Supply Chain Managment - Essay Example

?Supply Chain Management The road to success for any corporation is hidden in its corporate strategy. The corporation should be clear in its goals, objectives, issues on which they can compromise or not, what are their priorities and what they want to achieve at what cost. The corporation's strategy is based on the criteria set by their management at top level. The corporate strategy should be very clear regarding following issues: 1. The definition of cost (what to include in cost and what should not be) 2. The corporate priority (what corporate want to obtain: do they only want to earn money by all the means? Do they have any social responsibilities? (if yes then what are they, and on what cost these social responsibilities have to be achieved) 3. What is the definition of the quality of their product? 4. The corporate should be very clear about their role in sustainability issues like global warming and other environmental issues. The corporate supply chain management team is responsible to align their 'functional strategy' of supplies with the 'corporate strategy'. Without aligning the corporate strategy with the functional strategy it is not possible for a corporation to achieve its goals. As the strategic development is from top to down, therefore the supply chain management should support the corporate strategy. The external environmental factors should be handled by the organization in order to keep focusing over the organizational/corporate strategy, by maintaining the issues on priority bases, estimating an idea about the functional objectives. This will help the food and vegetable supply chain management to design their strategy. Corporate Objectives for the Food and Vegetables Market The Food and Vegetables supermarket have their own competitors. Some offer only organic food (with higher prices) and do not allow genetically abridged stuff at their stores and develop their market with their quality and performance. The others, offer Translating Corporate Objectives into Corporate Strategy The corporation should define 'performance' and 'quality' to evaluate their strategy with respect to their objectives. Food Miles The earth is facing new challenges in the form of global warming, toxic rains, earthquakes, floods, melting of icebergs and big typhoons as well as cyclones and hurricanes. The environmental changes have given rise to problems such as uncertain climatic changes that threaten the existence of all life forms. The Mileage calculator introduced a new parameter of monitoring the addition of pollution in the environment. In the mean time, by utilizing an unbroken supply chain with quality and cost effectiveness, the supermarket suppliers develop new supply chains from farm lands to the supermarket with innovation and new strategic allies. These supply lines some times use airplanes, some times trains and of course all of them use the road routes. For example, The Netherlands is the fourth biggest European Union exporter of fresh fruits. The largest export includes grapes 16%, apple 15% and orange 9% (CBI, 2005), Recommendations to Corporate Strategists As a consultant to the corporate strategists of the fruit and vegetable supermarket I recommend that the corporate should not compromise on the quality of the products at any cost. Secondly, it has to take steps to offer the best price to their customers. Thirdly, the environment sustainability issue should also be a major concern for the corporate. The quality of the product should be maintained within the over all cost, no matter from where the products get imported. As far as the millage calculator is concerned, most of the time there are no other solutions to use means of transportation like buses, trains, and air planes to transport fresh products to the customers. The cost (in terms of cash, environmental sustainability, labor and sometimes the quality) does not rely upon the nearest available products in comparison to fresh products from far places. Here the question arises that how to maintain the affordable cost for the customers with no compromise on the quality. To this end, the corporation should be very clear about their target customers with respect to their choice. If customers do not compromise on cost and compromise on quality then definitely it should not be your target. However, efforts to minimize the end cost should always be given the top priority without jeopardizing the quality of the product. For this, performance should be observed as found important in the following section. The corporation should take care about the performance and try to minimize the cost of the product. In the following section recommendations are presented for the corporation's strategists and the supply chain management as well. Performance Evaluation According to the corporate strategy the corporation should take care about the performance in terms of 'ethical' and 'cost' bases. The corporate should be careful regarding the following: Performance in terms of Ethics/Social Responsibility/Sustainable Environment policies: At the end, what farmers are getting in return of their effort (some balance should maintain in the profit obtained by the corporate and the farmer's earning). The cost of child labor involved in the processes involved during the packaging, transportation, selling and other stages of the supply chain life cycle. How, removal of intermediate brokers will reduce the cost to the corporation which will also provide better price to the farmers. Direct interaction with farmers will also influence them for the production of pollution free vegetables and fruits (from poisonous chemicals and dirty water). Performance in terms of cost/sale and quality of products How much do they have in their stock? Ratio between the demand and supply The sale graphs (statistics) on daily bases How much product is returned by the customer Recommendations to Supply Chain Management Following are the recommendations for the supply chain management to guarantee the desired quality of the product while maintaining the cheapest price on it. Keep running the products from stock to the customer, you cannot stock much for longer time for top freshness. Indeed, if more products could be stored in stock this may save some money but alignment with the corporate strategy is imperative i.e. no compromise with the product freshness. The time of arrival of products on stores. Keep observing the price and the cost ration, as energy price is constantly fluctuating, the cost – price ration should be maintained. Keep observing the stock position, should use some sort of sale system and insure its linkage with the stock stuff, to generate prompt query about supplies. Total distribution cost should be carefully calculated like purchase, transport, warehousing, insurance, inventory cost References: CBI (2005 and 2008), EU Market Survey 2008: The Fresh Fruit and Vegetables Market in the EU. Center for the Promotion of Imports from the Developing Countries, Rotterdam, The Netherlands. 52 pp (http://cbi.nl/marketinfo/cbi/docs/the_fresh_fruit_and_vegetables_market_in_the_eu) Read More