JNB330 Supply Chain Management : Advent of Globalization and Liberaliz

Introduction:

The operations that are undertaken in the modern world require the use of extensive methods in order to carry out their work efficiently (Leung et al. 2013). It has been seen that transportation and logistics has been one of the most important aspect with respect to a business and personal life as the transpiration of goods from one place to another has been active for decades.

With the advent of globalization and liberalization, it is seen that the demand for logistics management has increased incredibly. There have been various ways for the transportation of goods and one of the most easiest and the fastest way has been via air-cargo (Ou, Hsu and Li 2010). The advent of aviation industry has led to the increase in air-cargo as the mode of transportation. Therefore, the process of logistics management has gained importance at a fast rate. Every business and parcels related to an individual when they transfer to long distance is undertaken with the help of aviation industry as it takes very short time and can transfer a lot of goods at one go. The advent of aviation industry as the mode of transportation has led to the introduction of air-cargo planes where only cargos are transported from one place to another (Yang et al. 2010).

The current paper concentrates on the logistics management that are undertaken by air-cargo industries in United Kingdom and the various processes along with the rise in air-cargo industry and the need for logistics management is being discussed (Shen, Rankin and Le 2016).

Logistics Management in Air Cargo in United Kingdom 

The process of air cargo has an important role to play with respect to the supply chain that takes place in the modern day (Danyang, Rankin and Meilong 2016). The cargos that are carried by the airplanes are carried at the belly of the aircraft, which is below the seats where the passengers sit. There are certain instances where the cargos are kept along with the passengers. For instance Alaska Airlines undertake a combined flight where the cargos are kept at the main deck along with the passengers. There are many logistics industries that provide door-door services take help of these airlines as they are faster than the cargo aircrafts. On the other hand, logistics industries who bring in large goods, utilize large aircrafts who have the ability to carry cargos, which are way over size and have the ability to carry large volumes (Leung et al. 2009).

In the process of transpiration, the airports act as a significant link among the transpiration through the service and air. There are various cargo industries that are revealed in the by many journals that operate globally out of which a large section operates in Asia, which makes an indication that there have been a substantial growth in the business and trade in this area (Wu 2008). On the other hand, Louisville and Memphis make a lot of profit as they are the main hubs for FedEx and UPS. There are two airports that due to their geographical location act as the crossroad between various continents and therefore benefit from this action.

Looking at the airports in UK, it is seen that a lot of freight are transported in and out of the country (Hsu and Wang 2013). With respect to the weight, the amount may be small; however the cargos that are carried out through ships with the help of ports have been significantly more. The cargos that are transported are of high value density and by weight the air freight in UK accounts to 40% of the imports and exports. The main goods that are transported includes medical instruments, jewellery aerospace medicines etc (Mitra and Leon 2014). The advent of this industry has led to the rise in jobs directly or indirectly in this sector.

Unlike the process of marine trades, where an imbalance towards imports, the UK freight exists is evenly balanced outbound and inbound movements that are 48% and 52% respectively. It is seen that air transport is ideal for long distance travel and therefore surprisingly 80% if the freight has its source outside the country of UK and 50% of the mall volume is across the airports in UK (Feng, Li and Shen 2015). This reveals the variety of uses for air transportation and the problems the process have is with respect to the managers of this industry.

There exist various factors that have an impact on the cargo developments in the airports of UK. The location of the airport is one of the significant set where the physical location is relative to the freight market is vital. Additionally the demand in the local market is crucial for air services support (Dongsheng et al. 2014). The airport should not even be restricted by operational factors like weather. The influence over these factors is way beyond the hands of the airport.

The quality of the airport is however in the control of the authorities of the airport. The availability of congestion can have a direct impact that can have delays and lack of suitable time can cause delays. The level of changes in the airports and the change in the cost of labor can have an impact on the viability of the service (Singhaseni, Wu and Ojiako 2013). The infrastructure that are available both outside and inside of the airport with respect to the ground access to the market can be a factor that has significance in motivating the choice of the airport for the airlines because the freight service is different with respect to the demands of the customers (Klindokmai et al. 2014).

There are various other factors like the regulations of the government, variables with respect to behavior, airport marketing etc that has an influence on the freight service of the airports and the airlines making use of that airport (Yung-Hsiang and Chian-Yu 2007). There are various airports that are operational throughout UK but it is seen that the market is mainly dominated by the airports in London and Heathrow in particular. The cargos that are carried out through Heathrow are mainly through the belly of the aircraft. The organizations that use airlines that are dedicated to freight service make use of airports in Manston and Stansled, which were however closed later in 2014.

There are various other airports outside London that are operational and undertake the same freight service activities even though they may not be as big as Heathrow. The air cargo airlines like Antonov etc are huge aircrafts and they are in require a big storage space within the airport facility to store the goods that are coming inbound or going outbound (Ellram, Tate and Feitzinger 2013). The process of logistic management requires the implementation of various sound and successful strategies that will improve the line of work and will even enhance the management procedure. Logistic management is one of the basic process that is important for a freight service industry and with respect to air cargo logistic management is crucial as the goods are transported to various distances all over the globe and therefore require proper packaging and maintenance of the product (Srinivasan, Best and Chandrasekaran 2007).

Logistics management strategies that enable the company to become successful 

Adopting demand-driven planning that is based on real-time demand insights as well as demand shaping- Air Cargo should predict the contingency planning tools that ensure a proper view as well as effective responses to risks like political upheaval, suppliers going out of trade as well as natural calamities that affects manufacturing. Furthermore, the companies should be adjusting the pricing as well as promotion strategies for shaping the demand and moving to additional product as well as driving the revenue that actually expands the margins especially for higher demanded products with limited market supply (Levina et al. 2011). It is thereby important for Air Cargo to leverage the opportunities as well as mitigating the challenging events where the business can actually survive and succeed.

Building an adaptive supply change with rapid planning as well as integrated execution- After predicting the demand and risk where Air Cargo need to adapt to their supply chains that depends upon the market opportunities as well as events. It is essential for the Air Cargo for conducting dynamic planning as well as continuously fine-tuning operations (Wu 2010). The new model should be used by companies as it is more continuous as well as dynamic supply chain adjustments that rapidly respond to the market changes. Furthermore, use of new model by companies will actually minimize as well as eliminate shocks in and across the supply network.

Optimizing product designs for supply, sustainability as well as manufacturing for accelerating profitable innovation- Air Cargo should find ways for innovative ideas as it is one of the crucial steps taken that makes the company ahead of competition. Air Cargo to be successful need to make the correct decisions where product is manufactured at right cost (Chen, Yan and Chen 2010). Furthermore, the necessary decisions are to be made in the early cycles of product development that actually make or break a particular product. It is necessary for optimizing the designs used for supply as well as manufacturing activities where all the true costs are accurately captured as far as possible (Nance, Roesener and Moore 2011). Therefore, Air Cargo need to manage with the information, process as well as people at the time of taking decisions based on a product throughout the life cycle where the Air Cargo can achieve strong dividends as well as market leadership (Klindokmai et al. 2014). Embedded sustainability into supply chain operations should be adopted by Air Cargo for attainment of future goals as well as objectives. In other words, product innovation as well as competitive advantage is chosen from the suppliers and the relevant knowledge used by Air Cargo

Aligning supply chain with the business goals through connecting sales as well as operations planning and corporate business planning- It is essential for considering the fact that sales and operations planning actually coordinates with elements such as sales, distribution and manufacturing where it disconnects with the gaps in and among finance, operations and strategy. Air Cargo should work hard for bridging the gap through integrated business planning (Feng, Li and Shen 2015). Furthermore, the process used by companies should align with the financial strategic budgeting as well as forecasting systems with the planning of operations. Therefore, integrated business planning actually connects with the sales and operations planning where the Air Cargo try for achieving the proper balance between supply and demand that should automatically align with strategic goals (Ellram, Tate and Feitzinger 2013).

Improve its success in the future

From the above-listed logistics management strategies, Air Cargo should be using the strategies so that they are successful in the near future. Company leaders should be considering sustainability that is a core component of supply chain strategy. Furthermore, the Air Cargo should incorporate sustainability in their operations that is a key requirement in the supply chain. It is the responsibility of the supply chain managers for rapidly responding to changes as well as increasing profitability at next level. It is necessary to consider the fact that triple bottom line of people as well as profit is important in the recent times. Air Cargo should be striving its best on matters relating to social as well as environmental sustainable practices where they can achieve competitive advantage. It is in case of production efficiency, employee’s attractiveness as well as supplier management skills where significant opportunities exist especially for sustainability in supply chain operations in the most appropriate way (Hsu and Wang 2013).

Recommendations: 

It is recommended that Air Cargo leaders should be prioritizing projects that can actually reduce inventory as well as logistics expenses. Addition to that, in shorter span of time, there occur professional risk that ignores in the long-term. It is the business organization who prepares for rebounding of logistics that responds to the conditions and reduces labor pool, deflation and stagflation. Issues relating to energy and sustainability should be reduced after implementing proper logistics management strategies. It is advisable to Air Cargo to implement effective strategies that couples with well-defined plan as well as use of right tools that actually helps in alleviating the pressures in recent times where the managers are ready for any market changes in the near future. It is recommended to Air Cargo for developing a logistics strategy after considering various levels in their logistics organization. By examining the Air Cargo objectives as well as supply chain decisions, it is necessary to use the logistics strategy for reviewing how an organization contributes towards high-level objectives.

Conclusion: 

At the end of the study, it is concluded that study discusses regarding the logistics management in Air Cargo that is based in United Kingdom. The above analysis explains the supply chain operations that need to be undertaken in recent times so that Air Cargo can carry out the work in an effective way. The current segment elucidates on the logistics management where various process are undertaken by Air Cargo so that they are successful in the near future. The study discusses the various logistics management strategies that help companies to be successful and attain competitive advantage than its nearest competitors. Therefore, this result takes into consideration better visibility as well as enhanced collaboration in and across value chain such as sourcing and supply, warehousing, better analytics as well as enhanced decision-making process. At the time of implementing logistics strategy in a business, it is necessary for defining the service levels whereby the logistics organization can be most effective in nature. It is because of the supply chains that are actually constantly changing as well as evolving where Air Cargo need to develop various logistics strategies for a given product lines that needs to be country and customer specific. In order to adapt to the flexibility of the supply chain, it is essential for Air Cargo in developing as well as implementing formal logistics strategy. This strategies will further help Air cargo for identifying the impact of imminent changes as well as making the necessary functional changes that ensures service level are not reduced by any means.

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