Supply Chain Management - Research Paper Example

The Problem. The problems analyzed in the Supply Chain management of Regal Marine is in a broader sense are Vendor handling, Organization and Human Resource Management and the cost effectiveness of the inventory management. Though the company has undertaken innovations and improvisations of these factors, the excellence of their managements still persist as a problem which needs to be taken care in a scientifically efficient way. Vendor Handling A Vendor is broadly defined as any business partner toward whom there exists outstanding payable for received goods or services. (Curran, A Thomas & Ladd Andrew,1999a) Regal Marine being one of the leading ten boat manufacturers of America, their vendors are with suppliers ranging from providers of wind shield to providers to of instrument panel controls. The major challenge in the vendor management is to identify and maintain suppliers who can ensure timely and regular supply of quality inputs. The management of payment handling, communication maintenance and quality assurance becomes of a major count with reference to the vendors of Regal Marine. The complexity and diversity in the business operations of the firm and the vividness in the parts to be sourced make the vendor management more complex. The wide gap in the level and business operations of the parent company and the vendors make the process of associations with the vendors a difficult process. Cost effectiveness of sourcing inventory management The cost object controlling is a part of a product cost controlling process that determines the cost which accrues in producing a product or performing a service. (Curran, A Thomas & Ladd Andrew,1999b) The cost effectiveness of the products sourced becomes vital for Regal Marine as it would directly influence the price of the final product. This process becomes vital for Regal Marine so as to maintain the market competence and the present market status of the company. The inventory valuation process and a sourcing costing with relevance to this is a major challenge for the company. The limiting factor with regard to the product development process of Regal Marine in regulating the cost is the wide range of operations of its vendors. Human Resource Management The complex nature of the supply chain management process involved in Regal Marine would require highly trained and efficient man power. An improvisation in the Supply Chain management would mean a revamping exercise in the current organizational structure of Regal Marine. An improvisation and capacity building in the existing manpower, inclusion of expert staff in maintaining complex supply management process is a major challenge for Regal marine. The selection of new staff becomes a specifically specialized activity and would require specially trained attention. Important Variables The important variables in the Supply Chain management of Regal Marine are Inventory Value, Input cost, transportation cost, Customer maintenance cost, Vendor management cost etc. The Organizational Objectives The organizational objective of Regal Marine in terms of supply chain management Regal is to drive down sourcing costs while driving up quality and responsiveness. The market performance of the company has to be the final objective of the company must be cost efficient improvisation of the market performance of the company and its products. Organizational Restrictions or Constraints. The most important constraint in improvising the supply chain management is the complexity of the chain. The process path includes a number of vendors with a variety of complex production processes. Integration of all of these complex activities, while ensuring high quality is a major challenge for the company. The chronological and logical interdependencies of events, functions and process included in the supply chain management in case of Regal Marine is a major constraint in improvising the control flow. The limitations in Resource or Organization Unit assignment is another major restriction for the company in implementing an improvisation process in the Supply Chain Management. The current resources and manpower of the company would not be able to handle the diversity and complexity of the supply chain management improvisation. The Alternatives The alternatives suggested to improvise the supply chain management are as following. A more intense linkage with the vendors would be integral in bridging the quality gap in the supply process. Capacity building processes of the suppliers on material changes to be incorporated into new product designs and involving them in the planning process to an optimum level would help them supply inputs accordingly. Frequent discussions on the product development process and the sourcing process have to be initiated between the company and the vendors. Efforts must be made to make the vendors understand the level and demand of the industry which would ultimately initiate a customer based approach in sourcing, production and designing. Association and networking with other boat manufactures with similar purchase requirements would make an ideal stage to demand quality from the vendors. This kind of a networking would automatically create demand for quality and industry specialized products in the market. Further this would persuade the manufacturers to reduce the cost of products ultimately aiding the cost effectiveness of the Supply chain. The deliverance conditions and methodology must be modulated in accost effective manner. A time based assembly and deliverance of products by vendors must be encouraged to avoid the unwanted extra cost. . Arrangements and mutually agreeable deals with the vendors has to be formulated so to minimize the gap between purchase, deliverance, payment and real use of the sourced product by Regal. Identifying an increased amount of local suppliers would contribute much to cost reduction of the sourcing process. This would reduce the transportation of parts of the boats to a considerable extend and would eventually cause a reduction in the price of the end product. More initiative has to be taken in order to encourage the local producers to deal with industry specific and state of the art products. A close association of the company with local vendors as explained previously would encourage the local players to concentrate more on the quality and industry specificity. Customization, standardization and automation of the sourcing process would help to bridge the gap in the sourcing process. (Steiner G & Steiner J,1997) Moreover this would reduce the complexity in the supply chain management of Regal Marine and would make sourcing easier. This would also aid the quality assurance process of the sourcing and the allied activities of Regal Marine. This automation and customization process can be made possible on consultation with the state of the art consultancy services. The Capacity building of the existing organizational structure would be needed to undertake these improvisation processes. However the capacity of the current manpower may not be able to handle the quality requirements of the improvised Supply chain. Specialized professional head hunt services may be approached to have the intake of specialized and trained sourcing staff. The screening process of the candidates must be according to the most advanced benchmarks in the sourcing industry. An organizational and profile based restructuring may also be considered to enhance the improvisation process. Analysis of Assumptions. The assumption made while initiating an improvisation in the supply chain management is that it would positively contribute to the market performance of the company. This assumption is quite justifiable as the cost effectiveness of the improvised version of the sourcing process would help the quality assurance of the end products of Regal Marine and the cost effectiveness of the supply chain would lead to the reduction of the cost of end product which would in totality result in a higher market performance of Regal Marine. A Quantitative Technique. The implementation of a customized business protocol for supply chain management would help the integration of all the alternatives suggested for the improvisation of the supply chain management. However this technique has to be an event driven process and should include the chain of activities based on the Event, Function, Organization and Information. The process path must include quantitative inputs in terms of information or material flow. The reference organizational model mainly including The Data Model should be properly referred in the development of a quantitative model. The company should give due consideration to the cost factor of the boat and is parts, vendor maintenance cost and other related quantitative variables. The target concept and all the quantitative operations involved must be properly documented while implementing the technique. The Input Data. A master record of data must be formulated to enable the customization process. In general the input data would include all the related variables of the business blue print. Further it would also include General Data on the sourcing companies, product specifications, costing details and logistic details. Other quantitative and qualitative data must be sourced to customize the general model of the business blue print so as to customize it according to the real time business situations faced by Regal Marine. Implementation of Action plan The most important function in the implementation of the customized action plan is the modeling and adaptation of the plan in real time business processes. The modeling process should indulge the extensive experience, knowledge and creativity of the industry specific professionals in Regal Marine. However a zero based approach cannot be afforded by the company and the action plan will have to be optimized according to the critical requirements of the specific time. While doing this modulation, the policies of Regal Marine should be customer based and very much related with the standards in the boat industry. This action plan would serve as an ideal starting point and a guideline for the team in getting engaged in the sourcing process. However prior piloting before large scale implementation and related amendments is recommended so that Regal Marine may fetch long term market results in the boat manufacturing industry. Works Cited Curran, A Thomas & Ladd Andrew, “Vendor Handling”, Understanding Enterprise Supply Chain Management, Ed.Thomas A Curran & Andrew Ladd, New Jersey: Prentice Hall PTR, 1999 a, 143-151 Curran, A Thomas & Ladd Andrew, “Business Planning & Controlling”, Understanding Enterprise Supply Chain Management, Ed.Thomas A Curran & Andrew Ladd, New Jersey: Prentice Hall PTR, 1999 b, 191-206 Steiner G & Steiner J, Business, Government and Society, MCGraw-Hill, 1997, p- 180 Read More