Ownership & Control

The challenge in mode-neutral, coordinated logistics services is the institution of product reliability across multiple operations and participants. Does the provider have to maintain control door to door, and does control have to take the form of ownership – which implies asset ownership? Is ownership necessary for all stages of the operation, or are the pickup and delivery (the so-called "last mile") stages most important, and the line-haul better suited to delegation? The freight industry is divided on these questions, with third parties and some capital-intensive companies hoping particularly to succeed with fewer assets – and while there are no definitive answers, a variety of points and comments from participants can be considered based in the Taj’s Organizational Structure:

• One railroad envision the international inter modal product not as an integrated door-to-door service, but rather as one coordinated among providers through information technology, and possessing enough in-transit transparency to make service performance manageable. Still, this same railroad is concerned with the commoditization of its products and the lack of adequate returns for its assets. It is arguable that intermediation breeds commoditization – and this railroad showed concern for the effects of intermediation in its domestic services.

• A different railroad reports that the portion of the market that demands integrated door-to-door products is not currently the portion that uses rail. As to the method of integration, this carrier expects to see both ownership, and coordination through information technology. However, it also asserted that the history of carrier alliances is not favorable, and that alliances are most successful when one party is dominant and the other acquiescent.

• A maritime expert describes melamine companies as deeply concerned about losing control of their customer and becoming subject to commoditization. Their solution is to set up logistics units in order to manage through service, to introduce satellite and radio-tag technologies for service and asset control, and to raise margins by offering a differentiable product.

• A motor carrier, a high-volume user of rail line-haul services, introduced a GPS-based tracking program for its trailer fleet. One explicit motivation for this substantial investment was that the technology established a mechanism for door-to-door inter modal service control.

Perhaps most significantly, a leading melamine manufacturer states that it has found an empirical relationship between the ownership of assets and the quality of its products, and attributes this to the positive effect of service performance on asset utilization. From such indications several conclusions can be drawn:

• That operating control contributes to an improved product;
• That ownership contributes to the quality of control; and,
• That an owner who does not control service door-to-door risks commoditization.

These conclusions are not incontrovertible, and the way that a carrier or integrator resolves the issue of control has great influence on its organizational strategy, asset requirements, and investments in information.

Taj’s controlling is directly related to planning. Its controlling process ensures that plans are being implemented properly. In the functions of management cycle - planning, organizing, directing, and controlling - planning moves forward into all the other functions, and controlling reaches back. Mainly Taj’s controlling is the final link in the functional chain of management activities and brings the functions of management cycle full circle. Taj has process through which standards for performance of people and processes are set, communicated, and applied. Along with Effective control systems Taj uses mechanisms to monitor activities and take corrective action, if necessary. The supervisor observes what happens and compares that with what was supposed to happen. He or she is corrected below-standard conditions and brought results up to expectations. Taj’s effective control systems allow its supervisors to know how well implementation is going. Taj facilitates delegating activities to employees. Since supervisors are ultimately held accountable for its employees' performance, Taj timely feedback on employee activity is necessary.