Executive Summary
International sourcing of products is a common approach used by firms to enhance their abilities of operation and enhance the general cost-effectiveness and efficiency of their operations. Companies experience various benefits by sourcing products internally such as reduced cost of the products. However, the companies experience numerous challenges in the process of importation. Huawei is among the second-leading exporter of smartphones, and many international companies source smartphones from the company as they are perceived to be of great quality. This paper analyzes the logistics considerations involving container considerations, packaging, and material handling when importing smartphones from Shenzhen to Port Botany in Sydney Australia then Onward Delivery to Mayfield.
Introduction
In the current internationalized business world, utilizing the excellent sourcing destinations has become very significant for the companies to remain successful in competition and international sourcing is among the most significant issues for the purchasing department. International purchasing is the use of international properties, looking for a giveaway with the best value from all over the sphere. Firms source goods abroad due to different reasons such as decreasing the total purchasing costs, enhancing access to novel technologies, and ensuring the availability of resources. In addition, there are additional objectives like improving the competition between the firm’s suppliers to satisfy local content requirements and support the development of its international presence (Loppacher et al., 2006). When moving to international purchasing from local sourcing requires the companies to put up with with lengthier distances, amplified guidelines and protocols, variations of currency, levies and linguistic necessities, and dissimilarities in terms of culture and time. Also, companies that opt for international sources must contend with operational issues that impact the process of procuring while also handling an advanced degree of cross-functional and cross-location management (Jiang & Tian, 2010). In the part of supply chain management, global procuring needs firms to develop an international engineering sequence to create a balanced procuring blueprint and obtain excellent imports at sensible prices.
Compared to local purchasing, international sourcing has the following features which include enhanced purchasing scope such that the latitude of procuring events outspreads to the international platform and they no longer emphasize on the assets accessible in one nation and they can obtain resources from all over the sphere. Another feature enhances the risk of purchasing since international purchasing involves a sequence of purchases whereby companies purchase goods on a larger scale which requires greater monetary transactions. It also includes features such as reduced procuring cost, the want for organized criteria in provider choice, and unwavering procuring modes. Some of the risks that are involved in international sourcing include security risks, cost risks, quality risks, and intellectual property risks (Tressin & Richter, 2014). Supply chain management entails the preparation and controlling of all events that comprise sourcing, obtaining, and logistics managing activities involving mostly the harmonization and cooperation with channel associates which can be sellers, intermediaries, third-party service providers, and consumers. This report analyzes shipping a full 40-foot container load to Australia highlighting the physical characteristics and how its physical characteristics affect its packing, packaging, material handling, transportation, documentation, labeling, containerization, transit storage, and shipping to Sydney.
The Company
Huawei Technologies Company Ltd is a Chinese company that was launched in 1987 and began in Shenzhen. The company has grown from a locally owned company to a competitive global giant that is recognized globally due to its high technological quality products and innovations. It is among the leading worldwide provider of information and communications technology infrastructure and smart devices. The company is determined to make sure the world becomes digital in their homes and workplaces hence making the world fully connected and intelligent. Huawei is the leading connectivity and communications tools merchant in China and the second-leading dealer of mobile communications infrastructure equipment in the sphere. For the consumer products segment, the company creates and produces mobile broadband devices, household devices, and smartphones which it sells locally and internationally. The broadband devices offered by the company include data cards, handsets, and routers. The company, however, only exports smartphones and tablets and does not export laptops and other products that it develops and manufactures (Chacon & Rajawat, 2019). The company has managed to ship more than 250 million smartphones better than other telecommunication devices companies like Apple hence giving it a competitive advantage in the global market. The company is hence trusted and global companies love to source smartphones and tablets from the company since the shipping process is easier than sourcing from other companies. Mobileciti in Australia is a leading retailer of telecommunication equipment ranging from mobile phones, smartphones, tablets, drones, and cellphones. The company sells to Australian consumers who buy quality smartphones and the latest technology products therefore the company sources smartphones from internationally recognized technology product companies. Thus a company of this level needs a comprehensive integration with logistics partners to support its global sourcing of high-quality products.
The product
Smartphones have become a necessity for many Australians since most of them spend most of their time on them connecting with family, and friends, working and playing. Current approximately 90% of Australians own smartphones whereby almost a quarter of them use them to watch live television streaming on their phones once a week. Smartphones are also used in business and the government of Australia acknowledges the importance and role that smartphones play in the digital economy of the country. As digital technologies have become widely accepted in different firms and industries then people become more enlightened and required to source the best digital devices. Smartphones have significant benefits to business and hence the economy of the country. Besides, they have a positive impact socially since they allow people to communicate easily and quickly besides entertaining them. This great use of smartphones in the country, therefore, requires mobile retailers in the country to offer their customers quality and different types of smartphones so as to meet the demand of the consumers. As consumers need to experience different kinds of smartphones sourced internationally, the retailers are forced to source smartphones internationally to meet the demand and needs of the consumers in the country. Thus, Mobileciti in Australia sources Huawei smartphones which have a huge market share in the country to ensure that the consumers are satisfied. To have adequate and quality Huawei smartphones that meet the standard of the consumers, Mobileciti sources the smartphones from Huawei Technologies Company Ltd which is located in China. Sourcing the smartphones from Huawei Company, Mobileciti benefits in many ways such as obtaining quality smartphones at a rational price however, the company experiences various logistics challenges such as delays and also risks such as security risks.
Transportation
The principal constituent of logistics budget is transportation and thus the administration of conveyance happenings is important to the expenditure efficiency of the supply chain and the general success of the company. The role of the conveyance processes in the supply chain is to deliver catalogue on time and successfully to the right location and at the accurate time for this case transportation of smartphones from Shenzhen, China to Australia (Saxon & Stone, 2017). The distance to be covered between the manufacturer in Shenzhen and to Australia retail outlet needs the use of numerous channels of transportation, taking advantage of the benefits and abilities of each mode while reducing costs. The global transportation of smartphones needs air or water transportation from the factory in China. The choice of the transport mode has various impacts on customer service, order management, and lead times. Also, when choosing the channel of transporting products from China to Australia some factors to consider include the cost of transportation channels and the reliability and speed of the transportation channel (Notteboom, 2011). The smartphones should have characteristics that support the choice of water mode of transportation which involves shipping. Most of the countries in the world depend on water transportation since ships are able to carry immensely heavier loads at a cheaper cost than air transportation. Shipping is hence the preferred transportation mode for bulky items that cannot be accommodated by air transportation mode. The benefits of using the water transportation mode which is shipping are numerous including it can accommodate more space and weight, it is cheaper than transportation by air, and increases the safety of the shipment as the ships operate in a planned route and schedule meaning the shipment will go through minimal handling. However, the mode has some shortcomings which involve speed. As much as the ships are able to carry much bigger loads than other modes of transport, sipping takes more time making it unsuitable for businesses that require speedy delivery of products (Song, 2021). Shipping a 40-foot load containing smartphones from China requires strategies to be placed to address any challenges of long-distance sourcing.
Containerization Considerations
Australia’s chief importation partner is china since one-third of Australia’s importations are from China. This has contributed to the growth of containerized trade of Australia’s imports across the largest container ports in Sydney, Melbourne, Newcastle, and Brisbane (Lau et al., 2013). The growth of the containerized trade has been influenced by several factors including the demand for manufactured products and the growth of income levels which leads to increased consumption and increased demand for imported manufactured products. Port Botany in Sydney is the second-largest container port in Australia and contains two docks which include the Brotherson Dock and Hayes Dock. The Brotherson Dock contains two sides that accommodate eight container ship berths and is capable to accommodate ships with drafts up to 14 meters and focuses on developing an ability to house ships with drafts of 15 meters. With the advancement in technology, the containerization process is also advancing. The information of things technology has brought significant advancements in containerization which helps reduce risks such as damage in the process of shipping. As smartphones are high fragile containers considered to move the products to Port Botany need to be smart containers. The smart containers contain antennas in the outer part and the sensors are placed in the compartments where the products are placed. Smart containers are beneficial since the systems will be able to record time-stamped temperature, humidity, and GPS coordinates (Salah et al., 2018). For instance, in case the temperature is not favorable for the devices then immediate action will be taken to avoid damage to the smartphones. Additionally, the data recorded on the cloud visible on the stakeholders’ mobile application will enable them to know the whereabouts of their containers. This will make it easy for them to plan for receiving the container as they can see the location and can therefore estimate when the container will arrive.
Nature and Physical Characteristics of Smartphones
A smartphone is a type of mobile phone with more processing power and greater hardware abilities than the basic feature phone. The phone contains high-powered cameras which can break in case of mishandling. In addition, the smartphone screen is very fragile and needs secure handling to avoid breaking the screen which may render the phone non-functional. Moreover, they contain an in-built lithium-ion polymer battery and hence the device needs to be packaged properly to avoid any activation (Huo et al., 2017). Products containing lithium batteries are considered to be dangerous products thus it is essential to pack them carefully to avoid danger. Thus when packing them there need to use strong rigid outer packaging and fill the left space with protective materials like cushion bags. When packing the smartphones it is important to make sure no spaces are left between the items in the box and between the boxes. This reduces the possibility of damage such as breaking the smartphone screens.
Packaging/Packing
The packaging objective is to protect the product, communicate a brand image, communicate a message, and provide consumers with convenience. Since smartphones are of high value and are fragile, therefore they need to be packed in durable packaging that protects them. One differentiating feature making the packaging and handling of the smartphones exceptional is the in-built batteries. The inbuilt batteries save more space since no packaging of batteries is required allowing more space for more smartphones to be packed (Notteboom & Rodrigue, 2008). When transporting the smartphones they will be packed in boxes with individual plastic wrappings to protect the screen of the phones. Every box is marked with a barcode that is read by scanners when leaving the manufacturing plant and loaded onto cartons to make up part of the larger shipment. From the manufacturing firm, the smartphones arrive in the mobile shops in stylish boxes manufactures from a card with inserts made from low-quality or recycled cards. Smartphone packaging solutions are produced with well-crafted designs and technical advancements to allow recycling, reuse, and degrading. Smartphones are shipped to shops packed in folding cartons. The packaging is offered in a cuboidal shape to enable easy transportation and the boxes can be stacked on shelves easily to make efficient use of the available space. When packaging the smartphones some considerations to be taken include protecting batteries from short circuits and accidental activation of lithium-powered devices (Verghese et al., 2015). In addition, the smart devices containing batteries should be securely packed to avoid movement within the outer packaging or activation of the device. The stacked boxes containing smartphones are moved to a location where they are packed into containers and are ready for shipment through main ports in China such as Shenzhen Bay Port. From the port, the container is then loaded onto a ship to travel by sea to a port in Australia which include Port Botany in Sydney where the ship and containers will be unloaded and the cartons conveyed to the warehouse in the Mayfield Industrial area by either truck or rail. The distribution center allows Mobileciti to benefit from threat combining impacts in reaction to differences in consumer demand by having register positioned in a location where elements that were initially anticipated for single selling vent can be moved to another retail vent undergoing extraordinary demand. This caused enhanced manufactured goods convenience and advanced consumer fulfilment, low safety stock levels, and reduced holding costs.
Documentation
Various basic documents are needed for the carriage of the container and others needed by the consignees and buyers to complete any transaction. Some of the key documents needed for shipping a container from Shenzhen to Port Botany in Sydney include a bill of lading which is the original receipt delivered by the carrier confirming that the products in the specified marking and quantities have been loaded on the designated ship for carriage to the specified port (Ahmadi et al., 2017). The document should contain the name of the beneficiaries, the quantity of the product and type of packaging used, type of products comprising all legal, compulsory notices, weight and measurements by type of cargo and whether freight is prepaid or payable at destination, and complete markings and numbering of packages. These details are important as they will help the receiver to confirm whether the container received comprises all the products following the details specified in the bill of lading.
Material Handling
Main concerns in developing the material managing undertakings of the supply chain from a Shenzhen processing plant to Austria retail ship include the smartphones manufactured goods feature such as quality, capacity, sensitivity to temperature, permanency, and unfashionableness. Smartphones are fragile, high-value with high-temperature sensitivity. When received at the distribution center, the barcodes allow the contents of every carton to be identified by automated material handling equipment (Lysons & Farrington, 2010). The development of the material handling procedure should emphasize on reducing the amount of managing every product received since amplified manual handling greatly surges the risk of destruction of products. Therefore, highly computerized methods undertakings stretching from the packing of smartphones to cartons to the conveyance of resources in the manufacturing firm, stocking of containers onto ships are effective and cost operational elucidations to reducing the possibility of low product quality because of destruction that occurs in the supply chain.
Besides automated materials handling systems been more efficient because of less variables expenditures and less human restrictions, the phase of supply chain where product quality control checks are done, is of great significance in ensuring the quality of products that validates the usage and rate of manual work. Scrutinizing the products by humans to identify value concerns at the manufacturing plant before shipment is essential as it helps in eradication of expenses acquired by transporting defective products and a decrease in converse product movements and waste because of manufactured goods destruction. This allows Mobileciti to add quality to its supply chain and through maximizing the dependability of the manufactured goods value and reduced consumer displeasure, Mobileciti is able to attain a persistent competitive advantage.
Possible Delays
Among the greatest threats of operational global logistics is time interruptions in the supply chain. The prescribed zero failure level of Mobileciti indicates that each phase of the supply chain need to be proficiently scheduled and eventuality approaches creates in expectation of any concerns and likely interruptions. Among the approaches is bringing frontward the expected delivery date by a week so that the supply chain obtains a week’s worth of wiggles room to still meet the cutoff date established by Mobileciti in case of possible interruptions. As this increases catalogue holding expenditures, the fee of failing to meet Mobileciti’s prerequisite principles should be gauged against the additional cost together with the possibility of an incident happening. Besides, the water transportation mode having a long lead time, delays can be reduced and the procedure streamlined by the right preparations of the needed global certification (Kirovska et al., 2016). The documentation includes the primary contract which is the bill of lading which is the contract between the transporter and the shipper which functions as the receipt of the merchandises and quantities shipped. Delays clearing customs and border protection are among the most fruitless and time-draining constituents of the supply chain. Therefore, the research of official papers used by customs officials like shipment manifest certificates of origin and value, and packing lists have significant penalties not only on the lead time of a consignment but also, on consumer service.
Onward Delivery
Onward delivery involves transporting the container from the port to another destination. After the container arrives at Port Botany in Sydney it requires to be transported further to Newcastle in a warehouse in Mayfield Industrial Area. This means that there needs to be better coordination between the transport chains to ensure efficiency and avoid further delays. However, most of the terminal operators lack information on the onward transport segment for container discharges on the terminal. Thus, close coordination with the shipping lines, forwarders, and shippers is needed and can be attained by a better data exchange among supply chain partners. After the arrival and clearance of the container at Port Botany, the container will be forwarded to the Port of Newcastle in Mayfield. The onward delivery will consider shipping as well to avoid congestion on the Sydney roads and rail (Ng et al., 2013). This, therefore, will help avoid possible delays in the arrival of the container in Mayfield. Besides, the Mobileciti will save more transport costs by using the shipping method from Port Botany to Port of Newcastle (Lubulwa et al., 2008). Port of Newcastle will offer efficient delivery of the container to a warehouse in Mobileciti due to its connectivity with the rail. Also, the port is connected to major trade links hence making it an efficient terminal to consider for onward delivery. According to statistics, more than 25% of the Port Botany containers are moved to the port of Newcastle terminal to avoid traveling through congested Sydney.
Conclusion
International sourcing of consumer products has become a fundamental part of the current growing business environment. Globalization has enabled countries and connects easily in terms of trade. Thus, through globalization, there are few border restrictions thus allowing more countries to connect to do business. Australia has engaged in international sourcing whereby the country imports most of the manufactured consumer goods. Particularly Australia gets a third of its imports of manufactured consumer goods from China. Mobileciti a telecommunications retail shop in Mayfield Australia sources Huawei smartphones from Huawei Technology Company Ltd, through importation to Port Botany in Sydney then considers Onward Delivery to a warehouse in Mayfield where the retail shop picks the container from. The importation process involves different logistic considerations such as the nature and physical characteristics of the product, packaging, material handling, and onward delivery. These factors affect the importation process of the container in different ways. In the case of packaging, since smartphones are highly fragile and have lithium-ion batteries which are considered dangerous they need careful packaging which includes ensuring there are no spaces between the smartphones to avoid damage. Documentation for the shipment of the smartphones includes the bill of lading which acts as a receipt of the container beside containerization considerations entails picking a container that is suitable for the products being shipped from Shenzhen to Port Botany. As smartphones are highly fragile considering smart containers can help avoid the damage to smartphones. Smart containers will help monitor the temperatures of the location and the stakeholders can locate the container through the GPS location feature offered by smart containers. After the arrival of the container at the Port Botany terminal to avoid congestion on Sydney roads and rail as well as reducing freight costs, shipping the container further to the Port of Newcastle will be more favorable. Thus, the shipping process does not require urgent products since they may take a longer time to arrive due to possible delays.
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