inventory; perform bookkeeping and statistical work related to warehouse operations... Thanks to reserves, the logistics chain can operate continuously, smoothly and effectively.
The main types of reserves are classified according to their location in the logistics system:
- Raw material reserves
- Semi-finished product reserve
- Product inventory in production
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- Reserve products in circulation
Reserves are an objective necessity, they are the result of the social reproduction process. Thanks to reserves, life in general, and logistics activities in particular, can take place continuously and smoothly. However, it is necessary to know how to plan reserves appropriately for each period to avoid capital backlog. Reserve management in logistics requires extensive knowledge of logistics reserve costs, especially knowledge of total logistics costs to be able to make decisions on logistics system design, customer services, quantity and services of distribution channels, reserve levels, reserve forms, transportation methods, etc.
In short, inventory activities have a direct impact on many logistics chain activities. If there is a need to balance inventory costs and other logistics costs. Inventory activities are an important part of the entire logistics system. It is necessary to use well and closely coordinate the techniques: forecast analysis, inventory models, order processing systems.
4.Transportation services
Transport and distribution management is the most important part of logistics activities, because the results of the transport and distribution process greatly affect the efficiency of production and business. Transport and distribution management aims to manage the transport and distribution of goods on time, safely, ensuring sufficient quantity and quality.
Tasks related to transportation management in logistics business: Choosing a carrier (self-transport or hire); choosing a route,
mode of transport, means of transport; control of the transport process; delivery and loading and unloading work; handling of cases of damage and loss of goods.
Logistics service traders are usually Non-Vessel-Owning Common Carriers (NVOCC) or multimodal transport operators. They carry out the transportation of raw materials from the place of supply to the place of production, and from the place of production to the place of consumption, either by their own means or by their own hired means, or on the basis of a sub-contract that they sign with the carrier on behalf of the owner of the goods. When carrying out the transportation work, the logistics service trader acts as the trustee of the owner of the goods, which means that the logistics service trader will sign contracts on behalf of the customer for the transportation of goods in his own name and take full responsibility to the customer for all problems arising during the transportation of goods. Whether being a direct carrier (organizing transportation by their own means or by means they hire) or an indirect carrier (performing the transportation obligation committed to the customer by signing a subcontract with another transportation service provider), the logistics service provider is still responsible to the customer for all losses and damages occurring to the goods that occur during the entire transportation process.
Logistics service providers must solve these problems with the necessary methods and experience. When choosing a mode of transport, a combination of several important criteria is often used:
-Transportation costs
-Shipping speed
-Flexibility
-Volume/weight limit
-Accessibility
All logistics services aim to satisfy the needs of customers (producers and consumers) to the highest level. In the supply chain
consists of many stages, the links of the stages include services: delivery, loading and unloading, warehousing... If goods are left in stock too much or stored for too long, it will cause damage to the manufacturer, so it is necessary to solve this stage with different measures:
- Establish distribution channels, choose consumer markets
- Select warehouse location
- Establish distribution centers, logistics centers
-Manage the shipping process...
There are some firms that have achieved "no inventory" manufacturing for certain items, and have achieved high profits.
Along with other logistics activities, transportation also contributes to the added value of products and services. First of all, it solves the problem of bringing products to the right place where consumers demand, which means the value of the goods has been increased. Next, it meets the time requirement. Choosing the right means and coordinating different forms of transportation is only for the ultimate purpose of transporting goods to consumers as quickly as possible. Thus, the added value in the transportation stage is that customers enjoy the service or product at the right place, at the right time.
To transport goods, logistics service providers can choose one or more of the following modes of transport: sea, river, road, rail, air.
5.Warehousing operations
Warehousing is a part of the logistics system, where raw materials, semi-finished products, and finished products are stored during the entire process of circulation from the starting point to the end point of the supply chain, while providing information about the status, storage conditions, and location of the stored goods.
This logistics activity is a strategic activity, it affects the transportation process, customer service quality, goods circulation speed and of course affects the entire supply chain. Therefore, in this activity, it is necessary to determine the warehouse location well. The warehouse location is decided based on the following basic conditions: close to large sales centers, good infrastructure, procedures
simple (especially customs clearance procedures if it is global logistics), has a professional staff and especially has a stable social situation. This is the reason why 60% of large distribution centers and large warehouses in Europe are concentrated in the Netherlands.
Logistics service providers do not necessarily have to have warehouses. They can advise customers on convenient storage locations for delivery, transportation, distribution, and even sign contracts for storage of goods on behalf of customers. In addition to performing warehousing and storage tasks, service providers also provide customers with warehouse management and inventory management activities, which is a step forward compared to the simple warehousing and storage tasks in traditional delivery activities in the past.
Logistics service providers must be responsible for the goods during the time the goods are stored under their management according to the provisions of law.
Activities that add value to goods include labeling, marking, repackaging, quality control, order management, returning goods to distributors, etc.
Warehousing activities are closely related to transportation activities in the logistics system chain. Both contribute to the added value of time and location of products. Designing a scientific and reasonable production facility and warehouse system allows saving transportation costs at both the input and output of the logistics system.
A particularly important job in warehouse operations is information system management. Information must be regularly updated on stock levels, quantity of goods imported, exported, actual stock, location, status of goods, customer requests, etc. The information here must be timely and accurate. To do so, it is necessary to know how to apply the Electronic Data Interchange (EDI) system, the barcode system and computerize all activities.
CHAPTER II: CURRENT STATUS OF LOGISTICS ACTIVITIES IN JAPAN
I. CONCEPT AND FORMATION PROCESS OF JAPANESE LOGISTICS INDUSTRY
1. Concept of Japanese logistics
According to Japan Institute of Logistics Systems (JILS) (2006) : Logistics is the synchronous management of activities such as purchasing, production, business and distribution according to demand to enhance competitiveness, increase business value by satisfying customer requirements through reducing inventory, minimizing transportation to reduce supply costs.
Thus, the Japanese concept of logistics belongs to the second group of definitions (according to the division of understanding of logistics services as in chapter 1), logistics services have a wide scope, affecting from the pre-production stage until the goods reach the final consumer.
2. Development process of Japanese logistics industry
According to Hikaru Kajita (2000), the development process of Japanese logistics goes through the following stages: physical distribution, logistics system, and supply chain.
This division coincides with that of the United Nations Economic and Social Commission for Asia and the Pacific (Chapter 1).
2.1. Physical distribution : This period lasted about 30 years after World War II. Logistics activities at this time included individual activities such as: distributing goods from the production line to customers, providing input materials for the production process, transporting goods, warehousing, packaging, inventory control, warehouse selection, market forecasting, customer service.
During this period, in Japan, the scientific foundations for the logistics industry began to form.
1957: Establishment of the Center for Scientific Activities Research
1960: Japan Management Association established Distribution Technology Group 1965: Ministry of International Trade and Industry, Ministry of Transport,
The Ministry of Economic Planning has issued the "New Material Distribution Plan".
2.2.Logistics system
1970s: Expanding the logistics market
1980s: Some of Japan's leading companies responded to changing markets
1992: From physical distribution to logistics
2.3.Supply chain
1985: Started to abolish radio and cable communications, using information technology in the production process.
December 1989: Partial transport ballot
Early 1990s: Rapid Response in the Garment Industry
1992: Supply chain application in processed food industry
3. Characteristics of the Japanese logistics market
- Working regime in Japanese companies
The working system in Japanese companies is considered one of the fundamental reasons why Japan was able to become an economic miracle in the 1950s.
- 60 of the 20th century. The employment system includes: lifetime employment, seniority-based promotion system and union system. The lifetime employment system will make the employees, when recruited, stick with the company until retirement. Thus, the employees will have a stable mentality, be loyal to the company and master their professional skills. For the company, there will be a stable source of well-trained human resources, contributing to the development of the company.
Along with the lifetime employment system is the seniority-based promotion system, those who work long term in the company will be promoted, receive high salary regardless of performance. Currently, this system is being criticized because it tends to not encourage creativity, innovation and risk-taking of workers.
The corporate system is a unique system in Japan. Under this system, companies with close relationships will do business with each other for a long time, cementing traditions.
- Organizational structure of enterprises
Because of the union system, the parent-subsidiary and joint venture organization of Japanese companies is very popular. Each company in the joint venture will take charge of each stage in the logistics supply chain, the process of specialization takes place, while still ensuring smooth coordination. According to Mr. Yamada Tatsuya - Director of Logitem Vietnam.no.2, the organizational departments in Japanese companies always work together, working towards the common goal of development. This is a spirit of solidarity that is worth learning from Japanese companies.
Because of high specialization, goods go through many stages and processes, applying modern information technology helps businesses to harmoniously manage the supply chain, minimizing time and saving production costs. The production structure has increased labor productivity, saving time, thereby leading to low production costs.
- Domestic trade practice
Price system: the cost of products to consumers will include the following costs: production costs + management costs + packaging costs + transportation costs.... A special thing in the Japanese market is that the distribution system is very complicated, goods must go through many intermediaries to reach consumers, thereby increasing the value of the goods. This makes the circulation of goods more complicated, pushing the cost of goods 30-40% higher than normal compared to similar products in the foreign market. However, the goods reach consumers with higher quality and more beautiful designs. The process of specialization takes place at a high level, there are companies that only specialize in counting each leaf of vegetables, smoothing them and putting them in packaging boxes to move on to another stage.
- Consumer characteristics
Japanese consumers are said to be the most demanding customers in the world. Products wishing to enter the Japanese market must satisfy
satisfy really strict requirements. Japanese consumers are characterized by liking fresh, high-quality products that must be safe and aesthetically pleasing.
Just-in-time is the ultimate requirement for logistics service businesses in Japan. Distributed goods can sometimes be returned due to a delay of just one minute by the distribution company or a bad attitude by the driver. This requires logistics service companies to be really careful in every step, paying attention to even the smallest details of the product or service to satisfy the needs of customers.
- High land prices
Due to the characteristics of terrain and population, land prices in Japan are very high. Therefore, the cost of warehouses and factories serving logistics business activities is often higher than in other countries.
In summary, from the above characteristics of the Japanese market, we have partly understood the way Japanese logistics companies organize business and provide services. With a well-trained and experienced workforce, products and services are provided at high costs but must ensure requirements on quality, safety, convenience, on time and at the right place. The characteristics of the Japanese logistics market help us explain why Japanese goods are always popular all over the world for their quality, design and convenience.
4.Requirements for developing Japan's logistics service industry in the current period.
When introducing the concept of logistics services, JILS also makes requirements for businesses as well as related departments to develop the logistics service industry in line with the current period. That is the management of logistics service provision activities in the globalization period, the management of logistics activities to minimize environmental impacts, logistics management must provide solutions for human resources, and improve the competitiveness of businesses.
* Logistics and globalization
Logistics companies are increasingly actively participating in the globalization process, expanding their business bases abroad. Globalization of business activities requires support by modern information technology and the Internet. Therefore, the requirement for logistics businesses is to be fast.