The United States based electric company plans to sell its products such as tablets, personal computers and cell phones in the foreign market. The company wishes to set up warehouse and distribution process to support the expansion of its business products into the European Union and China markets. The company will provide electronic products in the China and European market in an efficient and speedy service. For a smoother flow of goods, aspects like the transportation policies, transport methodologies, warehousing, and distribution as well as inventory management must be taken into account.
Transportation Regulations and Policies
The transport policy and regulation seek to improve agency, freight, cargo management and enhance sustainability, efficiency and effective transportation of the company's products from the United States into the European and China markets. The transport policy makes practical decisions that are a concern with the distribution of transportation resources, which includes management and ruling of existing transportation undertakings ( Slack, Notteboom, & Rodrigue, 2017). The company would have to cooperate with the government agencies in Europe and the China that are frequently involved in policy developments as they manage the transportation structure and have the authority in the current transportation methods.
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Due to the practical aspect of the importance of transport in social, economic and political activities of a state, the transport policies are necessary. Through transport, which is a significant mechanism of supporting, developing and influencing the economy, the imports need to be regulated to protect the local industries. The policies are frequently established as an issue of national security which creates sovereignty and ensures control over national borders and space. A lot of emphasizes has been laid down on the safety regarding freight clearance that takes place at the ports during departure as well as the entry of goods or passengers ( Slack, Notteboom, & Rodrigue, 2017).
The issue of public safety and the environment has led to the development of policies that impose the standards of products to be imported. The company needs to ensure the electronics being exported to the foreign market meets the set standards of the said economy. The products should be of the standard, licensed and meets the environmental standards that are fixed in response to the growing awareness on the imports impact to the environment ( Slack, Notteboom, & Rodrigue, 2017).
There are the set transport rules and policies that govern on the uncontrolled completion of imports and the products manufactured locally. The unregulated competition leads to market supremacy by a company, thereby attaining monopoly control. That kind of supremacy leads to issues that affect the public interest like availability and price as monopoly leads to high prices. The policies also intervene to limit foreign ownership of vital industries in the concern of servicing more foreign products than the local interests ( Slack, Notteboom, & Rodrigue, 2017).
Transportation Methodologies
The company needs to take into concern the methods of exporting the electronic products to the international economy. The method of transport is essential in planning the transit of commodities. There exist four main methods of bringing in and exporting; mainly road, in flight, sea and rail even though it is essential to use more than one form of transport. The need to handle logistics through the company or outsource the work to a freight forwarder is a choice to be decided. Other factors that will influence the type of transport to use include destination country and type of goods ( Department for Business, Innovation & Skills, 2013).
In the case of exporting electronic products from the United States to China and Europe, air and sea transport are most effective. In using shipping for international trade, it will meet the need to export large quantities of products, but it will require no pressure to deliver quickly. The cost is effective for large volumes as freight forwarders will consolidate consignments to reduced cost ( Department for Business, Innovation & Skills, 2013). The exporters in recent years have access to different ocean transportation service providers with a worldwide network capable of handling the cargo shipment of any size to any destination in the globe.
In history, the airfreight industry has observed stable growth in reaction to the modernization of plane design and increase in the call for fast transit. For international and domestic transport, many companies are willing to take on the added expense of air cargo as it can provide more rapid transit which is highly economical. However, the size and weight of the goods being transported should be considered. The aircraft have limitations regarding loading capacity; therefore, size and weight of the shipment are a vital concern ( Department for Business, Innovation & Skills, 2013).
Warehousing and Distribution
Warehousing and distribution are precarious steps in business expansion. The efficiency of the warehouse relies on the organization of inventory items which should be done in a logical and effective method. The stock items should be placed in the right place and at the right time, be organized in a defined location, type, storage profile, capacity limit, order picked on inventory intelligence decisions and the location codes should reflect the physical layout of the warehouse. The distribution objective is to accelerate growth, improve customer satisfaction and the bottom line to enhance profit. The distribution operations, boost business productivity, improve services and order accuracy. Through the perfect plan of materials and resources which are required to meet customer demand, the inventory level ensures accurate flow of information from manufacturing, distribution to the next progressions.
The company may opt to third party logistics which entails the use of the third party to subcontract elements of the corporation's distribution and satisfaction of services. In warehousing, the third party logistics provides the specialized and integrated services which are scaled according to customer needs and the market conditions. The services go beyond logistics and consist of value added services related the procured goods. The 3PL providers have a better related knowledge and tremendous expertise than the manufacturing company and more worldwide network assisting in time and cost efficiencies ( Christopher, 2016). The information and equipment are regularly updated and adapted to match the needs of customers. The company may lack time, expertise and resources to adjust the system and equipment as fast.
Inventory Management
If inventory and stock level are not properly managed, it could hinder cash flow, the rise of cost, labor and time wastage, inefficient supply chain, low sales and customer disappointment. The inventory management will help the company remain stocked with the essential goods that the client's needs. The restocking of products should be done in a manner that does not lead to overstocking or stock deficient. A successful inventory management aids in meeting the target because demand and supply often change with the season and the product lifecycle. For better inventory management the company needs software that will help them track all their inventories, orders and vendors ( Christopher, 2016). Most of the startup's frequency record inventory quantities in Microsoft Excel as it is readily available though it lacks features that are needed to analyze data.
Inventory management is an important part of business, and companies deploy specific common techniques for maintaining cost and potential profits. Such techniques include;
Just in time; the method works to reduce the volume of inventory that the company has for a given period. The products are purchased a few days before they are needed for distribution or sale. The technique aid the company in saving the cost of storage and eliminates deadstock on shelves.
Dropshipping; the technique involves a system that ships the product direct to the customer, thus no stock and benefit from the positive cash flow cycle.
Bulk shipment; the technique banks on the delivery of bulk products as it reduces the cost of purchase and it is the dominant method in the market and is applied to products with high customer demand.
References
Christopher, M. (2016). Logistics & supply chain management . Upper Saddle River, NJ: FT Press.
Department for Business, Innovation & Skills. (2013). Transport and distribution for international trade. Retrieved from https://www.gov.uk/guidance/transport-and-distribution-for-international-trade.
Slack, B., Notteboom, T. & Rodrigue, J. (2017). The Nature of Transport Policy . Retrieved on 11 April 2017, from https://people.hofstra.edu/geotrans/eng/ch9en/conc9en/ch9c1en.html.
