Logistics plays a very important role in the world today. Logistics ensures that both goods and services get where they are needed at the exact time they are needed (Bowersox, Cooper & Closs, 2009, p. 21). Accomplishment of manufacturing, marketing, or even international commerce is next to impossible without logistics. Business operations of logistics have been established to not only be complex but also cover vast geography. Despite the existence of the industry since the beginning of civilization, there remains a challenge in implementing some of the 21st century’s best practices in the supply chain management. Bowersox et al. (2009) argue that logistics involves a number of operations such as management of order processing, transportation, warehousing, inventory, packaging, material handling among others (p.22). The main goal of logistics is to support manufacturing, procurement as well as supply chain operational requirements. It is a challenge within firms to organize functional competency into an integrated supply chain on servicing customers. Synchronization of operations in a broader context of supply chain is quite essential. For instance, it is very important to synchronize customers and suppliers of services and materials. The aim of such synchronization is to link external and internal operations as a single integrated process (Bowersox, Cooper & Closs, 2009, p. 22). On the other hand, it has been established that integrating all resources to achieve superior logistics is difficult and challenging. However, when such level of integration is achieved, it is not easy for competitors to replicate such integrated competency.
Many firms or businesses have not been able to achieve superior logistics in the transportation and logistics industry because of the complexity and vastness of the supply chain. Several firms in the global context are faced with logistics challenges, which have thwarted the prosperity of their businesses. An example of firms that have been faced with logistics challenges in the transportation and logistics industry is H&T International Transportation Company. H&T International Transportation Company is a firm that was founded in 1997 and is based in China. The firm does business in railway transportation, airfreight and ocean shipping. H&T International Transportation Company has over 30 subsidiary and branches across China with over 300 agents globally. H&T International Transportation Company has a number of logistics challenges, which include poor infrastructure, lack of proper information and communication technologies, poor warehousing, improper customer accommodation and logistics issues among others.
Transportation infrastructure is very crucial in the transportation and logistics industry (Bowersox, Cooper & Closs, 2009, p. 217). Transportation ensures smooth movement of goods and services through different stages of production and eventually to customers. Consequently, for H&T International Transportation Company to prosper there is need to provide efficient transportation infrastructure. The solution to transportation infrastructure therefore, is for H&T International Transportation Company to advocate for improvement of the conditions of roads, railways, airport and ports in China and other countries where it operates. This can be achieved by informing the government and policy makers on the gains that come with better infrastructure. Other infrastructure facility like warehousing is also very vital for H&T International Transportation Company. Hence, it is important that the company expand its warehousing infrastructure to be able to handle more products and offer more services to its esteemed customers. Warehousing, packaging and material handling is one of the logistics’ functionality that forms part of solution to logistic problems. For instance, inventory needs warehousing at selected times during logistics process (Bowersox, Cooper & Closs, 2009, p. 25). When a firm like H&T International Transportation Company has limited warehouse, it implies that there is less business for the firm, which gives its competitors with adequate warehouses advantage. The solution of lack of adequate warehousing is to set aside enough funds to construct sufficient warehouses. This is essential because the company will be able to provide adequate capacity to warehouse many more products and offer much more services to customers. When the company increases its efforts in offering more warehouse services, it will result into more economic return.
Lack of proper Information and communication technology is another challenge that H&T International Transportation Company and many other firms in the industry face. Information technology is very instrumental in the supply chain. Technology systems of supply chain track information and initiate activities regarding processes that assist in decision-making. They also facilitate sharing of information within a firm and between supply chain partners thereby making ICT very instrumental in the logistics operations (Bowersox, Cooper & Closs, 2009, p. 95). H&T International Transportation Company needs latest information and communication technologies to be able to advance considerably and to compete effectively in the market. For instance, computerized transaction system makes it possible to take orders, initiate order selection, and shipment as well as to complete financial transactions electronically (Bowersox, Cooper & Closs, 2009, p. 130). Information and communication technology is very crucial in controlling transportation and warehouse operations. A typical example is visibility systems, which monitor information and product flow. The aim of the visibility systems is to reduce uncertainty in the supply chain and to provide government-reporting information. In the transportation and logistics industry today, ICT is considered the competitive differentiator. The use of ERP and other execution systems to provide transaction and database systems aimed at initiating and tracking supply chain activities should be enhance by H&T International Transportation Company. A broad-based ERP system support human resource management, financial, service and supply chain operations. Technological innovations such as satellite, XML and EDI facilitate quicker and consistent communication among partners in the supply chain. Therefore, H&T International Transportation Company needs to embrace modern innovations in order to bridge the existing gap in the technological innovation in the company (Bowersox, Cooper & Closs, 2009, p. 130). Bowersox et al. (2009) admit that there are other important technologies, which are quite critical for effective competition in the transportation and logistics industry (p.130). The technologies include scanning, bar coding and radio frequency. The technologies enhance effective communication between logistics information systems and physical environment where they operate.
H&T International Transportation Company also needs to embrace technological innovation that will enable it to communicate effectively with its customers worldwide. The innovation needs to be customer friendly to be able to attract and even to lock the customers. All these can be achieved by immensely investing in ICT innovations. Technology has proven to not only save time but also cost, hence is cheaper despite the huge capital needed at the beginning of the investment. H&T International Transportation Company should apply technology in all its sectors to be able to satisfy customers since many customers are ahead of many firms in relation to information technology. Therefore, to overcome challenges associated with inappropriate technology, the company should apply the needed technological systems to be ahead of both its competitors as well as its customers.
Customer accommodation is another challenge that confronts H&T International Transportation Company. Success of a business or an organization is dependent on the accommodation of customers’ inventory and delivery of their requirements and expectations (Bowersox, Cooper & Closs, 2009, p. 47). Bowersox et al. observe that there is need for customer-focused marketing for firms to succeed in their marketing efforts. H&T International Transportation Company should not market their services and products just for the sake of it. It should instead allow its marketing to be driven by customers themselves, as this will make it become more preferable in the market. Bowersox, Cooper and Closs (2009) explain that in order for an organization to attain its set objectives and goals, it must outsmart its rivals in identifying particular needs of customers and focus its activities and resources on accommodating the customer requirements (Bowersox, Cooper & Closs, 2009, p. 48). The fundamental ideas on which H&T International Transportation Company needs to build its marketing concepts is customers’ requirements and needs. In real sense, the needs and requirements of customers are considered more basic than a company’s services and products. Another fundamental idea on which if H&T International Transportation Company builds its marketing concept then it will become more prosperous, is need to recognize the fact that different customers have different requirements and needs. Besides, the company needs to uphold the fact that services and products of H&T International Transportation Company become meaningful when and only when they are available and positioned from the perspectives of the customers, which is considered the focus of the logistics strategy (Bowersox, Cooper & Closs, 2009, p. 48).
Accommodating requirements of customers in a cost effective manner is considered the primary value of logistics. Therefore, H&T International Transportation Company should mobilize its resources to ensure effective and significant customer service (Bowersox, Cooper & Closs, 2009, p. 48). This it can achieve by putting in place a customer service programme. Such programme will identify and prioritize every necessary activity needed to accommodate logistical requirements of customers better than its rivals prioritize. If only H&T International Transportation Company could be in a position to embrace customer driven marketing aimed at customer satisfaction, it could have been one of the major players in the transportation and logistics industry. Customer satisfaction according to Bowersox, Cooper and Closs (2009) has been a fundamental concept in business and marketing strategy (58). Bowersox et al. (2009, p.58) states, “Simply stated, if a customer’s expectations of a supplier’s performance are met or exceeded, the customer will be satisfied. Conversely, if perceived performance is less than what the customer expected, the customer is dissatisfied”. It therefore follows that H&T International Transportation Company should embrace a proper model of customer satisfaction to be able to meet or exceed the expectation of customers. However, it should never allow its performance to be less than their customers’ expectations. To achieve customer satisfaction, it is also paramount that H&T International Transportation Company gets to know and apply expectations of customers, which are related to logistical performance. Customer expectations, which are related to logistical performance according to Bowersox et al. (2009, p.59) include responsiveness, credibility, reliability, communication, tangibles, courtesy, security, competency and knowing the customer.
Logistics is another challenge in H&T International Transportation Company. Logistics as a process that link supply chain participants into incorporated operation is a vital concern which H&T International Transportation Company needs to improve upon (Bowersox, Cooper & Closs, 2009, p. 45). Logistical services such as order processing, facility network design, warehousing, packaging; material handling, transportation and inventory should be properly synchronized. Their synchronization is vital because it will be the basis to achieve responsiveness, inventory reduction, variance reduction, consolidation of shipment, quality as well as life cycle support (Bowersox, Cooper & Closs, 2009, p. 21). H&T International Transportation Company needs to understand the fact that logistics’ actual work is functional in nature. Hence, the functions of logistics are operational processes of procurement, customer accommodation and manufacturing support. Firms should therefore focus on achieving the internal integration. This is only possible by properly coordinating the flow of information and inventory between these two areas. This should be done at the lowest possible cost.
In conclusion, logistics challenges range in type and complexity and vary from one firm to another across firms globally. It is how different firms address such challenges, which make them different from one another in terms of success in the industry. H&T International Transportation Company has its share of challenges which when properly addressed, will make it a more prosperous firm in the industry. Bowersox et al have established that innovation, infrastructure, customer accommodation, personnel training among others is crucial to logistics’ success. All firms including H&T International Transportation Company have a chance of becoming a significant player in the transportation and logistics industry provided they embrace appropriate strategies in addressing their challenges. It is important to conclude by saying that all components of supply chain are instrumental in shaping future of firms and should not therefore be neglected if prosperity is a priority.
Bowersox, Cooper & Closs, D., Cooper, B. & Closs, D. (2009). Supply chain logistics management. New York: McGraw-Hill.