Transportation and Distribution Management
DNR Process Solutions Pte Limited
Introduction
Report Overview
This report will aim at analyzing the effectiveness of the three major transportation management aspects which include carrier selection, incoterms selection consideration and carrier relationship management. This report will, therefore, describe in regard to the transportation and distribution strategy that is utilized by DNR Process solutions Pte Limited which is well popularly recognized as DNR. Additionally, the significance of the transportation and distribution management will additionally be addressed in details. The current modes of transportation strategy utilized by DNR will additionally be discussed in the report as well as the analyses in order to assist the corporation in achieving an effective and efficient distribution and transportation management. The most effective strategy for transportation and distribution options for DNR is recommended in order to deliver products on the stated time as well as save costs. This is based on the fact that customer relation management helps in achieving business effectiveness and this must thus be achieved with reduced expenses.
Company Background
DNR is headquartered in Singapore and its presence is in Indonesia, India, Vietnam, Malaysia, Philippines and the corporation’s services are globally offered (DNR, 2016). DNR process solutions Pte limited is a trusted company provider for customized industrial automation and IT solutions for gas and oil, waste and water, fats and oils, chemical specialty, pharmaceutical, semiconductors and food industries. The corporation, therefore, enables the achievement of efficiency in the significant improvement operations as well as products marketing by the utilization of actual time data and customized procedure automation solutions in fresh and existing plants. DNR provides the clients with innovative and optimized solutions which are provided with the lowest cost of ownership in delivering higher ROI. The company’s mission is to provide world-class integrated automation process and solutions for IT by utilizing leading edge sensors, information technologies, control and communications in order to manage assets with efficacy and also to develop value for consumers (DNR, 2016). The competitors include Genmark automation limited, ATS automation and Skymech engineering and automation Pte limited. The strategies utilized include advertising, developed customer relation and increased market location in developing its market base thus increasing its efficiency.
Incoterms Selection Consideration
Several given terms are provided for the consumers indicating the responsibilities towards the services which are provided such as price (Ward, & Peppard, 2016). Therefore if there is no insurance that is provided in the given product purchase terms then this means that the transport insurance is fully responsible for both the seller and the buyer in reference to the owner of the cargo at the provided transport period (Ward, & Peppard, 2016). In DNR normally it is no unique request from the consumers as the inciter is fully utilized for the shipment process. Under the contract, the seller is fully responsible for carriage arrangement of insurance transit as well as the goods and the cost of the arrangement is incorporated fully in their price of the contract. This is done in order o ensure that the consumer or the buyer does not have to worry about freight rates fluctuations of the stated insurance premiums that are involved in transportation after the products purchase.
The DNR as the seller, therefore, obtains the leading bills and the associated insurance policy and then delivers them to the consumers alongside with the price invoice and this, therefore, helps the consumer in paying on documents receipts. Since DNR is a consumer-centric organization, it is the full responsibilities of the organization to ensure and take full responsibility in taking the associated risks thus deliver the products to the mentioned destination in the contract. This, therefore, assist the corporation in maintaining god relationships with its consumers as it helps in building loyalty (Khan, & Zsidisin, 2011). Additionally, the consumers are able to trust the company because the company observes time and the states needs of the corporation in order to meet the contract criteria. Additionally based on the needs of the corporation the company is able to select its distributors based on the needs of its consumers as well as the requirements that the contract holds (Khan, & Zsidisin, 2011).
The FOB trade term is utilized by the DNR Company if the procedure and policy of the country of destination are challenging to handle. This helps in creating a better understanding between the buyers the seller as well as the transporters. FOB, therefore, implies that the DNR as the seller should, therefore, deliver the goods and then pass the rail of the ship at the mentioned shipment port (Rushton, Croucher, & Baker, 2014). This thus implies that the DNR consumer is entitled to barring all the involved risks as well as costs if losses occur or even when the products are damaged from that situation. Therefore the corporation holds no needs in taking risks as it arranges the schedules of goods transportation and distribution based on the instructions provided by the consumers. Based on the increased cost that the company incurs during transportation the incoterms utilized should consider cost efficiency (Ross, 2015). The corporation should ensure that it takes responsibility for all the involved risks, takes as well as duties and share them with the transport providers. This will help in reducing cost and earning loyalty from consumer’s to increased satisfaction (Eyob, & Tetteh, 2012).
Carrier Selection Criteria
There are distinct transportation modes in which products and services can be moved from the manufacturer to the consumers. The modes, therefore, include rail, air, water, cable, and space and pipeline transportation. Every mode, therefore, holds its individualized and unique features, it benefits as well as setbacks (Jacoby, 2010).
Presently DNR utilizes air transportation, sea and road transport modes which are thus determined by the urgency of the products and services delivery as well as the stated requirements by the consumers. As the control and instrumentation for tank management is a major part of DNR services and most of the corporation’s consumers are mainly based in southeastern parts of Asia (Margaritis, Anagnostopoulou, Tromaras, & Boile, 2016). DNR, therefore, purchases the instruments and then delivers them to the consumers for their plant's installation. The corporation mainly utilizes sea as well as road transport because of the large sizes and heaviness of the gods like cable drums control panels as well as devices to be utilized in the field. Trucking is thus utilized for shorter transport distances such as Malaysia as well as the provision of services which are characterized as the door to door. Moreover, this is associated with the lower time of transit as compared to other available modes of transportation as well as the high flexibility in regards to plans changes and well as transport tasks (Christopher, 2016). The limited volumes transport for every truck as well as traffic jams leads to delays while transporting goods to the consumer’s site. Seat transportation is thus utilized for the delivery of products to consumers whose location is distantly located (Christopher, 2016). Mostly this mode of transportation utilizes containers which vary based on different sizes. In this form of transportation the goods are packed into distinct containers in order to fill the containers as required. The idea of sea transportation for DNR Corporation is to transport bulky and heavy products. If the service is additionally required expertises are sent to the consumer site based on the three modes of transportation that the company utilizes depending on distance as well as urgency. Despite sea transportation lead time being longer the cost of transportation is low in comparison to the different modes of transport. The mode thus necessitates a packaging need in order to prevent the occurrence of damages that are influenced by weather (Waters, 2011).
Air mode of transport, on the other hand, is utilized for light products as well as products that are expensive. This is additionally utilized in situations where the consumers require the products to be delivered within the shortest time period. This form of transportation is the quickest thus DNR does not utilize it frequently because of the higher costs of transportation associated (Monczka, Handfield, Giunipero, & Patterson, 2015). At times the mode may be associated with delays of flights as well as cancellation due to weather changes and other risks sources. DNR is recommended to select carriers based on the cost of transportation, goods features as well as customer’s requirement. This should involve observing the needs of the consumers as well as the goods features. This is intended to save time as well as the associated costs in order to reduce expenditures.
Transportation is the major element for the DNR Corporation in as it is based on its ability to deliver services products as well as the developed promises to its customers (Wensveen, 2016). Therefore in order for the corporation to achieve an effective transportation strategy and transporters selection criteria that are effective in management of transport and distribution, it is necessitated to develop a more concise, clear and a well-targeted articulation of their target consumers segments, operations as well as suppliers. The developed strategy should thus recognize the needs of the consumers, the goals of the organization, the selection modes as well as the relationship of the carriers (Donselaar, & Sharman, 2013).
Carrier Relationship Management
In the recent business world, most corporations are utilizing outsourcing in managing carrier’s selection. This helps as it involves the utilization of a specified carrier instead of utilization of a privatized fillet (Bala, 2014). DNR is one of the many companies that utilize outsourcing for goods delivery as it holds no specified internally located logistic department. Through the transportation function being outsourced this reduces the worry need in regard to truck, maintenance, prices as well as purchases moreover the documentations freight which involves import , export documents and other documents that are related to freighting are not a necessity. The strategy of carrier management holds different advantages such as the capability to change and develop services of logistics without the present limitation. This additionally helps DNR in increasing customer’s satisfaction as the corporation is customer centric and the involved risks are shared with those that provide the services without involving the buyers. This helps the corporation in saving expenditures as the burden is reduced highly (Bala, 2014). Additionally, the corporation is able to benefit because the burden and leverage expertise has to comply with all the regulations of the government like the brokerage of customs.
However, the corporation is faced with various issues due to the use of outsourcing in managing carriers. While the services of outsourcing like processing of payroll and preparation of taxes the providers are able to view confidential information about DNR. This, therefore, threatens the security of the organization as confidentiality is not maintained. It becomes challenging for the organization to manage their services providers in comparison to the challenges that are involved while managing internal processing within the organization itself. The corporation is thus disadvantaged because it holds less control over the services that it has outsourced (Herrmann, Rogers, Gebhard, & Hartmann, 2015). This results in poor communication, delayed services as well as poor quality in managing the process. Additionally, the outsourcing process is expensive as the outsourced services in DNR Corporation are those that involve air freight transportation. Because of the convenient of this mode of transportation, it is thus associated with higher costs thus the company incurs more. They are generally expensive in comparison to other providers of transportation services as they guarantee goods safety and cargo tracking can be achieved easily through the internet (Stapleton, Pande, & O'Brien, 2014).
DNR is thus recommended to develop contracts that are long-term with logistics corporations as a third party. This is to that the shipment of heavy and large items n made effective. In building a long-term relationship this will help the company in acquiring discounts for the charges of transportation thus making a communication become easier for shipment planning (Cavusgil, Knight, & Riesenberger, 2013). This will enable the organization to be able to handle goods with ease and in an effective way. This is mainly because unloading and loading of goods will be handled in proper ways as most of the goods are large, valuable and heavy. DNR should additionally base on the following aspects when opting for a third party. This includes worldwide accessibility, service level, flexibility, cost, security management level, the lead time for delivery as well as the financial condition (Cavusgil, Knight, & Riesenberger, 2013).
Conclusion
Transport and distribution management is critical in supply chain and logistics effectiveness in a corporation. This is mainly because it is crucial in impacting the key issues throughout the global chain of supply as well as logistics distribution. In order to meet the requirements of the supply chain which are dynamic the corporation must adopt an effective strategy. The strategy is required to be responsive in regard to the demands of costs as well as services delivery of the company and the consumers. DNR Corporation holds an effective distribution and effective strategy which ensures that the customers are able to achieve satisfaction. This is mainly influenced by the fact that the corporation is a consumer-centric organization which puts the needs of the customers before its own interest. This helps in maintaining a good customer relationship. The effectiveness of the corporation can thus be proven by the fact that it incoterms helps in ensuring that the consumers do not have to worry about the goods delivery as the corporation takes full responsibility. Additionally it has accomplished to build a huge market segment through the developed customer loyalty. Its strategy of carrier selection and carrier management has been crucial in contributing to transportation and distribution management being success.
References
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