Academic journal article Review of Business & Finance Studies

Logistics Management Model for Small and Medium-Sized Textile Enterprises

Academic journal article Review of Business & Finance Studies

Logistics Management Model for Small and Medium-Sized Textile Enterprises

Article excerpt

ABSTRACT

The worldwide market opening and globalization of supply chains demand a series of structural changes where logistics plays a strategic role. Customers evaluate the quality of the product, its added value and its availability in time and form, which involves making processes more efficient. Some experts have proposed logistic management models to elevate competitiveness in the market. Some of these models are ambitious for Small and Medium-sized Enterprises (SMEs) due to their informal structure and a lack of technical knowledge. Other models make indirect reference to the internal information flows, including a whole disintegration of the system because of the interrelation among the different areas. SMEs represent 4.2% of enterprises existing in Mexico, generate 31.5% of employment and contribute to the Gross Domestic Product. It is important to reinforce their competitive position in the market. Some 85.9 percent of the textile industry in Mexico is SMEs. In this descriptive investigation, we design a logistic management model for textile SMEs.

JEL: L25, M11

KEYWORDS: Logistics Management Model, SME, Textile Manufacture, Supply Chain

INTRODUCTION

A logistics management model for SMEs is different from that used by big enterprise because of the technological resources, language, structure and culture of the model operation (Velasquez, 2003). This difference is due to high levels of training and economic resources in the big enterprise. The logistics sector is important by itself, but also generates a traction effect for private sector development and growth in other economic actors in a country or region. Efficient and accessible logistics constitutes a key aspect so the enterprises in general, and specially SMEs, could successfully compete in a globalization economy.

According to the Logistic Performance Index (LPI), published by the World Bank every two years, Mexico occupies 47 place among 155 countries. According to these data, it has a global logistic performance of 3.06 (World Bank, 2012). SMEs represent 4.2% of all the enterprises existing in Mexico, which generate 31.5% of employment and contribute 37% of Gross Domestic Product. It is important to reinforce their competitive position in the market. The manufacture industry contribution to the Gross Domestic Product (GDP) was 18.1%. The textile industry is included in this percentage representing 1.2% (INEGI, 201 la) and contributing, 0.74% to the GDP in 2011 (INEGI, 2012).

A literature review allowed us to identify different integral models of logistic management to increase competitiveness in the market. Some authors proposed ambitious models for a SME since it has an informal structure and a lack of technical knowledge. Other authors and organisms have developed logistics management models focusing on the characteristics of the SMEs. However, they do not consider the internal information flows necessary for their accurate implementation. This weakens the interrelation among areas involved in the management and breaks up the system as a whole.

The first part of this investigation discusses the importance of logistics management for the competitiveness of SMEs in Mexico with specific reference to the textile industry. The literature review and the data taken from secondary sources permitted us to idetify logistics management models, in a special way for SMEs. As a consequence, a logistics management model was designed to facilitate the integral management of four of the areas identified as the most important ones and the tool application that would improve the logistic performance of the supply chain. Finally, some constraints and suggestions for futures investigations are discussed.

LITERATURE REVIEW

Some specialists have proposed integral models of logistics management to increase competitiveness in the market.

1. The Secretary of Economy (2011) designed a model that considers 16 capacities such as strategy and performance of the organization, customer service, process management, demand management, supply and purchase, procès of customer orders, storage operation, inventory management, transportation, inverse logistics, security in goods transportation, import/export processes, financial capacities, environmental awareness, information systems and data management, organization, personnel and competences. …

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