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MISHAIR world cargo is a globally active carrier company serving an extensive network worldwide. It operates a fleet of cargo aircraft with extensive refrigerated transport facilities, through the help of a professional and quality-centered staff that provide personalized transport solutions for pharmaceutical manufacturers that can seamlessly be integrated into the supply chain. It has been trading for the past twenty years.
Transportation of products is a major challenge for pharmaceutical manufacturers since it adversely affects their supply chain. The significance of the pharmaceutical products, considering their high value and the fact that they touch on the health of people makes the manufacturers careful when selecting a transportation company. The company to transport the products must be very reliable and efficient, with the ability to deliver the products to the right destination within the shortest time possible. Equally, handling of the pharmaceutical products must be done by experts during the transportation and must be kept under ideal temperatures throughout the transportation journey. The high-value nature of the products usually makes the fleet prone to theft and robbery, thus the transporting company must be capable of enforcing strict security measures before the contract is awarded to them.
MISHAIR World Cargo Case Study
Based on nature and goods and the business environment the pharmaceutical companies operate, a Rich Picture involving MISHAIR world cargo as the transportation company may appear as below.
Figure 1: A Rich Picture for MISHAIR world cargo
The hand-drawn picture above gives an overview pictorial representation or mind map of the elements and processes involved in the transportation company, about its services offered to pharmaceutical manufacturers. This helps to create an understanding to the managers on what they need to ensure efficiency in their operations.
The picture indicates the pharmaceutical industry from where the products are transported to different locations. In the pharmaceutical industry, there is a loading zone, which is an important aspect of transportation firms because the products are loaded in bulk depending on the specifications given by the customers in foreign markets or the local hospitals. The loading zone is duplicated at the airport and the port for sea shipment.
There is a clear aspect of transport indicated in the picture, represented by large trucks positioned at the loading zones in all the major destinations. This indicates that the products are transported from the manufacturer to the warehouse for storage in refrigerated conditions, to the airport, seaport, and hospitals. This transport offered must be through refrigerated trucks to ensure that the products reach the destinations in their right conditions, which have a direct bearing on their quality. There is also the presence of a rail system from the industry to the airport and the seaport. This adds into the efficiency in the transport system in terms of capacity, since the products are ordered in bulk, either through the sea or air. The relationships between the variables are also indicated using arrows. For example, after manufacturing of the products, they can be delivered directly from the industry to the hospital, to overseas through the ports or supplied from the warehouse to indicate the supply chain.
Similarly, the MISHAIR world cargo operates a fleet of young aircraft to meet the speed of delivery of the products, especially in the international markets. For this reason, the picture captures the significance of an airport connected to the industry both by road and by rail. The airport has its loading zone to facilitate faster loading and unloading. An aircraft for export is also captured leaving the airport to represent the ongoing operations to meet international demand.
MISHAIR world Cargo Company has also tightened the security of the pharmaceutical products which are very valuable and are prone to theft, from the industry stores to the warehouses, while on transit, and to the ports. The presence of security officers is identified at the loading zones and guarding the warehouse, as well as offering the transit escort services. This helps to protect the pharmaceutical companies against losses and to increase the credibility of MISHAIR Cargo Company.
There is also the aspect of human resources that must be considered to ensure systematic delivery of the services. There are different heads of departments like the IT Director, storage manager, head of security, drivers, and secretary among others. All these employees in the respective areas need to be bell remunerated and motivated to improve their productivity. At the MISHAIR office, a staff expresses a feeling through a thought bubble indicating that there is too much pressure at the workplace, but low remuneration as well as no motivation to work leading to the desire for sleep. This clearly means that the company is understaffed about the amount of work expected to be done. These are part of Mr. Logistics' responsibilities to undertake in collaboration with other heads of departments. In every facility, there must be personnel to run the logistical issues. In this picture, there must be staff at the industry, warehouse, drivers, ports crews, port handlers, security teams, and the management.
Time management is also an essential aspect of the performance of MISHAIR Cargo Company. For this reason, the company uses a hybrid transport system that involves road, rail, sea and air. The time spent before delivery is represented by a thought bubble emanating from the aircraft crew indicating that they will be at their international destination just in one hour. This would however take days for the consignment to be delivered if done through road, rail, or sea transport. MISHAIR depicts through the mind map that delivery of pharmaceutical products needs to be speedy, more so because its deals with the life of people.
Task II: Detailed Investigation
One decision problem is choosing between increasing investments in the transport infrastructure or not, bearing in mind the economic challenges such as an increase in fuel costs. This is in line with the primary task of MISHAIR Cargo Company, which is offering efficient effective transportation services to the pharmaceutical manufacturers as implied by the Rich Picture above. Every duty and activity that includes; purchase of equipment for manufacturing, refrigerated transport system, human resource, and security systems are all carried out to realize the end objective. Similarly, Primary tasks are fundamental to the establishment of information systems that ensures orders are received in real-time since the information system transport logistics are typically set up to achieve the primary task
This decision problem on how best to achieve the primary task in relation to the current global issues surrounding security and the rising fuel costs and taxes, has prompted MISHAIR Cargo Company to appoint Mr Logistics to analyse their current operations with the view to adapt to the changing national and international legislation. Mr. Logistics has focussed on the areas related to Health & Safety and particularly improved risk assessment, safety when moving and handling goods, adhering to the guidelines set by the Pharmaceutical codes of practice regarding storage and handling of precarious goods.
Evaluating the Problem Using Two Different Tools
To evaluate this decision problem, Causal Loops Diagram and Soft Systems Methodology will be used.
1. Casual Loop Diagram
The first step of a causal loop is the identification of the success drivers of the operation that can lead to the achievement of the primary task. These success drivers influence the policy made in term of where to invest the company funds in the transport system to ensure the on-time delivery of the consignment. The tenacity in designing CLDs is to assist the stakeholders to understand the essential dynamics of the task and economic operating environment to develop policies that will efficiently guide and minimize losses in the system (Kondratenko, 2003).
In MISHAIR, the central point according to the CLD below is the efficient transportation of pharmaceutical products locally and internationally. Pharmaceutical companies are keen on engaging carrier companies that can safely, expertly handle and transport their products to the intended destination in a speedy manner. The management of MIDAIR must, therefore, identify the drivers of this demand to remain competitive. One major driver of this is an increased investment into the transport infrastructure. This will involve acquiring new refrigerated trucks, more refrigerators for aircraft and rail transport, investment in high capacity trucks, warehouses and aircrafts, and expanding the loading zones to minimise the time taken while loading or unloading. Another driver is an investment in the security of the goods in transit or the stores. This is an international challenge based on the increase in terrorist activities globally. The firm must therefore; design workable security systems that will ensure the products are not lost to theft and pirates in the high seas. Investment in human resources that is knowledgeable in handling pharmaceutical products gives the clients the confidence to seek the transport services of MISAIR.
In this loop, an increase in investment in the transport infrastructure by MISAIR Cargo results in inefficient transportation of pharmaceutical products. This in turn leads to an increase in demand for their services, which increases the revenue for MISAIR Company to be reinvested. Equally, pressure from pharmaceutical firms leads to improvement of security, which adds to the efficiency in transport services. An increase in demand for transport services also issues feedback to the pharmaceutical company to increase more pressure in demanding better services.
Based on this causal loop, the management should consider investing more in the transport infrastructure, since it has more reward to the company. Faster delivery of products in the right temperatures will increase its competitiveness and increase the demand in the market. This is likely to increase the capacity of products shipped to other destinations. Similarly, the company needs to invest more in security systems since the goods transported are of high value that is prone to theft. Failure to offer security services is likely to force the company out of the transport industry. Finally, the management need to consider hiring knowledgeable pharmaceutical handlers or training and developing the current workforce to be compliance with the safety and handling guidelines set by the pharmaceutical companies to win the market. They should as well be well remunerating and motivated to reduce the human resource turnover reported by Mr. Logistics in his report.
Soft Systems Methodology (SSM)
SSM is a universal approach for solving real-world challenging situations. This method will consider seven steps to decide whether to invest in transport infrastructure.
The seven steps are:
1. Entering the problem situation; involves the identification of the current problem, which is deciding whether to invest in transport infrastructure or to stop further investment based on the challenging economic situations (Williams, 2005).
2. Expressing the problem situation; this is an interactive session that involves brainstorming on the problem situation to identify the magnitude of the problem.
3. Formulating root definitions of the relevant system; this is done through several specific criteria that ensures that a particular root definition is comprehensive (Williams, 2005). These criteria involve the mnemonic CATWOE (Williams, 2005), where;
Clients identifying the beneficiaries or victims of this specific decision. In this case, the pharmaceuticals will benefit from the investment in infrastructure, while MISAIRS will benefit in the long term if the operations are carried out.
Actors identify all those responsible for implementing the process of the investment. That is the finance department, procurement, transportation, and management. This step assigns duties to specific people to ensure accountability.
The transformation looks at the transformation process required to make the changes. For example, if MISAIRS is developing the human resource to acquire the pharmaceutical handling skills, the company needs to identify the specific skills needed.
Weltanschauung (or Worldview) this looks at the justification of the decision about the world environment. This indicates the benefits of the operation that include the efficiency in transportation of products and increased demand the services.
The owner looks at who has the power to make the decision. In most cases,, massive investment activities like this can only be approved by the board of directors. Mr Logistics can only recommend based on the strength of the situation.
Environmental constraints look at the external constraints that decision carries over. This form of analysis helped the individuals to consider the impact of any proposed changes on the people involved.
4. Building Conceptual Models of Human Activity Systems; this fourth step allows the management to have a diagrammatic formulation of what the activity entails. This is still interactive
5. Comparing the models with the real world; at this stage, the models generated in the 4th stage are viewed against the real-world economy and its ability to be implemented based on the available resources.
6. Defining changes that are desirable and feasible; this level involves describing the realistic investments that the company can run.
7. Taking action to improve the real world situation; this is the last step in the soft system methodology where a comprehensive decision is made and the investment implemented
To realize best definitions, stages (2) through (4) are interactive where the stakeholders including Clients, Actors,, and Owners participate in a guided debate by the moderator to try identifying root definitions and conceptual models, which are then modified and developed to generate a desirable model through consensus (Williams, 2005).
Decision Support System
One method that can be used to gain competitive advantage in the market is through computerizing Decision Support Systems. The benefit of this is Decision Support System is its ability to assist managers makes better decisions. Good decisions are those that once implemented have effects on reducing costs, more efficient use of assets, increasing revenue, minimize risks, and improving client service among others.
This Decision Support Systems will be used to analyse business data and provide interactive information that can support the managers and customers who are the pharmaceutical companies during their decision-making process, starting from the problem identification to implementation and evaluation of the decision made. Decision Support System that will be employed in this case involves the use of; (1) analytical models, (2) specialized databases, (3) decision makers own insights and judgments based on the prevailing economic conditions, and (4) an interactive, computer-based modeling process that allows generation of answers to support semi-structured business decisions.
This paper concentrated on the MISAIR cargo company that operated a fleet of young aircrafts globally, particularly offering transport services to the pharmaceutical manufacturers. Transport for pharmaceutical companies has been a challenge over the years since they need very fast delivery having that the drugs have a bearing in the lives of people. MISAIR tapped this opportunity to offer the services. However based on the analysis carried out by Mr Logistics identified a number of issues that need urgent attention to improve the efficiency and productivity of the company. Some of the issues include; the company management at the strategic level are not engaging fully with the statutory authorities, nationally and internationally, which can result into major losses in revenue. There is also insufficient funds allocation and management in the areas dealing with management and handling of dangerous goods. He also realised that company records are not maintained appropriately leading to problems related to quality and integrity of data. This therefore, means that for the company to operate to its full potential, drastic changes need to be undertaken from the strategic management level to ensure that adequate funds for investments are allocated in the safety management activities, change the mindset of the human resource to properly maintain company records.
Another issue involves high employee turnover. This makes the company incur penalties as a result of the damaged goods and late deliveries. It also reduces the quality of the pharmaceutical goods due to poor handling by the new employees. The turnover is as a result of not training and development of the staff, reinforcing the efforts of the staff, lack of motivation, and punctuality issues of the human resource among many others. To eliminate these weaknesses, the company needs to decide to invest more in the transport infrastructure, improve security and improve the working conditions of the employees. This paper has also described a Rich picture outlining all the aspects of the case study involving the pharmaceutics manufacturers, refrigerated storage facilities transport systems, security systems, and human resources.
Decision-making is a vital aspect of every organization. A poor and slow decision-making process leads to losses to the company. It is important to design a decision making system to ensure that once the decision has been implemented, they will have effects on reducing costs, more efficient use of assets, increasing revenue, minimise risks and improving client service and improve competitiveness of the firm among others. The Causal loop tool helps the company management to only focus on the success drivers that can assist the company achieve its primary tasks based on the prevailing economic environment. SSM tool chosen for this decision problem is meant to help the management identify the key success factors that the CLD needs to focus on, through a comprehensive seven step decision making process that assists to formulate the root definition for consideration.
The evaluation of the MISAIR problem using the CLD and SSM tools can be aided by the computerized Decision Support System for a faster, comprehensive, and quality decision that when implemented will lead the MISAIR cargo to reduce costs of operation, more efficient use of assets, increasing revenue as a result of increased business, minimise mishandling risks through tight security for the valuable pharmaceutical products in the warehouses or while on transit, and to improving client service among others. These increase the company's competitive advantage to be the transport company of choice for the pharmaceutical manufacturers.
The difference in the Tools Used
The causal loop design tool only identifies the success drivers of the operation that can lead to the achievement of the primary task. It is noted that these success drivers influence the policy made by companies. Concerning the case study, the success drivers influence where and how to invest the company funds in the transport system to ensure the on-time delivery of the consignment. The tenacity in designing CLDs is to assist the stakeholders to understand the essential dynamics of the task and economic operating environment that changer over time, to develop policies that will efficiently guide and minimize losses in the system.
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SSM tool on the other hand is a universal approach for solving real-world challenging situations. This method follows seven steps to decide whether to invest in transport infrastructure. In SSM, the developing the root definitions is an interactive process that involves the Clients, Actors and Owners who participate in a guided debate by the moderator. The suggestions are then modified and developed to generate a desirable model. These two tools can be employed at the same time by the management. This is because the LCD tool does not outline the steps to identify the success drivers. SSM in this case outlines the variables under which the root definitions that are to be considered before making a decision. Step three in the SSM are involved a comprehensive interactive session through the use of CATWOE that brings all the key stakeholders together to ensure the decision made is all-inclusive. All these factors considered makes SSM tool better placed to produce a better decision owing to the fact that clients, owners and actors in step 2 through 4 generate models under the guidance of a moderator, then refine and develop the best option through consensus.
This paper has analyzed three parts; a rich picture that analyzed the mind map involving all the possible activities that MISAIR cargo company can be involved in when offering transport services to the pharmaceutical companies. Key issues in the picture include the transport system involving aircraft, rail, shipment, and trucks. The picture also includes security features to guard the valuable products, refrigerated stores, and human resources, some of whom showing signs of discontent. Part two involves evaluating the decision problem Using CLD tool that identifies the success drivers and the SSM tool that involves comprehensive seven steps to generate the best option. It also looks at the use of a computerized decision support system to create a competitive advantage by promoting fast and quality decision-making. Part three of the paper outlines a reflective commentary that gives the necessity of making the changes.
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