LOGISTICS

Posted: January 5th, 2023

LOGISTICS

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Logistics

Logistics a business component all operations in the Company that facilitates the transportation of goods to the customers (Zijm et al. 2019). Since it incorporates other processes outside the industry that are undertaken to facilitate the flow of goods to customers, it is affected by the business macro-environment factors. Therefore, the PESTEL analysis tool is essential in identifying and describing the various factors affecting logistics operations. This is because it examines the political, economic, social, and technological factors. The legislative and regulatory environment between the European Union and the United Kingdom presents challenges to Kildea ltd, whose business perspective aligns with expanding the business to these regions. Since the Company uses cross-docking to distribute goods all over the Republic of Ireland, it prioritizes the continuation of the operations upon consideration of the business expansion options. The Company supplies its customers with horticultural and garden-manufactured products (furniture).

Legal Business Environment

Before the Brexit on 31January 2020, United Kingdom shared a trading platform for their products with other countries in Europe through the European Union. The formation of a collective trading block for the European countries had created a familiar legislative environment for all products across the European continent (Crini et al. 2020). The European Union formulated principles that prohibited the enacting of any tariffs or barriers on the products, leading to higher prices for the products from the European Union member countries. Following the lifting of the obstacles, product safety and environmental conditions were raised to constitute the standard national regime.

 Standard Quality Requirements

The legislative requirements passed by the European Union were in relation to EEC regulations such as 315/68 and 316/68, which regulates the standard quality for fresh produce in the agricultural and horticultural sector. Therefore, according to this policy, the products that fail to conform to these standards are not eligible to be transported in an aim to trade or offered for sale in any country within the European Union (Crini et al. 2020). The imported products, as per law, are eligible for inspection at any period, even for exporters who have a history of policy compliance. The standards, testing, and certifications rules are more elaborate, comprehensive, and dynamic; hence, this presents a challenge for the small and medium exporters to the block. This is because of the domestic regulations’ dynamic nature on top of the present European Union in which the small and medium businesses may not be aware; hence, lack of security offers unpredictable markets in the European Union, especially after the United Kingdom exit.

Public Health Safety

Public health remains a concern for the products being exported in the United Kingdom and the whole European Union, especially for horticultural products. The producers whose produce is environmentally friendly are highly likely to benefit from the public health safety policy (Soleimaninanadegany et al. 2017). The European Union and the United Kingdom have set Sanitary and Phytosanitary measures that control contaminants’ level on horticultural and agricultural products, hence safeguarding the citizen’s health. The policy within this union also demands a response to the notifications within 60 days (Crini et al. 2020). This often presents a challenge to the developing countries’ companies export to this block due to lack of expertise in carrying out a risk assessment on the Sanitary and Phytosanitary measures as demanded within this block.

United Kingdom

The United Kingdom exit from the European Union presents various changes in the legal environment pertaining to these countries’ exportation. Since the government will have its bargaining power, it will likely impose tariffs that favor its output, limiting the number of exports into the country, especially on those products that the government can produce. The country’s exit forms an open opportunity for the country where it can sign trade deals in the future with other countries hence affecting some of the other countries that had the leverage in the United Kingdom’s market.

Cross-docking

In logistics, there are various processes of delivering products from the producers to the consumers. Cross-docking in logistics entails providing products to the consumers directly from the manufacturing or the producing company site with minimal or no material handling in between them. The process of cross-docking mostly involves the products being delivered to be allocated outbound deliveries whereby the picking and packing of the products in addition to outbound delivery of goods have all been planned for (Soleimaninanadegany et al. 2017). The delivery of the products directly to the consumers as incorporated in cross-docking aims at providing the highest customer service as customers enjoy the delivery of the exact product as ordered. Therefore, the cross-docking process in logistics reduces the material handling process and, consequently, the expenses incurred from storage (Soleimaninanadegany et al. 2017). Thus, the cross-docking method is economical to the business operation where no labor costs are incurred as the products are no longer stored in the warehouse.

Types of Cross Docking according to the Roles

Manufacturing Cross Docking. This type of Cross Docking facilitates the receiving of purchased and inbound products, which are destined for manufacturing. Therefore, the warehouse under this particular type of Cross-Docking receives products as well as prepares the sub-assemblies as per the production orders, especially the fresh horticultural products.

Distributor Cross- Docking. As Aamer (2018) argues, the particular type of Cross-Docking functions to consolidate the inbound products from the various vendors into a standard mixed product pallet hence the customer delivery upon receiving the final product.

Transportation Cross- Docking. This type of docking offers the combination of shipments from various carriers into less-than-truckload to save on scale economies.

Retail Cross- Docking. This particular type of Cross-Docking performs the role of collecting products from multiple vendors by Kildea, which then sorts the products onto outbound products for the various retail stores (Goodarzi et al. 2020). Within this type of Cross-Docking, the Company procures two products; items sold daily (staple stock) and the large quantities purchased once without restocking.

Opportunistic Cross-Docking. According to Rezaei, and Kheirkhah (2018), this particular cross-docking type applies to any warehouse. Kildea offers direct transfer of products from receiving dock and loading them direct to the outbound shipping dock as per the customer sale order.

Challenges Company Faces

In the past, the primary known European Union offered a favorable trading platform for the countries within Europe. The collective purchasing power has fostered the United Kingdom Economically up to the Brexit, which happened on 31 January 2020. The Brexit has affected the business operation in the United Kingdom.

Volatile Market-place

 The continuously changing market presents a challenge to the Kildea limited company, which provides cross-Docking operations in the supply of horticultural and agricultural products. The volatility of the market offers the Company the inability to predict the market. For instance, the Kildea limited is not sure of the tariffs likely to be imposed by the new European Union on the products following the Britain exit. The Company is also not sure of the customer’s future as the exit might force the country to impose new rules and tariffs, which might affect the products’ price. The volatility also sets the Kildea suppliers to extraneous expenses, mainly due to unpredictable demand periods when it lacks enough products to supply.

The volatility in market demands for inquiry well as sharing information among the shareholders in the supply chain hence jointly ensuring the customer’s specifications are met (Johnson et al. 2020). The high competition in the European Union and United Kingdom market presents extreme pressure on the business. The Company’s various shareholders are sometimes unwilling to share the information on the multiple challenges and the income generated from the multiple opportunities. The failure to present the data on the market by the stakeholders leads to the Company’s failure to satisfy the customers.

Truck Dock Assignment

 Dock assignment for trucks forms the essential activity in the various cross-docking centers. The processing of cargo and trucks occurs following docks’ work and is usually for a certain period (Johnson et al. 2020). The various dock availability and arrival and departures are subject to change for each truck depending on the operational eventualities such as accidents and traffic congestions. According to the eventualities, the various changes in the departure and arrival for the docks lead to customer dissatisfaction as they term the dock to be unreliable.

The Regular Inspections

The short period allowed by the European Union to respond to any notification on the exported products’ queries into the union is challenging to the developing countries. This is because the developing nations lack the financial power to undertake the complicated procedures required in testing. The Company also faces the regular inspection of the products despite having exhibited a positive record in the previous business operations. The various laws within the union and domestic laws further present a more significant challenge to export goods to the United Kingdom and the European Union.

The Potential Expansion of Kildea

The kildea can expand the business operations in the whole of the United Kingdom and European Union. For instance, the European Union fosters an excellent chance for expansion. The previous company opportunities in Ireland a member of European Union can be the regional center for the Company’s operations in the whole economic block. The exposure the Company has gained from the industry’s processes provides the necessary knowledge to gain extra control of the market. The new exit of the United Kingdom from the European Union is a great opportunity, as United Kingdom might factor in relaxed tariffs to encourage the companies to set up the business in the country hence a new business venture. The closeness of Ireland to the United Kingdom is of great significance, where the facilitation of transport will be easier.

Conclusion

Ultimately, the business operation involving multinational countries is affected by various external factors such as legal requirements. Kildea limited company faces different regulation requirements regarding the exportation of goods to the European Economic block, such as regular screening of the products and the various sanitary and Phytosanitary measures controlling the contaminants’ level on the horticultural products. The Company’s involvement in the business’s cross-docking operations facilitates the Company to incur the lowest cost of storage and procedures in the industry. The Company undertakes the roles in the manufacturing cross-docking for the garden manufactured raw materials, distributor cross-docking, transportation cross-docking, retail, and opportunistic cross-docking. The United Kingdom exit from the economic block presents volatility in the products’ market as the union might change the policies and tariffs as well as the United Kingdom. The more excellent grasp of Ireland offers an opportunity to controlling the larger European economic block since they share some regulations in products, with Ireland being the regional controller for Europe. The Company might also utilize the United Kingdom as the potential market.

Reference List

Aamer, A.M 2018. An Application of lean assessment in a cross-docking distribution center. In International Conference on Industrial Engineering and Operations Management. Bandung, Indonesia.

Crini, G, Lichtfouse, E, Chanet, G, and Morin-Crini, N 2020, ‘Applications of hemp in textiles, paper industry, insulation, building materials, horticulture, animal nutrition, food and beverages, nutraceuticals, cosmetics and hygiene, medicine, agrochemistry, energy production, and environment: a review’, Environmental Chemistry Letters, vol. 18, no.1, pp. 1451-1476.

Goodarzi, AH, Tavakkoli-Moghaddam, R and Amini 2020. A new bi-objective vehicle routing-scheduling problem with cross-docking: mathematical model and algorithms. Computers & Industrial Engineering, vol.149, no. 2, p.106832.

Johnson, C, Price, J & Tilley, H 2020, The implications of the European transition for key Welsh economic sectors, Wales center for public policy, Sydney.

Rezaei, S and Kheirkhah, A 2018. A comprehensive approach in designing a sustainable closed-loop supply chain network using cross-docking operations. Computational and Mathematical Organization Theory, vol. 24, no. 1, pp.51-98.

Soleimaninanadegany, A, Hassan, A and Galankashi, MR 2017, Product allocation of warehousing and cross docking: a genetic algorithm approach’, International Journal of Services and Operations Management, vol.27, no.2, pp. 239-261.

Zijm, H, Klumpp, M, Heragu, S and Regattieri, A 2019. Operations, logistics and supply chain management: definitions and objectives. In Operations, Logistics and Supply Chain Management (pp. 27-42). Springer, Cham.