A theoretical and practical evaluation of the logistical processes at Tate and Lyle, Silvertown
An evaluation of the logistical operations in Tate and Lyle will help understand the procurement, preservation and distribution process of the goods produced by the company. This will help recognize how the company plans, executes and manages the cost efficient movement and storage of the raw materials it needs, information it uses and the finished goods it produces to meet the needs of the consumer. The evaluation illustrated that Tate and Lyle’s logistical activities commence with the procurement process. The first procedure in the procurement process is the preparation of the specifications, which guides the selection of the supplier. The company analysis a number of suppliers and selects one that will satisfactorily meet its needs and requirements. The presence of quality certifications, stability in the financial capacity of the company and suitability in the price charged for the goods also influence the selection of the supplier (Cohen & Roussel, 2005). The company only selects suppliers that will deliver the raw materials needed on time, in the most competitive price and in accordance with the specifications in the most flexible way. The company then makes the purchase from the supplier. This is followed by the delivery of the raw materials, processing and distribution of the manufactured goods.
The need to manage effectively the logistical operations of a company has led to the development of supply chain strategies. Silvertown Refinery’s has developed a global strategy to help in the management of its supply chain. The company has established a global strategy to achieve a number of goals. The global strategy aims to facilitate and provide an arena for the development and enhancement of the company’s brand resulting to global recognition. Research shows that this strategy will ensure that the company achieves international recognition. Research shows that companies such as Sony, Toyota, Microsoft and Levis achieved worldwide recognition because they used the global strategy in the management of their supply chain.
This strategy will also ensure that the products of the company lead to global customer satisfaction. It will ensure that the company’s goods become global products. The will ensure that consumers the same quantity and quality for the company goods they demand for throughout the globe. Past research indicates that use of the global strategy in the management of the supply chain leads to the development of the economies of scale. The strategy ensures that the company buys its products in bulk resulting to greater discounts in the purchase of the company’s raw materials. The global strategy leads to the efficient use of resources helping reduce the cost of production. The strategy allows for the use of specialized inputs and better techniques of production and organization of inputs resulting to reduction in the cost of production. Supply in bulk also helps reduce the transport costs involved in distribution.
An analysis of the strategy used by the company help illustrate a number of challenges that limit the usefulness of the strategy. The fast limitation is the fact that the supply chain is determined and driven by the market. The strategy aims to ensure production and distribution of similar products globally. However, market pressures increase choice limiting the global distribution of the same product. The strategy is been considered not to be beneficial because of its high level of unresponsive (Burt & Pinkerton, 2009). The strategy has a low response rate to the values and needs of the consumers. This leads to the fall and reduction in the demand of the goods produced by the company. Although the strategy ensures production of the right quantity at the right time, it limits production of various goods to meet the different needs of consumers. When analysed based on its level of responsiveness, one considers the strategy inappropriate.
Another factor that makes the strategy used by the company in the management of its supply needs inappropriate is the presence of high level of customer expectation and change in customer needs. Scholars state that this is the “Age of Choice” characterised by many types of goods and products serving the same purpose. This leaves it the consumer to decide the good to buy. There are various types of goods all aiming to meet the various needs in society. This requires that producers have the most competitive products to meet the various needs of the consumers. The “Age of Choice” goes along with the “Age of Impatience” where people aim to get what they need in the shortest time possible. This calls for the strategy to ensure that the products of the company are easily accessible. Although the strategy fulfils the needs of the “Age of Impatience,” it fails to meet the requirements of the “Age of Choice” (Cohen & Roussel, 2005).
An analysis of the strategies used by Silvertown Refinery to manage its supply chain helps understand some of the challenges Tate and Lyle might face in its logistical activities and in the management of its supply chain. The first challenge Tate and Lyle might face in the management of its inventory is the high level of customer expectations. The traits that make up the market result to most of the challenges faced by Tate and Lyle. An analysis of the strategies used by the Silvertown Refinery’s limited showed that current markets could be described as the “Age of Impatience” where consumers want frequent innovations to meet their needs. However, the strategy used by the company might not facilitate the innovation of new products as expected in the market resulting presenting a challenge. The market is characterized by a high rate of turnover of goods. New products serving the needs of the consumers are been made everyday replacing existing products. The high rate of turnover presents a challenge to the company. Current markets can be referred to as the “age of choice” where there are different goods to meet their needs. The presence of many competitive forces presents a challenge to Tate and Lyle in the attempt to achieve its goals and objectives. The nature of the product made also presents a challenge to the firm.
Analysis shows that the strategies used by the management to address issues that concern the supply chain influence the logistical elements of any company. In this, the strategies adopted by Tate and Lyle had a number of impacts on the logistical component of the company. The logistic operation of the company involves the sourcing of raw materials, products, parts and components and organizing the ways to transport them. Logistical operations also involve the management of warehouses and the company’s inventory. Therefore, logistics entails the flow of information, resources and materials within the company.
In the management and performance of their logistic needs, Tate and Lyle face a number of challenges. Tate and Lyle have in the recent past being able to build its market size. The increase in its market size forms a basis for most of the problems Tate and Lyle experiences. The issue of speed is one of the challenges the company faces in the management of its logistical needs. There is need to ensure that the products of the company are supplied to the consumers on a timely basis. There is also need to ensure timely delivery of raw materials needed for production for production to take place. This calls for a fast means of transport to supply the goods needed. However, fast means of transport are very expensive. The challenge is for the company to locate a fast but cheap means of transport. These challenges arise because of the long distance between the company and its target market, more so the foreign markets.
The need to transport a large volume of goods to ensure that there is a constant supply of the company’s goods in the market provides another challenge to the firm. The increase in the company’s market size calls for the need to transport large volumes of goods to the respective markets (Cohen & Roussel, 2005). The means to use to transport leads forms a challenge to the company. The company has both lightweight and heavy weight goods, and low volume and high volume goods, which the company has to transport to various parts of the globe where its consumers are located. An extra challenge the company faces is the need to safeguard the security and safety of its products during transportation.
Another challenge faced by the company in its logistical operation is the need to ensure that the value of the good is not lost or good stolen during transportation or storage. There has been loss of goods or raw materials either due to theft among the staff in charge. The company faces many challenges in the attempt to ensure that the product remains the same during transportation or storage. The company is faced with the challenge to ensure that the size of the good, its weight, among other physical traits are not altered during its transportation or storage. Tate and Lyle have to ensure that the physical state, quantity does not change due to poor storage means or transportation in the wrong medium. The company also has to ensure that no hazardous substances combine with the products in the logistical process (Kuhlman & Industrial College of the Armed Forces, 2005). The company therefore faces a number of challenges to the stability of the products. The organic and material structure of the product should remain unchanged. There is therefore need to safeguard the good from unfavourable climatic and weather conditions to prevent damage.
The company has devised a number of ways to deal with the challenges it faces in the transportation and storage of its products, resources and raw materials. To deal with the issue of speed and urgency, Tate and Lyle has been using road transport to supply its products to the local market. It also helps deal with challenge of costs. Road transport provides an economical mode to transport the raw materials needed by the company and the goods produced. The use of transport ensures that the company is able to reach and easily access its local and regional market. The use of road transport helps overcome the issue of speed. It is one of the fastest modes of transport for short distances ensuring that the delivery of the company’s goods is appropriate. The company’s use of road transport helps secure the products because there is minimal handling.
To solve the issue of distance, the company uses rail and water transport. Rail transport helps deliver raw materials and goods to and from the regional markets. Rail transport helps solve a number of challenges facing the company. For instance, it is fast helping solve the need for speed. It ensures that goods are delivered on time. It also facilitates the transportation of large volume of goods at a greater speed. Water transport serves Tale and Lyle’s foreign markets. The use of water transport helps deal with the challenge of transporting large volumes of goods (Cohen & Roussel, 2005). The use of water transport helps reduce the level of cost incurred in the transportation of large volumes of goods. This is the cheapest form of transport. It provides a cheap avenue for the transportation of bulky goods over long distances. Water transport provides an effective means to transport bulky products that the company deals in.
To ensure that the goods are unchanged during transportation, transportation occurs in containers. This prevent alteration or damage to the goods by limiting contact or access and providing the optimal conditions needed to transport the goods. A container must be full for transportation to take place. Containers help solve the issue of security because they provide a door-to-door service. Once the goods packed in the container, at the company, the will only be accessible when they reach their destination. Once the goods are packed, there is no need for additional handling. The use of containers also helps reduce the cost of transportation because they reduce the amounts charged for insurance. This is because they reduce the probability of the goods been stolen. Containers also help deal with the issue of speed. They ensure the faster movement of goods as the documentation happens only once. Lastly, containers reduce the amount of time spent by ships in various ports. This reduces the amount its takes for the goods to move from the producer’s port to the foreign market’s port.
Once transported by water, the storage of goods happens in depots in the foreign markets. The good’s distribution to the foreign markets happens by road. This helps ensure that no shortage comes about in the market the company deals in. However, for goods and raw materials that are low in volume, sensitive and light in weight, the company uses air transport. For instance, transportation of letters, documents and contracts for the company takes place through air. This ensures that the goods are safe and quickly transported. Air transport deals with the challenge of speed, security and packaging. It ensures that urgent goods move swiftly while transportation of sensitive goods is secure.
The presence of logistics service providers also help Tale and Lyle deal with some of the challenges it faces. Such companies include Maersk Group, DHL, Kuene, and Nagel. The companies help deal with the issue of cost in logistical operations by offering low prices for the transportation of goods and services. They help ensure that goods are safe during the transportation process by providing monitoring services. Where there is need for specialised transportation, they provide the service at a low price (Kuhlman & Industrial College of the Armed Forces, 2005).
In the operation of the logistical activities, a number of alternative procedures exist that the company can engage in. For instance, in attainment of the goods purchased and in the distribution of the products manufactured, the company can use the services of the logistics service providers. In the transportation of the goods it produces, it can use the alternative of hauling and trucking companies in place of its own trucks and Lorries. In the documentation of the goods in transit, the company can use the alternative of freight forwarders in place of its own employees to arrange for transport and facilitate the custom clearance. In the production of its goods, the company can use the alternative of off shoring.
The use of alternatives presents a number of benefits to the company. For instance, it ensures that company cut down on costs. The use of the alternatives in the production process ensures that the company is able to penetrate into new markets by helping overcome the various trade barriers. It ensures that company enjoys the economies of scale and helps in the spreading out of risks. When the alternatives are used in the distribution, they help minimize both the direct and indirect costs. The alternatives help reduce the company’s capital requirements, reduce capital costs among many others. The use of alternatives can therefore be beneficial to the company.
As earlier stated, the need to manage effectively the logistical operations of a company has led to the development of supply chain strategies. These aim to help solve the problems a firm faces in the process of procurement, manufacturing and distribution of the manufactured goods. Effective strategies help ensure that the raw materials needed for the production of goods are appropriately supplied to the company. The strategies ensure that the focus of the company is to convert the raw materials efficiently into finished goods. The focus of the supply strategies is the transmission of the manufactured goods to consumers and customers in the shortest time possible. The strategy a company adopts influences the logistic operations of a firm and helps deal with challenges faced in its logistics. It helps ensure that the company benefits and is able to deal with problems due to globalization and international trade.
The selection and choice of supply strategies are affected and determined by a number of factors. The main determinant is the management strategy used in the company. Various strategies are used by the company in its supply chain management. One of the strategies used by the firm in management is the top down strategy, which is made up of the corporate parts and plans, the business unit parts and plans and the functional parts and plans. The corporate plans and part of the strategy aim to help to meet the goals of the whole company. The business unit part of the strategy aim to help achieve the goals of a given division in the company. Finally, the functional parts aim to help develop strategies that will result to the use of the various functions in the firm in its supply process. The downstream approach aims to ensure that the company is able to meet its targets and achieve its goals and objective.
However, this supply chain strategy has a number of limitations and challenges that limit its effectiveness. For instance, it is prescriptive and narrow. This means that it only helps meet a small number of supply needs of the company. The strategy also hinders the participation of the people or experts at the functional level towards meeting the goals of the organization (Kuhlman & Industrial College of the Armed Forces, 2005). The parts that are involved in the strategy at times merge or conflict reducing effectiveness.
Another management strategy used by the firm that helped determine the nature of its supply chain is the bottom up and emergent strategy. This management strategy ensured that there was integration of all the views and objectives of the various levels that make up the company. This strategy ensures that supply chain addresses the needs of all levels in the company and includes their goals and objectives. The management strategy also widens the perspective in the company to include the new technology. This strategy helps recognize the strengths of the business unit resulting to a strategy that effectively meets the needs of the organization.
An evaluation of the logistical operations of Tate and Lyle shows that development of strategies is critical in the management of the supply chain. The analysis shows that procurement is the first process in the logistical operations. The selection of the supplier to provide the goods is influenced by a number of factors such as financial capacity and level of certification of the individual. This helps supply the needs of the company. Procurement is followed by the actual processing and distribution. In conclusion, proper strategies should be developed to ensure that the company effectively manages its supply chain.
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