Implementation of effective logistics management system in motorcycle assembly plant a case study

Abstract

Logistics management is a part of supply chain management; it plans, implements and controls the flow and storage of goods and services in order to meet customer’s requirements. Logistics management is a basic factor in the success of any company’s operations and has a direct impact on its bottom line. Meeting customer demand and providing superior service is one of the most important benefits of good logistics management. Consumers demand better service and this mandate has ripple effects up the supply chain, creating a need to provide fast, accurate and quality service. Logistics management is responsible for satisfying customer demands. Logistics management is also important for creating visibility into a company’s supply chain as proper logistics management drives increased revenue. In recent decades the automotive industry has established a variety of new forms of logistics integration between automobile assemblers and their suppliers, in particular those in the first tier. Motorcycle market is expected to grow 25% every year. Company A is the only sole distributor of Japanese Motorbikes in Bangladesh. It is a well-established business group in Bangladesh. It plans to expand its distribution channel nationally and increase its reach to customers with the Japanese motorcycles’ brand value. As “Company A” has developed its logistics system to an extent within short time but to be competitive with other motorcycle companies the logistics system has to be improved and new developed systems need to be implemented immediately to capture market share. Company A wants to implement world class logistics system for on time supplying of all the products to the customer with the focus of customer satisfaction and cost effective manner. With a vow to implement an Effective Logistics Management System (ELMS) at Company A, the existing logistics management system has been analysed by interviewing various department heads and problems were identified. Using cause and effect diagram/ Fishbone diagram, the root causes of problems were found. To integrate various sections of Logistica Management System (LMS). CPFR moudule has been implemented in this study and demand was captured by using Delphi method. After implementing this module a positive changes in the results have been found compared to the exixting system where the slaes deviation percentage error shows a improved result of 9.6% which was previously 23% and the delivery miss issue has been reduced by 6.4% and also average inventory cost has reduced to 45%.