Supply Chain Principles - Term Paper Example

?Supply Chain Principles Table of Contents Question What Are The Specific Quality Problems Oak Hills Is Facing, And How Will They Influence The Company's Ability To Convert To A Lean System? 3 Impact of Quality Concerns on Effective Implementation of Lean Manufacturing 5 Question 2: What Changes In The Manufacturing Environment Need To Be Undertaken In Order To convert The Current System To A Lean System? Think About This From Both A Short-Term And A Long-Term Perspective. 6 Question 3: How Will The Implementation Of A Lean System Impact Employees, And What Can Be Done To Smooth The Transition? 7 Question 4: At What Stage In The Development Of A Supply Chain Is Oak Hills, And What Can Be Done To Improve The Supply Chain? 9 Improving Supply Chain 10 Question 5: For Oak Hills, What Is The Connection Between Demand Management And The Supply Chain? 12 Question 6: What Should Oak Hills Do? What Problems Might Occur In Implementing Your Recommendations, And How Can These Problems Be Avoided Or Neutralized? (Answer These Questions from a Strategic Perspective and a Tactical Perspective) 12 Reference list 14 Bibliography 16 Question 1. What Are The Specific Quality Problems Oak Hills Is Facing, And How Will They Influence The Company's Ability To Convert To A Lean System? Answer: A supply chain refers to the network as well as distribution of facilities. Its main task is to acquire the materials, convert these materials into semi-finished as well as finished goods, and thus allocate the final products to the consumers. The supply chain generally prevails in service and manufacturing organisations (Ganeshan & Harrison, 2010). Quality is observed to be the first aspect of consideration for any consumer in the existing competitive business scenario. Oak Hills facility is a division of The Oil and Gas Services Company (TOGS). It is headquartered in Houston, Texas. It can be observed that Oak Hills might be facing quality concerns because of certain issues. One such issue has been the rumour related to mergers. Lack of communication from management team towards the employees also tends to lower the morale of the employees, and hence the employees are not capable of adequately focusing upon the quality. The other problem was with respect to the lid-making process. It was observed that the company had to produce extra lids always because of the defects in the lid manufacturing method. This would give rise to cost in the Oak Hills. Incorrect amount of powder can be one of the critical issues in the manufacturing of the lids pressed from the powdered metals, especially because management assumes that seventy-five percent of the product variation occurs because of this aspect. Furthermore, there are a lot of powder deposits in the room. This actually demonstrates that some quantity of the powder is being lost by the press machine during the operation. It is also vital to weigh the lids once they are pressed. It has been observed that the weight of the lids needs to be recorded. Furthermore, the production process makes use of poka-yoke in order to check the magnitude of the completed lids, which is quite vital for statistical process control purposes. It is significant to take the samples of nearly three to five lids, and the workers are supposed to record adequate measurements on a control chart. Once the production run of lids is finished, it is significant to return the powdered metal to a proper storage container. The containers are supposed to be sealed firmly if they are not in use so that the risk of stain of the powders from dust in the room along with outside air can be reduced to the minimum. If they are not sealed properly, it poses a threat and thus hampers the quality of the product. It has further been observed that Black Dome, which was an internal TOGS unit, favoured producing large batches of sensor boards. They had a poor on-time delivery record creating late deliveries. The employees were not equipped with the necessary skills of using statistical process control technique. Few lids were taking longer time in the process of manufacturing in comparison to the time taken to assemble the box. It led to shifting bottlenecks thereby affecting the assembly press. The involvement of the production employees in machine set-up process was negligible. All these factors adversely create an impact on the quality of the products. Impact of Quality Concerns on Effective Implementation of Lean Manufacturing Lean manufacturing system needs constant input of the employees in terms of quality control, which few employees might feel disinclined or unqualified to provide. It has been recognised that Oak Hills faces numerous issues related to supply chain management as well as to production. Lean manufacturing is completely dependent upon the supplier efficiency, and, therefore, any disruption in the supply chain will affect the entire process. The complexities related to the supply chain may alter from one industry to another industry and from one company to the other company. Supply chain management decisions can be divided into two main classifications: operational and strategic ones. The strategic decisions related to the companies generally take longer period of time and are associated with the corporate strategy. It further tends to assist supply chain strategies from design perspectives. On the flip side, operational decisions are generally short-term by their nature where the focus is upon day-to-day activities of the operations. This type of decision endeavours to effectively administer the flow of the product in a strategically planned supply chain (Ganeshan & Harrison, 2010). It has further been observed that Black Dome has a poor on-time delivery record which was creating late deliveries and rescheduling issues for Oak Hills. Owing to the fact that only a small amount of stock is kept in hand, lean manufacturing actually depends upon suppliers who are capable of supplying the raw materials in the process of production without any interruption. Therefore, such issues adversely impact the company’s decision to implement lean manufacturing process (Soderquist & Motwani, 2010). Question 2: What Changes In The Manufacturing Environment Need To Be Undertaken In Order To convert The Current System To A Lean System? Think About This From Both A Short-Term And A Long-Term Perspective. Answer: Establishing a lean manufacturing environment is not possible through step-by-step execution process. It is quite difficult to implement a lean manufacturing method of production. It has been observed that most of the lean manufacturing functioning tends to be unsuccessful because of the fact that managers, especially the top level managers, are not capable of involving themselves in the day-to-day practice of the lean principles in their actual application in the organisation. The workers at the frontline of production are more concerned regarding their responsibilities. Open communication needs to be fostered in the organisation in order to encourage free flow of ideas in the workplace. For the companies to manufacture goods successfully, it is significant to focus upon poor quality issues and deliver the goods on time. If the company is facing issues related to late deliveries of raw materials from the vendors, then in such circumstances it becomes imperative for it to issue contracts from multiple sources. It is quite significant for Oak Hills to minimise wastes and thus enhance the value of the facility. It is also important for the Oak Hills to increase the quality of the products, seek for innovative ways so that the problems in the company can be resolved effectively. In order to attain workforce commitment, it is imperative for the company to cross-train the workforce members so that the workers’ problem solving capability can be improved to a greater degree. When Oak Hills does so, it is actually empowering its employees to consider their function in a new way while seeking methods to enhance their performance and offering them an overall view of the entire facility, not just their single job. It has been recognised that at Oak Hills, set-up procedures have been a major issue in the production process. It is quite vital for Oak Hills to focus upon the set up procedures, so all of the seven machines need not be stopped so that the die set could be altered and the pressure on machines recalibrated. Thus, Oak Hills will be capable of acquiring benefits both in the long and the short-term perspectives (Broyles, et. al., 2005). Question 3: How Will The Implementation Of A Lean System Impact Employees, And What Can Be Done To Smooth The Transition? Answer: Lean system is a challenging concept. It is praised for authorising the employees. It is also at times condemned for increasing the work pressure and thus impairing the health as well as well-being of the employees (Hassle, 2011). With this concern, it is quite paramount for the employees to familiarise themselves with the technology. This will assist them in getting a clear view of the disadvantages and advantages of the lean manufacturing system in the organisation (Cheng, et. al., 2010). One of the key components of efficient lean manufacturing system is the escalating role of the workers who are given the authority to involve themselves in the process of decision making. With the implementation of the lean manufacturing system in the facility, it has been observed that the labour productivity tends to surmount to a greater extent. Lean manufacturing helps to introduce team work in an organisation, which is quite a valuable part in the daily activities of the workers, and thus an individual employee can be quite successful at work as well as socially by deriving the benefits of team bonding. It has further been noted that team working procedure can increase the job satisfaction rate of the workers and escalate the output of the workers. Through the implementation of the lean manufacturing system, the workers are transferred from one job to another job in terms of job rotation. Because of the job enrichment of the employees, they are capable of taking the pleasure of incremental growth in terms of accountability, self-sufficiency as well as good judgment in the process of decision making. Since lean manufacturing system authorises the employees to take ownership of their machines as well as production equipments, the occurrence of a few problems is quite obvious. The employees might raise issues over the increase in the responsibilities. The main problem is observed to arise when the employees’ suggestion is not taken into consideration. It is imperative for the Oak Hills to make effective use of the human resources in the organisation. It must comprehend the significance of employee’s empowerment and must aim at using minimum supervision. When Oak Hills will incorporate employee empowerment initiatives, the employees will be motivated. Their talents can be burgeoned and jobs can be made secured (Satnam, 2010). Question 4: At What Stage In The Development Of A Supply Chain Is Oak Hills, And What Can Be Done To Improve The Supply Chain? Answer: A supply chain can be acknowledged as a set of steps taken by the companies in order to alter the raw materials into final products and thus deliver them to the consumers. Supply chain management can be recognised as an effective method utilised by the companies to ensure that its supply chain is quite efficient as well as economical. There are five stages in the development of the supply chain. They are planning, development, manufacturing, logistics, and returns. In the planning phase, it becomes significant for the companies to address how the given product will meet the requirements of the customers. It is during the development stage that the companies build good relationship with the suppliers and thus develop methods for shipping, delivery, and payments. In the manufacturing stage, the product is generally produced, investigated, wrapped up, and programmed for the purpose of delivery to the final consumers. In the logistics phase, the orders are received from the customers and the company plans regarding the delivery of the goods. The final stage is the phase when the customers tend to return the defective products. It can be analysed that Oak Hills is in the logistics phase. It has been observed from the case study that the company obtains customer orders and thus plans for the delivery of goods (CIO, 2012). Improving Supply Chain In the present globalised business context, the companies will be capable of attaining competitive advantage only if there are many key attributes in the supply chain. There are five main principles of the supply chain management. The first principle is based upon the fact that if the companies do not possess adequate comprehension of the customer requirement, it becomes quite difficult for them to construct a proper supply chain. Therefore, it is quite significant to possess adequate knowledge of the customers. The second principle states that it is imperative to adopt lean manufacturing which will assist in gaining operational excellence. The third principle states that it is quite vital to generate a supply chain information infrastructure which will assist in gaining competitive advantage. The companies must integrate the business processes so that they can endorse the planned supply chain objectives, which is the fourth principle. The final principle of the supply chain management system states that the decision support systems need to be integrated, which will improve the overall supply chain effectiveness (Muckstadt, et al., 2012). Most of the leading companies have recently been focusing upon the alignment of their supply chain with their business strategies and market requirements. Enhancing the process of supply chain can be stated to be a continuous method requiring an analytical performance measurement system as well as a method to commence steps for attaining the goals of the Key Performance Indicators (KPIs). Once the companies have identified the KPIs, it becomes necessary for the managers to attain enhancement in them by means of incessant planning, monitoring, and execution. In the process of production, the bottlenecks need to be identified and steps need to be taken to bring significant improvements. Good relationship with the suppliers needs to be maintained so that there is smooth supply of the raw materials by the vendors (Cai, et al., 2009). Question 5: For Oak Hills, What Is The Connection Between Demand Management And The Supply Chain? Answer: One of the main factors in the implementation of the pull system is the capability to plan for level production. There is a close connection between demand management and supply chain management at Oak Hills. It is crucial for the Oak Hills to examine upstream operations so that it can recognise if there is a correlation between certain upstream drilling operations along with demand for a product. Since one of the issues for the company is rush orders, it tends to hamper the supply chain adversely. It was because of the issue of rush orders that the company had to maintain high degree of raw materials inventory on-site. Question 6: What Should Oak Hills Do? What Problems Might Occur In Implementing Your Recommendations, And How Can These Problems Be Avoided Or Neutralized? (Answer These Questions from a Strategic Perspective and a Tactical Perspective) Answer: Oak Hills needs to focus on the quality aspects, because quality is the major concern for the facility. It is paramount for the facility to improve the method that it has used to transport the finished lids from the lid press room to assembly room so that it can prevent exposing the final lids to the outside environment. The employees need to be trained so that they can handle the statistical process control. Rush order problems need to be checked. The internal customers needs to be communicated regarding the impact of rush orders upon the production method. It can then identify the advantage and the disadvantage of charging for special delivery services. Oak Hills needs to improve the overall communication process in the organisation with the internal customers as well as the external customers, especially when it manufactures new goods and phases out old ones. It is crucial for the assistants to help the quality control technicians so that the testing procedure can be sped up. It must also pay due attention to the facility layout as well. It must have the lid making operations quite near to the assembly operations. The best layout would be to create work cells related to lid press as well as assembly press machine. However, it might face the issues related to the dust. Protective walls can be created in order to protect the machines from the dust. In implementing the above suggestions, it is important to gain approval from the top management. However, the top management may not readily approve the above recommendations because of the inherent cost associated with them and might also instil a fear of change in the organisation. It is vital to make the top management aware of the potential benefits that Oak Hills would receive in terms of supply chain effectiveness. Reference list Broyles, D. et al., 2005. Just-in-Time Inventory Management Strategy & Lean Manufacturing. [Online] AcademicLines. Available at: http://academicmind.com/unpublishedpapers/business/operationsmanagement/2005-04-000aaf-just-in-time-inventory-management.html [Accessed May 23, 2012]. Cheng, W. et al., 2010. Understanding and Addressing User Resistance to Implementation in a Lean Context. [Online] Available at: http://is2.lse.ac.uk/asp/aspecis/20110175.pdf [Accessed May 22, 2012]. CIO, 2012. Supply Chain Management Definition and Solutions. [Online] Available at: http://www.cio.com/article/40940/Supply_Chain_Management_Definition_and_Solutions [Accessed May 22, 2012]. Cai, J. et al., 2009. Improving Supply Chain Performance Management: A Systematic Approach to Analyzing Iterative KPI Accomplishment. Decision Support Systems, 246, pp. 512-521. Ganeshan, R. and Harrison, T. P., 2010. An Introduction to Supply Chain Management. [Online] Available at: http://lcm.csa.iisc.ernet.in/scm/supply_chain_intro.html [Accessed May 22, 2012]. Hassle, P., 2011. Lean Production – An Evaluation of the Possibilities for an Employee Supportive Lean Practice. Human Factors and Ergonomics in Manufacturing & Service Industries. Muckstadt, J. A. et al., 2012. The Five Principles of Supply Chain Management: An Innovative Approach to Managing Uncertainty. [Online] Available at: http://time.dufe.edu.cn/wencong/supplychain/008.pdf [Accessed May 22, 2012]. Soderquist, K. and Motwani, J., 2010. Quality Issues in Lean Production Implementation: A Case Study of French Automotive Supplier. Total Quality Management, 10(8), pp: 1107-1122. Satnam, Singh, 2010. Lunchbox: Lean Manufacturing (Part1). [Online] Available at: http://www.voicenet.asia/lunch-box/lunchbox-lean-manufacturing-part-i-by-dr-satnam-singh [Accessed May 22, 2012]. Bibliography Visich, J. K. and Wicks. A. M., n.d. Lean Implementation and Supply Chain Development at Oak Hills. Boston, MA: Bryant University. Read More