Understanding Logistics & Supply Chain Management

Question

Task: Write a report on the concepts of logistics and supply chain management of the organization.

Answer

INTRODUCTION
The primary motive of the assignmentis to know the concepts related to the logistics and supply chain management of the organization. Logistics is considered as a part of the supply chain managementthrough which proper planning, implementation and controlling of the storage takes place in an effective manner. The organization that is taken into consideration hereis Christian Dior wherein, theirmain areas of functioning of logistics such as marketing, finance, human resources as well as accounting etc. Along with this effectiveness of the present order cycle and management of inventory would be discussed below. The overall analysis as well as the application of the theories and concepts would be discussed below in the most effective manner.

ABOUT THE COMPANY
The organization that has been taken into consideration for this assignment is Christian Dior,which ispopularly known to beDior and is a provider of French luxury productsorganization that is primarily controlled and operated by a French business named Bernard Arnault. Also, Dior is considered as the most popular and the largest luxury shops of all times.Itwas founded in the year 1946 by a famous designer Christian Dior. The Company presently has its operations as well as retails fashion accessories, jewelry, leather goods, fragrances, skincare products, makeup and other cosmetics (Grant,Trautrims& Wong,2017). The supply chain managementdepartment of Dior primarily focuses upon Logistics as their main aim is towards providing timely delivery of its products which would in end help it in retaining their customers in comparison with the other competitors that are present in the market. Also, the assignment wouldbe focusing on the discussion of logistical theories and concepts in context with Dior along with the discussion of the effectiveness and efficiency of the order formulating system presently undertaken by the organisation.

THE INTERFACES
The areas wherein the functional areas that are production, marketing, accounting and finances of Christian Dior might interface when the products of Dior are being carried out and sold by different suppliers all across the globe just prior to their shipment towards the final destination. Therefore, logistics are considered to be a vital aspect that needs to be effective for the future development and growth of the organisation. Then in the case of marketing logistics is interfaced as in today's time of globalization the customers are geographically expanded which in end means that Dior has to provide products in a timely manner all across the globe (Adebanjo& Ahmed, 2019). In the case of finance, the availability of sufficient resources and funds plays a crucial role which would allow the management to effectively manages the resources so as to run the operations of the firm. In the case of accounting the management at Dior ensures that they bring innovative and creative products as well as services for the potential customers as well as maintain a proper record of the inventory so that an improved supply chain management could be handled by the firm.

Finance: The management working at Dior effectively looks towards the financial decision which relates to the choice of equipment to be used, various cost-control policies, and effective usage of overtime as well as price-volume decisions to be implemented. Through the effective use of Just-in-time inventory management, the management of the firm could easily make decisions about the investment and can decide the areas in which more of investment is needed to be made (Hugos, 2018).

Marketing: The management working at Dior makes sure that they understand the needs of their target segment and then accordingly develop new product and services which could gain much attention among the potential customers. By understanding the marketing needs and desires of the targeted customers, effective management of the inventory and supply chain management could be formulated helping the organisation attain a competitive advantage in the market (Mangan&Lalwani, 2016).

Accounting: Proper accounting and its management have been done by Dior wherein the management provides the data about the product as well as services based on the cost related to it with the help of which operational performance is evaluated (Feiner, 2019). Based on the budgeting and the operational planning undertaken Dior management is now able to access about the accuracy of the accounting data and thus helping in the proper supply chain management.?

ORDER CYCLE
Order management activities are well taken care of at Dior. These are the process that isimplemented between thetime when an order is received by Dior and till the time when the warehouse is asked to ship the goods so as to fulfill the orders received,

Following are some of the activities which are implemented by Dior for processing order received from their customers:

1. Order Planning- which relates to the forecasting of sales
2. Order Transmittal
3. Order Processing
Order picking and assembly
4. Order Delivery

Figure 1 ORDER PROCESSING SYSTEM OF DIOR
SOURCE- Wang et al., 2016

Order Planning- Dior has a weak order planning system. It needs to have an efficient order handling system because they often fall into bunching which can further lead to many obstacles in attaining their mission. Some of the ways in which they can avoid bunching are:

• They can use field salespeople for the ease of the customers.
• The use of phone by salespeople through which needs of the potential customers could be easily understood and could be more precise (Awrejcewicz et al., 2016).
• Price discounts for regular customers to increase their enthusiasm and loyalty

Order Transmittal- This is the step which is implemented at Dior at the time when a order is placed by the customer and the period they receive the confirmation of the order is known as Order Transmittal. There are different ways by whichindividualscan place their orders at Dior for example phone, email, POS system, or through online website of the company etc. When an individual places an order In person, there are fewer chances of order errors. Emails are a more convenient and easy form of transmittal. And, other electronic means are fast, comfortable, and potentially more reliable, but the main concern here relates to the security of data.

Order Processing- When an order is received at Dior, they first check the completeness and accuracy of the details, then they run the customer credit check. Once this is done, order entry is made to the computer system, and then all the departments do their assigned jobs. Marketing department here appoints salesperson, accounting department make sure to record proper transaction and inventory department make sure to locate their goods to nearest warehouse for the customer. After all these activities, the transportation department is liable for arranging the shipment facility so as to export and import the goods (Hou et al., 2017).

Orders that need to be imported need more creditability and are way more complex than domestic. There are a lot of formalities related to the preparation of the document as well as arrangement of the shipment.

Order Picking and Assembly- It provides Dior the opportunity to further make improvement in their working so as to make it more effective and efficient part of an order cycle. In this process, the nearest warehouse is first notified to assemble the order, providing them the list. Then the picked items are checked keenly. Stockout information is then sent to the order handling department. Then the packing list is put with the parcel (Coyle, 2016).

Order Delivery- This is the final phase of the order cycle, the right mode of transportation and carriers are selected to pick the items from Dior warehouse to the customerwhich in turn improves the order delivery. But some customers like to pick their own ordersand so this facility is also made available by the organisation for their customers (Lambert &Enz, 2017).

INVENTORY MANAGEMENT
Since Christian Dior is among the most famous and well-known brands dealing in fashion, effective supply chain management is implemented by the firm so that they could remain competitive in the business environment and attain success. Apart from this, the company also needs to cater to the requirements of the customers and make sure that they come up with innovative and creative products in the market; the management team ensures that proper logistics are applied by them in their operations. Their logistics are mainly handled by housing, fleet, and travel team that ensures that proper and effective operations are implemented by the employees so that they could attain future success and development in their work (Christopher, 2016).

The current inventory management process at Dior includes effective utilization of a Just-in-time approach wherein the management makes sure that the right amount of inventory is made available by them so that no shortage of products could be made. The current activity of Dior’s inventory management is to reduce the cost of holding inventory and knowing the exact time to replenish their products or knowing when to buy more material to manufacture them. With the implementation of this strategy into the working of the firm, the management of Dior is able to lower the wastage and thereby tries to decrease the cost of production involved (Kurihara,KaWanaka& Yamashita, 2019).

Rather than adjusting their methods to fit to just one theory, Dior should focus on whichever inventory system is more cost-efficient. As Dior offers more than a single group of products, they should be using more than one inventory model, such as Heijunka, and deterministic continues to review. By following these theories, they can ensure to have needed items in stock as and when required by the customers without making ineffective use of supplies or spending more amount of money on stockpilling (Aghapour et al., 2017). Dior should adjust its production of different products on a weekly as well as on daily basis, after evaluating on the precise calculations of customer demands. Also, whenever they are able to predict the customer order and shipping times, they should be prepared for the upcoming orders. This means that they should not just be following Just-in-time theory as it takes a lot of time to deliver the product to its customers but they should also be ready for the time when the demand graph goes high. This can be attained by keeping items in ready in stock and ordering more when demand begins to drop or otherwise make efforts to turn customers in new and innovative product which are not easily available and are less in quantity (Muller, 2019).

However, proper inventory management at Christian Dior helps them to prevent a number of other mistakes; like they are able to reduce spoilage and dead stock and they get to save more on cost of storage involved which leads to improvement in their cash flow, which further leads in the growth of their business. Dior’s growth is remarkable due to their proper inventory management.

CONCLUSION
Thus, it can be concluded from the above assignment that it is important for Christian Dior to effectively manage its logistics so that overall operations of the organization are carried out in the most effective manner. Under the supply chain management of Dior, logistics is considered to be the most important aspect because this helps in retaining its customers as the organisation concentrates mainly upon satisfying its customers by providing them with the best quality products and its timely delivery all across the globe. The functional areas of Dior are in interface with the logistics since it is an important aspect in terms of providing products to the final customers along with the maintenance of the accounting and finances of the firm in the most effective manner.

Also,the analysis and effectiveness of the present order cycle along with logistical theories and inventory and supply chain management has been discussed in an effective manner. The logistical theories and concepts that have been discussed above in the assignment help Dior in the management of its overall operations in an effective manner.

REFERENCES
Adebanjo, D., Teh, P. L., & Ahmed, P. K. (2019).Improving manufacturing performance by developing innovative capabilities: the importance of supply chain relationships.

Aghapour, A. H., Marthandan, G., Fie, D. Y. G., &Zailani, S. (2017). Risk management process towards operation performance in supply chain management: a survey of manufacturing SMEs. International Journal of Logistics Systems and Management, 27(1), 78-114.

Awrejcewicz, J., Krysko, V. A., Papkova, I. V., &Krysko, A. V. (2016). Deterministic Chaos in One-Dimensional Continuous Systems.

Christopher, M. (2016). Logistics & supply chain management. Pearson UK.

Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. (2016). Supply chain management: a logistics perspective. Nelson Education.

Feiner, G. (2019). U.S. Patent No. 10,364,052. Washington, DC: U.S. Patent and Trademark Office.

Grant, D. B., Trautrims, A., & Wong, C. Y. (2017). Sustainable logistics and supply chain management: principles and practices for sustainable operations and management. Kogan Page Publishers.

Hou, H., Chaudhry, S., Chen, Y., & Hu, M. (2017). Physical distribution, logistics, supply chain management, and the material flow theory: a historical perspective. Information Technology and Management, 18(2), 107-117.

Hugos, M. H. (2018). Essentials of supply chain management. John Wiley & Sons.

Kurihara, T., Kawanaka, T., & Yamashita, H. (2019). Dual Approach to the Harmonized Model between Inventory Reduction and Heijunka (Production Leveling) based on the Minimum Average-energy Principle. International Journal of Industrial Engineering, 1(2), 138-153.

Lambert, D. M., &Enz, M. G. (2017). Issues in supply chain management: Progress and potential. Industrial Marketing Management, 62, 1-16.

Malik, S., &Hashmi, M. A. (2016). To Evaluate the Impact of just in time on Organizational Cost Efficiency, Inventory Management, and Quality Management (Doctoral dissertation, Bahria University Islamabad Campus).

Mangan, J., &Lalwani, C. C. (2016). Global logistics and supply chain management. John Wiley & Sons.

Muller, M. (2019). Essentials of inventory management.HarperCollins Leadership.

Wang, G., Gunasekaran, A., Ngai, E. W., & Papadopoulos, T. (2016). Big data analytics in logistics and supply chain management: Certain investigations for research and applications. International Journal of Production Economics, 176, 98-110.