Analysis of Simba Dickie Group Enterprise

6. Logistics
“Logistics is the business function responsible for transporting and delivering products to the right place at the right time throughout the supply chain.” It is about movement and storage of product inventories throughout the chain. Logistics is an essential part of supply chain management because it links the downstream and upstream of a business’ supply chain.
For Simba Toys logistics function is prominent since the manufacturing process is held in Hong Kong because of cheap labor and long production hours. Manufactured and packaged toys are then shipped to the countries where the toys are going to be sold. In order to be cost-effective focus of the company, Simba Toys use either 3rd party logistics firms or in-house logistics regarding to the quality of transportation and price sensitivity.
Simba Toys accepts the fact that logistics have important impacts on operation, packaging, marketing, and finance. Because of the manufacturing process in Hong Kong, company is not able to benefit from just-in-time or lean manufacturing, since shipments are made by either truck or seaway. That’s why Simba Toys use mass manufacturing based on previous years’ data forecasts and arrange exact shipment schedules to avoid excess inventory and stock-outs.
To compete in a highly fluctuating toy sector, Simba Toys admits the impact of logistics on packaging, too. Since the packaging material is essential for both marketing and transportation, the company uses proper packaging for each kind of product it produces, which ensures product integrity.
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