The Agility and Flexibility of the Supply Chain - Example

Name: Title: The Agility and Flexibility of the Supply Chain Tutor: Course: Date: Introduction Contemporary market place is increasingly becoming dynamic and volatile. Due to globalization many organizations are experiencing market pressures that force them to fundamentally rethink of how their businesses should be conducted. For instance, trade-offs between labour, transportations, inventory cost as well as response time to the customers increasingly becoming complex. It has been recognized that the success of each organization depends on the reliability and performance of its own suppliers and customers. Uncertainty is one of the major issues commonly known to impact the effectiveness of a supply chain. This is because uncertainties within the supply and demand are largely recognized have impacts on the performance of manufacturing function (Christopher 2000). Supply chain complexity triangle offers an explanation on the far-from–equilibrium behavior and the useful insight into a generation of uncertainties in a supply chain. The three interacting the though independent effects are deterministic chaos, demand amplification as well as parallel interactions causes the dynamic behaviors that are experienced in the supply chain. A combination of such effects significantly increases the level of uncertainty in the supply chain system. The study examines the impacts of uncertainty on organizations within the supply chain, how internal and external factors can affect the businesses in a supply chain and how organizations can be agile and flexible as well as make use of such strategies to enhance their effectiveness and efficiency in a Supply Chain (Chopra & Meindl 2007). The impact of uncertainty on organizations in a Supply Chain Uncertainty is considered as the major driving force behind an effective creation of supply chain relationships. Adaptability or stability are the key terms that explains the relationships caused by uncertainty, implying that under the under the uncertainty circumstances, various firms develop inter-organizational relationships for them to be adaptable to the changing environment. Additionally, such relationships enable firms to effectively predict environmental changes as well as promote stability within the changing supply chain environments. For instance, internal demand fluctuations are the leading source of uncertainty within the supply chains. It takes place when the information signals are examined by the supply chain team vary from the real consumer demand. On the other hand, the supply side indicates that internal supply uncertainty can result from the parallel interactions when the concerned team at a similar tier interacts due to supply disruption. This implies that the networks of a supply chain create an inter-functional and inter-organizational relationships referred to as the supply chain partnerships. Therefore without a foundation of the effective supply chain in form of organizational relationships, attempts made to the management of information flow or distribution of materials across a given supply chain most likely to be unsuccessful (Christopher 2000). Studies indicate that supply uncertainty is considerably more significant determinant of the organizational performance compared to the demand uncertainty in product and service associated organizations. In addition, closer relationships among the trading partners are more associated with the higher levels of organizational performance within the product and service based firms or organizations. The emerging implication is that uncertainty can be minimized by becoming more closely aligned with the suppliers and customers within the product based organizations. However, in the service based organizations, the closer relationships with the suppliers and customers do not necessarily minimize the level of uncertainty in an organization (Van Hoek, Harrison, Christopher 2001). How internal and external factors can impact across businesses in a Supply Chain The relationship between an organization’s internal operations and the external environment is increasingly becoming shaped. Supply chain is the best area that exemplifies where the manufacturers involve in the coordination of their activities with the ones for their partner organizations. This suggests that the supply chain managers should have a clear understanding of the economic, social and political factors that affect their business operations. In the same way risks have understood, distribution teams are also required to balance their commitment to serve and regulatory compliance with the cost control. As a result, it has been recognized that the success of any organization is largely dependent on reliability and performance of own suppliers and customers. Due to increased competitive and challenging nature of the business environments, most firms are undertaking their efforts so as to compete along the multiple fronts. As a result, organizations are basically relying on their customers and suppliers for information accessibility and the complementary resources that they be capable of deploying in building their competitive advantage. Such organizations integrate internally with a focus to prepare a cohesive organizational response as well as their readiness efforts to ground for the external integration. Both the internal and external integration are implemented in order to improve the manufacturing associated competitive capabilities and subsequently the financial performance. Each of the supply integration dimensions has its own significant and direct effect on the competitive capabilities. They are in turn has a significant relationship with the financial performance of an organization. Although efforts made to streamline as well as integrate internal operations of the business can result into substantial benefits, majority of the organizations turn to their formed supply chain partners. Integrating with the supply chain partners facilitates the accessibility of the new skills as well as tacit knowledge and it can also assist in managing uncertainties in organization. This implies that highly integrated category of supply chain partners access a wider range of the required knowledge and information in comparison to the less integrated ones (Handfield & Bechtel 2002). How organizations can be agile and flexible and can use these strategies to enhance their effectiveness and efficiency in a Supply Chain. To a greater extent organizations are adopting the agile ways of operating. The explanations of agile methodologies provide more guidance on how to carry out management roles and duties on team levels. However, there is little information on the changes that are needed on higher levels with the organizations. Agile also assumes each organization is well equipped with professional workforce that is managed and supported in a manner that is capable of operating more effectively. This is not the case because there is limited information in the current agile methods concerning how develop as well as manage such workforce. As a result, the People Capability Maturity Model (P-CMM) assists organizations to establish and enhance their workforce, ensuring that the rightful conditions are provided for the teams to do extremely well their performance. A roadmap of the People Capability Maturity Model process areas a given organization should implement at the initial stage in order to reap the quick business benefits, becomes an important aspect for consideration. Organizations that implement agile experiences problems such as communication difficulties that occur between the new agile teams and exiting line organization, difficulties of establishing the appropriate ways of rewarding as well as supporting the team culture, outcomes and behaviors. In addition, it is always hard to assure the availability of right competencies and skills at the right time and need. The existing management styles also conflict with agile principles (Harrison, Christopher & van Hoek 1999). To overcome the above mentioned difficulties, P-CMM roadmap consists of 3 core process areas namely staffing, coordination and communication as well as participatory culture that an organization need to undertake so as to become agile and flexible. This means that staffing will ensure the availability of professional teams, communication and coordination assures the access to the right information through effective collaboration and the participatory culture which empowers teams as well as enabling to undertake effective decisions. Practices within such 3 process areas are supportive to each other, and a result ought to be aligned. This implies that the People-CMM roadmap for the agile enables organizations to put their focus on the critical people issues that have to be addressed when migrating to agile. This implies that in order for the organizations to respond to the raised degree of uncertainty that are associated with the product variety proliferation and the disruptions caused by unexpected crisis, their supply chains should be agile and flexible so as to match demand with the supply. It also calls for development of supply chains that are capable of responding to the systematic changes within the market as well as to the customer. Furthermore, companies need to adjust their own supply chain structures and associated strategies in case of any change occurrence. What could be done to make the supply chain more responsive to local conditions Increasingly, organizations particularly multinationals need to consider the supply chains within the emerging, high-growth economies. This should be both as routes into the local markets and a source of the parts as well as finished goods for them to be distributed locally and globally. In addition, though, the local conditions dictate the approach, for instance, In China, Wal-Mart as a multinational company has two main supply chains, one used for both sourcing and distribution within China and the other considered for sourcing almost everywhere else. Slicing up of the supply-chain into its various components, such as one at the highest areas of expense and the area that a number of companies struggle to understand and manage is the transportation (Fawcet, Ellram & Ogden 2007). Transportation is continuously becoming a significant portion of the entire supply chain cost. As a result, this fresh fruit and vegetable company should consider it the single most important area to focus its cost reduction attention. This will enhance the supply chain to be more responsive to the local conditions such as complains presented by the local distribution centres at Head Office on lack of appreciation of products and services that are locally available. Such measures will also encourage more selling and buying to be done locally, allowing the local distributors to source their produce themselves. This will acknowledge the significance of local distributors in the supply chain. For example, when the floods hit Brisbane, local independent stores as well as local community markets undertakes the full responsibility to distribute the grown produce locally and the growers arrange their own transportation means around the floods. Due to the stark variations between the slow-growth and fast-growth economies, the supply chain synergies hardly come by. Additionally, the increasing interdependence of countries within the global marketplace as well as the lingering uncertainties of the new downturn presents ongoing challenges. The key management step to be taken by the fresh fruit and vegetable wholesaler company is to scan the horizon, ensure that their options are kept open, and make quick respond to the opportunities as they materialize themselves. This implies that a multinational company with carefully designed global strategy can be capable of buying or selling wherever the customers, talent or the resources are as well as where on earth it makes the most sense based on a cost, quality or efficiency point of view. Thus, a flexible, adaptable supply chain considered so critical to any organization (Samaranayake 2005). How capable the company could entice more local producers to provide produce when required to cope with the conditions across the state. What types of arrangements need to be in place for this to happen? The company could be able to entice more local producers to supply the produce whenever required so as to cope with uncertainty conditions such as floods across the state. This is because it had enough fresh produce within its most regional locations of supply to the entire local population. There was also a complain from the local distribution centres that the company does not appreciate the locally made available products, inadequate buying at local level as well as inability to allow the local distributors to involve in their own produce sourcing. Various arrangements need to be made in order to attract the local producers and cope with the local conditions. For instance, availability as a best practice will ensure that safe and adequate food supply is physically available within the vicinity of its population. Since the major warehouse is situated within Rockhampton which distributes to the entire Queensland area that was isolated due to floods in a period of two weeks, the availability best practice will also minimize the substantial losses all over the state as stated. Applying the accessibility principle will ensure that people within the state have the right means to produce, buy and even get food through the socially acceptable ways (Handfield & Bechtel 2002). Enhanced availability will encourage other local producers to involve in the production and supply of products when needed to cope with the existing conditions. Such availability measures will ensure equal distribution of the local produces rather than centralizing the distribution responsibility, for instance, as it was claimed that even when the roads in Brisbane were all open, Gladstone could be supplied since it was the Rockhampton distribution’s responsibilities. On the other hand, enhanced accessibility will lead to reduced disruptions of supplies from the central Queensland as well as disruptions from northern growers, and hence promoting the transportation of fruits along the coast. Therefore, transportation is continuously turning out to be a significant portion of the entire supply chain cost. As a result, this fresh fruit and vegetable company should consider it as the single most important area to focus its cost reduction attention. Utilization will focus on ensuring that people are able to derive adequate nutrition from the locally available food that can sustain their lives. As a result, the enough fresh produce within most regional areas will be utilized or supplied to the local population. This implies that local independent stores as well as local community markets should be improved and supported to enhance the local distribution of grown produces. Since the company provides enough fresh produce in its most regional areas, it should encourage more local producers to ensure the availability of fresh fruits and vegetables to be equally supplied to the local population (Handfield & Bechtel 2002). Actions that must be taken to reduce the possibility of major losses as had occurred this summer Actions should be taken in order to minimize the possibility of major losses due to flood disruptions. For instance, the fresh fruit and vegetable company should restructure and redistribute its main warehouses throughout the state rather than centralizing them within the Archerfield suburbs as well as the company’s distribution centre within the suburb of Rocklea which are commonly faced with floods. This will ensure that the company’s supply chain is very effective and efficient at all costs so as to respond rapidly to the business uncertainties, in this case floods and disasters. However, the company’s rapid responses will only be successful if the principles of agility and flexibility are ensured within the supply chain as well as its network. Since apart from losses experienced in Brisbane, substantial losses are also incurred in the entire state, the company should also distribute its major warehouses throughout the state to ensure that supply of the produce is adequate during the occurrence of floods. As a result, there will less dependency on Rockhampton as the main warehouse that distributes to rest of central Queenslands area that is normally isolated by floods disrupting supplies (Fisher 1997). Other means of transport such as railway and air need to be provided rather than relying on road transport that is commonly affected by floods. This will ensure the continuous supply of the produce throughout the state since much of the company’s produce are only from the Lockyer valley, Darling Downs as well as its surrounding areas that particularly hard hit due to floods. For instance, the problem of disrupted fruit supplies from the central Queensland and from northern growers along the coast due to flood could easily be solved if other means of transport were considered. However, the protection of flood-prone areas should undertake both policies and programmes that keep away the future flood damages from rising through delineation as well as mapping of the flood-prone areas in the state. Additionally, when the floods hit Brisbane, local independent stores as well as local community markets undertakes the full responsibility to distribute the grown produce locally and the growers arrange their own transportation means around the floods. This suggests that local independent stores and the local community markets should be supported with incentives that can assist in ensuring the adequate supply of produces even in the occurrence of uncertainties such as floods (Fawcet, Ellram & Ogden 2007). Alternative use of the flood-prone lands needs to be considered. Therefore, measures such as zoning and flood proofing can be utilized in order to control the development and reduction of futures flood damages. In this case, flood risk mapping which defines the exact area at risk ought to be the basis for the entire flood damage control programmes and the subsequent actions. Mapping must be based on the frequency of a flood event that is determined through public consultation and be reflected within the policy in relation to the vulnerability analysis. In case the regional or state flood reduction programmes are well put in place, they become so advantageous to a certain common mapping standard. This suggests that maps emerge to be the common element in relation to the identification of the flood-prone, the risks associated to the individuals and organizations involved in the production of produces such as fresh fruits and vegetables. Furthermore, efficient and effective preparations of the emergence response plans and the design of appropriate flood protection and flood-proofing can be made through the implementation of flood risk mapping. For instance, transportation that is continuously becoming a significant portion of the entire supply chain cost, calls for the fresh fruit and vegetable company to consider it as the single most important area to focus its cost reduction attention. This will enhance the supply chain to be more responsive to the local conditions such as complains presented by the local distribution centres at Head Office on lack of appreciation of products and services that are locally available. Such measures will also encourage more selling and buying to be done locally, allowing the local distributors to source their produce themselves. The management of supply chain should responsibly work as a corporate in order to improve both the company’s and entire local conditions. As a result, not only the Queensland will be able to cope with the weather conditions, but also the entire state due to a reduction in the possibility of major losses (McLaren, Head & Yuan 2002). Conclusion Uncertainty is one of the major issues commonly known to impact the effectiveness of a supply chain. It is the major driving force behind an effective creation of supply chain relationships. Various firms develop inter-organizational relationships for them to be adaptable to the changing environment. The networks of a supply chain create an inter-functional and inter-organizational relationships referred to as the supply chain partnerships. Organizations that implement agile experiences problems such as communication difficulties that occur between the new agile teams and exiting line organization, difficulties of establishing the appropriate ways of rewarding as well as supporting the team culture, outcomes and behaviors. Each supply integration dimensions has its significant and direct effect on the competitive capabilities. They in turn have significant relationship with the financial performance of an organization. For the organizations to respond to the raised degree of uncertainty that are associated with the product variety proliferation and the disruptions caused by unexpected crisis, their supply chains should be agile and flexible so as to match demand with the supply. Although efforts made to streamline as well as integrate internal operations of the business can result into substantial benefits, most of the organizations turn to their formed supply chain partners. Transportation is continuously turning out to be a significant portion of the entire supply chain cost. Flood risk mapping which defines the exact area at risk ought to be the basis for the entire flood damage control programmes and the subsequent actions. Therefore, maps emerge to be the common element in relation to the identification of the flood-prone, the risks associated to the individuals and organizations involved in the production of produces such as fresh fruits and vegetables. Bibliography Chopra, S., & Meindl, P., 2007, Supply chain management: Strategy, Planning and Operation. Upper saddle River, New Jessey: Pearson. Christopher, M., 2000, The Agile Supply Chain: Competing in Volatile Markets, Ind. Mark. Man., 29(1), 37-44. Fawcet, S.E, Ellram, L.M & Ogden, J.A, 2007, Supply Chain Management: From Vision to Implementation, Upper Saddle River, New Jersey, Prentice hall. Fisher, M., 1997, What is the Right Supply Chain for your Product?, Harvard Business Review, New Jersey, Prentice hall. Handfield, R.B. & C. Bechtel, 2002, The role of trust and relationship structure in improving supply chain responsiveness, Industrial Marketing Management, 31(4), 367-382. Handfield, R.B, Monczka, R.M, Giunipero, L.C & Patterson, J.L., 2009, Sourcing and supply chain management. 4th edition, Ontario, South Western. Harrison, A., Christopher, M and van Hoek, R., 1999, Creating the agile supply chain, working paper, School of Management, Cranfield University. McLaren, T., Head, T & Yuan, Y., 2002, Supply Chain Collaboration Alternatives: undertanding the expected costs and benefits, Internet Research: Electronic Networking Applications and Policy, 2002. 12(4), 348-364. Samaranayake, P, 2005, A conceptual framework for supply chain management: a structural integration, Supply chain management: An international journal, 10(1), 47-59. Van Hoek, R.I., Harrison, A., Christopher, M., 2001, Measuring agile capabilities in the supply Chain, International Journal of Operations and Production Management 21(1), 126–147. Read More