Relationship between “Human Resources Management and logistics”

purpose of the research

We aim to :

1. Explore the relation between logistics and HR

2. Prove that HR practices can facilitate the execution of logistics strategies and enhance Co. competitive strategy

3. State the types of competitive, logistics and HR strategies and show the link between them.

4. prove in the end that there is a direct relation ship between logistics and external customers and indirect relationship between HR and external customers

introduction

Importance of logistics as a mean of achieving competitive advantage .

logistics has gradually been regarded as a functional area and an important constituent contributing to a firm’s competitive ability

Importance of HR practices to facilitate the implementation of logistic strategies to cope with the implementation of company’s competitive strategy.

i. Competitive strategy

2 types that a Co. may pursue superior performance

DIFFERENTIATION

COST LEADERSH

IP

Refers to obtaining competitive advantage through cost reduction

measures (efficiency)

Refers to providing high value-added products or services to specialized

customers (responsiveness)

characteristics of Differentiation strategy

A company pursuing differentiation strategy will :

1. segment target markets on particular clients and tailor offerings to match exactly the demands of those niches.

2. require detailed client knowledge as well as operational flexibility to respond quickly to customer needs.

Required Logistics tasks

emphasizing quality in products or services, as well as paying attention on responsiveness to target customers’ demands

Characteristics of cost leadership strategy

A company pursuing cost leadership strategy will :

1. provide relatively standardized products or services at competitive prices.

2. deliver products or services with maximum reliability to a broad range of customers.

Required logistics tasks finding the best standard in providing logistic services and offering

simplified and standardized logistics to lower operating cost and enhance efficiency.

Logistics definition

Logistics - Logistics is that part of the Supply Chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet Customers' Requirements. (CLM)

Logistics strategies

2 types of logistics strategies

1. Provide high value-added products or services to particular clients

2. Pay attention to communication

3. Form long-term cooperative relationships with customers and logistics partners

The purpose of such logistics strategy is to offer low price, reliable, convenient, and efficient products or services to a wide range of clients

MARKET-ORIENTED LOGISTICS STRATEGY

COST-ORIENTED LOGISTICS STRATEGY.

Linking competitive and logistics strategies

Based on the logic stated above we conclude :

Differentiation

MARKET-ORIENTED LOGISTICS STRATEGY

COST-ORIENTED LOGISTICS STRATEGY.

Cost Leadership

Company pursuing

Company pursuing

Will adopt

Will adopt

HR definition

The policies and practices involved in carrying out the “people” or human resource aspects of a management position, including recruiting, screening, training, rewarding, and appraising

HR strategies

2 types of HR strategies COST

REDUCTION HR

STRATEGY

HIGH COMMITMEN

T HR STRATEGY

1.Reducing operating costs

2. Adopting specific work definitions

3. Tight monitoring and control in work

4. Providing limited trainings

5.Allowing limited worker participation

1.Motivating workers potentials

2. Adopting broad job definitions

5. Rare interfere with workers daily tasks

3.Providing extensive trainings4.Allowing considerable participation

linking logistics strategies and HRM strategies

In the previous section, we have established the link between competitive strategy and logistics strategy.

Now we will explore what HR strategies can facilitate the implementation of different logistic strategies?

The logic linking logistic strategy and HRM strategy stems from the different level of uncertainty in tasks when implementing different logistic strategies

Since strategy is an action guide plan and all strategies must finally be executed through people, companies may use workplace HR practices to Shape employee behaviors for the effective execution of different missions

Market-oriented logistics strategy Working circumstances

firms must be flexible enough to quickly shift logistic-related organization resources to meet changing market demands. (Workers in such companies must have the skills and

trainings to perform a variety of different tasks)

it is difficult to predetermine all possible contingencies, standardization is less possible and the level of uncertainty in Performing logistics tasks increases.• (Workers engaged in uncertain logistic tasks are required to

use some discretion in determining when and how to perform different logistics jobs )

Market-oriented logistics strategy

Characteristics of workers needed

Skilled logistics workers with high level involvement, autonomy, extensive trainings can attract, motivate, and retain qualified employees, who will be committed to the goals of the firm.

These characteristics match with the description of the maximum commitment HRM strategy, whose primary objective is to encourage discretionary employee behaviors and decisions under conditions of high task uncertainty.

Cost-oriented logistics strategy

Working circumstances

Involves producing standardized products and services, and emphasizes cost reduction and logistic efficiency. • ( logistics processes are narrow and workers perform well-defined

jobs)

it is more easier to predetermine all possible contingencies, standardization is high and the level of uncertainty in Performing logistics tasks decreases• (low skills workers don’t need to use any discretion in performing

well-defined logistics jobs)

Cost-oriented logistics strategy

Characteristics of workers needed

Workers with low skills requirements, low innovative or creative behavior and less involvement and information sharing.

These characteristics match with the description of the cost-reduction HRM strategy, whose primary function is to reduce direct labor costs and other employment related expenditures

summary

Summarizing the discussions above:

MARKET-ORIENTED LOGISTICS STRATEGY

HIGH COMMITMEN

T HR STRATEGY

COST-ORIENTED LOGISTICS STRATEGY.

COST REDUCTION

HR STRATEGY

1. Strict cost control2. Efficient way of operation3. Tight control of employees4. Clearly-delineated responsibilities5. Standardized work process6. Production design based on

facilitating production process

1. Cost reduction in logistic process2. Emphasizing logistic efficiency3. Logistic process reengineering4. Trustworthy suppliers5. Offering standardized products and

services6. Extended service areas and large

amount of customers

1. Specific and well-defined work definitions

2. Tight control to prevent cost of error3. Close surveillance over workers4. Low worker participation5. Limited trainings6. Result-oriented performance

evaluation used as control mechanisms

Comparison of Competitive Strategy, Logistic Strategy, and HRM Strategy

Cost Leadership Strategy Cost-oriented Logistic Strategy Cost reduction HRM strategy

Differentiation Strategy Market-oriented Logistic Strategy Maximum Commitment HRM strategy

1. Strong abilities in product design, development, and marketing

2. Emphasizing quality in products and services

3. Pay attention to responsiveness to customers' demand

4. Serving particular market segments5. Value employees with skills and

creativity

1. Providing high value-added products or services

2. Emphasizing quality in products and services

3. Pay attention on responsiveness to target customers’ demands

4. Providing services to particular clientele5. Pay attention to communication and

cooperation with customers and logistic partners, form long-term cooperative relationships

1. Emphasize innovation and flexibility2. Loose job definitions with cross

functional communications3. Proper empowerment4. Problem solving through work teams5. Select employees with high technology

standard and innovative ability6. Emphasizing development and training7. Process-oriented evaluation used as

basis for worker development

There is direct relationship between logistics and external customers (customer satisfaction)

A direct relationship between human resources and internal customers (employee's satisfaction)

Indirect relationship between human resources and external customers

From the previously discussion we have proved:

Relationship between “HR and Logistics”Should engage with the staff by using

authorities

Before

HiringRecruitment

Select

ion

During

Operatio

nSalaries

Training

Promotion

After

leaving the compan

yInterview

Background

investigation

Performance

Productivity

Satisfied

External customer

Satisfied Internal

customer

Business Value

Profit Image

Competition

Why?*Transparency

*Fairness*Credibility

High performance work system

What?

Output

Outcome

HR

Staff authority

Implied authority

How?

When?