Introduction To The Company

Published Date: 02 Nov 2017

Fachita was founded by its current owner, Tung Koi Kiong on the year of 1982. Its primary activities are transporting tractors and various types of earth moving machines around the Peninsular Malaysia.

Mr.Tung was a tractor driver for one of a construction company prior to his establishment of his company. After a few years of working hard in the company, he felt the urge of becoming the boss of his own. Using the savings he got from his career as a tractor driver, he founded Fachita.

He started by acquiring some transporting trucks from various trucking firms to start his business. Using his connections in his industry, he quickly gets orders from companies which needed this kind of service. Because during that time this industry (transporting earth moving machines) is still a niche and not much of companies offer this kind of service, Mr. Tung was able to enjoy a good start for his company.

From the company establishment until now, the company now owns 9 transporting trucks and a warehouse situated near Gua Tempurung. Apart from storing transporting trucks, the company also uses the warehouse to park its customer’s machinery pending for transportation.

Its main office is situated at Kampar, where its employees arrange the transportation schedule and orders. The main office also serves as a database for the company to store the customers’ information.

The company philosophy is "Offering Customer Quality Service at an Affordable Price", which is also its strategy to compete in the industry. The company charges reasonable fees based on the weight of the machinery and the distance they travel to the unloading place. The company also takes great care of its customer’s machinery that are stored in its warehouse so that the machinery is kept at a pristine condition. For example, while they are loading the machinery onto the bed of the transporting lorry, the workers take great care by driving up the plank slowly. The company’s warehouse also equipped with a massive awning to keep their customers machinery out of the sun and rain.

Operation Processes of Fachita

Lorry returns to warehouse.

Unloads machinery at destinations.

Clerk arranges lorry for pick up and transportation/ Customers delivers machinery to warehouse.

Customer calls in to place order.

The diagram above illustrates the operations process of Fachita. As per introduction, Fachita is a logistic company that transport earth moving machinery as per customer request. Its operation covers Peninsular Malaysia. Fachita utilizes a process focus operation.

The first stage of Fachita operation is where the customer calls in. The customers call in to place order for the service required. The customers either request that their machinery to be picked up at their desired locations for further transportations or the customers delivered their machinery themselves to Fachita’s warehouse for future delivery to their desired locations. Then, the clerk will check the availability of drivers and lorries to give confirmations to the customers.

The 2nd stage is where the clerk arranges lorry to pick up customers machinery for transportation according to the customer’s request or the customers delivered their machinery to the company warehouse for future transportations. If the machinery were to be parked at the warehouse for some time, the employees would move the machineries under the shelter to prevent the machinery from being exposed under the sun and the rain. When the time comes, Fachita workers will load the machinery up to the company’s lorry with extra precautionary to prevent any damages done to any of the machineries.

The 3rd stage is where the delivery and the unloading of the machineries are done. When the lorries arrived at the customers desired location, the employees will unload the machinery for their own dedicated purposes of the next users. Because most of the machineries that Fachita transported are mainly for construction purposes, the condition of the work place may be harsh. According to the clerk, their employees are required to take extra care when unloading these machineries to keep the machineries in mint condition.

The final stage of the operation processes of Fachita is when the lorries drivers and employees finished their delivery job and head back to the warehouse. The employees may wash the lorries as the lorries might filled with dirt after unloading the machineries on site. The employees might also need to do some routine check-up for the lorries such as oil changing or suspension tuning due to the heavy duty that the lorries underwent.

Strengths of Fachita operation process

Simple operation process structure

The operation process structure of Fachita is fairly simple. The process where the customer place order is straightforward. After the clerk answer the phone call from the customers, the clerk will check the availability of the drivers and lorries. Because there were no clearly defined department at Fachita, this can reduce the "bricks and walls" between the employees. Using this, the company’s employees may have been more integrated than those firms with clearly defined department and reduce any communication error between the employees.

Quality services

The employees are trained to provide quality service to the customers. For example, when loading the machineries up to the lorries for transportation, the employees take extra care when handling the machineries. This is to prevent the machineries from suffering any damages and to give the customers a good impression on the services Fachita provide. The company also build shelters to keep the machineries that were stored at the warehouse out from the rain and the sun. The company also guaranteed that the delivery will be done on time as the customer request. The company keep a regular maintenance on their lorries to prevent any breakdown during the delivery.

Weaknesses of Fachita operation process

Limited capacity leads to a loss of profit

The company’s limited capacity lead to a loss of profit. Because of the company’s limited capacity (9 lorries), the company may not able to accept all the job offers by its customers. The company has to sub some contract to its competitors to prevent any damage to the customer reputation. The company has to pay its competitor part of it revenue. This has led to a further loss of profit for the company.

Strengths and Weaknesses of Office Layout

Layout design is a method which could help in well allocate the space using, working environment, and communication between department and department. However, it also consist several considerations such as improved customer interaction and flexibility.

The main strength of this office layout is the security lock. Fachita had placing a security lock at the main entrance which is the middle part of staircases. This act could ensure the security of the office. It also secures the documentation privacy.

Glass windows could be another benefit to Fachita’s office. They use the glass windows as easy way to monitoring the situation outside the office, for example the clerk could notice when clients or visitors arriving.

At the same, the glass window that placing in the director’s office is useful that the director could supervise the administrators. The director also could monitor and evaluating employee’s performance through glass window.

Furthermore, Franchita had provided a sofa and water dispenser in the administration office. It provide a convenience to their customers or visitors; they giving a comfortable way to them when they are waiting director and so on. The clients and visitors could have a rest and drink provided in the office.

Based on the floor plan, we founded that there are weaknesses arise. Firstly, the floor plan shown that there has extra non-using space. We founded that the scale of the administration office is small. Besides, there is a lot of documentation within the administration office.

Then, we notify that the documentation room is beside the director’s office. It might be affects the director privacy due to the administrator would pass in and out the documentation room frequently.

In addition, the arrangement of the documentation room is just a simple and basic furnishing which is bookshelf for the documentation purpose. The documentation has more than the capacity of room, it cause the room looks untidy.

Other than these, Fachita also faced lack of manpower issue. There is only 2 administration clerk take over the entire job; they have to play some critical roles, such as receptionist and secretary.

Benefits and Disadvantages of Warehouse Layout

Warehouse is the place which employer storage their products. An appropriate allocation of warehouse space using could help the job proceed in efficiency and effectiveness.

The main advantage of Fachita’s warehouse layout is they had well allocates the transport lorry parking lot. They have allocates the space that enough for parking and turn around the transport lorry. This is to prevent any incident arise when the driver move the lorry.

In addition, Fachita would help their clients to storage the earth moving machinery in certain circumstances. Therefore they had design a parking area for the parking purpose. This could avoid any damages when move the earth moving machinery.

Moreover, Fachita had design a staff lounge within the warehouse area. The main factor that company decides to design an employee lounge is company understands the employee’s physical needs, such as feel tired after the driver having a long-distance driving in order to transport the earth moving machinery. This could be an employee welfare provided by the company.

However, we founded that are few cons arise based on the floor plan provided. The main weakness should be the washroom location. The current location is provides convenient to the admin clerk, but that also would cause some inconvenience on it. Instance, all the workers are male except the admin clerk. Every worker would go in to the office when they go washroom. It would be one of the inconvenient to the admin clerk.

Besides, the workers pass in and out in frequently also would affect the impression from the clients when they visit. It also would get interruption when the admin clerk having a discussion with the clients.

Article Review

Fachita is a company that deals with logistical enterprise. At present, it is increasingly required to provide new services that could enlarge the business of Fachinta with good competency and competitiveness. One should first consider the four service characteristics- intangibility, inseparability, variability and perishability to develop a new service. New service development could be done externally and internally by where "external newness captures the novelty of the service as the customer perceives it and is helpful" whereas internal newness captures "the degree of change in service delivery personnel training and development, information flows and information technology infrastructure, non-IT physical infrastructure of the service, and facilitating goods" (Menor et al., 2002, p. 139).

"The nature of the service influences the development of services" (Shekar, 2007, p.14). Thus, the low ease of service delivery should be prevented because it may "lead to greater personnel skill requirements, greater quantity and quality of facilitating goods, greater resource requirements in general, unnecessarily greater service variability, longer service transaction times, higher levels of customer dissatisfaction, and other elements of poor service quality" (Menor et al., 2002, p.147). As developing a new service cause complex operation, Shekar (2007) said that "multi-disciplinary teams across the department should be brought together, along with users at appropriate times during the development process". To illustrate this, in the Fachita Company case study, a cross-functional team consisting of mechanical engineers, "service managers, frontline service staff, transport service staff and experts" should be organized to well fit the concept of new service development (p.14). They must fully understand new service and deliver them to customers consistently because it is difficult to reach out "shared understanding" on service concept between employees and customers (Tatikonda, 2002, p.204). Menor et al. (2002) had commented the process of service development involves the creation of component designs (referring to changes in people, service offerings and infrastructure) and architectural knowledge (indicating how design components are linked together without changing the core service) (p. 140). Fachita Company, hence, may introduce a Research and Development department to do more quality analyses and researches to improve besides amend the shortcoming of the logistical services.

A new service development would work better with the cooperation of service staffs and users, which "are critical to service production and delivery" (Shekar, 2007, p.4) Fachita Company should make sure that they hire licensed and safe drivers with experience for transportation. Staffs who take responsibility in taking care customer’s machinery must have mechanical skill. Service facility is very important and therefore, the awning used to cover service users’ machinery should be in good condition and best quality. On the other side, "creative and consistent techniques and procedures" are required to include the public in service decision- making. (Shekar, 2007, p.7).

In the journal of" Retailing and Consumer Services" which we had reviewed on is mention about how success the business was is depending on logistics and supply chain performance. Globalization and changing trend of the industry have forced retailing companies to using new technologies in order to improve and develop new Services development’ to make sure that company can continuously maintain their competitiveness. The overall aim of logistics is to reach high customer satisfaction with speed, means that high quality services with low costs are. Waters (2003). The analysis of implementing new technologies in logistics was main objective which can reduce the stored of inventoried in order to optimize stock levels in warehouses and stores as well. The most important technologies are warehouse management system, systems for automatically positioning goods on the store shelves. Companies also had use e-trade problem solutions in the process of distribution goods to their end user. High level of Internet usage in Croatian retailing provides preconditions for maximizing the business operations and the implementation of new Internet based technologies. S.Renkoa and D.Ficko(2010)

As the importance of services become broader, its increase the importance of systematic approaches to develop new services – commonly termed New Service Development (NSD). In journal "New Service Development for Electronic Services ", is talking the E-services is being implement, and the found that this new services is not limited to the B2B domain but also encompasses the domains of B2C, government-to-public, and intra-organizational entities Rust and Kannan,(2003).Through a collection of Web-services that together form a new value added service which is thus delivered through an electronic interface. For any business activity of value exchange that is accessible through an electronic interface included logistic activities. By implementing New Service Development E-services it can come out with the differentiate strategy in term of the cost structure of services, high degree of outsourcing, rapid development of new services, availability of transparent service feedback, and continuous improvement of services. C.Riedl,J. M.Leimeister,H.Krcmar(2009)

New service development (NSD) is very important for decision makers in the service firms and manufacturing firms, base on "Success Factors in New Service Development" by T. Posselt1 and K. Förstl (2011). With this study, we can see the starting point for customization and maximization of NSD in business practice. One of the main contributors to success is a unique or superior service. Service Success Factors normally determine by the characteristics of a successful service. The foundation for these characteristics is set during the NSD process, where the service system is designed, target markets are determined, and employees are trained. The synergy between the development project and its environment also determines the success of NSD. The intention of providing NSD with a comprehensive overview and structure of factors that leading to a high performance of service development projects. Managers can be provided with a "toolbox" for service development.

Service form an important part in economy and also accounts for most of the growth in new jobs (Lovelock and Wirtz,2004). This is because of the increasing competition, firms find it hard to survive without making any innovation. So, there are a few new service management that can be carry out to improve the overall performance. Services development can be categorized into three main parts which are service concept development, service system development and service process development. Service concept includes objective and strategies, idea generation and screening, concept development and testing (Scheuing and Johnson,1989). Service concept development relates to ideas about how to meet customer needs and it should start from a description of customer requirements and how new service development can meet those requirements and creates satisfaction. Service system development is about the infrastructure needed to deliver the service and the recourses to set up the system. Service process development builds a sequence of activities that must take place for the service to function and effectively delivered.

New service concept can be trying out for example a new service for the current market. It means that provide new service that attempt to offer existing customer of the firm that is not previously available. The leader of the firm might also provide new transportation service for example shipping service. This new service might enlarge the business field and also attract more new customer from other region to the firm. Besides that, some service can be improved for a better performance. Service such like customer service can be improved by upgrade and train the employees. Technologies update and new skills can be given to employees to ensure them communicate well with the customers by giving the right information to increase the customer’s satisfaction.

A large share of innovative efforts in business is related to the development of new services (OECD and Howells, 2000). This means that managing key activities in the new service development process, and creating a climate for continuous innovation. In addition innovation in services involves only small changes in the process and procedure, R&D is not needed. Innovation in services can be related to new client interface as well. This will make the firm to make some minor changes to retain current client and to bring it more potential customer. On the other hand, innovation in the delivery service system refers to the organization internal arrangement to allow the employees to perform effectively.

People. It is widely believes that any organization co-workers are the heart of the innovation process (Van de ven,1989). They are the ones who comes up with new ideas for new changes. For those employees that responsible for sales and service delivery may come up with a better new service that different from those competitors. Firms should consulting the employees for

their opinion before implementation decision is made.

After that, structures play an important character. To enhance efficiency and effectiveness, firms may divided up various tasks between employees and provide coordination for each tasks. For example, activities such as brainstorming among employees encourage pop up of a new generated idea. This new ideas maybe use as a reference or a recourse for further advance.

On the other hand, cross-functional teams are successful in development activities because this is a combination of experiences and knowledge they offered to service management. Firms that develop new service without using multi-functional teams suffers from functionally departmentalized structure.

As the provider of the service, customer’s feedback plays an important role in it. Because every customer’s perception is different from each another, the quality of experience must be evaluated effectively. These prove that a customer is heavily important to shape the company’s performance. That’s why quality control of the service is hard to achieve. Service should be put considered effort into the simplication of their service offerings, but also keen of the adaption of standardize service to particular user needs (Soeto and Miozzo,1989).

Firms and customer forms a bonding relationship when a service is provided. The information collected in the past about a customer and his preference can be brought to bear when a new service encounter occurs, increasing switching costs (Dolfsma,2004). This means that feedback or comments from customer plays a very important role to evaluate the company’s performance and for decision making for any changes.

Information technology is greatly used to collect and for surveys, firms should owns an official website on the internet so that enables people round the world manage to click in and have a better understanding of the company. Thus, the firm may give out points to the people about how it working and what it is work for. In addition, R&D can be carried to determine a better type of process so that the firm can deal with customers more effectively and efficiently.

New service development has being a hot and challenging issue as nowadays industry faced high competition, short product life cycle high customer demand. The selection of a correct service system for the enterprise is a major strategic and every system has its advantages and disadvantages. Services are intangible, heterogeneous and hardly to evaluate, but some companies still constantly improve to provide better services. Innovation of service creates competitive advantage along with two primary dimensions: the type of benefit offered and the degree of service "separability". (Berry, Shankar, Parish, Cadwallader & Dotzel, 2006 ) The first dimension is where new core benefit or new delivery benefit can be innovating for a business for customer. The second dimension concerns whether the service must be produced and consumed simultaneously.

Five success factors to better analyze the impact of project activities and characteristics on the success and failure of new service development initiatives. The five success factors are service marketability, service deliverability, inter-functional teamwork, launch preparation, and launch effectiveness. The success rate for new service projects is on average 58%, which is consider that average of two projects launch will be one successful. Poor planning may be one of the reasons why a new development could fail. Performance measurement helps ensuring the success of any project. As a conclusion, a reliable performance measurement system is essential for sound management decisions and company growth.

The study of review is about the application of Geographical Information Systems (GIS) in logistic industry. GIS is a collection of computer hardware, software, geographical data capturing, managing, analyzing and generate every aspect of geographical referenced information to provide useful information to solve logistic business trouble, they still have it own disadvantages. It might not appropriate to all logistic firm. In the study review of GIS, some company integrates GIS into their new distance approximation approach. There are develop a simple and accurate distance approximation with GIS based decision support system. The hybrid approximation reduce data requirement and improve travel speed by elimination of local road detail. Some business develops a new approach which used data envelopment analysis (DEA). GIS help user organize and combine spatial, temporal and economic information while DEA build in the query for select best location by maximize the ration of output to input

Case study of Third Party Logistic in Chinese Automotive Industry has discussed and indicated several services which greatly help in innovation of management and develop new business plan. Procurement service is one of the services to help firm in client selecting, client collaboration, implementation of practice and negotiation. The process of selecting a supplier is vital as it is directly and indirectly related to collaboration in future. Another service is new order management system. These new systems bring alternative payment system, order information transfer and new return and refund service. Warehousing system is another service discussed in case study. Integration of information technology into business will result of effectiveness and efficiency as well as increase accuracy yet reduce human made mistake. Nothing in this world are perfect, they must be an existence of negative down side. The new warehouse system, Radio Frequency Identification (RFID) and bar code system will cost an amount of implementation cost for organization. Another disadvantage can found in the implementation of new house system is abandon of new integrated system, employees might not able to suit them into newly introduced operating procedure.

By applying the above-mentioned advantages of New Service Development (NSD), logistics firms may implement NSD to increase their revenue as well as the reputation in their own field. Logistics is a field where a high human labor forces are involved. Applying NSD might reduce human made mistake and achieve a punctual delivery time. Over the past, logistics has play an important role within a company. The main targets of logistics can be divided into performance-related and cost-related targets. A few examples are high due date reliability, short delivery times, low inventory level, and high utilization of capacity. When decisions are made, there is a trade-off between targets. Any mistakes or misscheduling might cost the company their reputation or profit. So implementation of NSD reduces the risk. Company like Fachita offering transporting of earth-moving machinery, where the company utilizes their own lorry. Its highly recommended that they keep a close eye on the company’s lorry. These lorries are vital for punctual delivery time and the scheduling must be made clearly so that any conflict can be avoided.

Discussion

From the operation processes discussed earlier, each of the steps is very important in ensuring the efficiency and effectiveness of the company. Fachita applies process focus operation. Process focus operation suits this company as the activities involved are specific and the operations are of low volume and high variety. The process flows may very due to different requirements from customers. So, the company can adjust their operation accordingly to meet customers’ requirements.

The weakness of this company’s operation process is limited capacity. The limited number of lorries and small scale operation of Fachita restrict its business and cause them to earn limited sum of profit. Therefore, Fachita many improve on this by enlarge the scale of its business. They may acquire more facilities and hire more workers so that they have enough capacity to deal with more businesses and gain more profit from it.

Other than improve on its weaknesses, Fachita needs to maintain and strengthen its current strengths too. For example, its simple operation process structure. Although Fachita would like to expand their business in future, they still can apply this simple operation process structure, for example the straightforward ordering method to avoid unwanted troubles. Fachita also needs to maintain its quality of customer service. Other than those services mentioned above, Fachita can provide better customer services such as quicker response to customers’ requirement and shorten the waiting period to attract more customers.

Facility layout is a very important element to help a company meets its competitive meets. Facility layouts of Fachita consist of office layout and warehouse layout. Both of these layouts ensure the smooth operation of the business and enhance its efficiency and effectiveness. For example, its office layout is suitable and important for the order taking process and customer meeting whereas its warehouse layout is useful in parking its vehicles and storing customers’ machinery.

The major weakness of Fachita’s office layout is that they failed to fully utilise the space available. From the office layout floor plan, we can see that there is a "L shape" unused space. This is a waste of resources as they can actually expand the office to fully utilise all these empty spaces. This can enlarge the spaces in the office so that it will not be so messy and crowded.

Furthermore, the documentation room is just beside the director’s office and a glass window is placed on the front. This is a poor design as all of the things stored in the documentation room are visible to everyone who enters the office. Thus, it will leave a bad impression to the customers or visitors as overall the office looks quite messy. They should relocate the documentation room so that they can hide the untidiness from the sight of outsiders.

New service development is an important criterion for every company as it helps to enhance a company competency and competiveness. As what have been mentioned earlier, multi-disciplinary teams across the department should be brought together during the development process. Other than research and analysis done by Research and Development department, cooperation of service staffs and users are highly needed to ensure a well development of new service.

For Fachinta, new service development can be carried out to improve its overall performance. For example, providing new service that attempt to offer existing customers that is not previously available and different from what is being offered by competitors is a good way to get customer retention and new customer acquisition. A strong bonding relationship can be formed by offering new services. Thus, customers prefer the company and will always return to Fachita whenever they need logistic service. Good word-of-mouth may even been spread by these customers to their friends. This bonding relationship can be a competitive advantage and the company may earn more profit from this.

Conclusion

As a conclusion, Fachita is a logistic company, in which its primary activities are transporting tractors and various types of earth moving machines around the Peninsular Malaysia. It utilises process focus operation. The operation process of Fachita is basically consists of four stages. The first stage is where customer calls in to place order. The second stage is when clerk arranges lorry for pick up and transportation or customers deliver machinery to warehouse. This is follow by unloading machinery at destinations. The last stage is the returning od lorry to warehouse.

We can see two types of layout in Fachita, office layout and warehouse layout. Both layouts are important to this company as they assist in the whole operation process of transporting customers’ goods. However, we still discover some weaknesses in their layout. Fachita should look into these aspects and further improve on them.

New service development can help Frachita to improve on the efficiency and effectiveness of operation. They should start to develop new service so that they can provide something new to their existing customers and even attract current non-customers.