XYZ Company Logistics Plan

XYZ Company Logistics Plan
Executive Summary
XYZ Company sources materials from the vendors and processes them into finished products for customers. It procures the inventory items across many regions in the world using a network of suppliers. The products sold to the customers include electrical appliances, such as kettles, iron boxes, electrical heaters, among other products. As the Vice President of the XYZ Company, I will develop the logistics business plan that will see the company realize its overall supply chain, logistics, and company objectives and goals. The plan will identify the inventory strategies, logistics goals, location strategies, and transportation strategies, which will be applied to achieve the set goals.
Logistics Goals
The business will aim at achieving several logistics goals with the focus placed on the customers’ requirements and needs. The company aims at achieving logistics efficiency. The logistics efficiency will encompass reduced warehousing costs, transportation costs, order processing overheads, inventory costs, and other overheads (Clesi 1). The goal will be achieved through various methods. Enhancing the warehouse activities and processes, layout and design, and flow will contribute to the logistics efficiency. This will be realized by operating closely with the transportation service provider and developing a two-way association with the logistics players to exchange the emerging issues, best practices, and openings. The company will also achieve the objective by requiring the vendor delivering value-added service, including marking, packaging, and quality checks (Harris 1).

This will improve the risk of mistakes and errors observed at the source. The value-added services at the source all facilitate product and service movement across the warehouse.
The order processing and logistics workflow of the company will appear as follows.

Furthermore, the company will aim at improving the customer service. The company will improve the customer service by integrating its merchandising, marketing, and fulfillment operations together. Through the fulfillment operations and outbound and inbound transportation, the firm will be able to deliver the customer pledges by ensuring that the shipment is conveyed and delivered on time and in required state to the clients (Clesi 1). The reverse logistics will also be executed to guarantee between customer service and support. Accordingly, the company will offer the return services to its customers to allow them to bring back the unwanted products for refund or replacement.
Another logistics goal for the company will be the increased sales and improved customer relationship. The company will achieve this goal through the use of the customer management system. The CRM will ensure that there is enhanced financial visibility, with secure customer information and access to the required data to finish specific process within the logistic process. The CRM will also improve the customer experience and customer service encounter, and build sales management visibility within the logistics process (Clesi 1).
The projected revenue and profits for the next five years are as follow.
Year 1 ($) Year 2 ($) Year 3 ($) Year 4 ($) Year 5 ($)
Revenue Warehousing 5,000,000 7,000,000 9,000,000 10,000,000 12,000,000
Distribution 1,500,000 1,600,000 1,700,000 2,800,000 5,000,000
Total Revenue 6,500,000 8,600,000 10,700,000 12,800,000 17,000,000
Inventory Cost Depreciation 200,000 245,000 350,000 470,000 680,000
Insurance 78,000 120,000 135,000 320,000 450,000
Maintenance 26,000 89,000 97,000 150,000 210,000
Fuel 20,000 35,000 46,000 102,000 165,000
Gross Profit 6,176,000 8,111,000 10,072,000 11,758,000 15,495,000
Rent 1,560,000 720,000 810,000 830,000 900,000
Salaries 2,500,000 5,400,000 6,500,000 8,200,000 9,800,000
Bad debt 30,000 90,000 98,000 101,000 120,000
Operating Cost 4,090,000 6,210,000 7,408,000 9,131,000 10,820,000
Operating Profit 2,086,000 1,901,000 2,664,000 2,627,000 4,675,000
Interest 100,000 100,000 105,000 108,000 111,000
Net Profit 1,986,000 1,801,000 2,559,000 2,519,000 4,564,000
Inventory Strategies
The logistics costs will be reduced via the use of effective inventory strategies that optimize the operational and transportation costs of the overall logistics process. Two important strategies will be applied to ensure that the warehouse and stores are free from excess inventory items. The first inventory strategy will be the reduction of supplier and vendor lead-time. The company will negotiate quick supplier lead-time and find out more suppliers that can fulfill a faster replenishment structure (Clesi 1). When the lead time from the suppliers is higher, there is a greater level of safety stock that the firm will have to hold to make sure that all orders are met. The impact will be amplified carrying costs to keep additional stock amounts. Consequently, the company will aim at realizing a faster lead time, which will provide the inventory planners with more flexibility when replenishing the inventory items and enhances fewer inventory components to be kept (Harris 1). The effect of this strategy is that the carrying costs will be reduced in the short-run. Furthermore, a long-term risk of holding obsolete or excess inventory will be reduced.
Another inventory strategy that will be used in the logistics processes of the company is centralized inventory control. The logistics activities will encompass multi-level inventory maximization. The company will centralize its inventory control using the optimization software. The software will allow the planners and analyst to build more precise schemes at every level of the supply chain and logistics process, with a complete inventory schedule that consists of optimal cycle stock, safety stock, and demand forecast anticipations (Harris 1). The business will also apply supply chain simulation to predict and define target service levels redistribution capacities, and inventory amounts for moving the materials between the stores and warehouse sites of the company. The centralization of the multi-site or multi-level logistics and supply chain models will raise the global inventory rate visibility for proper planning, outsourcing, and procurement implementation.
Transportation Strategy
The company will operate within the global supply chain and logistic. As a result, some of the procurement and outsourcing activities will involve other firms from foreign countries. As such, all modes of transport will be used to transport and deliver items to and from the company. Specifically, trains, trucks, airplanes, and ships will be the most common means of transport for the materials in the supply chain. The company will use the motor carriers to ship its products from the source and to the customers. Specifically, the modern trucks loaded with a container of 40 foot and carried on a trailer will be used for the shipment purposes. The shipment size will depend on the frequency and size of the orders placed together with the demand and supply levels. Moreover, the carrier relationships will also be built and maintained to ensure a smooth logistic process (Harris 1). The company will work together with the carriers by ensuring that the necessary data and information is disseminated to the carriers. The relationship will also be a win-win version for all the parties involved. Again, regular communication will be conducted for updates of the routes and reviewing the performance, as well as creating a chance for sharing the opportunities with the carriers (Harris 1).
Location Strategy
The company will create both medium and large facility sizes across the globe. The medium sizes will be established for the regions with fewer demands and supply while the large facility sizes will be meant for the areas with supply and demand booms. Further, the company will operate with a total of 20 facilities worldwide, including the large and medium facilities. The facilities will contain the required inventory and stock items that customers order. Also, depending on the factors, such as labor and energy availability, transportation costs, infrastructure, and legal regulations, the location of the company facilities will be evaluated and determined (Lewis 1). The regions with the highest weight factor-rating will be selected for the site of the facilities in the respective countries. For example, in the United States, the Los Angeles Basin will be one of the sites for the facilities.
A sample factor-rating of a particular region for the location of the facility will be as follow.

Similarly, the firm will make use of both private and public warehouses. Where the public warehouses are not available, the firm will build its private warehouses that suit its merchandise nature and logistics needs (Lewis 1). Besides, the company will use the available public warehouses to remain flexible when there is seasonality of the demand and supply, and when it realizes a need to avoid the cost of constructing its warehouse. Ultimately, the business will be keen to assign the stocking points to source points, and allocate the demand to sourcing points, as well. These assignments will involve determining where to source or stock items to match the customers’ demand level. The level of demand for the products in a particular region will determine where to source and stock the required items to produce the products.

Works Cited
Clesi, Robert. To boost Shipment Productivity, look to the Cloud. Inbound Logistics. 2016
Harris, Ken. Who are you doing Business with? Inbound Logistics. 2016
Lewis, Chris. Logistics Hotspots: Nine that shine. Inbound Logistics. 2016

Appendix
The Links to the Articles
http://www.inboundlogistics.com/cms/article/to-boost-shipment-productivity-look-to-the-cloud/http://www.inboundlogistics.com/cms/article/denied-party-screening-who-you-are-doing-business-with/http://www.inboundlogistics.com/cms/article/logistics-hotspots-nine-that-shine/