Background of DRB-Hicom Berhad

Logistic management is considered as the component of the supply chain management which is used by the organizations for meeting the demands of the customers. Process of the logistic management initiates with the accumulation of the raw material and it ends with the delivery of goods to the consumers. This report mainly focuses on determining the logistic areas and key functional areas which interfere in the present order cycle and inventory management of the organization. This report also analyse the effectiveness of these areas in context of the present order cycle and inventory management.

DRB-Hicom Berhad (“DRB-HICOM” or the “Group”) is chose as the case study for this report, as it is considered as the nation’s largest and most diverse organizations. This organization mainly engaged in the Automotive, Services and Properties sector. Recently, this organization sees the renewal of its business, and this hapen because of the novel revenue streams and also introducing new lines of business by executing the new moves which are aimed at enhancing the growth and profitability (DRB-Hicom, 2018).

This organization is the result of the merger occurred in 2000 between the Heavy Industries Corporation of Malaysia Berhad (HICOM) and Diversified Resources Berhad (DRB). This organization expands its portfolio by creating the end-to-end value chains for its main organizations. This also boarded on a rationalization strategy by disposing those assets which are not important, and because of this organization developed more efficient developmental resources management plan. It is necessary to understand that, automotive manufacturing and engineering business activities of DRB-HICOM’s mainly focus on the manufacturing of the automotive components and also on the assembly of vehicle. This organization holds almost 12 organizations which are referred as Tier-1 vendors, and all these organizations equipped with world-class facilities and also the highly sought-after engineering expertise (DRB-Hicom, 2018).

Interface is considered as that term which deals with the techniques that are required by the DRB-HICOM’s in context of ensuring effective logistic management in their organization. This organization ensures the effective interaction between the different aspects such as departments and various other components of the organization. Therefore, interface is defined as that technique which enables the organizations in communicating and interacting on different issues of the organization. As stated by Christopher (2016), logistic management in the organization is the method through functions of all the departments of the organization is conducted. It mainly deals with the accounting, finance, marketing, and production. The complete cycle of interface is considered as most important phase of the logistic management.

Department of production holds the responsibility of inspecting and upholding the productivity of the produced material. Department needs to ensure that production of the products must be completed in such way as it becomes easy to market that product. This type of products helps the organizations in achieving the objectives determined by the company. It must be noted that both costa and quantity of product is considered as most important factors of the effective productivity. Generally, managers of   the production department are responsible to check the quantity and quality of the units and after this they determine the cost of the products (Seuring, 2013).

Interface for Effective Logistic Management

In DRB-HICOM’s, manufacturing is done by analysing the manner in which organization follow its production system. The major issue faced by organization in this context is the length of time spends by the organization, and in case organization fails to meet its deadline then it cause great loss to the organization because such cases increase the operating cost and minimize the profitability. It is necessary for the organization to meet its deadlines and this can only possible with the help of effective planning. Organization needs to make necessary changes in the cost related to the production and these changes must be done after determining the nature of the product (Respício & Captivo, 2002).

Following is the diagram of DRB-HICOM’s in context of managing the production and logistics-

The logistics management in context of the marketing department is considered as the way through which marketing process can be managed. The activities related to the marketing management and department of logistic reflect the strong relationship between the two. DRB-HICOM’s mainly consider the four types of factors while interacting with the market and these factors are traditionalist, relabeling, unionist, and intersections (Lakemond & Johansson, 2007).

Organization needs to determine the various kinds of changes while conducting the market interfaces. Organization evaluates the traditional views related to the market in context of ensuring the best management of logistics. It is necessary for the organization to understand activities related to the marketing management and logistics management activity does not correlate, which means, there is no interfaces between them. On the other side, factor related to the relabeling consider the relationship between the two activities by evaluating the huge portion of the market. Another factor that is Unionist considers both marketing activities and logistics activities together, which means, this factor administer both the activities in collective manner (Resipicio & Captivo, 2004).

It must be noted that interface occurred between the department of accountancy and department of finance is deemed as most significant interfaces. This interface evaluates the accounts of the DRB-HICOM’s, and also considers the checking of the organizations accounts and financial transactions. It mainly analyse those economic advantages that the firm gets from these interfaces. DRB-HICOM’s determine this interface while evaluating their accounting and financial transactions, and with the help of this they also administer the logistics nature of the organization from top approach to bottom approach. It provides recommendations in context of improving business performance in both the departments that are finance and accounting. Accounting and finance departments of DRB-HICOM’s is responsible to check and evaluate all the necessary profits and losses of the organization (Croxton, no date).

The time at which raw material for the organization is ordered from the supplier till that time at which manufactured or processed product is delivered to the end user, there are number of stages through which such product is passed such as order is placed, information related to placement is received, and lastly packaging and shipment (Pondiuni, no date). This process is defined as the order cycle.

Production and Logistics Management

It can be said that, order cycle is the process which determines the gap of time between the between the placement of one order and another order followed that. There is articular time gap between the two orders which are laces after one another, and the gap between lacing and receiving the order is defined as the order lead time. Techniques related to order cycle in the DRB-HICOM’s is unique in nature, and they are very effective in lieu of achieving the goals and aims of the organization. It is clear that, techniques of the DRB-HICOM’s are very innovative in terms of meeting the requirement of its order cycle, and this differentiates this organization (Stock & Lambert, 2001).

It must be noted that, organization goes through the similar order cycle in terms of supplying its products, and also use the digitalized process for monitoring the process of orders. Following are the important stets of the order cycle of the DRB-HICOM’s in terms of conducting the logistics activities-

Placement of order- The order is processed after it is placed, and once it is ready it is shipped at the stores of the DRB-HICOM’s.

Checking of order- One the order is laced and the process is start, each and every step of the process is monitored till the time it is reached to the end users. Organization analyse the remaining stock in the warehouse at the time of making the calculation of the Economic Order Quality. This technique is considered as the evaluation tool, and at the end, DRB-HICOM’s place the order of the inventory as per their requirement (MbaSkool, no date).

Key performance indicator- These indicators of DRB-HICOM’s not only measure the performance of the order cycle of the organization but also highlight the inefficiencies.

Following are some important recommendations in terms of the order cycle of the DRB-HICOM’s, and these recommendations help the organization in achieving their objectives in well manner-

• Order must be laced in such manner as it becomes easy for the organization to calculate the cost occurred by the organization. In other words, organization needs to maintain the record of each and every stage of the order cycle and also of the factors which help the organization in ensuring the cost reduction.
• transportation is the another factor which must be considered by the organization, and in this context, it is recommended to the organization to consider the product type because it is necessary to ensure the transportation of the product after considering the needs of the customers and transportation requirements of the product., because wrong transportation can cause huge damage to the product.
• Last recommendation deals with the services provided to the customers, which means, product must be reach to the customer on time because it ensures the client satisfaction (Oy, no date).

Management of inventory is considered as most important process for any business organization, and usually organizations keep extra inventory in their hands for meeting the future requirements or dealing with any urgent situations. It is generally estimated that cost of stock remain in the business and the quantity of the stock are calculated at later stage. DRB-HICOM’s maintain the inventory at proper level. It also manages the record in context of the leftover inventory and the quantity of the required is defined as an inventory. The actual process for the inventory management developed by the organization is effective, and this process also helps the organization in meeting its stated targets.

There are some recommendations in context of the inventory management, as these recommendations help the organization in managing the inventory in effective manner and also reduce the chaos-

• First recommendation deals with the Economic Order quantity, and it states that organization needs to check and measure the leftover stock in the warehouse, so that it can determine the required stock in the future.
• Order of the stock required by the organization must be laced at the time when warehouse holds the minimum stock, which means, at the time when minimum stock level is reached organization must place the order (Samanta, 2015).

Conclusion

After considering the facts of this matter, it is clear that logistic management process of the DRB-HICOM’s is effective in nature and organization can meet its various objectives with the help of this process. Logistic management is considered as the component of the supply chain management which is used by the organizations for meeting the demands of the customers. Process of the logistic management initiates with the accumulation of the raw material and it ends with the delivery of goods to the consumers.

Interface is considered as that term which deals with the techniques that are required by the DRB-HICOM’s in context of ensuring effective logistic management in their organization. It mainly discusses three functional areas that are production, marketing, and accounting.

Techniques related to order cycle in the DRB-HICOM’s is unique in nature, and they are very effective in lieu of achieving the goals and aims of the organization. It is clear that, techniques of the DRB-HICOM’s are very innovative in terms of meeting the requirement of its order cycle, and this differentiates this organization.

DRB-HICOM’s maintain the inventory at proper level. It also manages the record in context of the leftover inventory and the quantity of the required is defined as an inventory. The actual process for the inventory management developed by the organization is effective in nature

References

Croxton, K. The Order Fulfillment Process. Retrieved from https://pdfs.semanticscholar.org/182f/b7c9a6cecd0ac2cd6bd9d45c49f71326dcc1.pdf.

DRB-Hicom, (2018). Discover Us. Retrieved from https://www.drb-hicom.com/about-us/discover-us/.

DRB-Hicom, (2018). Manufacturing & Engineering. Retrieved from https://www.drb-hicom.com/about-us/core-businesses/automotive/automotive-manufacturing-engineering/.

Lakemond, N. & Johansson, G. (2007). Thomas Magnusson and Kristina Säfsten, Interfaces between technology development, product development and production: Critical factors and a conceptual model, International Journal of Technology Intelligence and Planning, Volume 3(4), PP- 317-330.

MbaSkool. Order Cycle. Retrieved from https://nerdyturtlez.com/tutor/order.php?id=784515.

Oy, H. Analysis of logistic process. Retrieved from https://www.theseus.fi/bitstream/handle/10024/72124/Kamthunzi_Eleanor.pdf?sequence=1.

Pondiuni. International logistics. Retrieved from https://www.pondiuni.edu.in/storage/dde/downloads/ibiv_ilm.pdf.

Resipicio, A. & Captivo, M. (2004). Marketing-production interface through an integrated DSS, International Conference 2004.

Respício, A. & Captivo, M. (2002) Cutting stock within a production planning problem: exact solutions, SICUP 2002 (Meeting of the Special Interest Group on Cutting and Packing) IFORS 2002, Edinburgh, Scotland.

Seuring, S., & Gold, S. (2012). Conducting content-analysis based literature reviews in supply chain management. Supply Chain Management: An International Journal, 17(5), 544-555.

Stock, J. & Lambert, D. (2001).Strategic Logistic Management. Boston: McGraw-Hill companies.

Samanta, P. (2015). Introduction to inventory management. Retrieved from https://www.researchgate.net/publication/317970709_INTRODUCTION_TO_INVENTORY_MANAGEMENT.