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RP Turner Corp. RP Turner Corp. makes pipeline valves for the oil industry in western Canada. It buys materials from Japan, the USA and eastern Canada, manufactures valves in Edmonton, Alberta and ships the finished products to oil fields in the North. The company grew by emphasising the high quality of its products, which work reliably in the harsh weather conditions of the Arctic. Transport to remote customers is expensive, and in 2000 the company looked for ways of reducing the cost of logistics. It soon found that separate functions worked more or less independently. This was sometimes all too obvious when the three main departments Marketing, Production and Finance were in different locations. Production was in Edmonton, as the nearest major city to the oil fields; Marketing was in Calgary near to oil company headquarters: Finance (including procurement) was in Vancouver near the port and financial centre. To appreciate the potential problems, you have to remember that Canada is a big country, so Production was a thousand kilometres away from Finance, 500 kilometres away from Marketing and over two thousand kilometres from delivery points. The company was rewarding different departments for different types of performance. Not surprisingly, when the departments were asked for their priorities, they had different views. Marketing wanted: high stocks of finished goods to satisfy customer demands quickly a wide range of finished goods always held in stock locations near to customers to allow delivery with short lead times production to vary output in response to customer orders emphasis on an efficient distribution system an optimistic sales forecast to ensure production was geared up for actual demand. Production wanted: high stocks of raw materials and work in progress to safeguard operations a narrow range of finished goods to give long production runs locations near to suppliers so that they could get raw materials quickly stable production to give efficient operations emphasis on the efficient movement of materials through operations realistic sales forecasts that allowed efficient planning. Finance wanted: low stocks everywhere few locations to give economies of scale and minimise overall costs large batch sizes to reduce unit costs make-to-order operations pessimistic sales forecasts that discouraged underused facilities. Despite good communications, the company felt that it was too widely spread out. It decided to centralise operations at its main plant in Edmonton. This brought the logistics functions geographically closer together, and major reorganisation over the next two years brought a unified view of the supply chain Discuss the advantages and disadvantages of Logistics Coordination As a Logistics Coordinator at one of leading 4PL logistics Company in Malaysia, you has been appointed to present proposal in helping RP Turner in solving their problems


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