Sample Term Paper
In the second part George presents the idea that how organization are getting affected by this transportation turmoil. According to the author from the beginning when this business started manufacturing, sourcing, distributions and other functions were performed with very little hustle due to the declining cost of logistics, improved means of transportation and stable fuel costs. Now days the supply chain and the distribution mechanism has become more complex and the increasing cost of logistics has made very difficult for organizations to get benefit from cheap labor areas. The congestion and blockages has made the supply chain process problematic, longer and inconsistent (Stalk, 2009).
Identification of new concepts:
George has classified cost into two categories, the obvious cost and the less obvious costs. By obvious cost what we mean to say is the rising fuel prices which cannot be ignored. It has resulted in making the logistics from oceans away very unappealing and as a result the overseas business has suffered dramatically. The less obvious costs include the transportation infrastructure which costs extra fuel consumption while passing through metropolitan area of the city.
Apart from the above mentioned direct costs there are some indirect costs on which the writer has thrown light. The time that these good take in process of reaching their desired destination is another vital factor in increasing cost (Craig, 1997). The longer it takes to reach the longer the companies responsibility would be held alongside the shipment. This overcrowding hurts an organization big time both in terms of monetary value and time value.
Neglecting the hidden cost:
According to George there are some hidden costs that are often neglected by the retailers. This includes the consumers for a particular product. If the supply and distribution system is not swift it might be possible that the product become unwanted by the customers because of any reason. Another reason could be not having products that the customer wants to buy due to slow transportation. The resulting factor of these elements can be selling at market down prices and loss of immediate sales. Both of them have tremendous effect on the organization’s overall image and reputation (Burnson, 2009).
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