The International Situations that Influence Logistical Strategic Planning
Strategic planning refers to a set of processes that supply chain based companies undertake in developing a wide range of strategies that can help the organization in meeting the set objectives. In this perspective, companies are forced to develop strategies that have the drive to take the organization to a higher level and remain competitive in the industry (Ballou, 2007). Strategic planning takes place at three organizational levels which are: corporate, business, and functioning level. Senior management formulates corporate level strategies. The middle-level managers devise corporate strategy. At the business level, strategic planning policies are formulated by front-line managers and supervisors. ORDER YOUR PAPER NOW
In today’s highly competitive business environment, supply chain management assumes significant roles in effective logistical planning for multinational organizations. As a result, the field of logistics has attracted serious attention by researchers, as most businesses remain challenged in finding the right strategies of meeting the ever-increasing market expectations at the manageable expense (Blanchard, 2004). Different supply chain based firms such as Wal-Mart, Microsoft, Samsung, Coca-Cola, and Toyota operate in the global market and have always used different logistical planning strategies thus their success in the market. The environment in which businesses operate, organizational structure and culture, nature of leadership, and availability of resources determine the success of strategic planning in these organizations (Blanchard, 2004). This paper will analyze the international factors in detail and explain clearly how they influence the strategic planning processes of a company.
International Situations that Influence Logistical Strategic Planning
Organizational Structure and Culture
Different multinational supply chain based firms have different structures that reflect their present reporting relationship, reputational image, and internal politicking. Organizational structure is defined by division of labor, order, and unity of command, decision-making processes, powers distribution, job duties and responsibilities within the business enterprise. In the procurement department, different departments work together in logistical strategic planning. A formal pattern of departmental interactions and coordination enables the supply chain management to link individual and organizational tasks together when formulating tendering, ordering and bidding analysis processes of the organization with top accountability and integrity (Blanchard, 2010). The strategic planning management informs all people with the firm their duties across the borders, and this helps in proper monitoring of all procurement activities in all branches located in different countries since every branch has a manager who is accountable for all procurement and logistical decisions are taken.
The culture of an organization is strongly formed on the beliefs, norms, attitudes, values, and behaviors of its employees. Organizational structure determines the success or failure of logistical strategic planning. Both organizational culture and structure are unique and diverse attributes towards corporate personality. Multinational companies operate in different countries where differences in cultures exist and are felt by the management at the headquarters. Valuing different organizational cultures leads to successful strategic planning by multinational companies (Rushton & Walker, 2007). When top-down communication is embraced, the top management shares the strategic logistics plans to the employees and gets feedback from employees. Also, the bottom-up communication approach helps in successful logistics strategic planning where the employees communicate their ideas and thoughts to the supervisors. This means that global companies such as Wal-Mart succeed in logistics strategic planning due to the adoption of both bottom up and top down communication methods. ORDER YOUR PAPER NOW
Internationally, every company must have leadership. The employment of qualified, experienced, skilled, and innovative leadership by a supply chain based company such as Samsung leads to success in logistics planning processes and decision making. On the other side, bad leadership leads to the failure of an organization in the procurement and supply chains management industry where logistics management ranks (Morton, 2005). A multinational company operated in more than one country, and having good logistics managers’ enables companies to make more coherent and cohesive logistics decisions that cut across all borders and boost customers services as demanded in the market. Companies with good logistics management representatives in different countries inculcate an environment that promotes the ethics, values, character, knowledge, beliefs, and skills of the followers hence success in strategic planning.
Strategic planning involves setting SMART goals by the management, to be achieved in a certain timespan or period of time. Important to note, the logistics supply chain industry is a highly significant sector in the business world. Thus, the products and services offered to the market must be of high quality and without any defects. Different strategic leaders adopt different managerial styles and procedures when making decisions, and this influences the supply chain either negatively or positively (Rushton & Walker, 2007). Multinational logistics managers need to explore and study in in-depth detail which strategies will work best in different countries for each branch is composed of employees of varying diversity in terms of skills, beliefs, and expertise. In this essence, leadership entails showing dedication and commitment in a meaningful manner that is beneficial to the enterprise and aligned to the set vision and missions by an enterprise.
Organizational resources comprise of human resources, availability of capital, technology, and physical resources. All organizational resources are planned, controlled, and monitored by employees who form the most critical asset of any organization. Internationally, the human resource department is viewed as an administrative function whose fundamental objective is aligning all organizational strategic plans. Strategic planning in the logistics department is undertaken by people, the human resources whose quality is key to the nature of logistics decisions taken by the company (Poirier et al., 2010). The success of a supply chain company both domestically and globally is influenced by the availability of skilled, innovative, qualified, and experienced human resources who work in the field of logistics management. The procurement processes, bidding processes, and tendering processes are investigated by the human resources of a company. High quality and skilled personnel help in proper logistics strategic planning- and this is a global factor. ORDER YOUR PAPER NOW
In the corporate world, there is proper alignment of logistics strategic planning and decision making with human resources, and this helps in the proper management of financial resources committed in a given project by the company. Excellent human resources are innovative and have the capability to apply sophisticated technologies in decision making in a manner that is cost-friendly and effective to the company (Morton, 2005). The finance employees control the finances of a procurement firm, and this applies to all companies across the world. The problem of limited human resources in companies needs to get addressed in order to boost logistics strategic planning. The current business environment changes focus on competitiveness, business growth, profitability sustenance, and increased business reputation. With the availability of skilled and qualified human resources, decision making in the logistics department is enhanced and hence increased the quality of products and services by a company thus achievement of set vision and mission of an entity.
PEST factors are another internationally felt situation that influences logistics strategic planning. PESTEL factors comprise of political, economic, social, and technological forces whose impact on business influences the processes of logistics strategic planning both positively and negatively. In particular, multinational companies such as Coca-Cola operate in over 100 different countries where the political, economic, and social environments differ. The impact of political forces such as business regulation, incentives, and subsidies provision, taxation policies, and the imposition of quotas is felt by supply chain based companies when exporting, importing, or doing business from different countries (Atwater et al., 2010). An excellent political environment makes it easy for strategic logistic managers to lay down strategic policies for a given period of time with certainty that the goals with being realized without having to change the strategies in an attempt to meet the set objective.
Different economic business environment factors impact the success or failure of international logistics planning by supply chain companies such as Wal-Mart. For example, inflation levels, tax rates, unemployment, labor laws, and economic depressions impact logistics strategic planning. Globally, the challenge of inflation is known for bringing failures in the planned goals of a firm in that it creates economic disabilities. On the other side, differences in social compositions in the market influence the type of decisions taken by logistics managers at different world markets (Rushton & Walker, 2007). Lastly, technology boosts the quality of strategic decision making by various logistics managers hence global supply chain success.
Based on the above study, organization structure, culture, resources, leadership, and business environment affect the international logistics strategic planning by supply chain based companies. Effective logistics planning seeks to improve the quality of products and services offered by an organization to its customers. Supply chain based enterprises whose global reputation is high are more competitive, sustainable, and preferred by most customers across the globe. In practice, strategic decision making is aligned with the vision and mission statement of an organization. Also, enhancing effective communication between the top management and employees boosts the quality of international logistics strategic planning. And this gives companies a competitive advantage over its rivals.
The aim of logistic strategic planning is to align all supply chain goals and develop a cost-effective plan to achieve the set goals. In this perspective, logistics management should understand the nature of the business, its environment, capabilities, and competitiveness in order to formulate useful strategies and initiatives. The logistics management must ensure creativity and innovativeness in the enterprise by ensuring that the employees hired are skilled, knowledgeable, and qualified to the nature of the business that the company runs. Options considerations before making a decision are also required in order to boost the quality of logistics strategic decisions and plans. Further, the logistics management needs to understand the nature of business environmental factors in which it operates and consider them when making both short-term and long-term goals. Finally, there is need to integrate all resources within the supply chain firm in order to enhance the processes of monitoring, reviewing, and assessment of the beneficial use of finances, application of technology, and utilization of physical resources by the logistics management for the benefit of the whole organization. ORDER YOUR PAPER NOW
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