Rio Olympics Supply Chain Management - Case Study Example

Title Module code Word count Submission Date Executive Summary The report is based on the Rio Olympics supply chain. The main areas of focus are the supply for the uniforms and supply for the food and catering. The organising committee chose 361° which is a Chinese company to be the main supplier for the uniform. For the food and catering, several firms including Aramak were chosen. The supply for the uniform was smooth apart from the delays due to customs clearance. This is unlike the supply for the food which faced several challenges due to supply chain challenges. The report shows that the design of the supply chain matters as proved by the comparison and analysis. It shows the importance of quality and the role of the consumers. Timing and costs are vital and are supposed to be addressed during procurement. Sustainability is a core theme in modern supply chain. In Rio Olympics, it was highly upheld as evidenced by the comparison and analysis in the report. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 3 The Overall Design of the Supply Chains 4 The Importance of Quality and End Consumers 6 Consumer involvement 6 Consumers influence 6 Consumers and supply chain strategy 6 Consumers and manufacturing 7 Quality and supply chain 7 Functions of the supply chain impact on overall quality and quality perception 8 Timing and Cost 8 Timing impact on logistics and the overall supply chain strategy 8 Procurement function impact on cost 9 Timing and cost impact on quality of the supply chain 9 Risks in relation to timing and cost 10 Sustainability 10 Importance of sustainability in the supply chain 10 Ethics and CSR in relation to sustainability 10 Green logistics 11 Consumer and sustainability 11 Conclusion and Recommendations 11 Reference List 13 Introduction Supply chain is a major source of competitive advantage. This can only be attained through having efficient integration of the suppliers, manufactures, warehousing and storage facilities (Waters, 2009). Olympics games are held every four years and are one of the most watched events globally. 2016 Olympics were held in Rio de Janeiro Brazil. When organising a major event such as the Rio Olympics, supply chain takes a centre stage. This is due to the huge number of suppliers required and the supplies involved. For example, Brazil procured an estimated 30 million different products which includes meals and sport equipment with the total procurement budget going over $2 billion (Sharma et al., 2017). The main aim was to host a sustainable Olympics through a comprehensive management. This report is based on supply of uniforms and food at the Rio Olympics. The report will compare and analyse uniform and food supply chains based on the overall design of supply chain, importance of quality to end consumers, timing and costs and lastly sustainability. The Overall Design of the Supply Chains To reduce the level of uncertainty, most of the supply chains are designed with an aim of being agile and lean (Waters, 2009). The use of lean supply chain is aimed at ensuring that there is reduction in waste. This is a concept that has been Toyota production system of Just-In-Time (JIT) approach. The agility concept is based on matching the supply and demand in the market. Rio Olympics took a hybrid approach utilising both lean and agile philosophies. Rio Olympics chose 361° which is a Chinese company as the official uniforms supplier. In the supply of the uniforms, Rio Olympics implemented the integrated supply chain model. This model is more progressive than the traditional model that was utilised in the supply of food and catering. The organisers were able to have an improved level of integration across the entire supply chain. On the other hand, the supply of food seems to have utilised the traditional design. This is where the individual suppliers were looked as separate unities which defined the functional entities. The design resembled a silo concept. This led to some parts of the supply chain opposing each other due to conflicting objectives (Tan, 2001). The end product was lack of efficiency in the supply of food stuffs and inability to meet the needs. In fact, it was reported that there was no adequate foods and drinks at the Olympics for the visitors in the Rio Olympics seven days after the start of the games (Sharma et al., 2017). The main areas of weakness in the supply of the uniforms were the fact that there was no assurance that Brazil was to speed the clearance in time and ensure fair duties. The country slow clearance may have affected the efficiency of the supply chain design. For the supply of food supplies, it is clear that Aramak which was the largest food caterer complained of the tendering issues. The country was late in building kitchens which affected the ability to employ qualified staff in time. Food catering is a vital event at the Olympic and the supply is supposed to be well organised. On the sustainability and ethics, both supply of uniform and food were done appropriately (Sharma et al., 2017). From the analysis, the supply of uniforms was well designed. The main area of contention arises on the supply of food and catering. The supply chain design for the food and catering should have been optimised. This is through a strategic network design on the number and locations of the suppliers and sourcing strategies (Slack, Chambers, Johnston, 2010). The old design of supply chain led to opposing parts and conflicting objectives. Poor design leads to inefficient supply and inability to meet the needs in time (Harland, 1996). Rio Olympics should have improved integration in the entire supply chain. Through appropriate design, it is possible to unlock the power of the supply chain. The Importance of Quality and End Consumers Consumer involvement The entire supply chain was meant to serve the athletes, visitors and the officials of the Rio Olympics. In both supply of uniform and food, the athletes were the most involved. This is due to fact that the uniforms were supposed to be of the right size and quality for the athletes. In addition, the food was supposed to be safe and free from any forbidden ingredients. Consumers play a major role in the supply chain. The organisers had to look for the best value for the consumers. Thus, the supply chain resilience is built around the customers (Waters, 2009). Consumers influence Consumers have a great influence on the supply chain decision making. This is due to fact that a supply chain can only be successful if they deliver what the customer needs (Waters, 2009). Thus, it requires gaining an importance understanding on what the consumer’s needs and how to get it. In the supply of uniforms, the Rio organising committee had to base their decisions on what the customers who included the athletes, officials and visitors’ needs. The resilience of the uniforms supply chain is based on the fact that the committee was able to identify what the consumers’ needs and how to deliver it. On the other hand, the issues with the food and catering supply is based on the fact that there was poor understanding on what the customers needed and how to get it. Consumers and supply chain strategy Customers in both cases at Rio Olympics shaped the supply chain strategy. To come up with customer focused supply chain, customers have to be involved in shaping the strategy (Tan, 2001). The supply of uniforms was customer centric since the athletes needed custom made wear for maximum performance in the games. In both cases, it is clear that the supply chain strategies were shaped by the customers. Despite this, there was lack of proper involvement of customers in the supply of food and catering. This is a common mistake that is made when supplying through lack of collaboration with the customers. Lack of two way communication between the customers and the organisers can compromise the supply chain (Mentzer et al., 2001). Consumers and manufacturing The number of customers and the level of demand determined the supply of the uniforms in the Rio Olympics. This was a pull type manufacturing where production was based on real demand. 361° had to make their products as demanded by the athletes and based on the official figures. On the other hand, the food and catering was based on push type manufacturing. The stock was not based on the actual demand. The company supplying the uniforms used the JIT production instead of utilising demand forecast. The inventory was kept at minimum due to JIT production. Use of push type manufacturing in catering and food led to crisis during the start of the games. This is due to poor forecasting which is associated with the push type manufacturing (Tan, 2001). Quality and supply chain Quality is very vital in the overall supply chain strategy. This is due to fact that quality ensures that there is no product recalls, wastage and loss. Quality issues can occur at any point in the supply chain process (Harland, 1996). In the supply of uniforms and food, quality is paramount. This is due to fact that both occupy a vital part in the entire Olympic Games. The uniforms are expected to be custom made and have to meet the set international standards. For the supply of food, quality is the main concern. This is due to cases of food poisoning to athletes and ensuring that the ingredients do not contain banned substances. Thus, 361° had a major role in ensuring that quality of their uniforms met the international standards. The same applied to the selected suppliers of food and catering (Sharma et al., 2017). Functions of the supply chain impact on overall quality and quality perception The overall quality and quality perception are affected by other functions in the supply chain. When the decision to purchase is based on the costs alone, there are possibility of low quality products and services (Waters, 2009). Moreover, the existing communication with the suppliers determines the level of quality. This is due to fact that it enhances collaboration on quality. Transportation and warehousing also determines the quality. Poor transport and storage may affect the quality of the foodstuffs. In addition, lateness in delivery leads to poor and inefficient services (Harland, 1996). Timing and Cost Timing impact on logistics and the overall supply chain strategy Timing is a vital component in the logistics and entire supply chain. Poor timing leads to excess inventory and shortages. In fact, poor timing leads to increased costs in supply chain and negatively impacts the performance metrics. Supply of uniforms and food at Rio Olympics shows the importance of timing. In the case of supply for the uniforms, 361° complained of issues with clearing and customs. This is an issue that affected the lead time variability. The outcome is loss of time and high costs. The same case applies to the supply of food and catering services. Due to poor timing, there were issues with food inventory leading to shortages. Thus, in both cases, timing has a major importance hence very vital (Harland, 1996). Procurement function impact on cost Procurement has a huge impact on the costs. It is through procurement that cost reduction programs can be implemented. First, the contract price competitiveness is determined through procurement. Through standardisation, it is possible to reduce costs using procurement. This is through use of economies of scale in the sourcing process by reducing the variety. It is through procurement that uncompetitive suppliers can be eliminated. In the case of supply for uniforms, uncompetitive suppliers were eliminated leaving the committee with 361 degrees as the main supplier saving costs. On the other hand, supply of food and catering failed in procurement. The suppliers were not competitive leading to high costs and loss of time. Centralising procurement leads to saving costs. Through centralisation, it becomes possible to control and utilise expenditure properly (Christopher, 2016). Timing and cost impact on quality of the supply chain Timing and costs affect the quality of the supply chain through delays, unreliable inventory, over supply and under supply. When goods are delivered at the wrong time, there is possibility there will be over supply or undersupply leading to unreliable inventory. This was the case in the supply of food and catering at Rio Olympics. The same scenario was repeated in the delays in supply of uniforms caused by slow clearing at the ports. The supply chain is very sensitive to time and costs and these are both brought about by poor timing and cost control. Timing leads to poor logistics in the supply chain (Jüttner, 2005). Risks in relation to timing and cost Costs of sourcing and timing are a major determiner of supply chain competitive advantage. The main risk associated with timing is poor inventory control. This is the case evidenced in the supply of food stuffs at the Rio Olympics. The poor timing led to shortages in the first days of the game. Another risk associated with costs is loss of efficiency. Costs also leads to poor quality hence risking loss of customers (Jüttner, 2005). Sustainability Sustainability is a key pillar in the modern supply chains. First, the organisation is able to reduce the carbon footprint globally. It becomes possible to reduce environmental impacts along the entire supply chain. This leads to a positive reputation which is vital for business. In fact, it becomes possible to gain a competitive advantage through being sustainable (Srivastava, 2007). Importance of sustainability in the supply chain The Rio Olympics were highly based on sustainability. The organisers made efforts to ensure that the suppliers were using sustainable practices to ensure that the entire supply chain was sustainable (Srivastava, 2007). This includes waste management, minimal use of harmful substance and responsible use of energy. Ethical labour standards were upheld in all sourcing including uniforms and food. This was able to give organisers positive reputation. Ethics and CSR in relation to sustainability Ethics and Corporate Social Responsibility (CSR) contributes highly to sustainability in a supply chain. Ethics acts as the moral guidelines on what is right and fair. This is what guides organisations such as Olympics to ensure that they are ethical in their sourcing. CSR stresses the need for organisations to act as good corporate citizens. This is through avoiding environmental pollution and exhausting global resources. Through CSR and ethics, it becomes possible for sustainability to be implemented by the organisations (Srivastava, 2007). This is the main reason why organisers behaved in a socially responsible manner during the Olympics. Green logistics Green logistics are very vital for sustainability (Rodrigue, Slack & Comtois, 2001). In the Rio Olympics, the logistics were expected to be environmental friendly to reduce the carbon footprint. The organisers wanted to make the event as sustainable as possible. This enhanced the country’s image and reputation. In the supply of uniforms, the logistics were expected to have least impact on the environment (Christopher, 2016). This was also expected in the supply of food and catering services. Consumer and sustainability Consumers play a role in ensuring sustainability. This is through advocating for sustainable supply chain practices. The advocacy can be attained through boycotting products which are not sustainable and supporting sustainable supply chains (Srivastava, 2007). In the case of Rio Olympics, consumers were very supportive for the sustainable sourcing practices. This is especially in the supply of uniforms where sustainability was highly supported. Conclusion and Recommendations The Rio Olympics were a success due to the supply chain management implemented. The organising committee aimed at coming up with a sustainable supply chain that would ensure minimal impact on the environment. Despite this, the supply for the food utilised traditional model in design while the supply for the uniforms followed integrated supply chain management. The outcome was a success in the supply for uniforms and problems in the supply for food and catering services. The customers were involved in the both process with low involvement in the supply of food and catering. From the analysis, it is clear that the supply chain design for the food and catering should have been improved. This is through making it integrated to ensure appropriate inventory. Moreover, the organising committee should have involved the customers more in the design for the supply chain for the food and catering. This would have prevented the issues that arose due to food shortages. It is advisable that the supply chain should have put more emphasis on timing and costs in both cases. This would have saved time, costs and make the Olympic more efficient. Timing and costing can lead to a lot of challenges and can be managed through proper procurement. Reference List Christopher, M. (2016). Logistics & supply chain management. London: Pearson UK. Harland, C. M. (1996). Supply chain management: relationships, chains and networks. British Journal of management, 7(s1), S63-S80. Jüttner, U. (2005) ‘Supply chain risk management: Understanding the business requirements from a practitioner perspective’. International Journal of Logistics Management 16 (1) 120 – 141. Mentzer, J. T., DeWitt, W., Keebler, J. S., Min, S., Nix, N. W., Smith, C. D., & Zacharia, Z. G. (2001). Defining supply chain management. Journal of Business logistics, 22(2), 1- 25. Rodrigue, J. P., Slack, B., & Comtois, C. (2001, July). The paradoxes of green logistics. In World Conference on Transport Research (WCTR). Seoul. Sharma, R., Watling, G., Watling, G., Sharma, R., & Sharma, R. (2017). Rio Olympics 2016 and the key takeaways for supply chain! « HICX Solutions. 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