BM4201-Introduction To Logistics And Operations Management

Introduction

A segmented and un-integrated transportation system has been due to increased competition between modes and the high rate of competition. Each mode, most essentially the carriers that initially operated them have focused at exploiting the intermodal transportation due to the safety, reliability, service as well as the costs associated with it. The carriers have aimed at increasing their revenue by maximizing the haul-line while retaining the business. Notwithstanding, due to the different regulatory regime as well as the competition rules, there has been an enhanced rate in mistrust and suspicion. Additionally, the public policy also has resulted in the lack of integration between various modes. This has led to placing the modes under the country’s direct monopoly control. The purpose of an intermodal is to enhance the economic performance of the transport chain. This report will focus on Pakistan’s Intermodal Limited PIL, to identify the strategic management strategies as well as the features of the intermodal. Some of the problems associated with Pakistan’s logistics network are identified, including how they can be solved, and the government’s involvement in the process.

Important Features of an Intermodal

According to Bouchery and Fransoo (2015), among the most essential characteristics of an intermodal include: first is the operations that take place both in the intermodal and logistics terminals. Problems that are associated with intermodal operations, including logistics operations affect the country’s intermodal freight traffic. Such operational issues that may affect a country’s intermodal traffic and which relate to the intermodal terminals include the time-of-day activities at the terminals that have a direct effect on the time-of-day drayage activities of the truck trips. For example, there might be a correspondence of the rush-hour drayage trucking activities with the primary freight corridors and access routes’ peak-hour auto traffic. This may result in congestion, cause safety problems, and lead to adverse environmental problems.

Among the intermodal features identified by Bouchery and Fransoo (2015), the most crucial feature is the drayage. The term drayage is used to refer to the movement of containers by use of trucks between intermodal stations. In regard to the intermodal transportation, the term is particularly applied from a freight modeling view since they require to be constituted in the right way. By so doing, they can assist in determining the total number of truck cruises on a given highway network. In addition, it is important to have a clear understanding and to develop a time-of-day distribution of the drayage cruises. It is essential to also understand how the two interact with the auto traffic that is created in the activities involved in the intermodal terminals.

Additionally, handling of the cargo at the intermediate facilities is the other feature of an intermodal. In the case of movements involving intermodal freights where cargo storage and control are involved during the modal exchanges, the factors that have an impact on a country’s distribution of the freight flows and its magnitude include the operations, location, the location of the storage facilities, and the intermediate cargo handling. Some of the operations and their effects on various intermediate facilities consist of: first is the bulk transfer facilities that include trans-loading of both liquid and bulk goods such as petroleum which is moved between transport modes, for instance, petroleum that is moved between road and rail. It is also important to consider the number of truck cruises which are made between the bulk movement warehouse and the client’s warehouse. LTL cross-docking station is the other operation. In the incidence of a long-haul LTL shipment, it involves many other short-haul transportation truck cruises which are essential in the pickup as well as the movement between an LTL receiver and the LTL’s cross-docking terminals. The last factor is the trans-loading docks that are found at the distribution centers and the warehouses. Both the distribution centers and the warehouses are crucial freight facilities that provide cargo holding between modal interchange and contain the necessary intermediate cargo handling.

Strategies in Logistics Management

According to Kanafani, Wang and Griffin (2012), when a logistics strategy is created by a company, the focus is always to define the service levels within which logistics is cost-effective in that organization. As a result of the constant changes in the supply chain, a company may opt to develop many logistics strategies depending on the nation, products, or even the customers. The main objective of a logistics management strategy is to make sure that little money is spent on delivering the costumers’ requirements. Since a logistics strategy facilitates flexibility within the supply chain, it is important for the Pakistan Intermodal Limited to develop their logistics strategy. Over the past few years, the company has become overwhelmed by the quantity of information from the customers as well as the suppliers who are located in different geographic locations. This is due to the problems that face the company, including expanding its market, quality standards, global operations, and stricter regulations. This makes it necessary to come up with strategies that will help in managing data properly. This includes all the data found in all the stages of the supply chain that consist of tax documents, rental contracts, labor agreements, direct and the indirect materials, and compliance certificates among others.

Notteboom (2012) notes that if the Pakistan Intermodal Limited adopts a data management and integration strategy, it can be in a position to solve its operational challenges. To achieve this, the organization should consider connecting its supply chain system to those of its shippers and the partners. The data management and integration strategy would assist Pakistan Intermodal Limited to obtain the required visibility and control over its logistics system. Additionally, the raw data that comes from the companies’ customers, suppliers, including the partners are both structured and unstructured, thus making it difficult for the firms’ to take in, asses, and come up with insightful information from the disjointed pieces of data. Putting in place an effective management and integration strategy is helpful to the organizations in transforming this kind of raw data into formats which are compatible, and which are necessary for all the supply chain management systems in ensuring that there is a seamless flow.

Issues with the Present Logistics System in Pakistan

According to Uddin (2013), by considering every logical indicators that include the transport infrastructure and the quality of trade, Pakistan’s performance is poor if compared with the other Asian nations. The current transport system has failed in availing the required desirable services, which is an indicator of the present logistics that is made of the intermodal transportation and which is crucial in combining the different transport modes into a single integrated transport system. The following are some of the issues that face Pakistan’s logistic system:

Bouchery and Fransoo (2015) note that among the problems facing Pakistan’s logistics system is the lack of planning as well as the high rates of corruption both in the private and the public sector. The role of the private sector, failure to come up with a high-capacity logistics system, as well as the failure of not maximizing on the use of the current land patterns to construct an efficient and reliable logistics system have been noted to be the most essential elements that are needed in coming up with an efficient logistic system in Pakistan. Nonetheless, the country is also faced with the problem of poor or lack of infrastructure. It is evident that the nation has got inadequate intermodal connections with the other modes that include the maritime ports, inland distribution centers, and the railroads. Also, there is a lack of the required infrastructure to link the truck transportation system with the rail. Regardless of the transport sector remaining operational, it is however faced with several problems such as being unreliable, poor quality, and prolonged traveling times, particularly the rail transport.

Giannikas and McFarlane (2013) argue that the poor planning combined with enhanced motorization have resulted in the increased levels of pollution and traffic congestion, mainly in the urban areas. As a result, there has been a decrease in export competitiveness, higher costs of carrying out business, and it also limits Pakistan’s ability to integrate into the global supply chain. Despite, the geography has enabled the nation to possess the capability to increase economic gains since it is a hub for regional trade both in China, Central Asia, India, as well as Iran, the policies made by Pakistan’s government will determine if the country will be able to capitalize on the opportunity. Relating to the logistics system, there has been a controversy in Pakistan between the professionals and the policymakers. Due to political pressure, in the past, the railways have maintained uneconomical rail stations and opened new ones, making the maintenance of the transport system to be an issue. There is also inconsistency in customs inspections, making the average time the containers remain in the ports to be double that of the international average.

How the Issues can be Resolved

Abbas and Hassan (2013) argue that a logistics network that is cost-effective and efficient is essential if a company is to remain competitive. Nonetheless, a good logistics network also has got a direct impact on the economic growth of a country. Pakistan’s logistics issues can be solved by putting the following in place; by enhancing Pakistan’s basic infrastructure, it implies that the logistics and the supply chain will become cost-effective and efficient. Basically, the primary reason for the existence of an organization is to serve the clients by making sure that goods are delivered efficiently and at the right time. If the infrastructure is developed, the logistics system also improves, thus resulting in an increase in Pakistan’s competitiveness as well as its ability to attract more investors. Pakistan’s economic and physical configuration can only be reshaped by improving the country’s logistics network and the infrastructure. This would make Pakistan develop into a hub for regional trade.

According to Samad and Ahmed (2014), Pakistan’s current interest rates have made the financing of facilities to become problematic in regards to logistics network and freight forwarding industry development. Also, there is an issue in growing the working capital requirements. In this case, Pakistan’s government can be helpful in resolving this issues by developing a mechanism to reduce the interest rates and search for finances to develop Pakistan’s logistics network. Additionally, it is essential that Pakistan’s government develops a transportation policy that is comprehensive and futuristic and which is based on actualable short and long-run plans. To achieve this, Pakistan’s government may consider integrating modern technology, mode approach, and engage the private investors both locally and external.

Pakistan’s Government Involvement in solving Logistics Issues

Pakistan’s urban transport issues can only be solved by constructing larger and better roads. In contrast, the use of low cost public transport are encouraged by the principles of sustainable logistics and they could perform effectively in the country’s high density cities. Pakistan’s government needs to develop future comprehensive logistics policies that are founded on short and long-term plans and which are realistic if it is to solve the current logistics issues. Over the past ten years, there has been several transformations in the country’s logistics sector whereby cities that include Islamabad, Karachi, as well as Lahore have put into place actions to improve their streets and roads. This includes measures to mitigate the traffic issues along with police efficiency. However, there is much more that needs to be done such as putting in place future projects under the short and the long-term plans by making use of the modern technology, integrated mode, and actively involving the private investors both from the country and outside the country. Currently, the country’s population is growing and there are many vehicles being added into the country every day. As such, the government should consider building Light Rail vehicle (LRV) trains in the cities and apply the Park and Ride concept.

The first option that the government may consider in regard to the LRV is plan to construct a line that runs from the new airport that is located in Islamabad Secretariat to south Rawalpindi. The Light Rail Vehicle Authority should provide individuals with a Park and Ride (P & R) that is free and secure in all the stations to facilitate people to park their cars and ride the Light Rail Vehicle. The government should make sure that individuals without cars use private minivans as well as buses to run from the neighborhoods to the nearest Light Rail Vehicle stations. Despite this option being convenient, it is not sustainable due to the heavy traffic that results from cars and the motorcycles that are going to the rail stations.

The second option the government should consider proposing Park and Rides lots in the neighborhoods such that they are located far away from the Light Rail Vehicle stations. In this case, there should be no cars and motor vehicles that should be allowed on the roads which lead to the LRV stations. The only cars that should be allowed to ferry passengers from the Park and Ride lots to the LRV stations are the cars used for public transport. Adopting this option will assist in minimizing the traffic congestion as well as environmental pollution inside the Rawalpindi and Islamabad cities. Additionally, it is evident that CDA and the Rawalpindi local government has continuously improved the country’s road, and should at least provide walkways along with new bicycle tracks. The country should also plan for a multi-modal logistics system and actualize its plan for the new international airport. Nonetheless, Pakistan’s government should expand and enhance its research facilities which are located at the Pakistan’s National Research Center and Military College of Engineering and develop a Multi-Modal Transportation Research Center at COMSATS Institute of Technology.

Conclusion

There is a lot of income which is generated by Pakistan’s large population which is over 160 million for the intermodal organizations; such as the Pakistan Intermodal Limited, to achieve the demand as well as the supply in the local markets. Nonetheless, the core issues that do hinder the investment opportunities and increases the capabilities of capitalizing on the current gaps are the underserved logistics infrastructure. If Pakistan’s port is to develop into a hub, it is essential that the government declares and provides the required infrastructure. In addition, it is also important that necessary logistics regulations should be well-developed to make sure that the issues which are linked to Pakistan’s logistics network are solved. Having a better logistics network in a country is important for its growth because it assures safety, ensures there are timely travel and delivery of goods to the customers and reduces the costs associated with transportation. Additionally, it gives the producers the opportunity to access the marketplace.

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