Transportation And Distribution Management: Key Information, Incoterms Selection, Recommendations, And Carrier Selection Criteria

Discuss about the Transportation And Distribution Management.

Increasing trends of globalization have significantly impacted on the business. Thereby, logistic and supply chain management is increasing day by day. This essay aims to provide the different aspects of the transportation management in terms of HG Metal Manufacturing Ltd like the effectiveness of transpiration capability. Similarly, it identifies the transport mode selection consideration through organization capability. It is also helpful to analyze the carrier selection criteria and carrier relationship management through goals and needs of the organization. The purpose of this essay is to identify the significance of transportation in logistics and supply chain management to success the business.

HG Metal Manufacturing Ltd is a leading steel manufacturing company in Singapore. The company has large diversified product portfolio, which involves more than 3000 different types of steel products. Simultaneously, company is also offered the various business solutions in respect of diversified industries like transportation, energy, electronics and marine (HG Metal, 2017). However, the company is also listed in Singapore exchange. Along with this, the company is offered various products and services like steel construction i.e. aluminium, beams, cold rolled steels, plates, distribution, and steel services like surface protection services (HG Metal, 2017). Company characteristics are to offer one-stop supply, large warehouse, and just in time production to its customers thereby, company gains the competitive advantage. Further, the company operates their operations across the globe. However, company revenue is $127.9 million in 2015 (Annual Report, 2017). Basically, company has three business segments like construction steel, distribution, and industrial steel and services. Company also operates their business in Thailand, Vietnam, New Zealand, Sri Lanka, Myanmar, Australia, and Papua New Guinea.

Besides this, company is used multi-pronged strategy in order to provide higher value-added services. However, there are different competitors of the company such as A & N Metal Pvt. Ltd.

Transportation involves the logistic cost of different goods as well as it is effective to enhance the performance of the organization logistic. Although, transportation process starts from procuring the raw materials and it finishes with the delivery of finished goods to the client or customers. For this, the company gains the benefits through better coordination between the different transportation elements. There are a different source of transports carriers that are used by the steel companies as per customer requirements such as air, water, railway, and motor carriers (Janthongpan, et al., 2016). Consequently, transportation selection mode decisions vary on nature of business.

Incoterms Selection Consideration

In terms of global business, an organization needs different transportation carriers for import and exports the goods. In concerning to this, different business carriers are significant for the steel manufacturing companies, because it is not possible to keep own transportation carrier due to a huge investment and maintenance (Zheng, et al., 2016). For instance, HG Metal Manufacturing Ltd maintains his own transport carrier to export the goods as well as it uses outsource carrier also for domestic and global market. For this, company is used own transport for moving the goods factory into the warehouse. In consequence, the company is used the motor carrier and railroad for delivering the final goods to the customers in Singapore and the global extent (Liu, et al., 2016). For this, company has large transport capability on the basis of different diversified business solutions thereby, company effectively negotiate with different transport providers. In adverse, it creates the disadvantage for the company, because it increases the total fixed cost of the company, which carries switching yards, terminal, and costly equipment. As compared to a railroad carrier, the motor carrier is less expensive

From the above analysis, it can recommend that company should ensure that the resources are fully utilized or not, as a result, it helps to maintain the proper inventory of the company. Further, company should use minimum carbon footprint so that it improves the business sustainability for the long term. Likewise, company should identify the critical changes regarding the import and export of transportation goods such as trade policies, and deregulation (Martin and Giedroc, 2016). In order to enhance the business, company should avoid those countries where high barriers in respect of exporting of goods, because different countries have a different trade policy, which may affect the export business of company. It also recommends that the company should use the latest technology so as to provide visibility of shipments, which may help to increase the capability of the company. Moreover, the company should also know about the currency fluctuations, because currency fluctuation tends to adversely affect the transport operations of the company. Here shows the diagram, which shows the effectiveness of transportation capability. Moreover, company should use water carrier for exporting the goods at the global level, which is effective in cost reduction. Here depicts the diagram of currency fluctuation and transportation selected, which may impact on the return of the company and goods export.(Balcilar, et al., 2015)

Recommendations

Selection criteria are significant in transport carriers, because it secures the product safety. Therefore, there are different transportation variables are required for the selection of carriers such as carriers, rates, mode of transport, ratings, and carriers performance and evaluations. Mode of carrier selection is important for the company for delivering final the goods to the customer, because it enables the company to reduce the cost of the different carrier and select the best one alternative for the business (Jacyna, et al., 2014). For example, if there are a lot of company goods to be delivered, it will require a heavy discount on carriers as well as effective services, which is quite helpful to overcome the transportation cost on goods.  

Further, the aim of the HG Metal Manufacturing Ltd is to provide the final goods to the customer with proper goods safety at one stop service (Dixit, et al., 2015). Concurrently, the aim of the company is to become the largest steel supplier in the world by delivering the quality products with safety to the customers. As a result, company requires different selection criteria while using the transport services. Although, the company is used five different business criteria for the selection of effective transport carriers such as move the goods fast, effective rates, transportation ratings, safety, low damages, time delivery, product secure, effective services, urgency shipment records, and theft of goods.

In addition, customer uniqueness may also affect the transportation carrier’s selection criteria, because different customer needs towards the transportation may impact on the company transportation such as proper goods handling, effective cost, tracking the shipment, product safety, and timely delivery. (Kumru and Kumru, 2014). While selecting the carrier, environmental factor criteria may also affect the transportation carrier of the company due to different factors such as climate change, environmental degradation, resource depletion, pollution, noise, Acidification, and ozone damage. In the case of HG Metal Manufacturing Ltd, company facilitates the different transportation attributes to their customers like the accessibility of cargo space, right schedule, proper filing of documents, and any other query related to the carrier (Reisi, et al., 2014). Service quality and transpiration cost are also significant carrier selection criteria for an organization in terms of proper delivery of goods. In consequence, HG Metal Manufacturing focuses on above these selection criteria, which helps to increase the effectiveness of the company in the eyes of the customers. In spite of this, there are some other carrier selection criteria that are necessary for the organization while ensuring the goods delivery such as pricing, warehouse, proper timing, and product safety. As a result, the company can unify all above criteria for better carrier selection.

Carrier Selection Criteria

From the above analysis, it can recommend that the company should analyze the time delivery criteria regarding the goods as a result; it helps to raise the feasibility of the company as well as satisfies the customer expectations. Further, it recommends that the company should concern the customer needs for the effective transportation service in terms of the appropriate price of the carrier, goods damaged, and tracking the goods detail. These can be helpful to increase the company feasibility, overcome the operation cost of steel as well as meet out the customer needs (Chen, et al., 2014). Besides this, company should identify the whether the carrier company provides the tracking detail of goods or not consequently it enables the company to get all goods delivery detail on time basis. This can be helpful to increase the customer loyalty. Additionally, company should ensure whether the company delivers the goods without any damages, which may help to improve the productivity efficiency of the company.

Carrier relationship is necessary between the shipper and carrier for doing the business effectively. Simultaneously, a positive relationship is also helpful to maintain the delivery service time and product quality. In terms of HG Metal Manufacturing Ltd, company effectively maintains the strong relationship with its carriers and it ensures to provide the good quality products within the service time. In this manner, it can help to raise the profitability of the company as well as the carriers. It seems that there is a positive relationship exists among shipper and carrier for their own interest (Shin, 2015).

Further, carrier relationship management is important in transportation, because it helps to increase the long-term sustainability of the company and better customer loyalty. As a result, it has positive impacts on the company feasibility and profitability. In order to increase the transportation effectiveness, company may opt the outsource carrier services. 

In consequence, there are three types of transportation determinants, which show the long-term relationship between company and carriers such as flexibility, effectiveness, and trust. In concern to this, flexibility helps to overcome the delivery anxiety of carriers as well as it reduces the company urgency delivery cost. Likewise, trust builds the open communication between the company and carriers, and creates the business opportunity in future. Concurrently, effectiveness helps the company to overcome the volume of carriers. For example, if increase the prices in oil, it would adverse impacts on the transportation cost, which affects the company operations and carriers. As a result, the company should collaborate with carrier suppliers in order to avoid any misunderstanding (Miller and Saldanha, 2016). Thus, it can be said that the carrier supplier requires continuing the process through effective planning, goods delivery confirmation, and tendering.     

From the above findings, it can be recommended that HG Metal Manufacturing should use the different transportation technique so as to raise the alliance with different carriers like transaction information and goods tracking information, which is effective to for the firm to deliver the goods on time. Meanwhile, if any carrier service provider fails to provide the accurate delivery information, which may form the dissatisfaction in the eyes of the company. Further, it recommends that the company should build the trust with different transport carriers, which may effective to create the large business opportunity in future thereby, it positive impacts on the business profitability and it creates the strong relationship between them (Montoya-Torres, et al., 2016).  In oppose of this, negotiation can help the company to resolve the transportation issues with the different carriers. In this concern, it helps to identify the requirements of company and carrier supplier at large extent. In addition, company should provide the business flexibility to its carriers so that it helps to reduce the operational cost of the firm regarding the transportation. Similarly, better flexibility helps the carrier in order to deliver the goods on time.

Conclusion

From the above analysis, it can be analyzed that the transportation carrier is significant for the firm to enhancing the productivity and competitive position. It also identified that the HG Metal manufacturing is used different transport carrier like water, motor carrier, which can be helpful to increase the transportation presence of the company. Further, it identified that the company is used different selection criteria during the transport selection such as unique selling point, customer identification, issues related environmental, market, cost, and transport performance. This report identified that the company should focus to deliver the goods on time in order to meet out the customers’ expectations. Further, it analyzed that the company should maintain the strong relationship with their carriers for ensuring good service to the customer. In consequence, it can be helpful to raise the profitability of the company. Therefore, company should analyze the transportation policy of different countries in order to increase the effectiveness of production operations, because fluctuations may adverse impacts on the company efficiency.  

References

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HG Metal (2017). [Online]. Retrieved from: https://hgmetal.com/company-profile/

HG Metal (2017). [Online]. Retrieved from: https://hgmetal.com/our-services/

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