Question

Fibre2Fashion Ltd. is the country’s largest manufacturer of spun yarn with well-established market. Fibre2Fashion Ltd. has good reputation for quality and service. Their marketing department identified that the potential for global market is expanding rapidly and hence the company undertook exercise for expansion of the capacity for export market. The company formed team of Marketing and Materials department to study

the global logistics possibilities. After extensive study, the team came up with a report on global logistics and submitted that global logistics is essentially same as domestic due to following similarities: • The conceptual logistics framework of linking supply sources, plants, warehouses and customers is the same. • Both systems involve managing the movement and storage of products. • Information is critical to effective provision of customer service, management of inventory, vendor product and cost control. • The functional processes of inventory management, warehousing, order processing, carrier selection, procurement, and vendor payment are required for both. • Economic and safety regulations exist for transportation. The company had very economical and reliable transportation system in existence. For exports as well they decided to evaluate capabilities of their existing transporter and entrusted them with the job of transport till port. For customs formalities they engaged a good CHA after proper cost evaluation and entered into contract for freight with shipping company agent. The response for company’s export was very good and the company could get as manyas 15 customers within first two months and reached to a level of USD 250,000 per month by the end of first half of the year. Based on this response the export volumes were expected to grow to a level of USD 400,000 per month by the end of the year. When the review was made at the end of the year, company found that export volumes had in fact come down to the level of USD 120,000 which was much lower than it had reached in the first half of the year. The managing committee had an emergency meeting to discuss this and the export manager was entrusted with the task of identifying the reasons for this decline. Mr. Ganesh decided to visit the customers for getting the first-hand information. When he discussed the matter with the customers, the feedback on the quality and price were good but the customers were very upset on the logistic services due to delayed shipments, frequent changes in shipping schedules, improper documentation, improper identifications, package sizes, losses due to transit damages etc.

After coming back, the export manager checked the dispatch schedules and found that production and ex- works schedules were all proper. Then he studied the logistics systems and found that the logistics cost was very high and all the logistics people were de motivated due to overwork and were complaining of total lack of co-ordination and the system had become totally disorganized.

Questions

1. Explain the problems experienced by Fibre2Fashion Ltd. What is the main cause of these problems?

(15Marks)

2. What logistics model should the company go for to ensure proper operations of the company?

(10Marks).

Note : Answers should be in word format and in details . ( you can copy and paste from the net )

Answer 1

Answer:-

1)

Fibre2Fashion Ltd is confronting various problems now boss among them being that profit edge is falling. The nature of item is declining and that is diminishing profit.This weakening in quality is because of absence of coordination among the workers.

There was nonappearance of interior control like money management,fraud,increasing human blunder, business issue , there was no proper soft product application.etc.

The primary driver was absence of coordination.Without proper coordination among the individuals a firm can't work successfully.Proper coordination brings all the individuals from the association together which is especially important for smooth working of the firm.

Thus coordination which joins everybody in the association was deficient.

2)

Since profit was declining the primary significant calculated reform should be to lessen cost of creation. The calculated individuals should work for less time and should not be overworked.Since because of absence of coordination, the framework was disarranged , proper coordination among the individuals should be there in light of the fact that coordination is the principle main thrust of proper administration of a firm.

Logistic administrations like shipment delay, misfortune because of harms brought about during progress, changing planning of shipment should be reduced. Documents of the company should be properlymaintained.

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