Inbound Logistics Case Study

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study
Today’s organizations are faced with increasing levels of global competition, customer’s demanding value for their money and high stakeholders expectations on investment returns. Gattorna (2003), notes that firms are now pursuing supply chain management as a strategy to competitive advantage. Firms in a supply chain relate, transact, and partner on different levels; from product design and development to product delivery. Through supply chain management a firm pursues value creation through timely product delivery, cost management, inventory control and customer service (Beamon, 1999).They do so individually or through synergies formed with other organizations to increase customer service

According to Mentzer (2001), several organizations have made supply chain management a key competency, particularly inbound logistics to support company operations. This is because its impact on services and products delivery to end consumer. Through supply chain management companies coordinate inter organizational operations for mutual efficiency. According to Brar and Saini (2001) to achieve supply chain efficiency organizations must be keen on their inbound logistics operations. This is because inbound logistics is the starting point of all supply activities in a firm and has an impact on subsequent supply chain activities. A disruption on inbound logistics flow may bring a company to a halt if production lines lack materials to run. This may lead to losses to an organization due to lost opportunities. Companies must therefore integrate inbound logistics in their supply chain plans for material sourcing and final product

As organizations move goods from source to place of utilization they enjoy utilities of place and time.According to Branch (2009) firms can choose one or combine several modes of transport to effectively move materials or products for scheduled production and smooth operation. Good transportation facilitates supply chain efficiency by delivering goods to the ultimate customer securely and in an economical way. Inbound transportation should plan for expected lead times to best manage delivery timelines. Baker (2010) states that organizations should have shipment visibility while managing inbound transportation. Additionally they should balance trade-off between imports costs and savings made at destination. This means keen focus on landed costs, customs clearance, shipments lead times and inventory holding costs. Supply chain performance is impacted by transport costs, speed and product delivery consistency. To achieve competitive performance Organizations must move materials in the right order, right quantity, right quality and right time (Bowersox,