Enhancing Supply Chain through Auditing - Research Proposal Example

Enhancing Supply Chain through Auditing Introduction Supply chain is a critical component in enhancing the production,profitability, and sustainability of any organization. Thus, organizations in the contemporary competitive and unpredictable market should formulate a supply chain that incorporates all the players to ensure the production and distribution of the products is smooth. In addition, it should be able to cater for mitigation steps that should be taken when the supply chain is interrupted by unforeseen economic or political factors in and outside the organization control (Lambert, 2008). Indeed, a closer investigation in many of the difficulties faced by organizations reveals that the supply chain is negatively affected by the internal decisions and culture. This calls for an audit of the supply chain when an organization is facing difficulties in carrying out its procurement, production, and distribution of its product. Accordingly, this research proposal paper has come up with a number of objectives that managers of an organization should evaluate in enhancing the supply chain of a typical organization in a modern market. In carrying out the audit of the supply chain of the organization, the researcher was motivated by the difficulties the organization is facing in receiving raw materials, distributing final products, and increasing transport and inventory cost. Thus, the audit the researcher has undertaken on the supply chain of the organization is critical in improving its efficiency. Indeed, the evaluation of the objectives in this research proposal is beneficial to managers and employees of the organization in crafting supply chain policy in future. Furthermore, the research question that helped in compiling the supply chain audit is how best the supply chain can be improved in an organization. Accordingly, the research question was answered by questioning the efficiency of information sharing, inventory management, and decision making certainty in the organization. In addition, the researcher evaluated the question of motivation in an organization to find out the effect it has on the supply chain performance. Objectives One of the major objectives that an organization should focus on is the sharing of information in an organization (Atilgan and McCullen, 2011). This objective implies the presence of a communication channel in the organization to allow sharing of information between the various parties involved in the supply chain component. Indeed, empirical studies have shown that when information between the relevant parties in the supply chain component is not clear, there is potential of duplication of tasks. In addition, conflicts are likely to arise between the parties when the tasks of each party are not clearly communicated by the organization (Parmigiani and Klassen, 2011). Consequently, the efficiency of the supply chain will be highly compromised rendering the productivity, profitability, and sustainability of the organization at risk. The management of an organization are supposed to invent a communication system that will allow the parties to pass relevant information when it is needed to enhance the supply chain (Childerhouse and Towill, 2011). Similarly, the communication system should be able to capture the needs of the different parties in order to increase their efficiency (Parmigiani and Klassen, 2011). A clear investigation of the communication channels of the organization reveals the difficulties the parties involved in the implementation of the supply chain component face. One of the communication failures of the organization is that it lacks a coordinating platform for the relevant parties to share information simultaneously. Thus, the supply chain is faced with a tedious and time wasting process in sharing information between the parties. This makes the efficiency of the supply chain very slow since the parties have wait for long time to get the right information before making decisions. Ultimately, the time taken in acquiring the raw materials to produce more products when the stock has gone down is wasted since the suppliers have no prior information when the stocks dry up. Similarly, distributors in the supply chain are not able to communicate effectively with the production team when they need more products to supply in the market (Wisner, 2011). This ultimately, increases the cost of transport since the organization is forced to distribute fewer units of products in the market than the optimum volume. In addition, the cost of inventory is forced to go up since the organization lacks an effective communication channel to communicate with the suppliers of the raw materials when they are needed at discount. Thus, the organization is sometime forced to source raw materials from the middlemen in the market at an inflated price. The organization needs to review its communication platform to enhance the sharing of information between relevant parties. This will eventually improve the efficiency in the supply chain component to curtail the current pitfalls. Consequently, one of the areas the organization should work on to improve the sharing of information is opening the access of information to the parties involved in the supply chain component. To enhance the sharing of information in the organization, one of the tools that are able to help is the networking platform (Cuthbertson and Cetinkaya, 2010). Under this platform, the organization will be able to update on daily basis the current scenario of the production level and volume available to the relevant bodies. Similarly, each of the parties and employees of the organization will respond to the information installed in the network platform to air their concerns to the management. This will help the management to take decisive actions in the right time to save the organization from undue delays and heavy costs. Another aspect that the organization should focus on to improve the supply chain component, is the management of the inventory (Silver, Pyke and Peterson, 1998). This refers to a professional keeping of the inventory records and recording in the organization. Indeed, it has been shown in the past that inventory management is crucial to the efficiency of the supply chain in many organizations. This understanding is based on the importance of accuracy in the production unit of an organization in understanding the volume of units available for sale and the volume of units required in a given period (Demski, 2008). The production unit of the organization is able to handle the demands of the distributors on one hand, and acquire raw materials when they are required urgently. Consequently, the organization should review its inventory management to allow the supply chain component to flow efficiently. The inventory management of the organization shows that the organization is unable to keep the supply chain efficient. This has been caused in the inventory account of the organization since it does not cater for the work in progress, raw materials available and available stock for sale provisions (Parmigiani and Klassen, 2011). Thus, the accounting provisions are subjected as one provision when they are shared among the procurement, production, and distributing divisions of the organization. This makes it difficult for the three vital divisions to keep an accurate figure when making production and sales predictions. Indeed, accounting for inventory is important since it allows the management in noticing the movement of inventory in making procurement and production decisions (Atilgan and McCullen, 2011). Hence, the organization has increasingly been facing procurement delays in acquiring raw materials and in distributing products in the market. Consequently, the inventory management should cater for the raw material provision, work on progress provision, and stock ready for sale provision to enhance the actions of the procurement unit, production unit, and the distributors. Supply chain auditing has also, in the past shown that lack of consistent decision is a crucial hindrance towards an efficient supply chain system in an organization (Curkovic, Scannell and Wagner, 2013). Uncertain decision making an organization has been found to be destructive to the efficiency of the supply chain. Indeed, it has been found that when decision making framework is not consistent in an organization, players in the supply chain system are confused in the kind of actions to take. This is because the decision making criterion is unpredictable especially to the junior staff that are responsible for the technical works. In undertaking an investigation of the organization, the researcher has revealed that the decision making framework is not clear to the managers of the organization. Indeed, managers in the different organization department have no clear policy to guide them in procuring items necessary to run the operations of the organization. Consequently, this has seen the cost of the inventory inflate more than that of its competitors. The organization should formulate a procurement policy to the entire organization to ensure that the cost of inventory and other materials are brought down (Atilgan and McCullen, 2011). Lastly, the other strategic objective the organization should focus on is the coordination of the department in supporting the supply chain component. Indeed, it has been proved that when the critical players in the production and distribution units have no resonating decisions, the supply chain is likely to suffer negatively (Childerhouse and Towill, 2011). However, there has been opinion that a coordinating platform for the procurement, production, and distribution department in an organization is likely to compromise the effectiveness of the supply chain component. This understanding is based on the fact that managers on the different department may come up with decisions that are likely to favour their workload in order to appear to be effective and efficient in their duties (Cuthbertson and Cetinkaya, 2010). Nevertheless, inasmuch the managers may be blamed for coming up with comforting solutions to their respective departments, a coordinating forum helps in sharing of vital information and making empirical decisions in creating an efficient supply chain. Thus, the management should ensure the decisions of the critical parties are bounded on one principle in improving the supply chain of the organization. Consequently, the procurement, production, and sales departments should come up with a coordinating point to consult and supplement their decisions in producing the final product to the consumers. Accordingly, the procurement of raw materials and the production of the products should be based on the interests of the consumers as contributed by the sales department. This will help in managing the customers’ dissonance and purchasing decision. Thus, the distribution of the products in the market will improve since the supply chain is well coordinated across the relevant departments. In addition, the transport cost will decrease when the production of goods is managed for the distributors to realise the number of goods to distribute. Conclusion Supply chain efficiency in an organization is nowadays been improved by undertaking a critical audit of its various factors. An audit of the supply chain of Oliver Company has revealed a number of areas the organization should improve in order to enhance its supply chain component. This research proposal has identified the information sharing, consistent decision making, inventory cost management and the suppliers education to be one of the major areas the organization should improve. This investigation has the potential of improving the supply chain of the organization due to the responses it gives to the weaknesses of the current supply chain system. Thus, implementation of the feedbacks of the audit research is critical in improving the current supply chain of Oliver Company in future. Work Cited Atilgan, Ceren and Peter McCullen. "Improving supply chain performance through auditing: a change management perspective." An International Journal (2011): 11 - 19. Awaysheh, Amrou and Robert, D Klassen. "The impact of supply chain structure on the use of supplier socially responsible practices." Internatonal journal of operations (2010): 1246 - 1268. Childerhouse, P and D, R Towill. "Effective supply chain research via the quick scan audit methodology." An International Journal ( 2011): 5 - 10. Curkovic, Sime, et al. "Business Administration Research." Journal of Business Administration Research (2013): 18-93. Cuthbertson, Richard and Balkan Cetinkaya. Sustainable Supply Chain Management. New York: Oxford, 2010. Demski, Joel, S. Managerial Uses of Accounting Information. Florida: Springer, 2008. Lambert, Douglas, M. Supply Chain Management. Chicago: Supply Chain Management Inst, 2008. Parmigiani, Anne and Robert, D Klassen. "Efficiency meets accountability: Performance implications of supply chain configuration, control, and capabilities." Journal of Operations Management (2011 ): 212–223. Silver, Edward, A, David, F Pyke and Rein Peterson. Inventory management and production planning and scheduling. New York: John Wiley & Sons, 1998 . Wisner, Joel, D. Principles of Supply Chain Management. London: Cengage, 2011. Read More