Logistics Management Assignment Help
It is difficult to state that online retailing business has no scope in Australia. In fact, it has big scope due to reduction in the domestically manufactured products within the country. In this academic study it is stated that in Australia, online retailing companies can purchase products from countries like china and resale to local residents.
Online retailing business is growing with the prominent rate every year. As every opportunity derives by the demand for the same so people now want products at lower prices, conveniently with wide range of choice with many facts. It is required to find custom free countries and ship the products for Australia. I have discussed in this academic report that from the sales point of view, Australia is one of the countries where trend of online purchasing is increasing on daily basis. This is due to the fact that online retailing has changed the concept of purchasing. Now people don’t bother to go for shopping at the store instead they prefer to purchase goods online via internet at low prices with a wide range of visible products online.
As the decision of starting a new company has been taken, and it is already in the mind of this consortium that there are some important factors that should be kept in mind regarding logistics. These factors are order management, customer services, inventory management, and distribution centers and networks in Australia will be discussed in the report. They have a choice to start electronics, car, car accessories and parts, electronics, books, clothing, sport goods, cosmetics, toys, and groceries retailing business.
In this study, I have seen that what kind of problems this company has faced in their operations related to logistics activities. In this business, different concepts related to shipment and transportation has been discussed. As the consortium decided that they have to build their distribution centre in Sydney and want to build distribution centers in many other cities of Australia due to the differences in online and in-store retailing. Furthermore, due to the existing of many in-store in the market, the consortium has decided to launch another place for distribution centers. In every logistics activity discussion, the difference between online and in-store retailing has been analyzed.
Once the business will be established online and this company will start getting orders then they will face problems related to order management and customer service specifically.
The expected problems related to order management and customer service have been stated in this report. The locations of distribution centre are selected where the products will be stored and distributed according to the customer order. Here, I have seen what kind of inventory management, products warehousing management methods they can easily follow. It has also been analyzed that how conveniently they are distributing products to customers within or outside the country. All these relevant operations are discussed to convey my knowledge regarding this course.
Online retailing is a simple concept in which retailer resale the products to end consumers through internet. Any domestic consumer such as government, private and public person can visit the relevant online products website and buy whatever s/he wants to buy by making through cheque, credit cards etc. At some of the websites, it is not necessary to pay at the time of order but customer can pay to the delivery person at the time of delivery of their products (ACMA 2010a).
Online retailing is the term which has been derived from e-commerce where consumer and retailer purchase and resale any product over internet. It can also be named as a business to consumers, e-tailing as well. Australian bureau of statistics has stated that there is a big growth identified in the online retailing business in the last 5 years. It has been increased from $40 billion to $ 143 billion. Figure 4.1 is indicating the growth of online retailing business in Australia (ABS 2010).
It is reviewed that internet has changed the lifestyle of Australian citizens. Now they are looking forward to low prices, wide range of products conveniently available to them whenever they want to have.
In contrast to online retailing, in-store retailing is different due to the following points:
- Customers can touch the products they want to buy.
- You need to have property, location for brick and mortar storefront.
- You can communicate to customer face-to face.
- The cost of technology in in-store retailing is less because of low intervals improvements (Partyka 2000).
Order management and customer service are the key elements in online retailing business as well as in in-store retailing business. There is a huge traffic coming towards online business due to the following factors:
- Low cost
- Easy visibility of products
- Less effort
If customer doesn’t find anyone of the above characteristics in the online retailing then the problem can arise. The customer can shift to another website for purchasing if they find it difficult to get the product in time. For avoiding the late delivery, weak response, weak inventory management etc. the company need to have a strong technological website where customer can easily find what they want to buy and order the same at the right time. Here, you need to focus on the order management and customer service very carefully (Krishnan and Rao 1965, p.212-215).
On the other hand, in in-store retailing, it is not difficult to manage the order because when everything is displayed on the racks then customers only have to pick the required product and throw in the shopping cart. Once they complete their shopping they pay the bills and leave the store. Suppose, if any customer needs assistance then that can also be provided in case of less traffic at the store conveniently. At the rush time, salesman can request customer to wait for sometime because of dealing to other customers.
The consortium is interested to start the online retailing business for Australian residents, government and private people and the decided distribution centre is Sydney then different angles of the centre will be analyzed. I shall try to differentiate the benefit of having a distribution centre in Australia for online and in-store retailing business. The literature will definitely be relevant and will be discussed for the online and in-store retailing logistics activities. Actually, the company is shipping the products towards distribution centre in Sydney so various points should be taken into account such as transportation mode, time of shipment, nature of orders, economic order quantity etc (Jin et al 2007, pp.981-1004).
The business is to be started in Australia so it is important to check and analyze distribution of products within Australia. The methods of distribution for the point of view of online and in-store retailing shall be implemented. The distribution within Australia is also significant in nature. Some of the key things shall keep in mind before starting the operations within Australia from Sydney. The points are as follows:
- Where the order has to be delivered.
- How much time is required to deliver the order?
- Cost of order.
- Mode of delivery.
- Stock Inventory checking.
Order Management and Customer Service in Online and in-Store Retailing
Order management and customer service is the important activity of logistics management. In the case of online retailing business, the company can have various choices such as:
- Outsource distribution work.
- Install advanced software.
- Manually manage the orders.
When company has decided to build distribution centers in Sydney at the initial stage then it is most suitable to use online order management software which can help to place the order efficiently. It is useful to buy order management software due to prevailing upward trend of the Australian citizens. Online customers have increased enormously they are still increasing so it is reasonable to manage hundreds or thousands of customer orders through advanced software (Randall et al 2006, p.567-580).
By having software, company can enjoy the benefits like in time delivery, less costly transactions, convenience to customer for ordering online and customer can browse a lot of packages of products as well online. In the software the company can include different aspects of order management like order management process, identify the order management issues, order fulfillment models like ship from stock. Some other logistics concepts are as follows:
- Internal order
- Order configuration
- Order assembling or packaging
- Ship or deliver the order to customer.
Order management cannot be carried out with inventory management. These two fields are attached with each other very closely. Without inventory management, all the orders cannot be placed efficiently. In the process flow “figure A” inventory check will be performed at two points. One is availability check and another one is reservation. It is clearly showing a process in which customer can place the order online for any specific products over the website.
Customer service in online and In-Store Retailing
Another Important logistics activity is customer service. In online retailing or in-store retailing it is very important to provide quick services to the customers. There is a difference in online retailing that customers only depend on the response of the retailer website network. If the speed of network is good then customer can easily buy whatever they want to. It is to be made sure by the company that the order is placed before or in time at the prescribed location. When there is any delay in the deliveries then customer switch to other websites for buying purpose. For fast distribution of products, the company will need to have strong business infrastructure. The problems arise when there is no policy or standard designed in the company for customer satisfaction which can be a huge drawback for the online and in-store retailing.
In in-store retailing, salesman directly communicate with customers, they sometimes offer catalogue and booklet to select any products. The liaison and polite attitude is very important in in-store retailing. Without these professional skills, improper handling of customers, they can leave the store without buying. Another important thing is the time of customer; customers never like to stay in queue for long period. They just want to do all the purchasing in a speedy time. If they wait for long time at the store for purchasing products due to rush at stores then they make a mind to avoid the same store in future (Sanai 2004, p.1-24).
Developing customer service package
The following list contains some of the major components of a good customer service package which should be used for your own business:
- Active Delivery or In-time Delivery
- Order – Delivery Time
- Substantial Delivery
- Emergency deliver required procedure
- Stockholdings and uninterrupted supply
- Completed Order-forms
- Recommendation on non-availability
- Ease of placing order
- Order Acknowledgement
- Accurate invoices
- Qualitative sales representation
- customary calls by sales representatives
- Manufacturer monitoring of retail stock levels.
- Credit terms offered
- Customer query dealing
- Qualitative outer packaging
- Well-stacked (Ordered) pallets
- Easy to read use by dates on outers Expiry dates visibility
- Attractive inner package for in store handling and display
- Idea for new product/ package development
- Inspection of product range regularly
- Synchronization between production, distribution and marketing ( Steve et al 2011, 183-193)
AUSTRALIAN DISTRIBUTION CENTRE DESIGN AND OPERATIONS.
Distribution Network Design Solutions
In the logistics activities of online and retail stores, it is very important to review the distribution centre design and operations. In this company, the distribution centers will be made in Sydney as decided by consortium. These distribution centers will perform their functions accordingly. The products shipments will be arrived from cities of China and stored in the distribution centers. All the online orders of the customer will be dealt from the distribution centers. Following things and activities will be performed in the distribution centers (Aitken et al 2003, p.127-140).
- Strong transportation network will be made.
- A professional team will work online to execute the orders of customer efficiently.
- An online system will be developed and all the people will have know how about low, medium and strong stock position of every product.
- When there will be a need of shipment for any stock, it will automatically be updated to suppliers in china and to the purchaser in Sydney.
- Stock will also be reviewed by special store personnel. Store managers will match the levels of online available quantity with existing available quantity on daily basis.
- Managing warehouse expense.
In store Retailing Distribution Centers
In online retailing, there are distribution centers where the stock of products will be maintained and customers will receive their orders at home. But in the case of in-store retailing, there is normally no stock delivery at home but they will get the products by physically visit the stores.
It is very essential for this online retailing company to have a strong distribution network in Australia. It is the most important part of this business from the logistics point of view. The company can avail a lot of advantages by having distribution centers in Australia. They can get the benefits such as low cost order execution, in time delivery, right goods, and right quantity. When customers will get the things together then your sales will increase optimally. It is very important for the company to note that increase in distribution centers will decrease the cost of transportation and vice versa Paul et al 201, p.538-544).
Distribution centers will be built according to the budget, location of customers, size of orders, quality of target customers, and products variety, etc of the company.
While performing or before performing logistics activities in Sydney for online retailing business, it is very important to decide the answers of question like where the centers will be located?
In the figure 3 given below you can see where we have to design our distribution centers. The initial distribution centers will be located in the following areas:
- North Sydney
Understanding Distribution Network Design
It was also possible for the company to outsource the distribution work to other companies but they prefer to establish their own distribution centers so before the establishment, there are many important things that needs to be considered properly.
Company should have idea about geographic shift in the level of production and consumption. Because when they will establish a distribution centre and the customer are not ordering from that area then it may be possible that the cost of the center may increase from the sales. In this way, the company can bear heavy losses. So the consortium has properly decided the locations of distribution centers which are mentioned above.
It is also very important to note that company should define the target market and make the right segments of customers according to online offered products. It is a very noticeable point in this distribution center logistics activity.
When the cost will increase in energy, plant and other maintenance of equipments or daily wages employees then the distribution center will be a burden for the company. This aspect should also be noted deeply. In regular routine, government policies and rules changes, the setup will be very government friendly so that you can have no problem in satisfying the needs of your customers.
The company has to create a less costly, demand-flexible distribution network. If this online retailing company will establish a full-service consulting and integration firm then they can survive in the market otherwise it is not easy to attract thousands of customers.
DISTRIBUTION WITHIN AUSTRALIA
There are major changes in the global and local economies and these changes have had foremost effects on logistics activities within Australia. In recent years, the logistics activities performance have been improved, and a wider range, of logistics services can facilitate to online retailing business some of these developments.
Due to some of the key factors improvement like removal of trade barriers, financial market rapid growth and improvements in information technology have facilitated to a major expansion of global online or in-store retailing commerce.
More and more firms are trying to start an online trading so with the same increasing trend, the requirements of logistics activities have also increased. Logistics services are very good and network are working well in Australia. This can be imagined by reviewing the performance of prevailing companies (GrainCorp 2000).
Distribution is a key logistics activity. In Australia, there are many customers who are buying products from online websites, internet etc. The rate of purchasing is increasing by browsing websites on internet so it is defined as a channel of sales. When the order is placed then it is the time to place the exact order from all the perspective at the door of customers. In this respect, we need to follow three steps:
- Managerial planning
The company is going to start a online retailing business and many objectives are to be met for the distribution of products to customers. The company need to outlet penetration by type of distribution, inventory choice and levels to be decided and detailed customer development programs. So in online retailing, distribution channels will be owned local transport. The transportation network will be in operation from distribution centers to the home of customers.
On the other hand, in in-store retailing there are stores established in the different areas of the one city, they can be increased to other cities and outside slowly. The stores are the physical places where customers visit and buy the products.
(Survey of Australian e-commerce business 2011)
The table shows online sales trend through different channels in Australia. At the top is e-bay distribution channel and the own websites is also having a good margin in the country for online sales.
You must be sure that immense opportunities are available in Australia. Your seriousness towards distribution alternative is required. Remember: There are not only traditional competitors who are challenging you rather beginners, coming with new ideas and having deep analytical observation of the past, are the greater threats for your survival.
The point is that there are new and evolving opportunities for you and your company. If you’re serious about growth, you’ll be serious about investigating your distribution alternatives. Remember: challenges to your business don’t just come from your traditional competitors. The most dangerous threats often come from new start-ups who take advantage of cataclysmic changes in business infrastructure—like those happening today in distribution channels.
Overall, there are many differences in online and in-store retailing. It is the time for offline retailer to join some distribution companies and outsource their business to them. This strategy will be suitable for them.
As far as the online retailing, the newly developed company can make its space in the market but the condition is to manage the logistics very carefully and closely. Without the proper planning and execution, the business cannot be successful. If you are coming in this business without proper logistics plans then the venture can also be negative for you. In fact, the business is solely depending upon the major logistics activities discussed in this academic report.
Careful consideration of logistics can bring enormous customers and big profits for the company. It just very much needed to install the modern technology and keep a check on the technology on prescribed intervals.
With the defined logistics channels and models, the company can sustain in a huge way. It is suggested as a student of logistics management that study and understand all the major as well as minor expected factors that can cause problems for you in future.
ACMA 2010a, “Australian retail industry”, online issues and problems in retail industry, viewed by 10 Jan 2012, available at: http://www.pc.gov.au/__data/assets/pdf_file/0009/113769/07-retail-industry-chapter4.pdf.
Partyka, J.G. and Hall, R.W 2000, “On the road to service”, OR/MS Viewed on 10 Jan 2012, August, pp. 26-30.
- Krishnan and V. Rao 1965, “Inventory Control in N Warehouses”. Journal of Industrial
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Jin, Ginger Zhe and Andrew Kato 2007, “Dividing Online and Offline: A Case Study.” Review of Economic Studies. Vol. 74, no.3, p. 981-1004.
Randall, Taylor, Serguei Netessine, and Nils Rudi 2006, “An Empirical Examination of the Decision to Invest in Fulfillment Capabilities: A Study of Internet Retailers,” Management Science, vol.52, no.4, p. 567-80.
Sanai, Todd and Joel Waldfogel 2004, “Geography and the Internet: Is the Internet a Substitute or a Complement for Cities?” Journal of Urban Economics, vol. 56, no.1, pp.1-24.
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Paul de Bruyn and Paul Freathy 2011, “Retailing in post-apartheid South Africa: the strategic positioning of Boardmans”, International Journal of Retail and Distribution Management, Vol .39, no. 7, pp 538-544.
Steve Burt, Ulf Johansson and Åsa Thelander (2011) “Standardized marketing strategies in retailing? IKEA’s marketing strategies in Sweden, the UK and China”, Journal of Retailing and Consumer Services, Vol 18 Iss: 3, pp 183-193 (Available in STORRE at http://hdl.handle.net/1893/2579).
GrainCorp 2000, Growing Solutions: GrainCorp Limited 2000 Annual Report, GrainCorp, Sydney