Penner Medical Products

Answer

Penner Medical Products

Analysis of the Delivery Problems from Stinson

Many reasons explain the delivery problems from Stinson. Delays could also be caused by other circumstances surrounding the supply chain. Delivery problems from Stinson could be due to incorrect customs declarations. Examples of incorrect custom declarations include a wrong description or omitted value of medical supplies, which could lead to erroneous categorization leading to inaccurate license. Automatically, goods are selected based on their classification number. Therefore, if Stinson wrongly described the products or missed a value, then the shipment could be held and placed under query at the border. Incorrect documentation and paperwork could be another reason causing delivery delays. Even a seemingly minor incorrect paperwork can result in severe delays to a shipment (Aronovich et al., 2010). Worse still, this has made Penner lose customers who were not prepared to wait until issues were solved. Stinson could have made a standard error and missed off the value of the shipment since sometimes the inventory was under-delivered.

In addition, custom timescales could be another reason for delayed shipment. However, it is not the revenues and customs timings that cause problems, but issues arise when there is incomplete or missing documentation, leading to a shipment not being ready to be submitted for clearance because the clearance agent cannot submit the clearance form. Usually, although filling up custom forms is not complicated, the process can be time-consuming since the importer is required to fill the form and obtain a Custom and Border Protection. A majority of companies prefer using a customs broker to take the burden off their hands. Although it is not legally mandatory to hire a customs broker, many importers opt to do so for convenience purposes. Stinson delay problems may have been caused by incorrect certificates and license. Considering that the shipment involves medical supplies, this may have been the case since they are considered sensitive. Incorrect or missing import license and certificate or origin may cause shipment delays. Although the goods may be collected by the forwarding agent, they may not reach Penner if nobody had confirmed if an export license is needed.

Several operation factors affect shipping times.  For example, if Stinson was experiencing some serious system issues, then it would possibly affect Penner at the end. Neil cannot assume that his business will find another company that has no operational problem since some of the system delays are inevitable. However, since in this case, the delays are occasional, then an immediate solution is necessary. Delivery times could also have been affected by a lag in communication, for example, it seems like Stinson and Penner were not in effective communication, and the ordering of goods was not well organized. It is important for both the buyer and the supplier to maintain clear communication lines so that the merchandise is ordered immediately and delivered without unnecessary delays. According to Hummels et al., (2012), delivery problems arise when a supplier does not have proper steps to manage delays in shipment. For example, if Stinson knew there was a delay, it should have notified Penner in time so that the company could look for alternatives. However, due to poor management of delays Penner's consignments were always delayed.

Recommendations

            The case study points out that there has been delays of Stinson’s products by 25%. Due to the delays, Penner is experiencing low sales because of lack of sufficient inventory. To receive shipment in time, Penner had to accelerate shipment from Stinson in an attempt to compensate for the lost money and time. However, this did not happen cheaply since the company had to manage its inbound logistics, thus increasing the shipping costs significantly. However, the problem of delayed shipment and increasing shipment can be managed through hiring a professional clearing agent and outsourcing transportation to a third party. 

In my opinion, I would recommend that Penner hires a professional custom clearance agent who can guarantee clearance of consignment via the international border without unnecessary delays. Besides ensuring that the company's shipment crosses the border and arrive at the company securely, a clearance agent would be beneficial to the company in various other ways. For instance, they help in ensuring convenient paperwork and their experience in the field can spare Penner from experiencing exorbitant errors. Customs agents are effectively well-informed of the duties or obligations required on products as they get into a country (Hummels et al., 2012). Every item of shipment is assigned a specific order number as they are isolated into considerable sub gatherings and gatherings to permit right and straightforward identifications for obtaining custom duty. With a customs agent, the company is assured of suitable identification of goods. A customs agent would ensure easy clearance with formal entry. Certain products, especially pharmaceuticals and food items, require a formal section.  Eventually, a professional clearing agent can enable the company to keep away from penalties, reallocation of goods, expensive deferrals and fines.  

            Another recommendation would be to outsource transportation. Penner should outsource transport for various reasons. First, outsourcing does not only potentially enhance customer service by making it possible for the company to concentrate on their core operations, but also allows for the development of evolving markets. If Penner wants to launch a new product, it will be possible with the increased flexibility that comes with outsourcing transport. Penner should also consider outsourcing because it is cost saving and drives efficiency. Third party organizations bring technology, experience, operational and scale best practices to help businesses increase the whole transportation cost savings and management efficiency (Aronovich et al., 2010). Transport companies would combine scale and volume for Penner to purchasing in bulk from Stinson and negotiate rates for the shippers. As the organization constantly looks for means to cut down transportation costs, outsourcing offers logistic optimization tactics to help the company realize sustainable long-term savings.

            In conclusion, as Penner wades through the challenging area of shipping, it is essential that its management understands shipping requirements as well as the factors that may contribute to delayed deliveries. In this case, delivery challenges might have been caused by various factors including fouls in Stinson's internal systems and documentation problems. However, understanding the entire supply chain will help the company secure its shipment and spot possible pitfalls to the business probably through hiring the services of a professional clearing agent. To avoid increasing transportation related costs, the company may choose to outsource the service. Outsourcing transportation may save the company resources time and money.