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Literature Review On Manufacturing Transport Logistics Commerce Essay

There is a requirement for a horizontal cooperation between teansport and logistics as the logistics sector is gaining momentum at a faster rate in today’s world.

To increase the efficiency of delivery process in 1993 Dutch producers of sweets and candy eight contending medium size to an agreement of intensive cooperation designing. 250 drop-off points was supplied by the companies, from the eight producers on a daily basis more than one producers recieves goods. The main goal of the cooperation was to cut transportation costs and increase the customer service becuase the number of deliveries of consolidated shipments decreases, unloading and handling costs reduces. This cooperation is called Zoetwaren Distributie Nederland (ZDN: Dutch Sweets Distribution).

First step of ZDN occurs more often. The organizations benifits got reduced due to the enhacement in the customers expectations, decreasing of product lifecycle furious competitors in the market e.g., Ruijgrok 2003.A strong inducement to reduce the costs of non-value added sevices like distribution and warehousing. (Burgers et al. (1993) says that organizational inactivity makes the firms difficult to internal development and purchase the capacities demanded to deal with quick change of demand condiations. To re-optimize companies logistics processes they gather number of megers and skills within the logistics industry. (Since the inner logistics optimization is almost completely used the logistics market undergoes a fundamental reorganization, so the attention was changed to improve managing external relations in the supply chain (Skjoett-Larsen 2000).

When redesigning logistics processes,(One of the basic option that companies facing whether to outsource or keep logistics in-house or seek cooperation with like companies to exploit synergies (Razzaque and Sheng 1998) in redesigning logistics processes.(The customers expecting that thier goods to be handover at right place, time and in in a perfect condition for a lowest price.So the companies experiencing difficulties in satisfying these demands by the dyad outsourcing relationships with service providers. (This results closely cooperating with other companies to become more and feasible.

Horizontal coooperation:

Cooperation between two or more firms that are active at the same level of the supply chain and perform a comparable logistics function on the landside is called horizontal cooperation. Suppliers, manufacturers, retailers, receivers (customers), or LSPs can these companies. On the landside horizontal cooperation in logistics and transport is fairly determined, the maritime shipping and aviation industry are well authenticated in horizontal cooperation. (Complex system of cooperative, rather than competitive denotes inter firms networks so the relationships between companies that are legally independent. (Pfohl and Buse 2000; Sydow et al.1995).

Merger between companies is the extreme event of horizontal cooperation. Some of the authors consider a strategic bond to be a diserable basis for a merger between the partners (e.g., Nanda and Williamson 1995), Hagedoorn and Sadowski (1999) says that these conversions occur only seldomly (2.6 percent of all strategic alliances). The detail study of horizontal acquisitions can be found in Hakkinen (2005). Bower (2001) makes ot five types of horizontal mergers

Scope and Intensity:

The classification of logistics-based strategic alliances was introduced by Zinn and Parasuraman in 1997. The principle classification arranged for vertical cooperation has a direct rendering for horizontal cooperation. It is based on two dimensions: the scope and the intensity of the relationship between the partners. The range of services for which cooperation takes place is called scope and the extent of direct involvement that exists between partners is called intensity.(The number of working hours dedicated to maintain the cooperation and the size of assets invested are the possible indicators.

Figure 2 indicates Zinn and Parasuraman (1997) classification of logistics-based strategic alliances into four general types. The authors provides examples of each generic type, as well as a list of their various advantages and disadvantages.

Horizontal cooperation plays a major role in aviation. Skyteam (nine airlines), Star Alliance (sixteen airlines), Qualifier (eleven airlines), and OneWorld (eight airlines) are examples of major alliances. Economically strong inducements is provided for airlines to function dense international networks. Strong enlargement is provided for the growth through mergers and acquisitions of a network.(The Increasing of former’s joint power the left alliances of main carriers as an effective compromise to international carders (Fan et al. 2001). Information on airline alliances example are Park (1997) and Oum et al. (2000).

Costs and Productivity

As discussed above, cooperation makes the organizations, a base to access the abilities and potentials of their partners (Kogut 1988; Westney 1988; Hamel 1991). Thus they can develop their own outfitted processes by raising their capability to manage costs and to decrease the prices of supply chain (Gibson et al. 2002; Cruijssen et al. 2006c). In addition, partnership on non-core activities put forward the prospective of mutual purchase (e.g., onboard computers, fuel and of vehicles) to decrease the purchasing costs (Dyer and Singh 1998).

Problems in Supply chain Design:

Single and multi-commodity supply chain design tribulations have been studied in many papers.Zuo-Jun Max Shen,2005[1] anticipated a multi-commodity model as a nonlinear integer program and anticipated a lagragian-relaxation solution algorithm. Samir Elhedhli and Fatma Gzara, 2008[2] proposed a tri-stratum, capacited facility location problem and apply lagragian-relaxation solution to putrefy the hitch by stratum. Renee j Butler, Joel, Jane, 2006[3] formulated an approach for a new product launch by providing chain planning to conclude distribution locations, materials flow and production capacities.

The main feature of strategic and logistical decision making for manufacturing organizations is making decision on location for the production of products as they are outline for the entire logistics system. Locating new manufacturing amenities is the significant and far attaining decision faced by operation managers. The facility location decisions become significant by considering the proficient supply management as a border of competition.

To provide a set of customers, locating a number of amenities or depots is a basic problem. Reducing the cost of locating the amenities and handing over the customer is the main objective.

In this paper, taking into consideration fixed and variable costs linked with each amenity, inventories and transport of each family, we analyze and formulate supply chain design model and put forward a solution by means of solver tool in excel.

Strong foreign competition in an increasingly global marketplace has forced firms to turn their attention towards streamlining operations in order to generate savings from a slimmer and more reactive Supply Chain.

To generate savings from slimmer and more imprudent supply chain, many organizations distorted their interest towards streamlining operations as sturdy foreign competition is in an increasing worldwide market place. As defined by A.T. Kearney, a management consulting organization (Sengupta and Turnbull [1996]) the estimated 80% of the cost formation is due to supply chain costs in distinctive manufacturing company.

Strategic Planning of SCM:

Sengupta and Turnbull [1996] defined supply chain management as”the process which is involved in managing the flow of materials and completed goods from dealers to consumers using manufacturing amenities and warehouses as a prospective intermediate stops”.

As per the observation of Cohen and Lee [1988], the performance of supply chain can be measured with respect to:

(1) The responsiveness and flexibility of the production/distribution system

(2) The product cost delivered to markets

(3) The level of service afforded to the customers

Managing the supply chain effectively results to develop customer services levels, diminishes excess inventory in the system, and cut excess access from logistic network

By using the protection buffers, rolling prospects and planning time enclosures one can deal with the stochastic nature of genuine manufacturing distribution networks and the supply chain management is deterministic over particular prospects which are implemented in practices. (Graves [1988], Martel et al. [1995], Martel [1995])

Figure A classification of SCM problems

As there is no single base on the issues of production/distribution, planning and coordination, this literature gives you a detailed view of various contributions done in this area to solve the problem. An overall review of the results associated with the major problems in a single facility is presented in the second section. The third section deals with the problems being faced in multi facility networks and also the proposed solutions and precautionary measures to be taken.

The problems related to the transportation across the U.S- Mexico border have been analyzed in this literature. (ex: Fawcett & Smith, 1995; Fawcett, Taylor, & Smith, 1995; Valdes & Crum, 1994). However, research conducted at a deeper level revealed that so far there were only two studies that conceptually described the problem. The two studies, Sheffi (2001) and Stank and Crum (1997) presented the impact of US-Mexico Border on the overall time-based manufacturing.

Also, Stank and Crum (1997) have examined JIT and non-JIT firms’ perceptions about the effect of cross-border performance. But, the study on the effect of cross-border trucking delays on specific manufacturing operations was not done. Sheffi (2001) has given a description about the unfavorable consequences of 9/11 on the supply chain. Also, he has proposed some changes to be made in businesses regarding the issues on increased security measures and supply chain.

Due to the transpiration issues in the field of manufacturing, many businesses have started to give their focus on supplier-delivery performance, and in-house, and also product carrier performance. Initially, a firm must acquire an efficient supplier who can give consistent delivery(Morash & Clinton, 1997).A recent survey conducted in this regard states that 47% of the American manufacturers faced major problems with supplier delivery timings(Shahabuddin, 1992).Secondly, the businesses must also retain the relationships with the reliable carriers who can deliver their products on time. Some of the delays in the timings can be due to the shipment delays which can lead to time-based competition. The competition arises as there is an increasing demand of suppliers to deliver the stock safely (Tyworth, 1991). Due to this, the inventory costs can be increased in addition to the usage of valuable plant space.

Literature Review on Manufacturing Companies

Leanness and Agility configurations are frequently being adopted by large companies, but within all industries.( Raffaella Cagliano, Federico Caniato_, Gianluca Spina)

These strategies are chosen by companies for which purchasing a high incidence has on total costs, and is done globally to a relevant extent. The other two strategies, instead, are more diffused among smaller firms, for which purchasing is slightly less relevant and is made locally to a larger extent.Since statistical significance is not high, we can conclude that contingent and structural factors affect only to a certain extent the selection of the supply strategy. In particular, size has a clear impact on the selection of the supply strategy, suggesting that large firms are adopting advanced strategies more than small firms, either because they have greater resources available or because they have higher complexity to manage. This is partially confirmed by the analysis of the relationship of supply strategy with the internationalisation of purchasing: leanness and agility are adopted by the firms for which global sourcing is more relevant, suggesting that these strategies are correlated with the expansion of supply markets.

5.3. Manufacturing performance

Finally, we investigated the impact of supply strategies on manufacturing performance, to understand whether sourcing and integration decisions affect the internal effectiveness and efficiency of the buying firm and, in particular, to compare the performance of different supply strategies.

The study entitled, “The New Economic Package and the Agenda for Restructuring the

Financial Sector” by Raghunathan.V. et.al (1991) discusses the emerging issues relating to new economic policy in the financial sector. Financial sector includes the integration of various financial markets, new instruments required for hedging risk, measures for investor protection, appropriate legislation, relevant tax reforms, development of financial infrastructure and the role of regulatory agencies An empirical study entitled, ‘Takeovers as a Strategy of Turnaround’ by Ravi Sanker and Rao K.V. (1998) analyses the implications of takeovers from the financial point of view with the help of certain parameters like liquidity, leverage, profitability etc. They observe that if a sick company is taken over by a good management and makes serious attempts, it is possible to turn it around successfully.

The working paper entitled, ‘An Analysis of Mergers in the Private Corporate Sector in India’ by Beena P.L. (2000), attempts to analyse the significance of mergers and their characteristics.

The paper establishes that acceleration of the merger movement in the early 1990s was accompanied by the dominance of mergers between firms belonging to the same business group or houses with similar product lines.

The Manufacturing Performance Management Strategies Benchmark Study finds that far too many manufacturers are still focused on the symptoms of their performance challenges, struggle to get the data to drive their performance improvement programs ahead, and use few commercial IT solutions to support their efforts. The better performers, on the other hand, have moved past these issues and are focused on improving their manufacturing capabilities that deliver market differentiation through a combination of extended manufacturing processes, service-oriented improvement programs, and commercial technology to speed improvement and maximize manufacturing performance. (The Manufacturing Performance Management Strategies Benchmark Report, January 2005) Grady [5] suggests “performance measures should be implemented as a means of articulating strategy and monitoring business results”. Ideally the measures will evolve from the organisations’s strategy, be developed to support business objectives, be collected and reported at various levels in the organization and be linked cross functionally. Beischel and Smith [1] also provide a framework for measuring manufacturing performance and it stems from two principal ideas. Firstly, that manufacturing performance can and should, be linked to company financial performance”. Secondly, “all manufacturing measures, at all organizational levels, should be linked to ensure constancy of purpose among organizational levels and to point to cause-andeffect relationships”.

The topic of manufacturing flexibility has been addressed by many scientific contributions in the past years, thus highlighting the relevance of the problem both at industrial and academic level. Internal and external issues need to be faced at the same time when designing a manufacturing system and its flexibility; indeed, products and processes are easily and frequently changed by market and manufacturing strategies, while production systems must cope with relevant inertia which slow down their changes. Therefore, a fundamental issue consists of filling the modeling gap between a production problem and the manufacturing system best suited to face it. Current literature provides a huge research on the analysis of flexibility, as a solution to cope with uncertainty in the market and to support the manufacturing strategy. However, the link between the need of flexibility and the design of manufacturing systems is still weak. This need includes a deeper understanding of the nature of flexibility and, in turn, a clear definition of the dimensions of flexibility. This chapter reviews the state of the art of the literature on manufacturing flexibility by proposing also a conceptual framework for its formalization. (A Design of Production systems by Tulia Tolio).

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