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  • Subject Name : Logistics

Sustainability Impact of Digitization in Logistics

Contents

Summary.

Introduction.

Problem..

Strategic Negligence.

Operational Inefficiency.

Lack of strategic financial management

Unfocused organizational goals.

Solution.

Setting individual and short-term goals.

Implementing financial and operational audit

Increasing HR performance.

Reference.

Summary of Toll Logistics Case Study

The study is based on one of leading Australia established transportation and logistics companies ‘Toll Logistics’. The Toll Logistics as a courier and logistics dealing business company for more than 130 years of experience with its presence in a major part of the world.

The Toll Logistics Group (TGL) as a subsidiary of the parent company Japan Post Holdings serves in the logistics domain where it is liable to taking care of the transport, warehousing, and mobilizing of the products, goods, and shipments involving the movement and delivery to end-user or customer. The Toll Logistics group, for the sake of efficient management of transport and logistics, operates and services its activities by utilization of numerous modes available for the efficient work system such as by roads, rails, seas, air, and even warehousing to reach the timely customer service provisions.

According to Tang & Veelenturf (2019), the global transportation and logistics industry has been one of the immensely changing and upgrading industries in the confrontation of technological and globalized advancements. The increased ease of accessibility and communication and the robust technological aids have catered to the logistics industry to provide flexible yet holistic operational services in all corners of the globe. However, the rapid technological innovations and advancements have also burst out several challenging facets for the logistics industry in the era of industry 4.0. The similar has been witnessed by the Toll Logistics operative in the focused industry.

The Toll Logistics deals with a variety of industries to provide with the required solutions in Industrial and automotive units, agricultural industry, chemical industry, direct consumers and door-to-door serviceability, healthcare industry, government and defense areas, retail industry, manufacturing such as mining, oil production, steel and fabrication, and whatnot.

A study is Wiggins (2020) has described the case event that the Toll Logistics Group in the early last year had announced its purchase of two new cargo ships for increased customer services over the boundaries such as for Huon Aquaculture from Tasmania to the mainland that constituted for billions of trading. However, the company failed in some senses, to manage and operate the overseas transportation and suffered a loss in the market worth 4.8$ billion of Tolls acquisition which led it to the selling of its ships for the sake of equilibrating the losses incurred by the selling of its inventory and assets and recovering of finances.

The overall study is based on the act of the Toll Logistics and its cargo ship sales, in the view of chalking out the details concerning the problems that aroused in the incident or case and the solutions the firm used or can use for the sake of balancing its operations. The study takes into consideration various fields and sub-fields like financial factors, operational factors, strategic factors, and many more.

Introduction to Toll Logistics Case Study

According to the definitions of Mangan & Lalwani (2016), the logistics and transport industry refers to the branch of operational science and management that incorporates the activities of procurement, maintenance, transportation, material handling, delivering the materials, and facilitating on-the-door serviceability. Also termed interchangeably as the supply chain management, the major focus of the industrial performances has been found in the arena of procurement, distribution, logistics, green logistics, and so on.

The enhanced technological assistance and abruptions in the global range have accelerated and smoothened many industries and business at local, national, and multinational levels. As supported by Kayikci (2018), the advent of technology and digital transformations has been in the benefits of the logistics and transport management services as it has created a wider scope of inbound and outbound services globally in a very accessible way. However, this has also shattered few yet effective challenges to the industries creating risks and mediocre in non-conventional ways. The global logistics and mobilization of resources act as a flexible service whereas it also includes the risk for data breach and technological issues.

Certain losses and failures in the operations of logistics and transport have been into the eyes of the viewers that had led the firm to face radical failures and loss in the operations and programming. A similar case has been with the company Toll Logistics of Australia dealing in the logistics and supply management industrial sector. The Toll Logistics as an Australian established courier, transport, and logistics service provider that deals with both B2C (Business to Customer) and B2B (Business to Business) market segments in the procurement, delivery, transport, mobilization, and processing of the inventory order to the users (Kayikci, 2019).

The Toll Logistics had found the need for extra miles to be induced in its operations and reach for the sake of management of its business performance and productivity. As a subsidiary of Japan Post Holdings, the Toll Logistics constitutes a great financial, operational, and market reach succession and hence had the effectiveness to develop and inherit any modern appeal to be included in its practice for the optimum results of workforces (Toll Today, 2019).

Also stated by Wiggins (2020), the Toll Logistics introduced two cargo ships in a previous couple of years from Tasmania to the mainland that constituted for around 311$ million of the total operational finance in servicing the Bass Strait trade in early 2019. With a high involvement of modern and constructive specifications, the Toll Logistics announced the two cargo ships to function the 400% additional working in comparison to other trailers, containers, or movers previously in service.

The two new cargo ships carried a high functioning and higher inclusion of technological innovations as mentioned below.

  • The cargo ships involved a higher and the most recent technical innovations such as RoRo technology that provided it with the capacity to firefight solutions.
  • Utilization of innovative mechanical advancements for the sake of enhanced crew safety and hence for the safety of goods.
  • Mechanical abruptions in the ship designing that benefit the working of the ships, etc.

The recent upgradations in the Toll’s cargo ships had the efficiency to serve the business operations efficiently. However, the purchase of the ships and other challenges in the business mid-ways created a financial burden on the logistics player, leading to which the Toll Logistics and Japan Post Holdings altogether consider to selling these two expensive and most financially lucrative cargo ships of the company as the firm attempts to generate cash to pay down its debts and hence maintain the financial equity within (Annual Reports, 2019).

The Toll Logistics Group has now, for the further commencement of its operations and activities, has approached to lease the similar cargo ships from a company in Singapore to prevent the stoppage of its functions and activities on the same pace that was carried out by the previous two cargo ships of Tasmania at the Bass Strait trade.

The overall case study propounds that the Toll Logistics suffers certain misguidance and challenges in the way of its functioning were some sorts of mismanagement or lack of conduct seem to be astonishingly developing itself. At one side of the coin, the Toll Logistics aims to reduce its financial stress by way selling-off its assets and inventories whereas, on the other pace of the coin, the Toll Logistics seeks to utilize and act upon different methodologies to sustain its business in the covered market domain. The further study investigates the problems or challenges identifiable in the provided case study regarding the business portfolio, its functions and strategies of cargo ships purchase, selling-off the ships, and maintenance of the current business and performance by the institution of leasing of other two similar cargo ships from a leaser in Singapore (Wiggins, 2020).

In the further commencement, the study also seeks to identify the solutions that can be used or taken into action for the management and success of the firm by the removal of the misconducts and loopholes in its overall business practices.

Problem

The overall analysis and inspection of the Toll Logistics and its case of purchase and selling of the cargo ships in the process of balancing the financial flows of the business firm and also focus the leasing process of two similar cargo ships after the sale from a leaser of Singapore in order to continue the Bass Strait trades of the Toll Logistics. The overall assessment of the Toll Logistics and its interconnectivity with the Japan Post Holdings, the parent company, certain problems, and challenges have been noticeable in the overall case of the Toll Logistics, a few of which have been detailed below.

Strategic Negligence

According to Gurel & Tat (2017), strategies in any business or operational area or contexts have a powerful significance in the determination of the future directions of the business and also in the recognition of the business position in the industry effective. A sound level of inclusion and formulation of strategies eases the analysis of SWOT (Strengths, Weaknesses, Opportunities, and Threats) factors that are relevant in the business.

Toll Logistics as the target business entity in the case study has been observed to constitute a less involvement of magnifying the strategic parts of its functions and operations as its much focus has been on the expansion of the market activities and increase share. The negligence of the strategic alignment has acted as a major problem in the setting of unclear goals, inadequate strategy, and execution leading it to dilute into the financial misleads.

Operational Inefficiency

The Toll Logistics has in the era of its overall services must have witnesses distinct operational tactics and strategies in the conduct and processing of different sorts of activities and insights within. Thus, the company seems to have a higher knowledge of the kind of operational tactics or approaches that must be used or must align with the leading situations of the business and hence aid the removal of low tendencies.

Invernizzi et al. (2018) say that in the current situation, the purchase of two cargo ships for increased operation and its management, selling of the cargo ships to balance the financial decrements and debts, and eventually leasing the similar cargo ships for the continuance of the operations at the target point explains the inadequate or inefficient alignment of operations and management activities in the possession of the cargo ships such as improper planning, poor scheduling or intake of variables, lack of quality supervision, etc.

Lack of Strategic Financial Management

The strategic financial management approach is a crucial practice that must be followed in each organization or business context in the process of inheritance of emerging or new action plans in the implementation phase. Financial resource management has a critical role in the performance and productivity of the business and also has a greater relation to the ROI, hence utilization of a proper analysis and inspection of finance is vital (Delkhosh & Mousavi, 2016).

Toll Logistics and its case study put a brighter light on the inadequacy of the firm and its financial authorities and advisors regarding the failure or inefficiency in the monitoring and assessment of the financial capabilities of the firm. It is visible throughout the case study that the Toll Logistics seem to be in negligence of the financial monitoring during the process of purchase, sale, and leasing of the cargo ships, eventually representing the company’s dilemmatic situation in the decision making in the focused incident, leading it to bear the loss of millions.

Unfocused Organizational Goals

Organizational goals help define a company’s purpose and its business growth in way of achievement of its overall goals and aims. Organizations must strive for implementing a model or practical framework that well suits the proneness of the achievement of the organizational goals and objectives (Butkevica et al., 2018).

In the case study provided in the target of Toll Logistics, the subsidiary company under the Japan Post Holding, it is observable that there are some actions and activities in the workplace where inclusion and insight of organizational goals have been vacated. For instance, the abrupt changes in the decision making of the firm in the context of cargo ships purchasing, selling, and leasing inquires the low involvement of its relation with the organizational overall goals.

Solution

The complete and all-round analysis of the case study of Toll Logistics results in the finding of the following resolutions in way of removal of problematic situations and strategies of the business entity to enable the balancing of unintended problems and mediocre arrived in the act.

Setting Individual and Short-Term Goals

According to Wang & Spinney (2017), organizational goals and objectives are the prominent factors that act as a roadmap for any organizational overall activity and process. In addition to this, the routine practices and acts in the organizations require the setting of minor goals in alignment with the overall goals of the firm that could provide a guideline for the conduct and accomplishment of the routine goals inherited.

Toll Logistics, the Australian logistics player, must focus on the installing of the short term and routine goals for the welfare in the accomplishment of routine goals that could establish in a good alignment of the organizational goal and its achievement. For instance, Toll Logistics must have instituted the short-term goals in the process of cargo ship's institution and purchase for the desired organizational policies. The absence to install a short-term goal related to the cargo ship's project has laid the challenging and failure ratios for the organization.

Implementing Financial and Operational Audit

According to Lee (2020), auditing in the processes of the company’s internal and external operative contexts in the evaluation of the effectiveness and control. Maintaining an effective control on the internal operations is especially important for the achievement of business objectives, obtaining of reliable financial reports and analysis, misappropriation of assets and activities, and also minimization of the unwanted costs and expenses.

Toll Logistics has been in the problem of financial crisis according to the provided case study. Lack or negligence of auditing and assessment of the financial, operational, and management outlooks and variables involved leading to the failure and loss to the Toll Logistics company (Lee, 2020).

Henceforth, for the further resolution and elimination of such occurrence, the company must focus on a routine assessment of the organizational strength by institution and formulation of audit processes in all areas of business practice like human resources, finance, operations, marketing, sales, and so on.

Increasing HR Performance

The Constitution of competent human resource concentration within the business and organizations has a constructive relationship with the organizational success factor and probability. Having a robust population and construct of competent and focused human resource and employee personnel in the activity can act as an extraneous variable for the accomplishment of business success and reach their goals inherited (O’Donovan, 2019).

Toll Logistics must also incline its human resource in such an effective way that there are a focus and alignment of each human personnel towards organizational prosperity and hence towards goal achievement which can eventually reduce the financial wastes and burdens arising out of the unintended practices in the firm. Also, having a qualitative human personnel population rather than a quantitative human resource can leverage the business by minimization of the cost incurred on the human resource management approach (O’Donovan, 2019).

Reference for Toll Logistics Case Study

Annual Reports. (2019). Japan Post Group. Retrieved from: https://www.japanpost.jp/en/ir/library/disclosure/2019/pdf/all.pdf.

Butkēviča, A., Zandbergs, U., Namsone, D., & Briķe, S. (2018, May). Exploring the input of competence assessment to goal-setting in various types of organizations. In SOCIETY. INTEGRATION. EDUCATION. Proceedings of the International Scientific Conference, 6, 130-141. https://doi.org/10.17770/sie2018vol1.3280.

Delkhosh, M., & Mousavi, H. (2016). Strategic Financial Management Review on the Financial Success of an Organization. Mediterranean Journal of Social Sciences7(2), 30. http://dx.doi.org/10.5901/mjss.2016.v7n2s2p30.

Gürel, E., & Tat, M. (2017). SWOT analysis: a theoretical review. Journal of International Social Research10(51). https://doi.org/10.17719/jisr.2017.1832.

Invernizzi, D. C., Locatelli, G., & Brookes, N. J. (2018). The need to improve communication about scope changes: frustration as an indicator of operational inefficiencies. Production Planning & Control29(9), 729-742. https://doi.org/10.1080/09537287.2018.1461949.

Kayikci, Y. (2018). Sustainability impact of digitization in logistics. Procedia Manufacturing21, 782-789. https://doi.org/10.1016/j.promfg.2018.02.184.

Kayikci, Y. (2019). E-Commerce in logistics and supply chain management. In Advanced Methodologies and Technologies in Business Operations and Management, 1015-1026. IGI Global.

Lee, T. A. (2020). The evolution of audit thought and practice, 18. Routledge. New York.

Mangan, J., & Lalwani, C. C. (2016). Global logistics and supply chain management. John Wiley & Sons. The United Kingdom.

O’Donovan, D. (2019). HRM in the Organization: An Overview. In Management Science, 75-110). Springer, Cham.

Tang, C. S., & Veelenturf, L. P. (2019). The strategic role of logistics in the industry 4.0 era. Transportation Research Part E: Logistics and Transportation Review129, 1-11. https://doi.org/10.1016/j.tre.2019.06.004.

Toll Today. (2019). Home News & media. Toll. Retrieved from: https://www.tollgroup.com/news-and-media/news/toll-today-june-2019.

Wang, P., & Spinney, J. (2017). Strategic Asset Allocation: Combining Science and Judgment to Balance Short-Term and Long-Term Goals. The Journal of Portfolio Management44(1), 69-82. https://doi.org/10.3905/jpm.2017.44.1.069.

Wiggins, J. (2020). Toll eyes cargo ship sales. Infrastructure Report. Retrieved from: https://www.afr.com/companies/infrastructure/toll-eyes-cargo-ship-sales-20200605-p55004.

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