Chain Processes of Oak Hills - Case Study Example

Lean Implementation and Supply Chain Development at Oak Hills Introduction Oak Hills being a unit of TOGS requires implementing strategies that will ensure that its supply chain is developed in a manner which will coordinate all of its subsidiaries so that they are enabled to work toward achievement of a common goal. The opportunities that Oak Hills have in the market include the market for its energy services within the government owned and energy companies. However, Oak Hills face a challenge of managing the low demand and prices of oils within the industry. In this sense, the company is obliged to manage its supply chain in a manner which will ensure that the production and supply of its products and services causes a satisfaction of the demand in the market. The mergers and acquisitions which characterize the company have an implication on the supply chain and thus it is necessary that the company implements strategies which will not impact negatively on the efficiency and effectiveness of the supply chain. The competition in the market is growing as illustrated by the rise of competitors such as Triangle Corps. The competition is stiff within the market because the two companies deal in the same products and services. The essence of effective supply chain development within Oak Hills is attributed to the fact that the company is in the process of being acquired even though the acquisition process has not been successfully completed. The revenues of the company are expected to rise as the combination of companies is to offer an array of upstream services. Oak Hills is in dire need of improving its supply chain processes in terms of effectiveness and efficiency. The special testing instrument as the main product of the Oaks Hill manufacturing facility requires applying a lean system in ensuring that all of the operations within the supply chain are coordinated. With the headquarters of Oaks Hill being in Houston, it needs to coordinate the activities of all of its branches so that they are integrated into a common business unit. As a result, the special project of the facility in testing oil and gas exploration can achieve its goals and objectives. The most important stakeholder of any supply chain is the customer (Hilletofth and David 264). This means that customers must be given priority consideration in the processing of the activities of a supply chain. Both the external and internal customers of the facility must be given due consideration in the supply of the products so that their needs are met. The effectiveness of a supply chain can only be achieved through the integration of all of the sectors of the supply chain to ensure that facility is able to collaboratively manage the challenges which face the decreasing demand of the Oaks Hill testing instruments. Through a development plan for the supply chain therefore, the facility is enabled to increase the effectiveness of the supply chain within all of its supply chain processes. The facility has a wide opportunity within the market as demonstrated by the fact that the demand for the company’s testing instruments ranges from the local market to the global or international market. This is caused by the focus of the company in increasing its product line. Because of the many products which the facility tests and approves, there in an erratic increase in the product line and the demand of these products within the market. Since months would elapse before a specific product was produced again, the company needs to implement a lean supply chain and develop it with a view of ensuring that it is focused on the needs of the customers. The need of developing a supply chain of an organization emanates from the necessity to improve the efficiency of production so that the demand of the market is met. This means that Oaks Hill needs to implement an effective approach of improving efficiency within its supply chain so that the customers are satisfied by the services and products of the facility. The most appropriate approach of developing a supply chain is ensuring that sharing of information about the projects being undertaken by an organization or facility is as effective as possible (Jagjit, Srai and Mike 386). It is notable that Oaks Hills has insufficient information about the impending and current projects. The challenge which the facility faces is the ability to meet the need of the customers to place rush orders and ensure that their demands were met. This makes Oaks Hill to work toward ensuring that its supply chain is developed in a manner which makes the production process to be effective enough to meet the market demand. Because customers of the Oaks Hill are used to make rush decisions and demanding that they are met, the facility is facing high inventory costs. Ti situation has caused a negative implication on the morale of the employees because they are being demanded to offer an output which is beyond their actual abilities with the increased demand to meet the needs of the customers. It is argued that the sectors of a supply chain brings forth high demand on the employees of a production facility because they are required to produce more per day so that the demands of the consumers are satisfied (Hilletofth and David 270). Through the implementation of a lean system within the supply chain of Oak Hills, the facility will be able to ensure that the productivity of the employees is able to meet the increased demand in the market without having a negative implication on the morale of the employees. It is recommended for Oaks Hill to implement a lean supply chain in addition to the development of the various sectors of the supply chain so that the increasing costs of delivery can be reduced. For example the box production process of Oak Hills would be able to integrate the different lead which is required for every box produced if an implementation of a lean supply chain was achieved. The facility has an opportunity of reducing its labor costs. This can only be achieved through an implementation of a lean supply chain and developing in a way which ensures that production techniques did not require a large number of employees. The need for the reduction of the labor costs within Hills Oak is illustrated by the fact that it has been noted that the whole production and packaging cost is by far more than the cost of labor. It is thus recommended that an MRP system is put in place so that the ordering of raw materials within the facility was as efficient as possible. Since the MRP system was not applicable in the production function of the Oaks Hills, it is necessary for the process of raw material acquisition or supply is facilitated through the MRP so that the general production process is facilitated. Hill Oaks has an opportunity of reducing the costs of production through the implementation of its strategic plan by the management. It is thus recommended that the management team focuses on a lean supply chain as the ultimate solution to the facility’s problems in the production, distribution and sale of its tested products. A plant tour of the Hills Oaks facility illustrates that there are many concerns among the employees with some of them being concerned about the security of their jobs. This has caused most of the facility’s employees to be laid off and thus increasing the general cost of production. A question and answer session with the management of the facility reveals many issues related to the viability of the facility to implement a lean supply chain and make developments in the problems facing the production function of the facility. Cycle time in production is slower in addition to the fixed daily production schedule. It is thus recommended that the supply chain of the facility is reviewed by the management so that it is developed with an aim of increasing its cycle time. As a result, this will cause the facility to successfully reduce the cost of production in addition to fulfilling the needs of the customers. Conclusion Supply chain development is an important aspect of any organization or facility. However, effective development of a supply chain must be geared towards ensuring that it causes efficiency in the supply of raw materials, production, cycle time, distribution and compliance to the need of the customers. However it is important for an organization or facility to guard the motivation of its employees because it determines the achievement of success in production and customer satisfaction. It is recommended for Hills Oaks facility to implement a lean supply chain which will collaborate all of the activities within its subsidiaries and ensure that the production process is geared toward the attainment of a common goal and mission which is congruent with that of the facility. Within the strategic plans of Hills Oaks, implementation of a strategic approach in supply, production, distribution and sale of its products must be geared towards a lean supply chain which puts into consideration the needs of the customers while maintaining employee motivation. The sharing of information and collaboration among the sectors Hills Oaks supply chain is very important because it is through effective communication that the supply chain as a whole is allowed to move towards the attainment of the goals of the facility. Works Cited Hilletofth, Per and David Eriksson. Coordinating New Product Development with Supply Chain Management. Industrial Management and Data Systems, 2011, 111.2: 264-281. Jagjit, Singh Srai, and Mike Gregory. "A Supply Network Configuration Perspective on International Supply Chain Development." International Journal of Operations & Production Management, 2008, 28.5: 386-411. Read More