Timberland Corporation's Growth and Impact on Logistics and Supply Chain Management
Timberland Corporation has experienced tremendous growth during the 1970s, which has had a substantial impact on its logistics and supply chain management systems. As the company expanded into international markets, its once simple supply chain management and logistics systems proved unsuitable. The unexpected rise in demand generated issues with transportation, inventory management, warehouse management, and distribution.
Financial and Competitive Implications
Less visibility in the supply chain, customer loss, diseconomies of scale, a tarnished brand image, and increased transportation costs are all financial and competitive implications of these issues. The solutions to the logistical problems include outsourcing of transportation, implementation of Just-In-Time inventory management system, reduce overhead costs, and ensure consistent quality inputs for production.
Importance of Proper Logistics Management
Why?
Proper logistics management promotes increased revenue and ensures improved customer service which helps to generate more business. It also enhances the satisfaction of customer demands and control over inbound freight and inventory levels hence cost cutting (Christopher, 2016). Proper logistics management will also create visibility for the company’s supply chain.
Consequences of Solutions on Financial Performance and Competitive Position
The consequences of such solutions for the company’s financial performance and competitive position include reduced delivery times, improved customer relationships, enhanced revenue and profit as well as optimized inventory levels. Efficient logistics and distribution systems ensure that the corporation’s products are available to customers on demand.
Reasons for Using Third-Party Manufacturers
Response to question three
The reason for using the third party manufactures maybe to increase its flexibility or because such producers have more production capacity than Timberland hence can respond faster to increased production requirements. It also wants to eliminate such overhead costs as quality insurance personnel and utilities. The company cannot outsource all its production because that is its core competency. Timberland does not manufacture its products in the United States because of the high cost of labor there compared to the other two chosen countries (David, Dorn & Hanson, 2013).
References
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
David, H., Dorn, D., & Hanson, G. H. (2013). The China syndrome: Local labor market effects of import competition in the United States. The American Economic Review, 103(6), 2121-2168.
