ADVANCED LOGISTICS MANAGEMENT

(ALM811S)
ASSIGNMENT TWO

STUDENT NAME: TULONGA N KAPIYE

STUDENT NUMBER: 212099825
MODE OF STUDY: DISTANCE
COURSE: LOGISTICS AND SUPPLY CHAIN MANAGEMENT
HONORS

FACULTY OF MANAGEMENT SCIENCES

NAMIBIA UNIVERSITY OF SCIENCE AND TECHNOLOGY

MAIN CAMPUS
Question 1

A) INTRODUCTION

According to Knowledge N. (2018), he defined warehousing as the procedure of keeping

physical inventory for sale or issuing. Warehouses are mostly utilized by all several types of
businesses that are suppose to keep goods in bulk temporarily before shipping them to other
places or specifically to end consumers (Jacobs,2021). City Candles investments cc
(Namibia)‘s warehouse involves the flow of products, from where they are being received
from, and to where they are being stored and distributed to (end customers). The flow of
goods, as well as storage and movement of those goods to the end customers in City Candles
Investments cc involves: Receiving, Put-Away, Storage, Picking, Packing and Shipping
(Charles, 2022).

A flowchart of the flow of goods in the warehouse of City Candles Investments

Receiving:

 One of the most crucial warehouse process is receiving. To carry out the receiving
process perfectly, the staff members of the warehouse should be able to confirm that it
 has acquired the right product, the accurate quantity of products, in the accurate
condition, and at the appropriate time. Failing to do so will have a huge effect on the
rest of the warehouse operations. Receiving also includes the hand-over of
responsibility for the products to the warehouse. This eventually puts accountability
on the warehouse for taking good care of the goods until they are shipped. A handling
of a receiving process will allow you to take out goods that are damaged and eradicate
liability for them (Charles, 2022).

Put-Away

 This is the second warehouse process at City Candles Investments cc. Tom P. (2017)
defined this process as the transmission of goods from where they are being received
to the location of where there are being stored. Failing to place goods in their correct
and reliable location can damage the productivity of the operations within the
warehouse. There are various benefits when the Put-Away process is carried out
properly:

 Cargo is stored rapidly and more accurately.

 The traveling time is being decreased.
 Ensure employee and good’s safety.
 The utilization of the space in the warehouse gets expanded.
 Cargo is much easier and rapidly to locate, track, and restore.

Storage

 This is the process of the warehouse in which goods are taken into their most suitable
storage space. When the storage process is appropriately done, the process fully
expands the space in hand, in the warehouse and increases the efficiency of work
(Charley, 2020).

Picking

 According to the managing director of City Candles Investments cc, Mr Charles

Ndaningina, he further explained that Picking is the warehouse process that gathers
 goods in a warehouse to satisfy customer requests. Since it is the most expensive
process in the warehouse, comprising percentages of 55, of the total operating cost,
advancing this process will gives you right to diminish costs remarkably and expand
your warehouse effectiveness .In this process, Streamlining should also concentrate
on accomplishing excessive accuracy, as mistakes can eventually have effects on your
customer services.

Packing

 (Charles, 2022) Further explained that Packing is the warehouse process that
centralized items that are picked in a sales order and gets them ready for shipment to
the end user. One of the first tasks of packing is to make sure that damages are
lessened from the time goods depart the warehouse. Furthermore, packaging must be
as light as possible so that it does not increase the weight of the items and few enough
to regulate packaging expenses.

Shipping

 The last warehouse process is shipping and the beginning of the journey of products
from the warehouse to the end user. The time the process of Shipping is considered
victorious is only if the correct order is classified and loaded, is transported to the
correct customer, travels through the righ mode of transport, safely delivered and on
time. The recent discussed processes, such as ordering, putaway, picking, and
packing, are however also significant to the accomplishment of shipping because they
impact whether the order is satisfied accurately and safely.

B) REASONS WHY FIRMS USE WAREHOUSES AND DISTRIBUTION

CENTERS:
According to the Warehousing Education and Research Council’s (WERC) WERCipedia
(WERC’s online dictionary), warehouses do serve as the backbone of various logistics firms.
They perform as a site of storing items temporarily during the transportation, consolidation,
while waiting for the clearance of customs and so on.

Uses of warehouses:
 Storage
 To keep the goods safe.
 For price stability

Storage

The main uses of a warehouse is to give the space for storage of equipment, inventory and
other goods. It gives necessary equipments to the firm for storing their items when they are
not in for sale. This assists eradicates wastage of stock and ensure its security and safety.

To keep the goods safe

A warehouse gives security to items from theft, loss, or harm due to unfriendly weather
conditions like wind, heat, moisture and dust (Jean, 2022).

For price stability

They assist in regulating brutal changes in prices by:

 Releasing goods
 Storing goods and

Uses of distribution centres:

 The distribution centers serves the purpose of temporary keeping of goods and
products, and that is why the more the distribution centers the fewer will be the
warehouses (Hitesh, 2019).
  Distribution Centres make sure that items that move slowly are removed and options
it stocks are either consumed or returned back to minimize stock.

Question 2

On the 25th of April 2022, I interviewed a warehouse manager of City Candles Investments
cc in Windhoek. The reason for the interview was to evaluate how they determine Inventory
holding costs and ordering costs.

Mr Charles (The warehouse manager) defined Inventory holding costs as the total of all costs
in storing inventory which is not sold. Inventory holding costs are worked out as part of the
sum of the inventory costs within one supply chain. These costs include insurance,
warehousing, labor, delivery, depreciation, stock shrinkage, damaged or inventory which is
spoiled and opportunity costs (Charles, 2022).

Inventory holding costs calculation

Mr Charles further explained that In order for them to calculate the inventory holding cost
they always need to determine the following: storage, employee, opportunity, and
depreciation costs.

Inventory holding cost formula:

Inventory Holding Cost = (Storage Costs + Employee Salaries + Opportunity Costs +

Depreciation Costs) / Sum Value of Yearly Inventory

Ordering cost

This is the cost of putting in an order of items to the supplier for inventory. The number of
items ordered is calculated by the yearly number of goods demanded divided by volume per
item (Jean-Paul, 2017)
Ordering cost = D/ Q

Where:

 D = Yearly goods demanded

 Q = Volume per item
 Yearly Ordering Cost

Question 3

A) Definition of Contract management

According to the Law education study (2020), it has defined Contract
management as the process of directing agreements, from the process of being
set up through to their implementation by the selected party, and to the
ultimate ending of the contract.

Uses of contract management:

 Managing the delivery of service: This makes sure that items are transported as and
when they are requested..
 Managing the association: Involves strengthening the connection between the seller
and the buyer to allow for effective communication entirely in the process of contract
management.

 Managing the contract: The continuing administration that makes sure that the day-
to-day activities within the procurement process follow what is displayed in the
agreement
Seeking improvements.
 Ongoing evaluation: Activities within the procurement process are assessed
simultaneously to make sure that contracts are verified, and all buying processes have
been determined.

 Managing fluctuations: As one of a long-term procurement association, the

fluctuations in activities, requirements, or items need to be noted and handled
properly.

 Managing renewal or ending of contracts: When the renewal time of the contract is
almost due, taking effective procedures to understand whether the contracts should be
renewed as is, re-negotiated, or ended, based on future business essentials,
commercial attractiveness, and recent performance by the supplier.

B) Introduction

According to the Procurement and Supply Contract management Guide (2019), The
contracts agreements are an important component in the supply chain management
but procurement experts usually ignore to manage them accurately and concentrate on
other business operations instead. However, proper contract management and contract
negotiation in supply chain management are important. It will not only advance your
company’s productivity, but it will also maximize your bottom line, provides you with
an advantage over the competition who utilizes traditional methods, and minimize the
chance of risk and liability in your agreements. According to The Chartered Institute
of Procurement and Supply says within its Guide that the following are reasons for
using contracts in Supply chain management and procurement:
 Assessing of the supplier’s performance throughout the contract allows for
action to be taken to increase the performance and effectiveness of the contract
 Decisions carried out at an effective time, which mitigates potential risks
appearing in the future
 The supplier corroborate and attends to the organisation’s needs
 The delivery of services is good to all the parties
 No contract disputes or surprises
Contract management also assists in the effective running of transactions, keeping good
associations with suppliers, risks are being minimized and the rapid ways of getting solutions
to certain problems (Paul, 2022). Another primary goals of Contract Management in
Procurement process are:

 To make sure that services or goods are being sold at the prices that are agreed by
both parties.
 To assess wether products or services are of quality.
 To make sure that products or services are delivered at the right time,, at the right
location, and to ensure that the correct quantity has been delivered.
 To make sure that the seller management is cost-effective.
 Ensure proper budget of the organization. And this may lead to a good monitoring of
the firm’s financial transactions.
 Improves business purposes by pointing out the needs, introducing relevant
strategies, and analyzing the goals.
 Holds and strengthen a long term relationship between the parties.
REFERENCES:

Jean-Paul Rodrigue (2020), New York: Routledge, 456 pages. ISBN 978-0-367-36463-2

Copyright © 1998-2022, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography,
Hofstra University, New York, USA.

"Best Practices in Contract Management: Strategies for Optimizing Business

Relationships<". Aberdeen Group. Retrieved 2008-07-10.

^ "Contract Management: Optimizing Revenues and Capturing Savings". Aberdeen

Group. May 2007. Retrieved 2008-07-10.

^ "Contracts<". Cornell University Law School. Retrieved 2015-07-22.

^ Marikar, Q., The cost of poor contract management – are you using all tools at your
disposal?, accessed 31 May 2021
 ^ Contract & Commercial Management - The Operational Guide, Van Haren
Publishing, October 2019, ISBN 978 90 8753 627 5