BPMG 3013 TRANSPORT PLANNING AND POLICY (GROUP ASSIGNMENT 1)

BPMG 3013 TRANSPORT PLANNING AND POLICY

SECOND SEMESTER SESSION 2017/2018 (A172)

GROUP ASSIGNMENT 1

HOW TO OPTIMIZE THE RISKS IN THE INDIUSTRY SUPPLY CHAIN

SUBMITTED TO:

DR. KAMAL IMRAN BIN MOHD SHARIF

PREPARED BY:

MAERSK

NAME MATRIC NUMBER

1. YU LE 230681
2. NUR SHAHIRAH AQILAH BINTI HAMID 234604
3. CHO RUN LI 239374
4. NORFAZILAH BINTI ROSLI 239570
5. LIEW LEE CHEUN 240566
6. TOH JIE QI 240586
7. NUR LIYANA FITRI 240929
8. FASYA FASIHAH AZIZAN 240962
SUBMISSION DATE:

16TH APRIL 2018

BPMG 3013 TRANSPORT PLANNING AND POLICY (GROUP ASSIGNMENT 1)

HOW TO OPTIMIZE THE RISKS IN THE INDUSTRY OF SUPPLY CHAIN?

1. Shipment Visibility

Shipment visibility assist to minimize the risk in the supply chain industry via information
given about the detail of shipment either has been delayed, mis-routed or had been damaged
and did not find out about until well after the time it occurred. The information for example
are what, why, where so that proactively can see what is around corner and act accordingly
within supply chain structure to ensure full shipment satisfaction during the delivery process.
Shipment visibility can help to the shipper, consignee, and vendor partners the ability to trace
and know exactly where their products are at any given time either locally and or globally.
Through the technology and automation that used, shippers can visibly see the status of all
shipments and be aware of any delays or issues proactively. After that, they also can track a
shipment to see if it has been released by customs, and visibly see with a click of your mouse
where the shipment is at. So, it can help to minimize the risk in the industry of supply whereby
all the movement of the shipment is aware by the parties involved. After that, shipment
visibility allows to communicate to consignee if a delay happen, an issue, and or advise of
shipment will be received on time. Full visibility within supply chain offers logistics personnel
the ability to track and trace in real time all inbound or outbound freight, proactively schedule
shipments, check the status of deliveries, access POD’s instantly and audit freight bills on
screen instantly after deliveries are completed. Connecting to the technology and resources
that enables tracking and monitoring material flow as it happens will simplify supply chain
process, reduce costs and increase efficiencies and allowing the company to have the
competitive edge within the effective logistics program. Increase visibility into supply chain
operations, including event management. Shipment visibility proactive alerts and event
management to identify deviations. Customers can characterize adaptable business decides that
show the status of any lifecycle of milestone in the supply chain. These occasions can be
finished back exchanges to the first buy arrange for finish perceivability into singular details.
For example, with sea shipments, shippers can get programmed notices on status occasions for
every container such as date of receipt, vessel stacked, departed and arrived, travel, and so on.
Any shipment can be found or followed by any of a few reference points such as booking
number, container number, or bill of filling number. Shipment visibility also can achieve the
BPMG 3013 TRANSPORT PLANNING AND POLICY (GROUP ASSIGNMENT 1)

customers. Since the drive is accomplishing the advance, there are can exploit customers
characterized geofencing uses the global on Wi-Fi and cellular data to enhance email or text-
based notifications to customers, enabling them to know their conveyance status. Diminish
telephone request and enhance customers benefit by setting up the framework to convey the
most recent data to the customers.

2. Collaboration improvement

It is important to have a great relationship with lots of suppliers in order find the best
sources. Companies might experience different kind of risk such as operational, financial and
reputational. In order to manage those risk, companies need to identify and also classify the
risk in order to make a better risk strategy. Having a better relationship or collaboration might
help companies to mitigate risk especially operational risk. Companies able to exchange
strategies or information regarding to the operational management. In order reach great
support, it is crucial for supply chain industries to be able to share the strategic plans and
information so that all parties able to improve and mitigate the possibility of the risk in supply
chain industries. Every companies should be able to sustain the relationship with other
companies in order to gain profit of the collaboration. There are a few ways that can be done
in order to maintain the collaboration between companies such as mutual strategic operational
goals, two-way performance measurements and formal and informal feedback mechanisms. It
is very crucial in supply chain, the collaboration with the suppliers because supplies in term of
time and quality are the greatest risk. They need to maintain the suppliers so that they will
maintain will able to fulfil the customer request. Disruption of supplier can bring the disruption
of the production of the supply chain. Communicating the information to the suppliers can help
build intelligence that can fuel better relationships with suppliers for business continuity.
Managers must know the numerous supply chain plans by collaborating with clients as they
describe and pursue supply chain distinction strategies. For companies to be viable, managers
must adopt the agility and insight strategies and rapidly respond to unexpected disruptions.
Moreover, to minimize the risk, collaboration in sharing skills and technology also is
important. By using technology to build a bridge to collaboration, it brings significant benefits
for the manufacturer itself. They can have improvement in accuracy of the production of the
BPMG 3013 TRANSPORT PLANNING AND POLICY (GROUP ASSIGNMENT 1)

goods. Moreover, they can have a faster transaction cycles and also help companies reconfigure
business processes quickly and extend information to employees and partners across the globe.

3. Better forecasting

Moreover, through risk pooling there is an important aspect that need to be emphasized in
order to have a better forecasting. It is centralization of inventory. Inventory is the heart of
every business because it is an asset to the company and it will become a liability if not manage
well. Incorporation of a centralized inventory control to the supply chain can improve in the
manufacturing system that consists of lone lead time and significant uncertainty (Garcia, Ibeas,
Vilanova, & Herrera, 2012). A centralized inventory management will sync all operation
system. With the aid of this system, there will be an increased in inventory accuracy as data
from all departments will be unified and incorporated together for comprehensive tracking and
business intelligence. Consequently, when inventory level is accurate or as precise as it can be,
risks related to demand and supply, business operations, delays and many more can be reduced
in supply chain industry. Last but not least, risk pooling is also considered one of the useful
strategy to address variability in the supply chain. Variability occurs when the exact quantity
for a certain product is unknown but rather a range of quantity of data is obtained (Oeser,
2010). By implementing risk pooling, it may reduce variability and thus uncertainty and
expected costs such as holding costs, stock out costs, backorder costs and so on. To explain
further, risk pooling should also be considered when making decisions in product design.
Decisions on the options available and complexity in products where the less colour choices
or other specifications, the simpler the demand forecast in the supply chain. This is because
the aggregated demand is simplified and easier to determine.

4. Inventory Optimization

Inventory optimization is one of the way to optimize the risk in the industry of supply
chain. Inventory is a cost to a company due to the inventory is the most valuable assets and the
inventory management and controlling costs a lot to a company. Companies have to think twice
in purchasing the inventory due to the holding cost and storing cost will be involved in
managing the inventory. According to Ogbo (2011), the inventory management is to give the
information about how much of the products to re-order, when to reorder it, how frequently
the orders should be placed as well as the amount of the safety stock. Thus, there are many
BPMG 3013 TRANSPORT PLANNING AND POLICY (GROUP ASSIGNMENT 1)

methods in managing the inventory. Firstly, Just-In-Time (JIT) is one of the famous system
that used by many companies in managing their inventories. JIT was adopted by Toyota and
other Japanese manufacturing establishments without any failure in increasing their
productivity with reducing the waste (Kaneko & Nojiri, 2008). According Singh & Singh
(2013), the main objective of JIT is decreasing the total production cost by manufacturing
immediately what is needed as well as eliminating the unwanted wastes. Another technology
that can be used in inventory management includes Internet of Thing (IoT). According to
Wigmore (2016), IoT is a system of interconnected computing devices, mechanical and digital
machines, physical objects to the Internet network. With these connections, it is able to
generate the information from real physical objects in real time and upload it to the internet
automatically. There are thousand and thousand types of inventories being stored in between
the supply chain, so it is necessary to have a good and completed system in managing the
inventory in order to reduce the problems. By implementing IoT in inventory management, it
enables to respond immediately with the changes of the situation in the industry supply chain
by using the automated progress. Therefore, the risk in the industry supply chain can be
optimized.

References

DeGruttola, M. (2016, March 15). The Secret to Retail Success: Centralized Inventory
Management. Retrieved from The Stitch Blog: https://www.stitchlabs.com/blog/the-
secret-to-retail-success-centralized-inventory-management/
Garcia, C. A., Ibeas, A., Vilanova, R., & Herrera, J. (2012). Centralized Inventory Control
Approach for Supply Chain Systems. In Control & Automation (MED), 734-739.
Kaneko J, Nojiri W (2008). The logistics of Just-in-Time between parts suppliers and car
assemblers in Japan. J. Transp. Geogr., 1: 155-173
Oeser, G. (2010). Methods of Risk Pooling in Business Logistics and Their Application.
Frankfurt: Europa-Universität Viadrina. Retrieved from https://d-
nb.info/1014261058/34
Ogbo, A. I. (2011). Production and Operations Management. Enugu: De-verge Agencies Ltd.
Singh, D. K., & Singh, S. (2013). JIT: A Strategic Tool of Inventory Management.
International. Journal of Engineering Research and Applications (IJERA), 3, 133-136.
BPMG 3013 TRANSPORT PLANNING AND POLICY (GROUP ASSIGNMENT 1)

Wigmore, I. (2016 July). Internet of things(IoT). Retrieved from TechTarget:

http://Intenetofthingsagenda.techtarget.com/defination/Internet-of-Things-IoT