ensure that the company enters into agreements with only the reliable suppliers. The idea of Que seeking to expand its markets to diverse geographic regions and locations is in line with its policies on growth. This may also have positive effects such as increasing sales, profits and worldwide presence. Some negative impacts include high costs and the amount of resources required. Legal requirements of other countries may also present challenges to the efforts of Que Corporation as illustrated by Kasilingam (1999). Environmental concerns are also another issue that needs to be addresses because different countries have different policies regarding the environment. Opportunities in the African market are great because the company is already well established. The mining sector in the African market can greatly benefit from a well established company like Que in terms of growth and development. This would open up newer markets that would bring in more profit for the company. Pursuing the African market is however costly and can lead the company to spending a lot of money. The African market being a different geographical location is bound to have its own unique legislations and laws that will present challenges to the company as it seeks to open up in the African countries (Blanchard 1998; John & Joseph 1998). 6. Provide a Final Recommendation and Implementation In regard to immediate issue being faced by the company, the management should nsure that it comes up with different criteria for selecting its suppliers. It must also make it mandatory for the suppliers to respect quality standards and abide by deadlines. This can ensure that the company is not affected by these problems in the long-term because they will be addressed before they occur. The steps that will prevent the current problems from reoccurring are if the company ensures that its deliveries are done on time and that the quality of the goods is always high. The company should also strive to choose the right suppliers. The management can also be made aware of the problems and know how to deal with them before they occur (Christopher & Peck 1997; Glaskowsky, Hudson & Ivie 1994). 7. Monitor and Control These recommendations will be able to monitor the operations of the company in different ways. For example, suppliers will be selected using more stringent criteria that will ensure that only the best are chose. Once this is done, most of the other problems will be much easier to solve because most of them were initially caused by the bad suppliers. Conclusion In conclusion, the Que Corporation has been experiencing a lot of challenges over the past few years. Despite the numerous challenges, the corporation has managed to remain effective and efficient in its operations and service delivery. The company has come up with measures and strategies that are meant to ensure that it continues to thrive in the highly competitive markets. The corporation has been trying to address the problems that affect is such as that of suppliers. All in all, the company has still managed to maintain high sales rates and record high profits. References  Blanchard, BS 1998, Logistics Engineering and Management, 5th edn, Prentice Hall, London. Bowersox, DJ & Closs, DJ 1998, Logistical Management: The Integrated Supply Chain Process, McGraw Hill, New York. Christopher, M & Peck, H 1997, Marketing Logistics, Butterworth-Heinemann, Michigan. Coyle, JJ & Bardi, EJ 1998, Transportation, South-Western Publishers, California. Coyle, JJ, Bardi, EJ & Langley, CJ 1996, The Management of Business Logistics, 6th edn, West/Wadsworth, Chicago.  Coyle, JJ, Bardi, EJ & Novack, RJ 1994, Transportation, 4th Ed.,West/Wadsworth, Chicago. Glaskowsky, NA, Hudson, DR & Ivie, RM 1994, Business Logistics, 3rd Ed., Wadsworth Publishers, Chicago. Handfield, RB & Nichols, EZ 1998, Introduction to Supply Chain Management, Prentice Hall, New York. John, OM & Joseph, LT 1998, Operations Management: Production of Goods and Services, 2nd edn, Prentice Hall, USA. Jones, JV 1998, Integrated Logistics Support Handbook, Special Reprint Ed., McGraw Hill, New York.  Kasilingam, RG 1999, Logistics and Transportation: Design and Planning, Kluwer Academic Publications, Chicago. Langford, JW 1994, Logistics: Principles and Applications, McGraw Hill, New York.  Leenders, MR 1992, Purchasing and Materials Management, 10th edn, McGraw Hill, New York. Nerseian, RL & Swartz, GB 1996, Computer Simulation in Logistics, Quorum Books, Michigan Orsburn, DK 1991, Spares Management Handbook, Tab Books, Texas. Pooler, VH & Pooler, D 1997, Purchasing and Supply Management: Creating the Vision, Chapman & Hall, Michigan. Ronald, HB 1999, Business Logistics Management, 4th edn,  Prentice Hall Int. Inc., USA. Wallenburg, C, et el 2011, ‘Commitment and Trust as Drivers of Loyalty in Logistics Outsourcing Relationships: Cultural Differences Between the United States and Germany’, Journal of Business Logistics, vol. 32, no. 1, pp. 83-98. Read More