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Saturday, 24 May 2014 08:30

Aero Marine Logistics (AML) Featured

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Aero Marine Logistics (AML)


Supply chain management is a field that has been intensely studied within management science. Supply chain is a series that involves many participants who work together in value creating processes that start from the company boundaries so as to provide the end consumer with value (Chikan, 2008). Supply chain management involves the conscious management of various processes of the supply chain so as to enable the participants of the supply chain to attain a high level of competitiveness. Defining uncertainty and risks is always a challenge since it is perceived to exist when there is a high likelihood that a derailing event can occur that will have a significant impact on costs


 Thesis statement

Supply chain risks are an occurrence that can occur of a failure or incident in seizing opportunities for supplying to the customer. The outcomes of such an occurrence lead to financial loss in the entire supply chain. This means that risk can occur as a result of any form of disruption, poor quality, and price volatility of a service or product or from any event that can damage the reputation of the company.


 Purpose

The purpose of this paper is to analyze the case study Aero Marine Logistic. The paper will answer these main questions on logistics and supply chain management practices at Aero Marine Logistics. The first question will be about the participants in the supply chain as discussed in the case. The second question is about the logistics partnerships who are involved in sharing risks and costs. This question will address these risks and costs that are part of the venture as shared by the participants. The last question will be about negotiating agreements when considering risks costs, losses and possible profits of the venture.


 Logistics partnerships involved in sharing risks and costs.

The participants of this venture can include the mushroom suppliers such as the mushroom pickers, mushroom pickers and farmers. Other participants include transportation carriers who deliver mushroom to consolidators. There are the fresh food consolidators based in Amsterdam; the transport providers located in Delhi, Mumbai, and ocean carriers from Amsterdam to Mumbai.


There is also the container leasing company known as AML, restaurants, hotels, markets and open-air markets based in Northern India.The venture entails costs like line haul and accessorial transportation costs, energy costs incurred through the need to provide goods in a refrigerated container, containers investment costs, containers maintenance costs, flatcars reconfiguration costs and the capital costs. The capital costs have not been mentioned, but it is essential to consider it as a vital expenditure in starting this venture.The relevant risks facing the venture include the irregularities emerging from the product supply mainly in poor conditions that do not support the growth of mushrooms.


There is also the risk of lack of demand for the products. Refrigeration problems that cause product spoilage, maintenance of containers can be high than expected. This is mainly because of the high temperatures in India. There is also the risk of theft, but at a minimal rate because containers can be safe shelters for the products. Finally, there are the risks of dramatic changes in capital costs. Sharing risks and costs depend on the affected parties mainly on the risks and costs. For example, when mushrooms lack demand, the risk has to be shared between AML and Fresh foods.


The refrigeration inadequacies can alternatively be shared between the container supplier, AML and the company responsible for the installation of flatcars that are power equipped if they are not part of AML.The suppliers (mushroom pickers, mushroom pickers and farmers) will share risks, costs and losses and profits with transportation carriers who deliver mushroom to consolidators Fresh food consolidators based in Amsterdam and the transport providers located in Delhi, Mumbai will also share profits and losses with ocean careers from Amsterdam to Mumbai and the container leasing company known as AML.


 Conclusion

From this discussion, it is clear that Risk management helps partners of the supply chain to focus on collaborative and managed approaches and strengthen their resources so as to lessen the frequency and impact of undesired events. Risk management can, therefore, help in aligning the activities of the stakeholders based on shared information. This study indicates that the supply chain is much more responsive and agile to unforeseen events that positively contribute to improved performance.


Management of risks in supply chain is a growing and established concept within the commercial sector especially in supply chains that are already established like for the case of Aero Marine Logistics (AML). The company being an expert in handling exports of various cargo types through the ocean and air freight. Therefore, it is essential for AML to come up with a risk management plan that will ensure that all participants within the supply chain are involved in sharing costs and risks and also profits and losses (Murphy and Wood 2010).


 Reference

Chikán, A (2008). Vállalatgazdaságtan. Aula kiadó, Budapest

Murphy, P and Wood D (2010) Contemporary logistics. Prentice Hall, p 152-153



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