Question

In the recent years, Bharat Point Corporation has emerged as a very successful merchandiser of contemporary fashion apparel for men and women. The company publishes a high quality catalogue that it sends to prospective customers, who then place order by mail or by using a toll-free telephone number. The customer base consists principally of young working couples. Children are not included as potential customers. The young working couples also receive catalogue from competitive firms such as ABC Ltd., etc.

Though catalogue business is fiercely competitive, it is growing as well. People who are "just-to-busy" to shop at retail outlets regard this as an appealing alternative. Also, it is seen that purchase apparel merchandise by catalogue has an element of prestige in certain social circles.

To further connect with today's consumers, the company has developed an internet-based capability, , which provides full and ordering services for on-line customers. The breadth of the product line is identical to that of the traditional , the company's website offers a new and effective way to interact with customers.

Among companies of its kind, Bharat Point . is thought to offer the best product assortment, product quality and customer service. Two critical customer service elements at Bharat Point . are that the company receives, packs and ships orders in a timely manner and that the product return procedures are "customer friendly". Although the company accommodates product returns with "little-or-not-bother" to the customer, is practice is expensive and of growing concern to the higher management.

Bharat Point does not produce any of the merchandise that it sells. Instead, it contracts with local manufacturers and also imports from Korea, Hong Kong, Taiwan and Singapore to meet its largely seasonal product-line needs. The company ships container loads of labeled and tagged merchandise by combination of ocean transportation and domestic inland motor freight to a centralized distribution in Delhi and Bangalore. Subsequent movements to individual customers are made by companies like UPS and Federal Express.

Bharat Point executives consider themselves to be in the "logistics business". They feel that the company's logistical capabilities are the key to its excellent reputation in the market place. An area of nagging concern to the managers of Bharat Point however, is that customer tastes and company product preferences are beginning to change very quickly, sometimes in the middle of a selling season. Only a continued ability to react quickly to the changing market needs will separate market leaders from the others.

1. In what ways should you consider the components of the logistic information system important to Bharat Point? What suggestions do you have for improving the company's logistical information system?

2. What type of logistics challenges do you feel may be associated with the use of customers of the company's online capability?
3. What macro environmental factor will be critical to Bharat Point's future success? In what specific ways can the company develop logistic capabilities to address these factors?

Answer 1

a) In terms of Level of inventory, lead times, accurate demand forecasts delivery capacity and times are the logistic information critical for success in the business of the company.

In business terminology Logistics denotes the movement of resources along the supply chain from point of origin the point of consumption to fulfill requirements of consumers or corporations. This also includes storage at the desired destination until consumption. Therefore, it is very important that Logistics be closely monitored and controlled considering that it is a major component of the supply chain and can impact production and consumption as it controls deliverables at both ends. Logistics needs to be thoroughly analysed to enable perfect Planning and development of a strategy, which enables immediate control measures in case of deviations. Being an important process is largely impacts demand and supply through production and delivery it has to be critically managed as a sensitive process. It is also important to budget logistics adequately as input costs for the process are high and adoption of the perfect strategy, for the given products and Company can greatly reduced related costs, through minimising wastages. The just in time inventory system is an excellent example of one such strategy. The major objective of the logistics function is to ensure proper and timely flow of resources within the origin and destination perfectly connecting all relevant points. Strategic management ensures that this entire process flows smoothly with minimum input generating maximum output for the given level of activity.

Most distribution models maybe based on various intermediaries existing between the manufacturing company and the end customer. This results in additional identities within the supply chain that exist in the network. Another consideration is when a wider business model is followed involving multinational partners where relationships play an important part and even better and more lucrative suppliers may need to be overlooked to maintain existing relationships with the present suppliers. Another feature peculiar to distribution channels in certain nations is the multiple roles a single entity may play of being a distributor as well as a wholesaler, or a wholesaler as well as a retailer. The distribution strategy needs to utilise channel partners effectively to ensure maximum outreach, with the advantage of availing access to the market share these distributors already hold. It requires development of an excellent and effective sales team which would be utilised for educating and training the channel partners as well as meeting sales targets especially management of key accounts. The entire process should be dynamic and ensure constant monitoring, modification and replanning as and when required to ensure the long term and short term sales goals are being achieved.

b) Logistics challenges of on time delivery with minimal lead times along with tracking facility have become the norm as with the advent of e-commerce the customer has definitely become king. With the convenience of online shopping for individuals constantly juggling time due to technology rendering free time negligible, becoming a necessity rather than an option. The competition within e-commerce is largely dependent upon exceptional customer service for gaining competitive advantage in an environment where there is no physical contact with the customer speed of shipping can make a huge difference to brand value. This has resulted in over the top expectations by consumers demanding same day shipping and fastest possible delivery even in non metropolitan areas. The cut throat competition has led to extensive development of supply chain network across Nations and locations far off from metro centers. The demand chain result from an expectation of immediacy in satisfaction of the demand for an item by the consumer with competitors striving to fulfill every consumer demand to maintain competitive advantage and maximum market share while protecting brand image the supply chain needs to be optimized as extreme pressure has been caused for logistics operators. This is the reason that most companies in the e-commerce business have realized the critical nature of timely delivery and easy returns for attaining competitive advantage and adopted logistics as an advantageous for vertical integration to have optimal control over this critical process.

3) The supply chain comprises all the processes involved in connecting the point of demand to the point of supply by facilitating delivery to point of conjunction with optimal speed and accuracy to achieved minimization of cost and wastage while maximizing profitability. This requires every process within the chain to be optimised for efficiency and utility to achieve benefits of minimal cost and maximum output for a given level of resources. With unprecedented advancement in communication and other Technologies the world has indeed become flat resulting in a global economy with extremely high level of competition. This has imposed optimisation upon every organisation operating within this global environment achievement of performance excellence. Transportation and logistics important contribution factor input cost of goods will greatly impact the pricing and resulting scope for competitiveness of the organisation and its ability to achieve flexibility cost leadership pertaining sustainable competitive advantage. this cut throat competition within global markets has also resulted in customer satisfaction becoming extremely important to ensure customer trust and loyalty for availing the benefits from customer retention providing customer lifetime value for exceptional returns in the long term with adequate value being generated for the brand image. Achieving absolute customer satisfaction with in time delivery is a major factor.

c)

The socio-cultural and technological forces would be critical to Bharat Point's Future success along with economic factors. It is mostly the changes within the socio cultural and technological forces which will impact the future growth of the company as with increased development in technology the company would have the ability to adopt the required tools to optimise the supply chain for procurement of the latest products buy exploring greater number of possible supply options and also implementing Technology optimising logistics to facilitate quick delivery from suppliers and to the consumer. It would also help to obtain more accurate demand forecast to be able to optimise inventory management. Conducting adequate business intelligence to remain informed about emerging trends and requirements within the market on basis of the socio cultural factors which can greatly impact the profitability of the company, by using the information to minimise obsolete stock and risk factors.

Vertical integration through investment in logistics business or forming strategic alliance with a logistic provider would provide growth along with better control and management of the logistics with substantial long term benefits due to achievement of better customer satisfaction. Adoption of adequate inventory management tools should provide the perfect support effective logistics to achieve optimization within the major processes.

Answer 2

The components of the logistic information system are crucial for Bharat Point Corporation's success as a merchandiser of contemporary fashion apparel. These components include:

1. Inventory Management: Proper management of inventory is essential to ensure that the company has sufficient stock to meet customer demand while minimizing carrying costs and stockouts.

2. Order Processing: Efficient order processing ensures that customer orders are received, processed, and fulfilled accurately and promptly.

3. Transportation and Distribution: Effective transportation and distribution networks are necessary to move merchandise from manufacturers to the centralized distribution centers and finally to individual customers.

4. Warehousing: Well-organized warehousing facilities help in the storage and retrieval of products, enabling quick order fulfillment.

5. Information Technology: Utilizing advanced information technology, such as the internet-based capability, helps in enhancing customer interactions, streamlining processes, and staying updated with changing market demands.

To improve the company's logistical information system, Bharat Point should consider the following suggestions:

1. Adopting Real-Time Data: Implementing real-time tracking and monitoring of inventory, orders, and shipments will enable the company to react quickly to changing market demands.

2. Customer Data Analysis: Analyzing customer data and preferences can help in understanding trends and tailoring product offerings accordingly.

3. Collaboration with Suppliers: Establishing strong relationships with manufacturers and suppliers can lead to better coordination, faster response times, and improved supply chain efficiency.

4. Continuous Improvement: Regularly evaluating and optimizing logistic processes can lead to cost savings, improved customer service, and enhanced competitiveness.

For customers using the company's online capability, the logistics challenges may include:

1. Order Fulfillment: Ensuring that online orders are processed and delivered accurately and promptly.

2. Reverse Logistics: Dealing with product returns and exchanges in an efficient and customer-friendly manner.

3. Last-Mile Delivery: Ensuring timely and reliable last-mile delivery to customers' doorsteps.

A critical macro-environmental factor for Bharat Point's future success is changing customer preferences and market trends. To address this, the company can develop logistic capabilities such as:

1. Agile Supply Chain: Building a flexible and agile supply chain that can quickly adapt to changing customer demands.

2. Data Analytics: Utilizing data analytics to gather insights into customer behavior and market trends, which can guide inventory management and product assortment decisions.

3. Collaboration with Logistics Partners: Partnering with reliable and efficient logistics companies like UPS and Federal Express to ensure smooth and timely deliveries.

By focusing on these logistics capabilities, Bharat Point can effectively navigate the dynamic fashion apparel market and maintain its reputation as a market leader.