Business management principals and concepts refers to the main idea behind why a business is in existence. There principals and concepts are set in place to provide a meaningful guide for the business to follow in order to form a business pan and start up a firm. (Spacey, 2018). The transport and logistics profession are experiencing rapid growth as there are a vast range of opportunities in this profession providing roles for individuals such as logistics management, transport management and freight transportation.
Challenges faced in the logistics and transport profession
Some of the main logistics and transport firms include National Rail, DHL Supply Chain and Bay Freight. It is obvious that as the growth in the logistics and transport profession in still expanding at a rapid rate, the challenges faced by the top firms in this particular industry will also be growing at a rapid rate. Some of the challenges faced in this field of profession include Fuel Costs which will increase transportation cost if these costs rise, Business Process Improvement looking at the importance of new technology and how firms in this industry have struggled to stay on top of new technological advancements, Improved Customer Service as customers desire full knowledge of when goods will be received, Economy because as inflationary pressures rise it will have an impact on different cost sectors in businesses , Driver Shortage & Retention looking at the problems with keeping drivers on rotation, Government Regulations which looks at the regulations implemented by the government that will be challenging , Environmental Issues which looks how the firms will try and avoid emission chargers and Technological Strategy & Implementation looking at the cost and who will help implement these strategies. (FPO, 2017)
In an interview with the President of Life Sciences and Healthcare, Scott Allison talking about his work and the challenges faced by DHL as they are supporting the supply chains of health organisations in 22 countries. Scott Allison presented these problems to be the downward pressure on costs from an operational and regulatory perspective, the increase in expectations of patients which is propelled by greater understanding of medical issues and offered by the firm. Lastly, Allison states that the last challenge ties the rest together, he states how there is a lack of inpouring supply chain in order to solve inventory solutions. Through this, it is clear that if a firm supply’s themselves with their own inventory it will prove to be a big opportunity in terms of cost reduction for a firm like DHL. (Wadlow, 2017)
Furthermore, when speaking to the CEO of DHL Supply Chain, on the reasons why DHL have failed in the provision of stock to KFC. His reason was, “Really what has happened is that at launch we lost the synchronisation between the distribution operation and the transport operation. It’s a result of a combination of planning and execution challenges which ultimately disrupted the flow of product to stores. The solution leverages specialist transport equipment which is in short supply and not easy to obtain. That created capacity management challenges. So, most of our efforts have focused on creating incremental capacity to relieve pressure on the system and that's what we're working through on a very diligent basis.” (Todd, 2018)
Business principals and concepts effectiveness on the Transport and Logistics profession
Looking at a business principal and concept such as Innovation which looks at the process of implementing a new idea that is brought up in the business which will be converted into a good or service that customers will pay for. The concept of innovation is clearly very effective in the transport and logistics profession. This is because, as firms desire to become more innovative, it will mean that they will invest more in technology such as robotics and automation in order to drive down the amount of human workforce to improve efficiency in delivery and warehousing which will make transport and logistics processes faster. Looking at DHL as an example, their approach to technology distribution is to satisfy all customer needs through the togetherness of industry platforms. This gives an advantage of freedom to deal with variations in activity and scale. (DHL, 2014). Furthermore, through the use of technological advancements through innovation, 3PL firms like DHL are able to show the effectiveness of this on transport and logistics as they are able to provide customers with the ability to track their goods through the use of a satellite. Business theory will suggest that as these transport and logistics firms become more technologically advanced, they will reduce their labour force in order to keep cost down. This is not the case as economic trends in the US show that the Transport and Logistics Sector accounts for 2.3% of the total US employment showing that this sector went through a 12.7% growth between 2008 and 2017 with an addition of 416,316 jobs (Damicis, 2018).
Additionally, the concept of just in time which looks at goods and services being provided to customers in relation to the forces of demand. In the current state of the market, demand is very volatile meaning there are rapid changes in consumer taste and preferences. Therefore, businesses cannot be forecast driven, but demand driven. This shows that with the use of the concept of just in time firms can reallocate resources in order to add value to other parts of the business. This clearly shows how this business concept has been effective in the transport and logistics profession. But for this to be fully effective, capital contingency must be aligned to inbounds and outbound through material resource planning. For example, a firm that has mastered the just in time process is Toyota. This is because raw materials are not brought into the production floor until and order is made by customers. This method has allowed Toyota to keep a minimum amount of inventory which will mean lower cost. (Wilsom, 2015)
Impact of the changing international business and economics environment on transport
The changing international business and economic environment can be narrowed down to the topic of globalisation. Globalisation refers to the integration between global economies and business through methods like international trade and information communication technology and in terms of transport it covers shipping and aviation. Although recent trends have shown that people will shift away from shipping due to the speed, the increase in the level of globalisation has led to an increase in in level of international shipping activity. The available evidence shows that ocean-going ships currently consume 2% to 3% of world fossil fuels. Air transport has also played a key part in propelling globalisation. The rise in the changing international business and economic environment has contributed to the restructuring in order to meet demands of global markets. 40% of global trade moves through air transport. While individuals and markets benefit from this improvement in the changing international business and economic environment on transport, the environment suffers. It has been found that there has been a 1% in the level of trade leads to a 0.58% increase in the level of CO2 emissions. (OECD, 2010)
Furthermore, the changing international business and economics environment on transport has caused further negative externalities. The activities of transport have contributed to the general climate change. As the transport industry experiences rapid growth, it releases millions of gases annually into the atmosphere, computing for between 25% and 30% of all greenhouse gas emissions. Although, there is a clear argument regarding the degree to which this actually impacts the environment. Gases like nitrogen oxide also participate in the deterioration of the ozone layer leading the earth’s surface into radiation. Noise levels is also another effect of the changing international business and economic environment on transport. Exposure to noise levels above 75 decibels (dB) hamper hearing intensively, noise as a result of transport in urban areas accounts for 45 to 65 dB which deteriorates the quality of life. (Rodrigue, 2017).
Conclusion
Conflicting evidence presented earlier in the essay clearly states the negatives business concepts and principals have had on the Transport and Logistics profession. It is presented by the information from this essay that when these concepts come into play, it leads to externalities on society such as air pollution as the air quality will be deteriorating, noise problems and water pollution. However, while these negatives are very important, I believe that the degree to which these business concepts and principals have enhanced and propelled this transport and logistics profession outweighs the benefits. Not only do these business concepts and principals support technological advancements in the Transport and Logistics profession, they also contribute to the level of employment, resolving problems such as employee redundancy and contributing to the general employment rate as living standards rise up.