Running head: PHASE 4 INDIVIDUAL PROJECT Phase 4 Individual Project Katyane Meiman Colorado Technical University Introduction to Logistics/ Supply Chain Management SCM210-1402B-04 Chester Legenza June 16, 2014 1 PHASE 4 INDIVIDUAL PROJECT 2 Domestic vs. International Consideration Introduction It is highly advantageous to have multiple distribution centers domestically. This is because the organization through purchasing of raw materials benefits from large trade discounts on the same. The downside to this is that the multiple centers might result in duplication of duties especially with regard to centers that are in close proximity to each other. One is able through having a distribution center, to meet the needs of the target market with great precision through the international center set up there, as opposed to shipping the goods directly from the United States. It also makes the citizens of the country feel a sense of importance in that, a branch, was set up solely to cater to their needs (Cordon, Hald & Seifert, 2012). The disadvantage that comes with this is that the distribution center within the foreign country might not adhere to the set standards of the brand comparing operations there and how it is done in the United States. Being a supplier to a large based international supplier has its perks. One being, you can charge a premium for the goods sold and as such have a surge in revenue overnight. On the other hand, it is tedious and regulations of that particular country where goods are being delivered to have to be taken into consideration; for example, the issue of double taxation in certain parts of the world. Employee costs will also be high as a result of the increase in centers or by having multiple distribution centers (Gunasekara & Ngai, 2003). The manpower required to operate the centers is immense and as such the company will have a bulging wage bill to contend with at the end of every month. PHASE 4 INDIVIDUAL PROJECT 3 Reporting also becomes difficult for an organization with multiple distribution centers. The organization loses part of the control it had when it had a central distribution center. It becomes difficult to conduct stock accounts and too know with great precision what is in fact stored within the carious warehouses of the multiple distribution centers. Decision-Making Criteria Expansion of the warehouse in the East Coast or building a West Coast distribution warehouse is the two likely scenarios. The organization has to primarily look at the demand within the two regions, the cost of catering that demand and which area is set to have higher returns as soon as possible. The cost of building and or renovating the warehouses must be recouped within the shortest time period (Shen & Chou, 2010). Sustaining the warehouse must also be looked into; these will be the aspects that shall be delved into based on the information at hand. This is primarily seen through the feasibility plan whereby costs and the location attributes are assessed in a bid to find out whether the new location is worth the hassle. The metrics of success include the revenue targets, costs, operation efficiency, demand and the requirements to operate within that locality. These indices help one gauge the success and or failure of choosing a particular area to conduct business. Be it domestically or internationally. Labor is also another key aspect that one has to look into. This applies both domestically and or internationally. The location must be able to cater to the labor needs of the organization as it sets up business within that area. If not, the organization might be forced to incur high labor costs, as it has to relocate expertise from the multiple locations it has so as to cater to the needs of the current location. This is both costly and consumes a lot of time (Lysons & Farrington, PHASE 4 INDIVIDUAL PROJECT 4 2012). The new employee must first adapt to the new setting before he or she can engage in the work they were assigned to undertake. The company is at the mercy of the new relocated employees and if they decide to leave, the organization will be forced to incur additional costs to recruit and or relocate employees. Under the business continuity plan, if such a scenario exists, whereby the new location does not meet the labor needs of the organization, as much as the organization can relocate an employee it must seek ways of recruiting new employees within the locality to handle the tasks stipulated. In the long run, this would be the ideal situation. The organization is seeking to set up a new warehouse in the West Coast. It faces two a wide array of problems such as timeliness with regard to delivery and high shipping costs. Considering that 20% of the cost of raw materials is attributable to shipping needs only, the cost is high. At the same time, the bulky nature of the raw materials makes it difficult to transport and might lead to delays. Seeing that customers who demand the commodities are growing, yes but not numerous, the cost of ferrying the goods to the West Coast will only break in a slight profit and or break even. This then makes the exercise in certain ways seem futile. Transportation is a key element both locally and internationally to look at when branching out to different locations. Other facets to look at include the infrastructure available within the locality such as power supply, security and many more. Security is vital as burglary and or vandalism costs money. In certain areas, the insurance premiums are higher as a result in the frequency of vandalism as compared to other areas. This increases the cost of doing business, which is normally already high (Daugherty, 2011). Power supply especially for a company dealing in manufacturing is necessary. It is not only the availability or supply of power that is crucial, its PHASE 4 INDIVIDUAL PROJECT 5 cost is also important. In certain countries, the cost of power is higher and or lower as compared to others. This has to be factored in when looking at the location and or country. The political outlook is important especially when setting up business in a foreign country or internationally. It greatly affects business and as such should never be overlooked. The recent political upheavals in the Middle East forced a lot of MNCs to close shop resulting in lost revenue and additional costs incurred in relocation expatriates. The organization must factor the political climate before venturing into any country. The level of power the government possesses must also be looked into; if it is high, then the government can arbitrarily change the rules making the cost of doing business, high as a result of the risk associated with it. There is also the translation risk that comes with the change in currency. The currency, of a country as a result of the negative political happenings might deteriorate and as such when the earnings are translated into the parent company currency, the revenue becomes little and or negligible. Metrics to Assess Success Any effective logistics plan has its customers at the core of its plan. They are indeed the primary focus of any logistics plan and if they are happy, well, then the plan is a success. The reverse is true. Any activity conducted by an organization whether from a local and or international perspective, has its customer at the forefront of its activities. Logistics is no exception. In essence, any activities and/or plans made will be judged by how the same assisted in meeting customer’s needs (Selviaridis & Spring, 2010). The customers dictate the logistics plan and how the same shall be executed. Without them being the focus of it, then how can it possibly succeed! PHASE 4 INDIVIDUAL PROJECT 6 The success of a logistics plan lies squarely on how well an organization prepared itself. Preparation is vast and looks at all realms of what the organization is involved in on the daily. One has to anticipate the needs of customers beforehand and know how the same will be produced and delivered to them when and, as they want it. Meeting the customers’ need is a key litmus test in determining the success of am logistics plan. The cost element comes into play, as a successful logistics plan must be able to deliver both raw materials and finished goods to customers at the cheapest cost possible. This is also a factor in the transportation aspect of the whole process and the means chosen were both cost effective and reliable. One cannot work without the other. The logistics plan must also be able to cater to unanticipated needs. There should be an allowance within it, to cater to emergencies and unforeseen scenarios that might occur at any time. There ought and should be a contingency plan that caters to unanticipated needs (Daugherty, 2011). This then makes the logistics plan full proof and is able to cater to all the needs of the company both locally and internationally. Non-Quantitative Factors Subjective aspects are broad and vary with each company. Among them include, the working environment, staff of the organization and their needs, social amenities available within the location and lastly, the ambience of the place. The working environment requires that the area should be ideal for the organization to carry out its operations. A noisy and crowded surrounding may not be appropriate for an organization seeking to have a production center within the locality. Most organizations especially manufacturing organizations prefer being secluded from the rest. A successful logistics plan takes that into account. PHASE 4 INDIVIDUAL PROJECT 7 The staff and their needs are paramount. They must be catered to with little or no effort. Their productivity is dependent on the same. The logistic plan must be highly effective and ensure that the employees of the organization are safe and secure within the premise and that the same people can conduct what they are paid to do with very little or no obstacles. Social amenities are equally important (Shen & Chou, 2010). The location should have a hospital, school and other social amenities close by. This gives the organization and its employees an assurance that, if anything arises, they will be assisted. The assurance goes along way and in more ways than one, increases productivity of the employees. The proximity to social amenities allows the organization to save on transportation costs in case anything goes wrong and or in ferrying employees from the organization’s premise to their homes, of the service is available to them. The reduction in costs results in higher revenues for the company, which is a welcomed move. The ambience of any location is crucial; as trivial as it may seem, the organization could be looking for a certain appeal within the location so as to conduct business there. If it does not meet the needs of the organization, then the plan is seen to be ineffective and or poorly done. The logistics plan should be easy to execute and flow seamlessly at every stage of execution (Cordon, Hald & Seifert, 2012). This saves on time and ensures that all the deadlines are met as per the stipulated times. The time saving element of the plan results in a reduction in cost as far as transportation costs are concerned resulting in higher revenues. Be it qualitative and or quantitative, an effective and or successful logistics plan has its customers at the helm with every other person trying to cater to their needs. PHASE 4 INDIVIDUAL PROJECT 8 Conclusion The three most important points is that the target market and or customers dictate everything. The decision-making process starts and ends with them. The other factors to look into are the costs and benefits derived from engaging in any activity. The customer as has always being said is king in any given scenario. Any activity of the organization should be aligned towards meeting their needs; meeting their needs results in sales and/or revenues for the company. Failure to do so is a failure in all aspects including the logistics planning of it. The logistic plan should be executed after extensive research has been done on the customers and the location where the organization wants to set up. A cost benefit analysis should be undertaken looking extensively at all aspects and what it entails to set up shop and or expand in the various localities. There should be a benefit for the organization in any activity it undertakes be it in the short run and or long run. In most scenarios, it is normally profits in the long run and breaking even in the short run. Once all the aspects of the project have been looked at and factored in extensively, the success of the logistic plan is imminent. PHASE 4 INDIVIDUAL PROJECT 9 References Cordon, C., Hald, K. S., & Seifert, R. W. (2012). Strategic supply chain management. Abingdon, Oxon: Routledge. Daugherty, P. J. (2011). Review of logistics and supply chain relationship literature and suggested research agenda. International Journal of Physical Distribution & Logistics Management, 41(1), 16-31. Gunasekaran, A., & Ngai, E. W. T. (2003). The successful management of a small logistics company. International Journal of Physical Distribution & Logistics Management, 33(9), 825-842. Lysons, K., & Farrington, B. (2012). Purchasing and supply chain management. Harlow, Essex: Pearson Financial Times. Selviaridis, K., & Spring, M. (2010). The dynamics of business service exchanges: insights from logistics outsourcing. Journal of Purchasing and Supply Management, 16(3), 171-184. Shen, C. W., & Chou, C. C. (2010). Business process re-engineering in the logistics industry: a study of implementation, success factors, and performance. Enterprise Systems, 4(1), 6178. Running head: PHASE 4 INDIVIDUAL PROJECT Phase 4 Individual Project Introduction to Logistics/ Supply Chain Management June 16, 2014 1 PHASE 4 INDIVIDUAL PROJECT 2 Domestic vs. International Consideration Section I - Introduction It is highly advantageous to have multiple distribution centers domestically. This is because the organization through purchasing of raw materials benefits from large trade discounts on the same. The downside to this is that the multiple centers might result in duplication of duties especially with regard to centers that are in close proximity to each other. One is able through having a distribution center, to meet the needs of the target market with great precision through the international center set up there, as opposed to shipping the goods directly from the United States. It also makes the citizens of the country feel a sense of importance in that, a branch, was set up solely to cater to their needs (Cordon, Hald & Seifert, 2012). The disadvantage that comes with this is that the distribution center within the foreign country might not adhere to the set standards of the brand comparing operations there and how it is done in the United States. Being a supplier to a large based international supplier has its perks. One being, you can charge a premium for the goods sold and as such have a surge in revenue overnight. On the other hand, it is tedious and regulations of that particular country where goods are being delivered to have to be taken into consideration; for example, the issue of double taxation in certain parts of the world. Employee costs will also be high as a result of the increase in centers or by having multiple distribution centers (Gunasekara & Ngai, 2003). The manpower required to operate the centers is immense and as such the company will have a bulging wage bill to contend with at the end of every month. PHASE 4 INDIVIDUAL PROJECT 3 Reporting also becomes difficult for an organization with multiple distribution centers. The organization loses part of the control it had when it had a central distribution center. It becomes difficult to conduct stock accounts and too know with great precision what is in fact stored within the carious warehouses of the multiple distribution centers. Section II - Decision-Making Criteria Expansion of the warehouse in the East Coast or building a West Coast distribution warehouse is the two likely scenarios. The organization has to primarily look at the demand within the two regions, the cost of catering that demand and which area is set to have higher returns as soon as possible. The cost of building and or renovating the warehouses must be recouped within the shortest time period (Shen & Chou, 2010). Sustaining the warehouse must also be looked into; these will be the aspects that shall be delved into based on the information at hand. This is primarily seen through the feasibility plan whereby costs and the location attributes are assessed in a bid to find out whether the new location is worth the hassle. The metrics of success include the revenue targets, costs, operation efficiency, demand and the requirements to operate within that locality. These indices help one gauge the success and or failure of choosing a particular area to conduct business. Be it domestically or internationally. Labor is also another key aspect that one has to look into. This applies both domestically and or internationally. The location must be able to cater to the labor needs of the organization as it sets up business within that area. If not, the organization might be forced to incur high labor costs, as it has to relocate expertise from the multiple locations it has so as to cater to the needs of the current location. This is both costly and consumes a lot of time (Lysons & Farrington, PHASE 4 INDIVIDUAL PROJECT 4 2012). The new employee must first adapt to the new setting before he or she can engage in the work they were assigned to undertake. The company is at the mercy of the new relocated employees and if they decide to leave, the organization will be forced to incur additional costs to recruit and or relocate employees. Under the business continuity plan, if such a scenario exists, whereby the new location does not meet the labor needs of the organization, as much as the organization can relocate an employee it must seek ways of recruiting new employees within the locality to handle the tasks stipulated. In the long run, this would be the ideal situation. The organization is seeking to set up a new warehouse in the West Coast. It faces two a wide array of problems such as timeliness with regard to delivery and high shipping costs. Considering that 20% of the cost of raw materials is attributable to shipping needs only, the cost is high. At the same time, the bulky nature of the raw materials makes it difficult to transport and might lead to delays. Seeing that customers who demand the commodities are growing, yes but not numerous, the cost of ferrying the goods to the West Coast will only break in a slight profit and or break even. This then makes the exercise in certain ways seem futile. Transportation is a key element both locally and internationally to look at when branching out to different locations. Other facets to look at include the infrastructure available within the locality such as power supply, security and many more. Security is vital as burglary and or vandalism costs money. In certain areas, the insurance premiums are higher as a result in the frequency of vandalism as compared to other areas. This increases the cost of doing business, which is normally already high (Daugherty, 2011). Power supply especially for a company dealing in manufacturing is necessary. It is not only the availability or supply of power that is crucial, its PHASE 4 INDIVIDUAL PROJECT 5 cost is also important. In certain countries, the cost of power is higher and or lower as compared to others. This has to be factored in when looking at the location and or country. The political outlook is important especially when setting up business in a foreign country or internationally. It greatly affects business and as such should never be overlooked. The recent political upheavals in the Middle East forced a lot of MNCs to close shop resulting in lost revenue and additional costs incurred in relocation expatriates. The organization must factor the political climate before venturing into any country. The level of power the government possesses must also be looked into; if it is high, then the government can arbitrarily change the rules making the cost of doing business, high as a result of the risk associated with it. There is also the translation risk that comes with the change in currency. The currency, of a country as a result of the negative political happenings might deteriorate and as such when the earnings are translated into the parent company currency, the revenue becomes little and or negligible. Section III - Metrics to Assess Success Any effective logistics plan has its customers at the core of its plan. They are indeed the primary focus of any logistics plan and if they are happy, well, then the plan is a success. The reverse is true. Any activity conducted by an organization whether from a local and or international perspective, has its customer at the forefront of its activities. Logistics is no exception. In essence, any activities and/or plans made will be judged by how the same assisted in meeting customer’s needs (Selviaridis & Spring, 2010). The customers dictate the logistics plan and how the same shall be executed. Without them being the focus of it, then how can it possibly succeed! PHASE 4 INDIVIDUAL PROJECT 6 The success of a logistics plan lies squarely on how well an organization prepared itself. Preparation is vast and looks at all realms of what the organization is involved in on the daily. One has to anticipate the needs of customers beforehand and know how the same will be produced and delivered to them when and, as they want it. Meeting the customers’ need is a key litmus test in determining the success of am logistics plan. The cost element comes into play, as a successful logistics plan must be able to deliver both raw materials and finished goods to customers at the cheapest cost possible. This is also a factor in the transportation aspect of the whole process and the means chosen were both cost effective and reliable. One cannot work without the other. The logistics plan must also be able to cater to unanticipated needs. There should be an allowance within it, to cater to emergencies and unforeseen scenarios that might occur at any time. There ought and should be a contingency plan that caters to unanticipated needs (Daugherty, 2011). This then makes the logistics plan full proof and is able to cater to all the needs of the company both locally and internationally. Section IV - Non-Quantitative Factors Subjective aspects are broad and vary with each company. Among them include, the working environment, staff of the organization and their needs, social amenities available within the location and lastly, the ambience of the place. The working environment requires that the area should be ideal for the organization to carry out its operations. A noisy and crowded surrounding may not be appropriate for an organization seeking to have a production center within the locality. Most organizations especially manufacturing organizations prefer being secluded from the rest. A successful logistics plan takes that into account. PHASE 4 INDIVIDUAL PROJECT 7 The staff and their needs are paramount. They must be catered to with little or no effort. Their productivity is dependent on the same. The logistic plan must be highly effective and ensure that the employees of the organization are safe and secure within the premise and that the same people can conduct what they are paid to do with very little or no obstacles. Social amenities are equally important (Shen & Chou, 2010). The location should have a hospital, school and other social amenities close by. This gives the organization and its employees an assurance that, if anything arises, they will be assisted. The assurance goes along way and in more ways than one, increases productivity of the employees. The proximity to social amenities allows the organization to save on transportation costs in case anything goes wrong and or in ferrying employees from the organization’s premise to their homes, of the service is available to them. The reduction in costs results in higher revenues for the company, which is a welcomed move. The ambience of any location is crucial; as trivial as it may seem, the organization could be looking for a certain appeal within the location so as to conduct business there. If it does not meet the needs of the organization, then the plan is seen to be ineffective and or poorly done. The logistics plan should be easy to execute and flow seamlessly at every stage of execution (Cordon, Hald & Seifert, 2012). This saves on time and ensures that all the deadlines are met as per the stipulated times. The time saving element of the plan results in a reduction in cost as far as transportation costs are concerned resulting in higher revenues. Be it qualitative and or quantitative, an effective and or successful logistics plan has its customers at the helm with every other person trying to cater to their needs. PHASE 4 INDIVIDUAL PROJECT 8 Section V - Conclusion The three most important points is that the target market and or customers dictate everything. The decision-making process starts and ends with them. The other factors to look into are the costs and benefits derived from engaging in any activity. The customer as has always being said is king in any given scenario. Any activity of the organization should be aligned towards meeting their needs; meeting their needs results in sales and/or revenues for the company. Failure to do so is a failure in all aspects including the logistics planning of it. The logistic plan should be executed after extensive research has been done on the customers and the location where the organization wants to set up. A cost benefit analysis should be undertaken looking extensively at all aspects and what it entails to set up shop and or expand in the various localities. There should be a benefit for the organization in any activity it undertakes be it in the short run and or long run. In most scenarios, it is normally profits in the long run and breaking even in the short run. Once all the aspects of the project have been looked at and factored in extensively, the success of the logistic plan is imminent. PHASE 4 INDIVIDUAL PROJECT 9 References Cordon, C., Hald, K. S., & Seifert, R. W. (2012). Strategic supply chain management. Abingdon, Oxon: Routledge. Daugherty, P. J. (2011). Review of logistics and supply chain relationship literature and suggested research agenda. International Journal of Physical Distribution & Logistics Management, 41(1), 16-31. Gunasekaran, A., & Ngai, E. W. T. (2003). The successful management of a small logistics company. International Journal of Physical Distribution & Logistics Management, 33(9), 825-842. Lysons, K., & Farrington, B. (2012). Purchasing and supply chain management. Harlow, Essex: Pearson Financial Times. Selviaridis, K., & Spring, M. (2010). The dynamics of business service exchanges: insights from logistics outsourcing. Journal of Purchasing and Supply Management, 16(3), 171-184. Shen, C. W., & Chou, C. C. (2010). Business process re-engineering in the logistics industry: a study of implementation, success factors, and performance. Enterprise Systems, 4(1), 6178. Running head: PHASE 4 INDIVIDUAL PROJECT Phase 4 Individual Project Introduction to Logistics/ Supply Chain Management June 16, 2014 1 PHASE 4 INDIVIDUAL PROJECT 2 Domestic vs. International Consideration Section I - Introduction It is highly advantageous to have multiple distribution centers domestically. This is because the organization through purchasing of raw materials benefits from large trade discounts on the same. The downside to this is that the multiple centers might result in duplication of duties especially with regard to centers that are in close proximity to each other. One is able through having a distribution center, to meet the needs of the target market with great precision through the international center set up there, as opposed to shipping the goods directly from the United States. It also makes the citizens of the country feel a sense of importance in that, a branch, was set up solely to cater to their needs (Cordon, Hald & Seifert, 2012). The disadvantage that comes with this is that the distribution center within the foreign country might not adhere to the set standards of the brand comparing operations there and how it is done in the United States. Being a supplier to a large based international supplier has its perks. One being, you can charge a premium for the goods sold and as such have a surge in revenue overnight. On the other hand, it is tedious and regulations of that particular country where goods are being delivered to have to be taken into consideration; for example, the issue of double taxation in certain parts of the world. Employee costs will also be high as a result of the increase in centers or by having multiple distribution centers (Gunasekara & Ngai, 2003). The manpower required to operate the centers is immense and as such the company will have a bulging wage bill to contend with at the end of every month. PHASE 4 INDIVIDUAL PROJECT 3 Reporting also becomes difficult for an organization with multiple distribution centers. The organization loses part of the control it had when it had a central distribution center. It becomes difficult to conduct stock accounts and too know with great precision what is in fact stored within the carious warehouses of the multiple distribution centers. Section II - Decision-Making Criteria Expansion of the warehouse in the East Coast or building a West Coast distribution warehouse is the two likely scenarios. The organization has to primarily look at the demand within the two regions, the cost of catering that demand and which area is set to have higher returns as soon as possible. The cost of building and or renovating the warehouses must be recouped within the shortest time period (Shen & Chou, 2010). Sustaining the warehouse must also be looked into; these will be the aspects that shall be delved into based on the information at hand. This is primarily seen through the feasibility plan whereby costs and the location attributes are assessed in a bid to find out whether the new location is worth the hassle. The metrics of success include the revenue targets, costs, operation efficiency, demand and the requirements to operate within that locality. These indices help one gauge the success and or failure of choosing a particular area to conduct business. Be it domestically or internationally. Labor is also another key aspect that one has to look into. This applies both domestically and or internationally. The location must be able to cater to the labor needs of the organization as it sets up business within that area. If not, the organization might be forced to incur high labor costs, as it has to relocate expertise from the multiple locations it has so as to cater to the needs of the current location. This is both costly and consumes a lot of time (Lysons & Farrington, PHASE 4 INDIVIDUAL PROJECT 4 2012). The new employee must first adapt to the new setting before he or she can engage in the work they were assigned to undertake. The company is at the mercy of the new relocated employees and if they decide to leave, the organization will be forced to incur additional costs to recruit and or relocate employees. Under the business continuity plan, if such a scenario exists, whereby the new location does not meet the labor needs of the organization, as much as the organization can relocate an employee it must seek ways of recruiting new employees within the locality to handle the tasks stipulated. In the long run, this would be the ideal situation. The organization is seeking to set up a new warehouse in the West Coast. It faces two a wide array of problems such as timeliness with regard to delivery and high shipping costs. Considering that 20% of the cost of raw materials is attributable to shipping needs only, the cost is high. At the same time, the bulky nature of the raw materials makes it difficult to transport and might lead to delays. Seeing that customers who demand the commodities are growing, yes but not numerous, the cost of ferrying the goods to the West Coast will only break in a slight profit and or break even. This then makes the exercise in certain ways seem futile. Transportation is a key element both locally and internationally to look at when branching out to different locations. Other facets to look at include the infrastructure available within the locality such as power supply, security and many more. Security is vital as burglary and or vandalism costs money. In certain areas, the insurance premiums are higher as a result in the frequency of vandalism as compared to other areas. This increases the cost of doing business, which is normally already high (Daugherty, 2011). Power supply especially for a company dealing in manufacturing is necessary. It is not only the availability or supply of power that is crucial, its PHASE 4 INDIVIDUAL PROJECT 5 cost is also important. In certain countries, the cost of power is higher and or lower as compared to others. This has to be factored in when looking at the location and or country. The political outlook is important especially when setting up business in a foreign country or internationally. It greatly affects business and as such should never be overlooked. The recent political upheavals in the Middle East forced a lot of MNCs to close shop resulting in lost revenue and additional costs incurred in relocation expatriates. The organization must factor the political climate before venturing into any country. The level of power the government possesses must also be looked into; if it is high, then the government can arbitrarily change the rules making the cost of doing business, high as a result of the risk associated with it. There is also the translation risk that comes with the change in currency. The currency, of a country as a result of the negative political happenings might deteriorate and as such when the earnings are translated into the parent company currency, the revenue becomes little and or negligible. Section III - Metrics to Assess Success Any effective logistics plan has its customers at the core of its plan. They are indeed the primary focus of any logistics plan and if they are happy, well, then the plan is a success. The reverse is true. Any activity conducted by an organization whether from a local and or international perspective, has its customer at the forefront of its activities. Logistics is no exception. In essence, any activities and/or plans made will be judged by how the same assisted in meeting customer’s needs (Selviaridis & Spring, 2010). The customers dictate the logistics plan and how the same shall be executed. Without them being the focus of it, then how can it possibly succeed! PHASE 4 INDIVIDUAL PROJECT 6 The success of a logistics plan lies squarely on how well an organization prepared itself. Preparation is vast and looks at all realms of what the organization is involved in on the daily. One has to anticipate the needs of customers beforehand and know how the same will be produced and delivered to them when and, as they want it. Meeting the customers’ need is a key litmus test in determining the success of am logistics plan. The cost element comes into play, as a successful logistics plan must be able to deliver both raw materials and finished goods to customers at the cheapest cost possible. This is also a factor in the transportation aspect of the whole process and the means chosen were both cost effective and reliable. One cannot work without the other. The logistics plan must also be able to cater to unanticipated needs. There should be an allowance within it, to cater to emergencies and unforeseen scenarios that might occur at any time. There ought and should be a contingency plan that caters to unanticipated needs (Daugherty, 2011). This then makes the logistics plan full proof and is able to cater to all the needs of the company both locally and internationally. Section IV - Non-Quantitative Factors Subjective aspects are broad and vary with each company. Among them include, the working environment, staff of the organization and their needs, social amenities available within the location and lastly, the ambience of the place. The working environment requires that the area should be ideal for the organization to carry out its operations. A noisy and crowded surrounding may not be appropriate for an organization seeking to have a production center within the locality. Most organizations especially manufacturing organizations prefer being secluded from the rest. A successful logistics plan takes that into account. PHASE 4 INDIVIDUAL PROJECT 7 The staff and their needs are paramount. They must be catered to with little or no effort. Their productivity is dependent on the same. The logistic plan must be highly effective and ensure that the employees of the organization are safe and secure within the premise and that the same people can conduct what they are paid to do with very little or no obstacles. Social amenities are equally important (Shen & Chou, 2010). The location should have a hospital, school and other social amenities close by. This gives the organization and its employees an assurance that, if anything arises, they will be assisted. The assurance goes along way and in more ways than one, increases productivity of the employees. The proximity to social amenities allows the organization to save on transportation costs in case anything goes wrong and or in ferrying employees from the organization’s premise to their homes, of the service is available to them. The reduction in costs results in higher revenues for the company, which is a welcomed move. The ambience of any location is crucial; as trivial as it may seem, the organization could be looking for a certain appeal within the location so as to conduct business there. If it does not meet the needs of the organization, then the plan is seen to be ineffective and or poorly done. The logistics plan should be easy to execute and flow seamlessly at every stage of execution (Cordon, Hald & Seifert, 2012). This saves on time and ensures that all the deadlines are met as per the stipulated times. The time saving element of the plan results in a reduction in cost as far as transportation costs are concerned resulting in higher revenues. Be it qualitative and or quantitative, an effective and or successful logistics plan has its customers at the helm with every other person trying to cater to their needs. PHASE 4 INDIVIDUAL PROJECT 8 Section V - Conclusion The three most important points is that the target market and or customers dictate everything. The decision-making process starts and ends with them. The other factors to look into are the costs and benefits derived from engaging in any activity. The customer as has always being said is king in any given scenario. Any activity of the organization should be aligned towards meeting their needs; meeting their needs results in sales and/or revenues for the company. Failure to do so is a failure in all aspects including the logistics planning of it. The logistic plan should be executed after extensive research has been done on the customers and the location where the organization wants to set up. A cost benefit analysis should be undertaken looking extensively at all aspects and what it entails to set up shop and or expand in the various localities. There should be a benefit for the organization in any activity it undertakes be it in the short run and or long run. In most scenarios, it is normally profits in the long run and breaking even in the short run. Once all the aspects of the project have been looked at and factored in extensively, the success of the logistic plan is imminent. PHASE 4 INDIVIDUAL PROJECT 9 References Cordon, C., Hald, K. S., & Seifert, R. W. (2012). Strategic supply chain management. Abingdon, Oxon: Routledge. Daugherty, P. J. (2011). Review of logistics and supply chain relationship literature and suggested research agenda. International Journal of Physical Distribution & Logistics Management, 41(1), 16-31. Gunasekaran, A., & Ngai, E. W. T. (2003). The successful management of a small logistics company. International Journal of Physical Distribution & Logistics Management, 33(9), 825-842. Lysons, K., & Farrington, B. (2012). Purchasing and supply chain management. Harlow, Essex: Pearson Financial Times. Selviaridis, K., & Spring, M. (2010). The dynamics of business service exchanges: insights from logistics outsourcing. Journal of Purchasing and Supply Management, 16(3), 171-184. Shen, C. W., & Chou, C. C. (2010). Business process re-engineering in the logistics industry: a study of implementation, success factors, and performance. Enterprise Systems, 4(1), 6178.
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