Introduction
Strategic Warehouse Management, Inc (SWM) is headquartered in the United States and deals with management and construction of warehouse operations. Warehouse management is the procedure of synchronizing the incoming goods, the ensuing storage and tracking of the products, and ultimately, the distribution of the commodities to their required destinations. Similar to all other corporations across the globe, the entity seeks to attain maximum revenue, and this can only be achieved by diversifying its operations. In this case, SWM is contemplating opening a warehouse in Australia with the aim of reaching out to its client base. The CEO reached the decision after analyzing the booming warehouse operations in the Australian region. Research indicates that the business connections between the United States and Australia are booming and therefore this represents a lucrative opportunity ( Coyle et al., 2016). With specific recognition to opening a new warehouse in Australia, the paper documents a supply chain that involves all the business operations Strategic Warehouse Management, Inc, will incorporate in its new business venture to reach a broader target market.
Warehouse Design and Organizational Factors
The CEO should understand the characteristics of the products that will be stored to crack the storage purpose primarily. For example, attributes including the number of units to be kept, unit weight and unit dimensions among others. Since it is all about the product, the CEO should categorize the items and provide a place for such in the warehouse design as per the needs. The dimensions together with facets of the warehouse infrastructure play a key role in deciding the layout structure within the warehouse. Such features influence the design of shelves, faculty of the installations alongside the distribution of the commodities inside the warehouse. There are a variety of limitations too that must will be considered. They include access, floors, windows, columns, boxes, lines as well as power lines among others. There are building rules too which directly influences the calculations of metal storage configurations and in due course, the warehouse design too. In many situations, basic warehouse design not only incorporates vacant space but aspects involving racks, lifts or transport equipment should also be considered. These elements impact the design scheme. They make it feasible to assess the design best elements to project requirements, any confines present and the want to incorporate new tools in the future according to capacity expansion (Grant et al., 2017). The CEO should provide an effective organizational structure in which all elements are taken into consideration. For instance, SWM will organize its organizational chart in row systems that will be split into three sections involving second medium-rotation regions on either terminal of an inner pure picking side.
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Considerations for Workforce Management
SWM should be well informed in the pay regulations of Australia; otherwise, the management might incur legal liabilities alongside other fines and penalties. It is crucial to understand the numerous regional factors including the pervasiveness of local labor inspectors alongside different elements to compliance and the manner in which they operate to shape the scope of enforcement and the rigorousness of punishments. In Australia, new and operating entities are legally required to offer special allowances for selected functions. SWM will need the right information as well as insights to track Australia's statutory benefits with the aim of ensuring that compensation packages tally with internal administration, while further maintaining competitive appeal to its target market. SWM should also ensure that all tax-connected issues related to international relocation and assignment or local pay are handled with utmost urgency. Tax burdens together with other penalties can be substantially minimized if the company manages its global workforce well, and that incorporates taking into account the precise standards and conditions of Australia (Gupta, 2018). The management of SWM should carefully assess global human resource data about domestic supply and demand, cost-of-living figures, rates of unemployment, alongside other demographics before deciding whether or not Australia is a good fit for the company. Finally, SWM will need to evaluate how much organizational talent will be required to send abroad versus the level of expertise that can be sourced from the domestic labor market.
Issues and Regulations related to Managing a Warehouse in Australia
Globalization provides several critical supply chain management issues to enterprises and companies. First, to reduce expenses in the supply chain, SWM is moving production operations to Australia because the country offers reduced labor charges, decreased levies, and inferior expenses of movement for raw goods. For SWM, outsourcing production includes not solely a single nation, but also the United States for different sections of their items. Nonetheless, outsourcing extends the manufacturing process globally and furthers the company’s procurement grid. Maintaining suppliers in dissimilar geographic regions confuses the supply chain. SWM will have to deal with, direct, and team up with parties in Australia regarding production, storage, as well as logistics.
Furthermore, it will have to expand or uphold fast release lead times to clients who wish to obtain their commodities on program despite the heightened intricacy in the manufacturer’s supply chains. Finally, SWM will also have to maintain a real-time approach to its production network from raw materials to finished commodities to guarantee the efficiency of their manufacturing procedures. Second, since SWM is expanding sales into the Australian market, localization of existing products needs a significant variation in the supply chain as it adapts its products to diverse cultures as well as preferences ( Hugos, 2018). There is an inherent danger of losing power, visibility, together with proper management over inventory, more so if enterprise applications are not incorporated. This is a process that necessitates diverse data structures across geographies. As the technology matures, SWM might skip EDI altogether and shift to a more contemporary API driven model to communication just as Australia has jumped landlines in favor of cell devices. Supply chain practitioners should decide if SWM technology is prepared to tackle these diverse elements of communication that surge from globalization and build a business case to ensure preparedness.
Export and Import procedures in the United States
To start with, a company is required to fill the forms; confirm its initial capital, address information, contact data, alongside other formalities. After some time, a corporation will be established. To establish a company, management should pay some government fees as stipulated by the United States government. Before deciding to start a company in the United States, it is fundamental to think through the export business properly. It is fundamental to conclude export business schedule as well. An export business plan is vital to help set the right operations and set goals alongside priorities. Proprietors also need to approach the local bank with company corporation documents in the accessibility of a business plan and apply for a bank account. Companies will be required to fill different forms and respond to banker questions regarding the future business activities. After some time, companies should have an existing bank account. Corporations need international banking service to send and receive money from abroad. Finally, after getting an existing entity with the bank account, proprietors are required to apply for an export and import license. This is further referred to as IEC number, which is the export and import license code number ( Monczka et al., 2015). Example, in the United States, IEC, is a code containing ten digit figures issued by the General Director of Foreign Trade and the Department of Commerce within the government of the United States. So, in order, to apply the application, companies need to approach the Department of Commerce in the United States, in the local branch.
Supply Chain Risks and Possible Mitigations
Internally, in a firm, one of the key risks is in comprehending the information of the supply chain and having the ability to take verdicts at the most appropriate time. Senior leadership should balance expansion needs with what the entity can manage to invest. In big businesses, the managers of the corporation focus more on maintaining stakeholder ideas as well as external shareholders, while heavily relying on their management configurations and operating approaches to have a say on the pulse of the procedure. There is an aspect of decision making that has to evaluate risk real time and guide business in a direction. Senior executives may lack all the details obtainable all along to evaluate the risks in conducting the progressions. Operational problems in the supply chain can happen even where the senior leadership believes they conduct a healthy and established supply chain which handles all the audit boxes. Cost optimization implies that operational decisions are held farther away from the central progression and become sluggish as a consequence.
First, companies must guarantee that there is visibility as well as an alliance of the value chain towards the final aim of supplying the client. Clarity necessitates a complete comprehending of value movement along the chain. It needs clear scrutiny of what right appears like, what entails success and the manner in which it can be computed, and elements that can prevent that success from taking place (Ross, 2016). Corporations need to recognize the ‘bottleneck,’ or the feeble connections in the procedure, and take the most effective action. This might be a risk appraisal which evaluates the danger and stopping actions or precise alternatives.
SWM Operations
To operate in Australia, SWM should outsource a variety of operations to ensure success in its routine activities. According to a 2004 survey by PricewaterhouseCoopers, approximately 80% of US, as well as European businesses, employ outsourcing for financial services. In the report, about 50% of executives reported that outsourcing economic elements had saved their corporations a moderate or more significant portion of the money. In case finances and managing the financial records are not a strong suit, then outsourcing bookkeeping is a right decision for SWM. Management would not want to make errors on the finances of the business. Leveraging the skill of a professional auditor and bookkeeper will save SWM numerous problems early on. Since the company will be running a startup in Australia, it is easy to lose itself in the details of management work. Handling email, planning and confirming appointments, booking travel plans, conducting the different study, invoicing customers, and paying bills represent essential tasks. However, since SWM is pressured for a time managing the crucial facets of the business, the management should hire a dedicated virtual assistant ( Coyle et al., 2016). Outsourcing recurring management tasks will save the company an essential amount of time, time spent with the managers focusing more on the ultimate vision.
Due to financial and staff constraints, SWM will outsource the design and the enhancement of their services; be it a website, an application, or a platform. This provides time to focus on assessing the leading technology of their services. There are public businesses that employed outsourcing to build their facilities. In case SWM decides to outsource the development of its services, it should consider business aims, the time to market, and the funding. In situations of testing for market demand, or when it’s vital to get to market rapidly, or if funding cannot maintain a full-time in-house enhancement team, outsourcing will provide the competitive advantage that the startup requires. SWM’s management should understand early on the significance of what outsourcing can do for the business ( Grant et al., 2017). Maintaining a clear grasp of what activities to outsource and when the procedure makes sense will allow the company to make better decisions. Human resources should primarily be managed according to the company's rules and regulations.
Budget Line Items
Human Resources Expenses: Ensuring that workers are rewarded on time and in totality is vital to upholding a productive and content workforce. Pay and wages for leaders and other employees can include a large percentage of a form’s expenses. Alongside base pay, human resource departments should budget for bonus salary, travel costs, employees’ compensation insurance alongside other items (Gupta, 2018).
Marketing Costs: Marketing includes advertising, sales, promotions together with public relations. Development alone can be a considerable expenditure for businesses alike, and corporations that have solid advertising financial plans might find themselves with a gain over their rivals. Public relations is typically a smaller cost, but sales promotions may cut into revenue margins and momentarily decrease gross revenue. SWM should budget effectively for sales advertisements to avoid falling short of income requirements (Hugos, 2018).
Investments: SWM should invest in property to expand growth. Investments in items such as buildings, property, equipment as well as technological infrastructure can cause SWM to incur considerable costs in short periods. Maintaining an adequate financial plan to finance investments in valuable and prolific assets is fundamental for short- and long-term expansion.
Operational Expenses: The common costs included in organizational financial plans are overhead charges in the form of rent alongside utility bills, the fees of products sold, legal charges and levies. Given the fact that a range of costs must be incorporated in organizational budgets, SWM should allow leaders to draft financial plans for their units, ascertaining that all aspects are accounted for in the process ( Monczka et al., 2015).
Sales: It is fundamental for SWM to account for anticipated sales in their financial plans in addition to costs. Budgeters employ expected sales as a preliminary point when providing financial decisions. The critical goal of any business plan is to accomplish aims while keeping general costs under total income. To approximate prospective sales, SWM will use past years' sales data as a preliminary point. The company will estimate the rate of expansion in sales for the immediate future based on its anticipations for the success of existing marketing efforts (Ross, 2016).
Measuring Success
Perfect Order Index: The complete order index will be used to measure the mistake-free rate of the whole supply chain process. This is a composite metric; ideal orders from each stage are computed to provide a performance indicator. Even if phases are performing well when multiplied the entire procedure will attain a 95% error-free percentage (Gupta, 2018). The perfect order index represents a good benchmark for supply chain performance. The index will be evaluated over time to measure progression improvement.
Cash-to-Cash Time: The C2C cycle, further referred to as cash conversion, computes the duration between when SWM sends money to suppliers and the time the company receives cash from clients. The C2C framework is another compound approach, comprising three supply chain computations namely days of inventory, payables, and receivables. C2C benchmarks alternate greatly; but, one study indicated the best-in-class companies appear to have a cash conversion grid of below a month in spite of the industry. With a reduced cycle, finances are using less time in the hands of people instead of being employed to SWM’s core activities. A study of more than 30,000 publicly-traded organizations indicated a direct link between reduced C2C cycles and superior profitability in 80% of cases (Hugos, 2018).
Supply Chain Cycle Time: This is an all-encompassing approach that will be used to measure the duration to complete a client’s order in case all inventory degrees were nil at the juncture the order was placed. This model is the total of the most extended lead times for all stages of the supply chain grid. This model is an excellent pointer of the total effectiveness of SWM’s supply chain. A reduced network means the progression is flexible, agile and receptive to environmental variations. Tracking supply chain grid time will recognize existing or potential issues so that SWM can incorporate corrective action (Gupta, 2018).
Conclusion
The paper documented the process of SWM’s commencing a new business venture in Australia. The supply chain analysis, in this case, incorporates all the business operations Strategic Warehouse Management, Inc, will include in its recent business venture with the aim of reaching a broader target market. It is fundamental to note that designing and starting a warehouse in a foreign nation is a tasking procedure that critical consideration of all factors. Managing the workforce in Australia is essential for SWM's success. The human resource element is the most crucial element for companies desiring to make it big in the industry. SWM's management should further assess the risks and problems associated with commencing business in a foreign country. The company should adhere to all the rules and regulations of conducting business that as stipulated by the Australian government. On the same note, SWN needs to outsource numerous services in the form of bookkeeping, financing, and technology among others to generate successful warehousing operations in Australia.
References
Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. (2016). Supply chain management: a logistics perspective . Nelson Education.
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.
Gupta, S. (2018). Key supply chain integration factors for the success of medical device startups (Doctoral dissertation, Massachusetts Institute of Technology).
Hugos, M. H. (2018). Essentials of supply chain management . John Wiley & Sons.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and supply chain management . Cengage Learning.
Ross, D. F. (2016). Introduction to supply chain management technologies . CRC Press.
