A Study And Review Of Supply Chain Management Essay
Supply Chain is essentially a global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical and cash.’
Supply chain consists of all stages involved directly or indirectly in fulfilling a customers request/ requirement. It includes not only the manufacturer and suppliers but also transporters, warehouses, retailers and customers themselves.
Managing the chain of events in this process is what is known as “supply chain management. Effective management must take into account all the focal Different parts of this chain, it is possible quickly without any loss of quality or customer satisfaction, while maintaining low costs. The first step is to acquire a customer order and follows the production, storage and distribution of goods and supplies to the customer’s premises. Customer Your satisfaction is paramount. Supply Chain Management is involved in this process is a customer orders, order processing, inventory, scheduling, transportation, storage and customer service. Necessary in all these activities, coordinate network information service. Moreover, the key to the success of the supply chain is the speed with which they
Activities can be achieved and the realization that customer needs and customer satisfaction are the very reasons for the network. Reduced Inventories, lower operating costs, product availability and customer The benefits satisfaction are all developed through effective supply chain management. The decisions related to supply chain management to cover both long-term and short. Resolutions dealing with corporate policies strategy, and consider Overall design and structure of the supply chain. Operating decisions are those Related activities every day problems of an organization. These These decisions must take into account the strategic decisions already in place. Therefore, an organization must structure the supply chain through long analysis at the same time focusing on the day to day activities. Building the supply chain requires an understanding of patterns of demand Requirements for service level, distance considerations, and other costs relevant factors. It is easy to see that these factors have significant differences nature and volatility should be considered during the supply chain process analysis. Furthermore, the complex interplay of these considerations You could have a significant impact on the outcome of supply chain analysis process.
There are six key elements of a supply chain:
Each of the following describes the details:
Strategic decisions on production and focus on what customers want market requirements. This work experience in developing supply chain agility takes What examination and how many products to produce, and what, if any, parts or components to be produced in which the plants or outsourced in a position to
suppliers. These strategic decisions with regard also to concentrate on producing Capacity, quality and volume of goods, bearing in mind that customer demand and satisfaction to be met. Operational decisions, on the other hand, focus workload planning, maintenance of equipment and the immediate convocation client / market requirements. Quality control and distribution of the workload issues that are Be taken into account when they are making decisions.
Subsequently, an agency must determine what facility or facilities
Able to produce, both economically and efficiently, the quality, while keeping genes high. But most companies can not provide exceptional performance with Construction of all components.
Outsourcing is an excellent alternative to be Considered products and accessories for those who can not produce
Effective from the premises of an organization. Companies must choose carefully suppliers of raw materials. When selecting a supplier, the emphasis should be Developing speed, quality and flexibility with a parallel reduction Keeping costs low or levels of cost. In short, strategic decisions should be made to determine the core capabilities of facilities and outsourcing These partnerships should be increased by the decisions.
Further decisions focus on inventory and how much product should be in-house. A delicate balance between “too much inventory, which can cost anywhere between 20 and 40 percent of their value, and inventory to Not Enough respond to market demands. This is a critical issue in effective supply chain management. Operational decisions that revolve around the best levels of stock
Any stock in a position to guarantee the customer satisfaction as the market calls fluctuations. Control policies must be examined to determine appropriate levels order supplies and reorder points. These levels are critical to the day to the daily operation of organizations and keep customer satisfaction high.
These decisions depend on the location of the market and identify customer expectations satisfaction. Strategic decisions must focus on the placement of production plants, distribution and breeding, and placing them in prime positions in the market served. Once the customer purchases a fixed, long- Term commitment must be to locate production and breeding, as close to the consumer, such as practical. Where components are industries lightweight and market driven, facilities should be located close to the final
user. In heavier industries are examined carefully to be done to determine Where should the plants be sited to be near the source of raw materials. Also, decisions about location should also take into account the tax pricing issues, including translational and global distribution.
Strategic transportation decisions are closely related to inventory decisions and meeting customer requirements. Apparently it takes using air transport Quick and product to the customer quickly, but the cost is high, oppose the shipping by sea or rail. However, using either rail or Often Means Having higher levels of stocks at home to respond quickly to requests customer. It is wise to bear in mind that since 30% of the cost of a product Included is the transfer using the correct means of transport is Critical strategic decision. Above all, customer service levels must be met Often times determination, and this means of transport. Often times it It may be a business decision, but strategically, an organization must have for
modes in a position to ensure smooth distribution of goods.
Effective supply chain management requires obtaining information from point of end use online sources of information throughout the chain of rate of exchange. Great stuff and computer paper flow
Unacceptable competitive world of today. Fostering innovation requires good organize information. Connect computers and networks through internet, as well as streamlining the flow of information, knowledge and Consolidated Helped speed the product. Account management software products Configurations, Enterprise Resource Planning systems and global communications
The key components of effective chain management strategy supply.
Q1 How might Wings & legs combine a lean and an agile approach in its supply chain?
Business success requires the ability to know one’s strengths and weaknesses, Understanding the customers desires and needs, providing them with the best a business can offer. Wings & legs is a poultry processor in Netherlands, for many years they have been known for their products uniqueness, quality and customer services but since few months they have encountered few problems related to the chain supply and quality issues which has affected their profits and business management. The demand for poultry products by the end users show a very uncertain pattern and are usually unpredictable. The management at Wings & legs is concern with the business sustainability therefore they decided to work on the areas that requires improvement. The concepts of hybrid supply chain strategies and the decoupling point are applied to the Wings & legs supply chain where they experience high demand uncertainty in production environment that is inflexible.
The company so far focused on the lean approach, which is based on market demands and “pulling” goods through the system based on those demands. Agility, on the other hand, emphasizes flexible, timely action in response to rapidly changing demand environments. Adopting lean strategy is one of the reason that supply chains have become increasingly vulnerable, combining agile and lean practices together is most suitable to meet the needs of Wings & legs. This approach is known as ‘hybrid approach’. With the increase in competition hybrid chain supply emerged as the new dimension to the business. With fast consumer changing preferences it becomes important to bring new produced lot into the market in time. Hybrid approach can be practiced on the basis of the decoupling points, a decoupling point is the concept of producing at the time when a specific demand is made for that particular time and order. Material decoupling and Information decoupling are two components of this approach, and they suggest to forecasting or estimating the quantity on the basis of demand before producing a product to avoid waste and bulk issues. Combination of lean and agile is effective in proper functioning of supply chain both in vertical and horizontal ways. Inventory is minimized and efficiency throughout the supply chain is maximized to get the desired profitable results. All upstream and downstream functions collaborate together in the supply chain to make sure that the forecasted demand is met at the possible minimum cost
Q NO 2)
What are the relative merits of each possible position of the material decoupling point and of the information decoupling point .how do they relate to each other with respect to supply chain planning and control?
A major problem in supply chain of Wings & legs is that they have little visibility of ‘real’ demand. . In order to be responsive to the customer’s needs and demands of the market place for greater variety, uniqueness and customization the firm put efforts to set the product differentiation point as close to the customer needs as possible. The order fulfilment strategy based on customer demand determines the de-coupling point in the supply chain which describes the point in the supply chain system, where the forecast-driven and demand-driven elements of the supply chain meet. The decoupling point always exists as an inventory joint that is needed to coupe for the discrepancy between the sales forecast and the actual demand. De coupling point has become increasing significant in the supply chain to maximize the demand-driven supply chain elements.
Material decoupling point is defined as the process of doing the final set of production or customization to the point where actual market demand is known. This implies that Wings & legs like to postpone the production as further up the supply chain as possible, the objective being to keep the inventory in generic form for as long as possible till the required need is forecasted. Material decoupling point has many advantages i-e, to maximize improvement in supply chain dynamics, to reduce cost for production and other factory expenses, improving company’s internal processes which affect in a way the speed of production and delivering, applying more efficient technical and production solutions.,
Information flow is equally important,. information decoupling point is the basis for supply chains moving towards continuous flow of supply and demand. . Wings & legs finds the business opportunities generated by first understanding the existence of the supply chain information decoupling point and then implementing its utilization to gain strategic advantage. In order to make effective planning and delivery decisions, Wings & legs must be able to identify real demand placements based on correct information flow, The source of information for Wings & legs is the data on sales acquired directly from the customer behaviours, which for example in the form of daily sales reports sent to the remaining chain components. This helps to forecast sales on the basis of received information, preparation of sales plans and orders to suppliers. Therefore information integration within the supply chain is a source of reduction of the stock level and at the same time a source of satisfying demand in a more efficient and successful way.
(Q NO —3)
Most of managers of wings and les see the exchange of tactical information about (price) promotions between wings and legs and the retail companies as difficult to accomplish. What are the advantages for the retail companies of exchanging more timely and more accurate information about promotions with wings and legs?
There are many advantages of a strong supply chain, which is a source of coordinates between the retailers and producers. Sharing of timely information from the retailers to the Wing & legs can bring many benefits to the business, the most important factor in this regard is the production of the poultry products prior to the demand in the market. As poultry products are perishable in nature and cannot be kept for long as inventory, therefore right information from the retailers to the producers about the demand in the market can help in smooth production and reduction of losses, a strong supply chain effects the reputation of the retailers in great extent, the retailers for Wings & legs enjoys competitive edge over others because of well defined supply chain beneficial for both the parties. It fasten selling trends for the retailers as it increases the value of a certain product and its market need, whenever required by the customers, an information is sent to the producers about the demand and it is than met accordingly. Increasing information sharing among the members in a supply chain will lead to improvement in the performance of the entire chain. Specifically, both the company and the retailers ,can reap benefits in terms of reductions in inventory levels and cost savings. Information sharing finds the value of collaborative forecasting, estimation and integrating retailer forecasts, into the manufacturer’s production process
(Q NO —4)
The network-based approach of an agile operation strategy could solve part of the matching problems for wings and legs. In supply chain management much attention is paid to improvement of the vertical processes in a supply chain. However, wings and legs also outsource part of production (they buy poultry products from other poultry- processors) which means that horizontal processes and horizontal cooperation are of importance.
What advantages are there for wings and legs in outsourcing part of their production to other poultry processors ? what advantages are there for these other poultry processors?
At Wings & legs, as mentioned in the case they have outsourced part of their production to the other processors, as at times it becomes difficult to meet up market demands in a limited time, this makes Wings & legs to go for outsourcing their production. The company has enjoyed many advantages as far as their costs are related. Outsourcing proves to be cost effective; the management does not have to pay wages or extra benefits to its employees which saves the money for Wings & legs .Their credibility increases when they meet up the orders in time, their own production capacity increases. Quality which is the major element in the production gets better with increased capacity for production.
Other poultry processors share some benefits as well, like increase in profits and orders, more business opportunities, strong relationship with the producer. As well as they hire more employees to speed up the production demand, this results in initiating employment opportunities. Inventory is minimized and efficiency throughout the supply chain is maximized to get the desired results. All upstream and downstream functions collaborate to make sure that the predicted demand numbers are met at the minimum cost possible.
(b) How should wings and legs outsource part of production to others poultry processors, with respect to production planning quality control and product specifications?
For Wings & legs, quality is their identity but since few months, they have received complaints about the quality of the products and it remains a topic of great concern for the management.. Quality control is extremely important in any part of production process, the issue of quality control becomes complex when the production is carried out by the other party to whom an order is being placed. Without careful controls and check and balance policies by Wings & legs, lower-quality materials may be substituted without company’s knowledge. Wings & legs should know about their processors, their credibility, performance, capacity for meeting orders and market reputation therefore a number of considerations come into play while outsourcing. They should negotiate with the processors about the production estimation, product specifications, its features and quality standards prior outsourcing the production..
Q NO 5)
The information decoupling point only concerns information about changes in demand and market. this is information that flows upstream in the supply chain, living chickens and perishable products are exchanges. Wings and legs therefore not only have to take into account variations in demand, but also variations in supply. What information should flow downstream in the supply chain (to the poultry processor) so that wings and legs is able to match supply with demand in a better way?
There are many possibilities and conditions for gathering and making market data and information useful and practical, the exchange information in a sufficient way helps to make the supply chain respond efficiently to market requirements by undertaking activities governed by the demand. The quality of forecasts created by the information decoupling point links distant from the market and pertinent as far as the availability of products and stock volume is concerned may be improved the updated information on the demand gathered from the retailers available to Wings & legs. Supply information exchange is intended for use in the supply chain for Wings & legs and its suppliers to allow the supplier’s capability to supply material for the production in real time.
In case of poultry business there is an uncertainty in demand from the market, the requirement for the raw material is always changing for Wings & legs and it becomes difficult for them to manage such inventory which deteriorates with time. The suppliers for Wings & legs provide certified chickens to produce poultry products, these products are than processed into the final product for the end users. Managers at Wings & legs are trying to match their supply and demand forecast so that losses can be minimized. Supply is to be made only once the market acceptance for a certain product is judged so that more supply is asked accordingly, rather than wasting all the supplied material
Thus, to provide a determined level of customer satisfaction, Wings & legs try to coupe with the uncertainty of target market by coordinating to all the components of supply chain including suppliers, retailers, and outsourced parties effectively and timely. Matching up of supply and the demand is than properly executed and applied to the supply chain.Order Now