Question

Now apply the trade-offs concepts at the Port of entry. The Department of Homeland Security (DHS) is tasked with keeping the homeland safe and secure, while allowing goods to come across the border. The number one objective of DHS is security. Taxpayers must pay for the services from the government, but expect to have accountability, and thus keep the cost as low as possible. Companies that move goods across the border have time a Just-in-Time incentive of moving their goods to the desired destination to keep the supply chain going. They mostly use commercial trucks; whose number one objective is to minimize time to cross. As a future logistics expert, you notice that these objectives are divergent. If you had to suggest some improvements into how the commercial border crossing operates, what kind of trade-offs would you consider? If you had to model the operation, what would be the most important consideration? Use at least 3 academic sources, and make an argument for what can be one at the POEs of the valley to improve logistical operations?

Answer 1

Supply chain management is flow of goods and services after productions from raw material to finished products from manufacturing unit to the consumers. It also involves management of storage of such goods. Logistics is management of flow of goods and services from the manufacturing concern to the consumers. Both supply chain management and logistics are equally important for business operations. Example- we have a manufacturing unit of Manhole Covers at Salap, which is in out skirts of West Bengal (india). We are not only into trading locally but also export our product in high scale to Middle East, Australia, US, UK, etc and I am in charge of the middle east market from the point of getting orders till the time it gets delivered to the customers. Trade-off is there is each business concern. Many firm reorganise their trade-offs occasionally as it benefits both client and business. Example of trade-offs are- keeping large amount of inventory in stock, this would generate high warehousing cost, or we can just reduce inventory to reduce the cost which would not full fill client’s demand.

Here, the objective of DHS is to maintain security, keeping cost low, distributing just-in-time incentive to the companies who help in moving the goods to desired destination in supply chain management, reducing time by using trucks for transportation, etc. Such objectives are divergent and the below mentioned objectives can be followed keeping in mind commercial border crossing:

• Enhancing the quality of product
• Always following the ethical standards, rules and regulations
• Focusing on customer satisfaction – Taking reviews regularly from the clients
• Using better technology for production of the product, maintenance of such product, storage of such product and delivery system.
• Focussing on better delivery technique for each order, i.e- not only depending on trucks to deliver but choosing the mode of transportation as per the category of product
• When we enhance our delivery system, the product will reach clients at shorter span of time and once they are satisfied, the demand can increase. Should always maintain a justified amount of stock in hand for better and faster delivery.
• Reducing cost by improving the production techniques.
• Organisation must maintain proper planning, strategy implementation, execution, delivery, storage and feedback from customers.
• At the border, improving operations of customs with single window of initiative.

If I had to model the operation, I would consider the following-

• Checking on proper order processing should be made
• While production starts, proper evaluation should be done at each stage so that there are no mistakes
• Checking and packing the goods by re-checking the purchase order
• Arranging for proper transportation and delivery system on basis pf what the product is
• Proper maintenance of stock in hand electronically through a software
• Checking and ensuring that goods are delivered on time
• Taking regular client’s feedback and ensuring that the problems (if any) should be solved with utmost importance
• Ensuring that work environment is positive and the entire team is working with unity. This is the most important point to be considered by any organisation as the employees or workers are the person responsible in operation of each stage of supply chain management and logistics.

3 examples on how can logistics operations be improved at the POEs are-

• ABC Company was into manufacturing of Potato chips. It had around 60 tonnes of potato chips to be delivered to its client at Bangladesh, which would require crossing the border. ABC Company handed over the following documents to the truck driver- Bill of Lading, Handling Receipt and Shipping Bill. The containers were loaded and ready to start for delivery. It took around 12 hours for the container to reach Bangladesh border, and the truck was stopped for further checking before entering Bangladesh. The officers of the custom department at the border asked the driver to show further documents of the containers, the driver showed the documents he had. To which the officer asked for further Invoice of the Product and Packing List of the Product, which was not being given to the driver. The custom department did not let the containers to cross the border due to unavailability of proper documentation and that they would require these two documents mandatorily in hand to allow export. The driver tried contacting the management of ABC Company explaining the issue, and the company said that they would send someone with the documents to the driver till then he should wait nearby. It resulted in loss of time, loss of manpower, took high delivery time, etc. Conclusion- ABC Company should have checked with the customs that what documents are required for the product to be delivered crossing POE before dispatching the product. Documents like- Bill of Lading, Handling Receipt, Commercial Invoice, Packing List and Shipping Bill are mandatory for exports. A person should be appointed who would handle all documentation relating matters at ABC Company throughout the time the order is delivered successfully to the clients.
• XYZ Company, India was into manufacturing of Manhole covers and they were exporters to Oman, Dubai, Australia, Doha, Qatar, Europe, etc. They received an order from NIC Abrab, in Dubai for 500 containers. XYZ took around 3 months in production of the covers. Once the product was ready it was to be shipped to NIC Abrab, in Dubai. For exporting it is said that Bill of Lading should be couriered ti the customer beforehand, as Bill of Lading is the document which is required by the customer in order to release its containers from the shipping port. The containers were dispatched and it would take around 20 days for it to reach Dubai. XYZ forgot to send the Bill of Lading to the client via courier. As a result of which the customer, NIC Abrab could not get the containers released and demurrage (late fine) was being charged by the port. As we know, any parcel (even if it is a document) would take at least 10 days’ time minimum to be delivered from India to Dubai even if express courier is used. Here, the customer was at fault as well since they did not ask for Bill of Lading from the manufacturers. There was huge financial loss as the port was charging Demurrage which was equally beard by customer and manufacture. Also, since the document was to be courier via express service, it was highly expensive and involved loss here also. XYZ should improve its operations and check everything properly before dispatching its containers to avoid financial and mental harassment.
• LM Company, China was into manufacturing of mobile phones. They had order for 1000 pcs of mobile phone from Assels Ltd, United States. Once the product was ready they chose to deliver such product by ship which would take around 15 days minimum for delivery with all documents as required. Shipping via water took large time and high cost. Instead they should have chosen to deliver via air, which could have generated speedy delivery. Here, they should have chosen delivery system according to the product for better operation’s.