Supply Chain Elements in an Organization, Agility, and Flexibility of the Supply Chain - Term Paper Example

SUPPLY CHAIN: THE MECHANISM BEHIND IT By Class code Instructor’s name Institution name Institution location Date: 18th May, 2011 Executive summary……………………………………………………………………….3 1. Introduction………………………………………………………………………….….3 1.1 Scope………………………………………………………………………..………….5 2. Supply chain elements in an organization …………………………………….…5 2.1 Supply chain uncertainty effects in an organization……………………….5 2.2 Internal and external factors effects in the multi business supply chain…7 2.3 Agility and Flexibility of a business………………………………………………8 3. Risks in the supply chain……………………………………………………………..…10 3.1 Uncertainty reduction………………………………………………………...…10 3.2 Variability reduction……………………………………………………………..13 3.3 Lead-time reduction…………………………………………………………….13 4. Conclusion ………………………………………………………………………………..14 5. Recommendations ………………………………………………………………………15 6. References………………………………………………………………………………….16 Executive summary The report concerns the discussion of the many events that raw materials do take from the time they are ordered to the time they are made into finished goods. The discussion of the different components of the supply chain has been fully analyzed where the component of technology has formed the better part of the analysis. To have an outstanding comprehension of the value chain, the inclusion of real world situation has been incorporated into the report. This symbolizes the kind the reality of the situation and hence making it relevant in the application to real life situations. The internal and the external factors have been revisited and the uncertainty issues well covered. 1. Introduction Businesses setup always has to be done in the best way possible to avoid the many problems that affect businesses today. The macroeconomic atmosphere is the most important component in the success of any business. The environment determines the operation of the different components of the business and this determines the collective efficiency of the business (Sehgal 2009). Technology is another factor that has always been a great consideration. The emergence of new technological techniques has always put many businesses ahead in the conduction of the transactions making them attain a competitive platform that make them the most successful (Obal 2006).The introduction of technology has always made the customer preferences in some way change hence the trends in the market place making technology a powerful tool in any business. The process of technological advancement or shift has always been the most economical to businesses and this has been due to the fact that the components of the technology can easily be incorporated in the already established infrastructure (Wu & Blackhurst 2009). The resources businesses use is a component that has been the most deterministic factor in its existence. Organizations must always plan and execute the best policies in the acquisition of commodities that allows the transactions of business possible ( Mentzer 2001). The resource a business sorts must always be the most appropriate since the resources may in some way shared hence presence of high competition. Resources can in many ways determine the kind of the product a business produces hence the choice will always be the backbone for the survival of the business as a whole. The raw materials the, the labor force pool must always be viewed in a way that overall returns to the business are sizeable and no conflicts are propagated in terms of the setup policies by the relevant authorities. Lateral relationships have always been the most important factors within a business setup. These factors have always determined the way coordination is done both within the business and outside the business (Nagurney 2006). This helps in the acquisition of the required information that helps in the installation of values in the different sectors of the business enhancing its efficiency. The proper equipping and feeding of information to the workers for example has always determined the kind of products or services they will deliver. 1.1 Scope The flexibility and the agility of any business will virtually depend on the kind of the elasticity it has in the servicing of the different demand needs present in the market. The proper execution of policies and the proper establishment of such policies should be well vetted before any adoptions are made. This forms the basis of this report. 2. Supply chain elements in an organization 2.1 Supply chain uncertainty effects in an organization The production of goods mainly happens through thorough activities within the company premises. Instability has been one of the most common problems in the production of products (Mangan, Lalwani& Butcher 2008). This has been in line with the global supply chain trends where the markets for commodities normally change with time and the competition is usually high. This depresses the business operation costs and hence a loss may be incurred at long last. Inflexibility is another cause that a business can experience in the production of goods. The business inside machinery can be highly affected if the coping with the high demand is not checked. The straining of the available resources may also cause harp-hazard doing of things that in return might harm the business reputation due to client dissatisfaction. The production process mainly has some set out policies and standards that must be followed in any case. This mainly applies to the type of goods being supplied. The presence of defects is always an occurrence that is not readily ascertained or foreseen. This leads to the process of production being halted or slowed down during the correction of such uncertainty. For the process of production a lot need to be implemented that will allow the produced good reach the customer. The issue of uncertainty has always played a role in the delay of goods to the market (Hugo 2006) .Natural disasters have been the most causative agents of this delays. This may lead to a demand rise being initiated hence the rise in basic commodities. The problem may also cause the loss of the products considering their kinds e.g. the shelf life hence the where products may expire due to the late arrival at the consumption pint hence the increase in the losses. Loss of suppliers is another problem that happens at any time without warning. This mainly occurs when the suppliers find other places to supply the same products but at higher prices this happens since they may want the increased profit margins. Another common effect on the supply of goods is the event of supplier bankrupcy. This has been recently caused by the recession phenomenon that was designed to put suppliers out of the market. This leads to suppliers borrowing of money from banks and if the banks aren’t willing to lend out, the suppliers may have to live the business. This may lead to the increased product prices and a soaring demand. Deliberate acts may also be a problem that normally can cause the destruction of company properties hence the increased low delivery of goods or services bringing in the lack of customers satisfaction. This can happen through such acts as terrorism or vandalism. 2.2 Internal and external factors effects in the multi business supply chain In the operation of various companies that are in the same line in the production of a particular good, the internal and external factors need to be considered. Different companies have different internal operations that plainly depend on the already set up organizational culture (Geunes&Pardalos 2005). This might be different from the next business in the production line and hence conflict may arise in the delivery of the services or commodity to the consumer. This widely may affect the supply chain making it inefficient. Operation may exist where the goods have to be crossed over the border or boundaries. This exposes the goods on transit to many Political indifferences where different policies different from origin area exist. Lead time also is affected and customer impatience may be encountered. This may be the case not unless there is a setup understanding that may counteract against this. The policies outlined in any business mainly go hand-in-hand with the rule of law in any country. The commercial litigation laws vary from one place to another and are conscious of the relevant penal laws that have been put in place. The in-house operation strategies are also a factor to be considered in the supply chain. The implementation of the management systems vividly determines the kind of a business and also the protocol in the authority ladder (Gattorna 1998). The presence of low performing business due to above outlined factors may cause an overall lag or absolute halt in the running of the businesses within the supply chain. Other factors include the competition. 2.3 Agility and Flexibility of a business In the improvement of the supply chain agility or dynamics, the introduction of leaner supply chain is paramount. This mainly reduces the lead time and at the same time it lowers the amplifications. Another decision to make mainly depends on the finding of the right trade off that exists between the level of stock production and the rates of production. This in return increases the flexibility of the production hence the smooth running of the business with reduced overstrains. Following this implementations , the inventory may also be reduced overall which may give two modes of operation that is for varying inventory levels, the process of production should be fixed whereas the to have a fixed inventory levels, the production process should have a varying processing rate. Improvement of the engineering designs within the industry is an aspect that can determine the process maturity (Frazelle 2002). This mainly involves such activities like the changing of the product design. This happens when the maturity rates cannot meet the available demand for given products. The business might decide in the changing of the design of the product to increase its processing. This on the hand can be achieved through also in the redesigning the layout of the production line. Processing improves hence the satisfaction of the demand available and no hitches can be caused at given time. This places the business way ahead of its competitor. Another aspect that is worthy looking at is the production process reengineering. This mainly involves the input of strategies that allow the sequencing and the integration of processes that helps in the efficiency improvement in any organization. This in return reduces the lead time for the production of the goods and demand is well taken care off in good time. This reduces the presence of lags in the production process making it a virtue that businesses must assimilate in there running. To couple this overall improvement in the production process, the presence of good supply to the business should be taken care hence good and reliable suppliers to the business should be well chosen. In the business internal networks, the improvement of the data transformation and the relevant output of the same data is usually a vital task. The data capture process should be well outlaid so that data capture and can be improved tremendously. This helps in the proper understanding of the demand needs and the relevant supply requirements. This in some way can be vital in the flexibility of the business processes. The interfaces in the collection and input of electronic data should be addressed where the improvements in these sectors will help in the proper running of the business (Frazelle 2002). Application of emerging technological knowhow can be applied or incorporated in the information departments e.g. web 2.0 that allows the proper interaction of the business with other components of the same business on a web-based platform The operation reengineering is vital in the catering of the emerging demands at different times of business existence. The adoption of the pull system in the delivery in the making and delivery of products is preferred to the push system. The system also allows the shared planning of business processes which in return allows the proper utilization of the expertise possessed by the different professionals’ deployment in the different sectors of production in the business. In the planning of scenarios in the future, it’s important to anticipate and mitigate risks which can be done proactively or reactively. In case of agility, the reactive responses supersede the others. 3. Risks in the supply chain 3.1 Uncertainty reduction In any undertaking by any business the issue of uncertainty is vital looking at. The process involves the identification of the various areas that could be of risk to the business where they can be solved proactively if identified or reactively when they crop up (Chopra& Meindl 2007). In the case of the grocery suppliers in Brisbane, the dire need of the product redesign inevitable. This is crucial since the product need to be reengineered so that the losses can be reduced greatly. The refrigeration and preserved packaging can form a good example in the curbing of this problem. The introduction of various branches of the grocery in Archerfield and Rocklea area reduces the time workers reach their job places. This in return increases the production process that in return reduces the presence of risks in the supply of goods or services. The decentralization of the business to the various locations in Brisbane will have an added advantage in the overall operation in the production of goods. The product maturity process will be shortened hence on time delivery of such products to the market. These sorts of a decentralized business plans also help in the reduction of inefficiency hence improve service and good delivery. The workers in branches have reduced time in the relay of information hence rampant and on time decision making. Losses can be experienced in the business due to the disrupted communication infrastructure. The grocery business in this case should define the kind of benchmarks to work with in the delivery of the products to the market. Some of the metrics to consider in this case are the market share or the availability of places to sell their products in the whole of Queensland, The unit volume produced will also form a platform for the mitigation of the product loss i.e. are there a lot of same products in the market, Do they need site conversion strategy for business spread and the consideration of the different time consumption to market or to revenue. This is some of the communication strategies they need to look at in the transaction conduction to reduce the losses. Supply chain management inventories vary in the different regions in goods production (Blanchard 2007). The grocery may be facing myriad of dynamic problems that may require readdressing prior to resuming to previous status. The grocery has to address the investment in the thorough communication networks that will allow the conveyance of information at a moments notice. This varies from the volume or locational changes which concern the customers’ demands to natural phenomenon occurrences and globalization. It will allow the discovery of the different back tracking of the business where the inbound and outbound logistics can be tackled in a better way reviving the grocery business and this may help in the consumer need service in slower ways which other groceries in the market place cannot afford. Other inventories the wholesaler can look into are the transportation logistics, retailer logistics where the business has the ability of translating the products it produces into money (Bolstorff & Rosenbaum 2007). In the elimination of the problems within the Rockhampton, the business can decide, on the formation of contractual dealings that would allow the delivery of its products to the market places. This is mainly possible through the proper business outsourcing. The process will involve the delivery of the products in the Gin Gin & Sunshine Coast areas of chosen business having the same business products as the grocery. In return the grocery management should allow the occupation of its deport at Rockhampton by the local suppliers. This way, there is the mutual understanding hence conduction of business as usual. The main problem with such kind of association is the fact that the outsourced business may not comply with the supply instruction, the required packaging or the quality stated by the grocery. To eliminate this sort of problem, the grocery business manager should maintain a proper performance evaluation strategy that would maintain proper service and goods delivery. Another give up is the Gladstone depots where the outsourced business can operate from and this allows the grocery stores to operate elsewhere with minimal costs. 3.2 Variability reduction Variability can be reduced greatly so that business can have a sharp and timely delivery in the supply chain network. The process can be incorporated in the running of the grocery where the reduction of the factors that delay the delivery of good and services can be cut down tremendously. This happens through the adoption of recent technologies such as the six sigma supply chains. This model helps in the innovative and approach in the design of the network that precedes the design. This can be advocated for by the grocery business where the process. The lean reduction in waste needs to be addressed where the lower the waste generation the high the productivity of the processing activity. In the case of the grocery, the process of reducing the wastes during the processing period can have a reduced cost which might be lagging the other process of operations. Another activity worth while in the reduction of variability is the variation reduction, this in one way that has the ultimate reduction in the variability of products manufactured (Bolstorff & Rosenbaum 2007).This can be adopted by the grocery business where customer satisfaction should form the better part of the production process. 3.3 Lead-time reduction Lead time is the duration that a product is initiated into the processing line. This varies from one product to the other.The lead time mainly depends on various factors. The turn around factor is on of them where the business in question should investigate and find out. This allows one to determine the lead time for the various product that one has. In the case of the grocery business, the lead time may be of importance to the planning of the business. This is usually identified and broken down day by day or hour by hour in the activities involved in the supply of the products. Business beat rate is another factor to be considered in the elimination of the lead time. This mainly helps in the determination of the demand-supply behaviors where the products need to be produced at the same rate as the demand calls for it (Basu &Wright 2007). The demand in the grocery business should be checked to identify the supply characteristics this will help in the reduction of losses in terms of the product. The business might also consider the geography in which it’s located and this might play a part in the reduction of the losses currently in the business. Large batch has high turn around time which reduces the efficiency of the business this need to be taken care off. 4. Conclusion The process of supply chain analysis is paramount in the running of the business. This should be made one of the most comprehensive processes so that the elimination of risks and the improvement of the overall delivery of goods and services should be enhanced. The consumers or customers should be addressed in every stage of production so that reduction in the end the customer satisfaction will be the one keeping some business in business and others out of business. 5. Recommendations To enhance the viability and productivity of the business, the business wholly should embrace the notion of outsourcing which in many cases has its effect on the service delivery and also in the with holding of quality a virtue customers can strive to have. Customer loyalty should be enhanced so that in the case of any economic hardships, the business can still survive. 6. References Basu,R & Wright,JN 2007, Total Supply Chain Management, Butterworth-Heinemann,Oxford,UK. Blanchard,D 2007,Supply chain management: best practices, John Wiley and Sons, New York,NY. Bolstorff,P & Rosenbaum,RG 2007, Supply chain excellence: a handbook for dramatic improvement using the SCOR model, Volume 1,AMACOM Div American Mgmt Assn,New York,NY. Chopra,S & Meindl,P 2007,Supply chain management: strategy, planning, and operation, Pearson Prentice Hall, the University of Michigan. Frazelle,E 2002,Supply chain strategy: the logistics of supply chain management, McGraw-Hill Professional,Columbus, NY. Gattorna,J 1998, Strategic supply chain alignment: best practice in supply chain management, Gower Publishing, Aldershot Hampshire. Geunes,J &Pardalos,PM 2005,Supply chain optimization, Springer, New York,NY. Hugos MH 2006,Essentials of supply chain management, 2 edition, John Wiley and Sons, New York,NY. Mangan,J Lalwani,C & Butcher,T 2008, Global logistics and supply chain management, John Wiley and Sons, New York,NY. Mentzer,JT 2001,Supply chain management, SAGE, London. Nagurney,A 2006,Supply chain network economics: dynamics of prices, flows and profits, Edward Elgar Publishing, Camberley,UK. Obal, P 2006,Glossary of Supply Chain Terminology: A Dictionary on Technology, Logistics, Transportation, Warehousing, Manufacturing, Purchasing, and More!, Industrial Data & Information Inc.,Tulsa,OK. Sehgal,V 2009,Enterprise supply chain management: integrating best-in-class processes,John Wiley and Sons, New York,NY. Wu,T & Blackhurst,J 2009,Managing Supply Chain Risk and Vulnerability: Tools and Methods for Supply Chain Decision Makers, Springer, New York,NY. Read More