Third Party Logistics

Third Party Logistics

Introduction

In the age of innovation and advancements, the businesses have introduced innovation and modifications in its core functions and activities. Beginning from the product idea and prototype development and continuing up to the development of an original and superior quality product, the organization apply quality procedures and boosted methods of development. The success has been guaranteed but the unique approach that businesses practice nowadays, with which the companies adopt the distribution and supply. Companies in any sector, whether it is retailing or manufacturing adopt the modern and sophisticated methods of operation. Just like other activities, the Supply Chain Management is one of the advanced methodologies to ensure a proper and sophisticated supply and distribution of the goods and services by the firms in an industry. The paepr discusses the use, benefits and importance of third part logistics in thorough context.

Discussion

Components of Supply Chain

Production

Production is a significant aspect of Wall mart's supply chain decision regarding the focus on customer needs, capacity, quality and market demand. There are some issue that the company may face in the production of goods such as changes in taste and customer choice, new technology, and quality of raw material. To cope with this problem, Wal-Mart conducts surveys and gets continuous feedback from the customers so to effectively oversee the changing production demand (Hugos, 2006).

Supply

Supply refers to an outsourcing process from which an organization obtains material and inputs for the production of goods and services. It is one of the significant elements of Wal-Mart's supply chain. Wal-Mart focuses on the quality of predicts, velocity development in supply inputs and flexibility in prices that ensures low cost strategy. However, the price consideration may create a problem for Wal-Mart in terms of selecting the right supplier. To tackle this issue, Wal-Mart considers developing flexibility and quality in selecting the suppliers which maintain lower cost levels (Basker, 2007).

Inventory

Wal-Mart focus on daily stock bases through the Radio frequency identification. It is a technology that identifies the product availability in the form of bar codes that are printed on them. Greater traffic may create a problem in effective utilization if this technology and it may interpret wrong information. Therefore an increase in the server database and implementation in technology can be effective in minimizing the impact of this issue on supply chain management.

Location

Wal-Mart's focus is on the customer demand and determination of the customer's satisfaction for the stores. This helps in determining the locations of the production facilities close to consumers. The selection of right location in the regions with lower income and living standards of people may create problems for Wal-Mart (Basker, 2007). The micro and macro analysis helps in selecting the effective location so that eh supply chain is effectively managed.

Transportation

Wal-Mart offers its products to customer through stores and products are shipped by its own delivery trucks. The procedure reduces cost, but another option for Wal-Mart is the sue of external logistics so that the management responsibilities are reduced and the company can focus more closely towards ...