Introduction
Logistical issues are at the center of the operations of a manufacturing firm. As a producer, it is integral to ensure that logistics are well taken care of for the sake of proper supply chain management. Logistics addresses issues related to the acquisition of raw products, manufacturing of intended goods, and the shipment to the target market. Global logistics affect the manner in which a manufacturing firm undertakes distribution networks. Such factors as global market forces and supply chain management play a crucial part in a manufacturing firm’s operations.
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Logistical Risks
There are several logistical risks for manufacturers to consider while running their business. One of the main risks in logistics is the disruption of distribution patterns (Ju et al., 2017). In a situation where a crucial distributor moves their services to a different location, this can have severe impacts on the cost of distribution of products. A sudden change in international or local laws is another significant risk that a manufacturer faces. This is especially the case if the regulations affect logistics of the company. Economic fluctuations in different countries can also impact on the distribution of products, which may force a company to run into losses while evaluating alternative markets. Another serious risk that a manufacturer faces is a potential breeches of technological systems by hackers, which may lead to breeching of essential company secrets, especially critical information of logistics.
Global Market Forces
Global market forces have a significant impact on how manufacturers evaluate their logistics options. Global market forces are the factors that interfere with demand and supply at a global scale. These factors could include political, social, and economic forces. Due to wide dissemination of information, it is possible to harness customers from far and wide. Global market forces are usually created by international competitors (Kovács & Kot, 2016). A manufacturer should study where there is demand for their products in order to make the best decisions in terms of logistics. Distribution of products should be targeted at areas where demand is high in order to propel productivity. While considering logistics services, global transporters such as shipping companies also provide a good alternative for manufacturers that wish to export their products to distant areas.
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Development Chain
Product development is an essential part of a manufacturer’s job. Product development passes through five critical stages. These are idea stage, screening stage, development of concept, development of the product, and commercialization of the product (Schniederjans et al., 2018). Product development also encompasses a study of specific needs in the market, and studying the competitive advantage in the market. Logistics play a central role in product development because many factors should be considered. These factors include considering the source of raw materials for the product, the suppliers available, as well as how to distribute the products to the identified market. It also ensures that the manufacturer is conversant with all the laws pertaining to the distribution of the product. Putting all these considerations in place ensures that new products have an increased chance of succeeding in the market.
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Supply Chain
Supply chain management is the backbone of a successful manufacturing venture. It involves the planning for efficient acquisition of raw materials, best manufacturing processes, efficient storage facilities, transportation to the market, as well as facilitating recall and the return of faulty products from the market. The four crucial elements of supply chain are operations, integration, purchasing, and distribution (Hugos, 2018). These four elements are interdependent and ensure that there is seamless functioning of a manufacturing unit. As logistics try to maximize each step of the production and distribution process, supply chain management ensures that there is optimization from the beginning to the end of the production, and shipment to the market or the customers. Investment of technologies for increasing efficiency should be centered in both logistical processes, as well as in the supply chain management to ensure profitability of the manufacturing firm.
Logistical Strategies
Logistical strategies help in the coordination of plans and policies between different parties in a supply chain. These strategies are defines as goals and attitudes that are adopted by a manufacturer in order to develop efficiency. One of the strategies that a manufacturer should have is to use volume to leverage on prices (Fernie & Sparks, 2018). Having the capacity to produce large quantities of products for a long period of time can serve as a bargain while hiring distribution services. As the distributor is assured of long-term commitment, they are likely to offer friendly distribution services to a manufacturer. There should also be regular risk assessment to ensure that all areas of risk are well evaluated and addressed. A manufacturer should hire managers to make important decisions on logistics to ensure that inefficiencies are reduced. Another important strategy is the utilization of technology at all areas, such as using social media to update clients.
Summary
In conclusion, logistics are at the center of profitability of a manufacturing firm. A manufacturer should consider a number of factors in order to increase efficiency. Some of these factors include global market forces, supply chains, development chain, logistical risks, and logistical strategies. An elaborate understanding of these factors makes it possible to succeed in the market.
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