The Supply Chain Management - Case Study Example

Supply chain management University Student I d Course Date Supply chain management Question 1 Risk assessment and contingency plan John Lewis distribution center just like any other automated warehouse is exposed to varying risks. Risk assessment then becomes vital in the mitigation process of the warehouse risks. Therefore, warehouses usually require a management plan for the risks, whether it is complex or even simple for the risk managers to execute them. The term risk assessment is the determination of the various risks that are encountered by a business, and what should be done to those risks in case they are realized. However, since is not possible to plan for everything, the majority of the businesses in most cases they always identify those risks that are more likely to face them (Gu, Goetschalckx, and McGinnis, 2010). The following are the appropriate steps that can be followed in the process of assessing the risks in the warehouse. Step 1: Risk Forecasting John Lewis distribution center can try to forecast the level of the risks that are likely to face the warehouse with the aim of developing the necessary risks management strategies. Risk forecasting is the initial step in the assessment process of a risk is usually the determination of the quantity as well as the level of the risks which a certain business encounters. It is in the risk forecasting step that John Lewis distribution center can ensure the identification of the threats that a business may face. The risks that face John Lewis distribution center can include the financial risks, weather-related risks, operational risks, human risks, and also the technical risks among the others. It is in this stage where John Lewis distribution center can be in a position to realize the possible risks (Baker and Canessa, 2009). These risks are usually measured basing on their likelihood of occurring and also the impact they have on business. Also, there are always numerous ways that John Lewis distribution center can use in the process of identifying the risks. John Lewis distribution center can use techniques like interviews, SWOT analysis, surveys, cause analysis, and also group brainstorming among the others. Risk forecasting can help John Lewis distribution center in the process of developing the necessary strategies to use depending on the potential risks. Step 2: Composite Risk Index In this step, John Lewis distribution center can assess the probability of the risk occurring using risk index. The most standard formula of assessing a risk is that a risk is usually equivalent to the probability of a certain event times its cost. Moreover, every risk which is identified is then rated on a scale which ranges from one to five, whereby the rate at five indicates the more likelihood of an occurrence of a risk. In general, all the various risks which are identified can either be rated as low, medium or even high depending on the risk rate. As a result, John Lewis distribution center can be in a position to realize the high and the low risks. Step 3: Risk Option Evaluation John Lewis distribution center in this step can come up with the necessary option that can be used in the process of managing the risk. The different options that can be employed are evaluated in this step to select the best option to use in mitigating the risk identified. After a risk has been identified, John Lewis distribution center can now decide on what to do on the risk. However, there are usually four major approaches that are employed in the evaluation of a risk. These basic approaches are risk retention, risk transfer, risk avoidance and risk reduction. John Lewis distribution center can choose the method to use depending on the level of risk whether it is low, medium, or high. The risk avoidance method involves the evasion of doing any task which can make the business to come into contact with the identified risks (Serrano, et al., 2008). The risk transfer method revolves around taking an insurance for a business against losses that can be suffered in case the risk occurs. The risk retention approach is the process of accepting loss possibility and then budgeting on how to cover them. Risk reduction approach entails developing the necessary strategies that can help in reducing the impacts of the risks the moment they occur. Contingency Plan John Lewis distribution center can develop a contingency plan aiming at dealing with the risks that are likely to occur. For instance, in case a business makes a decision to accept a risk, it will accrue benefit from the contingency plan that is implemented by a business for dealing with any risk which occurs. A contingency plan usually ranges from the fire evacuation plan to the appointment of an emergency coordinator who assists in the evacuation. John Lewis distribution center needs to have a fire evacuation procedures in place to ensure that in the case of a fire risks, as it is common in warehouses the risk can be managed easily. This can involve training a team that will be responsible for taking action the moment fire risk occurs in the warehouse (Roodbergen, Sharp, and Vis, 2008). Also, the risk managers can establish detailed plans for dealing with the various situations which are more likely to be faced in John Lewis distribution center and affect them negatively. Therefore, the risk managers are required to communicate about all these plans to the necessary personnel in John Lewis distribution center. Setting the plan actions clear can help in making sure that the risks are properly managed the moment they occur. Evaluation John Lewis distribution center need evaluate its plans it has in place for managing risks the moment they occur. It is through the plan evaluation that John Lewis distribution center can be in a position to assess whether the actions set in place can be able to achieve the set objectives. John Lewis distribution center usually required to review the plans in place for managing risks occasionally to ensure that they are updated. Also, through risk evaluation John Lewis distribution center can become aware of the condition of the risk equipment which includes the fire extinguishers and the eye-wash stations to ensure they are maintained in a good working order. John Lewis distribution center is also required to do an evaluation on the plans after any emergency has taken place. Factors to be considered to ensure continuous delivery to customers Some factors need to be considered in John Lewis distribution center to ensure that the delivery to the customers continues even in case the warehouse automation fails. These factors can include location, design, technology, and measuring performance. Location: the location of distribution center need to be considered to make sure that case of automation failure the warehouse can continue delivering to the customers. Locating the distribution center in a place that is more central can help in delivering to the customers in case of automation failure. Apart from the transportation costs, the location of a distribution center is also determined by various aspects such as the location of the supply points, transport rates, product characteristic, the location of the major markets and the product volume which is moving from the supply points. Besides, some of the local conditions which include the cost of labor, transportation infrastructure, government policies, and also the communications infrastructure usually play a major role in the determination of a location. However, there is usually the need to consider the automation failure of a warehouse in the process of locating a warehouse to guarantee continuous delivery to the customers despite the failure (Barroso, Clidaras and Hölzle, 2013). In the case where the warehouse is located far from the customers, there can be challenges in the process of delivering to the customers especially after the automation of the warehouse has failed. Designing and operations: the way a warehouse is designed and operated can determine whether the operations can still continue even after the automation failure. Therefore, there is need to make sure that designing of a warehouse is in a way that can enable delivery to the customers even when there is a failure. The operations of a warehouse need to allow delivery to the customers even after the failure of the operations. Some of the basic determinants of the distribution center design and also operations include; the peoples` perception about a product, service levels, transportation mode and also nature of the customer orders. Moreover, some of the characteristics that describe a certain product include; the weight, dimensions and also packaging among the others. Also, the perception of a product is usually viewed to be critical in both the efficiency of inbound operations and the space utilization. However, to optimize the efficiency of the inbound operations, it is usually necessary to obtain material in an immediately storable conveyance such as the box or even a pallet. Also, the number of the stock-keeping units in the distribution centers is of great importance in the determination of the equipment selection and also in the determination of the requirements needed in a business process (Gu, Goetschalckx, and McGinnis, 2007). Also, the selection of the storage equipment should always be based on the product characteristics. Technology requirements: considering the technology requirements of the warehouse is important in the process of making sure that there is delivery to the customers even after automation failure. A warehouse needs to ensure that it does not over-rely on technology to deliver to the customers as in the case of failure it can fail to ensure continuous delivery to customers. Information is one of the significant drivers which result into the successfulness of the operations in a given distribution center. Moreover, the short-term forecasts always provide necessary information which is important in the determination of the labor as well as the space requirements in a distribution center (Önüt, Tuzkaya, and Doğaç, 2008). On the other hand, the long-term forecasts are in most cases used for the capacity planning such as the workforce and also the size of the distribution center. Importantly, the information technology is very crucial in achieving the performance of a distribution center. However, there is need to make sure that a warehouse can even operate in the absence of the technology to ensure continuous delivery even after the failure of the automation. Measuring performance: the performance of a warehouse need to be measured to make sure that it can even function in case of automation failure. The main objective of the distribution center is the provision of the right product at the right time and also place at a cost which is competitive. However, the fundamental requirement for achieving as well as maintaining the objectives of the distribution centers is the measuring performance. Some of the common performance measures of the distribution centers include; accuracy, service, space utilization, inventory and also cost (Ekren, et al., 2010). These measures need to be considered to make sure that in the case of a failure of the automation, there can be a guarantee of continuous delivery to the customers. Putting these into action There are strategies that can be employed in the process of implementing the risk assessment and contingency plan. Following are the ways that can be employed to ensure the plans can be put into action. Monitoring and adjustments: the risks facing the warehouse can be monitored to assess the changes taking place with the aim making the appropriate adjustments. It is through the evaluation that the correct action can be taken to manage the risk. This can involve evaluating the areas that are not properly addressed hence taking the necessary strategies to ensure proper implementation of the strategies. Evaluating trends: this entails assessing the progress that has been taking place over time. The evaluation of the trend helps in coming up with the appropriate policies that can be employed in the process of ensuring successful implementation of the plan. Engaging the stakeholders: the key stakeholders in the risk management can be engaged to ensure that they provide their ideas. This can be an appropriate way of ensuring successful implementation of the plan where the risk assessment and contingency can be put into action (Önüt, Tuzkaya, and Doğaç, 2008). Question 2 Factors considered when redesigning layout of a warehouse The designing of a warehouse has been considered important in the process of developing a warehouse that can ensure efficiency. The selecting of the equipment and the designs of the warehouse are important in the process of ensuring the services offered can exceed the expectations of the customers. In this context, a warehouse is used a big well-structured building used to keep ready or finished goods or raw materials to facilitate continuous production. There have different purposes of keeping goods or raw materials in a warehouse (Ariyachandra and Watson, 2010). But before the stock is kept in the warehouse its design and layout have to ensure enough space and operations that can guarantee efficiency. There are several factors that affect the efficiency of a warehouse as far as designing and selection of its equipment are concerned. Some of the factors that need to be considered to ensure efficiency in the process of redesigning of warehouses can include the following: Flow: efficiency in a warehouse can best be achieved through coming up with a designing that can help in ensuring easy movement of good. The designing of a warehouse has to put into consideration the efficiency in the process of moving the goods in and out of the warehouse. Continued movement of goods or raw materials has to be factored when designing a warehouse. Operations of a warehouse need to have a smooth and fast procedure to receive goods or raw materials. These have to be made possible from entry and exit of the goods in the warehouse. The systems in a warehouse need to be very efficient to avoid conflict caused by work density, congestion on roads and clearance of goods or materials (Ekren, et al., 2010). A warehouse has to accommodate all activities that take place in it. The flow of stock in and out of warehouse entails acquiring a qualified personnel, efficient systems of keeping information and well-highlighted design of the warehouse. Therefore, the designer of a warehouse has to make sure that the system used in managing the stock in the warehouse of efficient in terms of being fast in receiving and issuing goods. Accessibility: efficiency in a warehouse can be achieved through ensuring easy access to the goods stored in the warehouse. The access is determined by the systems used in stocking goods where automation can be the best strategy of making sure that accessibility is achieved. A warehouse has to be made accessible to retrieve or keep all goods or raw materials. When designing a warehouse has to be considerate on how to ensure easy accessibility of the goods stored in the warehouse. Systems or equipment used in a warehouse need to make it easy for receiving and issuing stock. Transportation network linking to the warehouse need to be provided to ease movement of stock from the warehouse to the customer (Mutha and Pokharel, 2009). A complementary source to enhance accessibility such as availability of electricity has to be factored to make the layout to set standards. Movement of some equipment is made possible by electricity, so in designing a warehouse, the designers need to consider ensuring availability of electricity. Therefore, the accessibility of the warehouse is important in ensuring efficiency through reduced costs and time needed to access a warehouse. Space: the spacing factor is considered essential in ensuring that there is efficiency in the process of storing goods. Designing a warehouse that has enough space can make it easy to access the goods stored hence reducing the costs associated with good retrieving stock from the store. In entails the size of the floor area covered by the warehouse. The space covered by a warehouse need provide adequate movement of goods in and out of it. The available area should be well capitalized on storage operations and goods processing purposes (Karana, Hekkert, and Kandachar, 2008). Spacious warehouse or frequently creating spaces in a warehouse makes every operation smooth and fast. When designing a warehouse processing and storage space has to be highly factored. The designer has to consider the mechanization that is used and creates more space in the warehouse. The spacing of the warehouse has to be considered in the process of making sure that the operations of a store are efficient. The needed speed: The rate of clearing stock in the warehouse should be considered. When designing and obtaining equipment for a warehouse the speed in which stock move in and out need to be highly considered. Handling equipment of a warehouse facilitates efficient clearance of stock. When the right technology is incorporated into the operations of a warehouse the rate into which stock is received stored and cleared out of it is increased. Proper methods of keeping data help increase the same rate of stock in a warehouse (Lim, et al., 2008). The fact that time is a crucial factor in development every possible method to increase the rate of movement of goods has to be considered. The designer of a warehouse can ensure that the speed in the warehouse is improved through adopting the necessary technologies that can help in improving clearance speed. Plans of the local authority: the designer to ensure efficiency in operations a warehouse has to comply with the government policies concerning the warehouse operations. The Government policies on location and designing of a warehouse. It has to be designed and operated in line with the prevailing laws and rules of the government. Construction of a warehouse is overseen by the local government authorities so as to enhance every stakeholder in the warehouse. In designing a warehouse set standards by the government should be met (Il-Choe and Sharp, 2014). In any case, a warehouse does not meet the expected law it has to be consequential to the owner. Safety of workers and employees has to be always considered because the government has set consequences for the same. Complying with these policies can help in making sure that there is efficiency in the operation of a warehouse. Site details: it is important for the designer of a warehouse to ensure that all the information concerning the site of the warehouse is considered. For instance, before a warehouse is being set up or to the design in which it has built status of the land, good drainage system and site topography has to be highly considered. A suitable site has to be identified to enhance ease of preparation. The site has to provide good accessibility of the warehouse. The poor the site the more the challenges one faces in moving his or her stock in and out which may finally reduce the number of customers in place (Heragu, 2008). A site with continued supply of water allows operations possible and efficient since it’s a factor of production. It has to be visible in that a not in a middle forest or on top of a hill affecting accessibility. Therefore, it is important to ensure that the site details are considered in the process of designing a warehouse. Financial considerations: the designer of a warehouse has to consider the funds available to know the nature of systems to adopt. This ensures that the design adopted is in a position to be supported using the available funds. The cost of constructing the warehouse needs to be factored. A sufficient outline of every factor of construction has to be listed with their costs. Every cost incurred in construction all the way from foundation laying to roof fitting need to be made sufficient. One has to consider a design or a layout of a warehouse that is economic friendly not to fail in construction need to be considered. Management and coordination of work in a warehouse construction have to be cost friendly (Apple, Meller, and White, 2010). Capital is very significant to put a warehouse at work. A design that is likely to use high amounts of finances is likely to take long unlike the one that uses small amounts of money, but the design and layout of it are to the standards. Therefore, to ensure efficiency, it is important to make sure that the available funds are considered in the designing of the warehouse. Prevailing building factors: If the designer of the warehouse considers using an available building and improvising it to a warehouse he or she has to ensure that it provides space to stock and safety to workers. It’s significant that buildings that previously existed influences the design layout of a warehouse and many of these happen not to meet many functions. In other cases, if building a localized or closely build buildings the design of a warehouse can be highly affected. Some other buildings are built in a way that they protrude and take too much space that can provide space for a warehouse to be built (De Koster, et al., 2007). One has to be considerate because a warehouse has specifications meant to meet storage of stock which is the core business. Space, in this case, is the most important factor to be factored for maximum storage and accommodation of equipment to facilitate smooth operations. It is through the consideration of the prevailing building factors that efficiency in the operations of a warehouse can be achieved. Movement: a designer can ensure efficiency in operations of a warehouse through improving the movement of equipment and people. Free and smooth movement of equipment and people in the warehouse should be factored. The fact that movement is the core factor that facilitates operation in a warehouse, it has to be built to meet that. Human beings control every activity in a warehouse movement need to be made possible when designing the storehouse (Battini, et al., 2009). A warehouse design layout has to warranty small navigations in and out of the warehouse and space to enhance movement of equipment and people. A design layout has to enhance accommodation and safety of people and equipment for proper control and management of operations. It has to provide movement of hardware efficiently. Movement from one point to another should be done with ease to ensure efficiency in the warehouse. How to go about redesigning There are four steps that can be followed in the process of ensuring successful redesigning of a warehouse. Step 1: looking at the space available In the redesigning of a warehouse, the first step needs to be auditing the space which is available. Auditing space helps in putting the current investments in an optimum utilization to ensure efficiency (Grosse, et al., 2015). A warehouse space is usually utilized the moment around 85% is occupied by the stock hence auditing space can be crucial in the process of ensuring efficiency in the utilization of a warehouse. The auditing of the warehouse space can involve planning how to use the space available in a more efficient manner. Step 2: moving up This step involves considering what need to be done to improve the current situation of a warehouse. This involves assessing how designing new shelves can help in maximizing the available space. The planning need to involve the stock management teams to determine the arrangement of the warehouse that can ensure efficiency in redesigning (Ekren, et al., 2010). For instance, they can demonstrate the planned arrangement to assess how it can affect the space utilization. Step 3: removing dead inventory The redesigning making plans on how to address the issue of dead stock in the warehouse. An automated solution can use in dealing with the issue of dead stock. The stock that stays in the warehouse for long has to be removed during redesigning to create space. Removing the dead stock can help in eliminating inefficiencies in the utilization of stock. Step 4: going green This is the last step in the process of redesigning a warehouse that can ensure conservation of the resources available. The redesigning need to make sure that there is efficiency in the use of resources to be sustainable (Kimball, 2008). For instance, automatic lighting in redesigning a warehouse can help in conserving energy in the warehouse. References Apple, J.M., Meller, R.D. and White, J.A., 2010. Empirically-based warehouse design: Can academics accept such an approach. Progress in Material Handling Research, pp.1-24. Ariyachandra, T. and Watson, H., 2010. Key organizational factors in data warehouse architecture selection. Decision support systems, 49(2), pp.200-212. Baker, P. and Canessa, M., 2009. 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Empirical studies to assess the understandability of data warehouse schemas using structural metrics. Software Quality Journal, 16(1), pp.79-106. Read More