Marketing is very vital in every business especially when introducing a new product in the market. It is communicating the worth of an item, service or a make to the consumers for an intention of endorsing or advertising that item, service or a make to the market (Blanchard, 2010). Marketing promotes teamwork amid buyers and suppliers, brand maker and usual schemes, consumers and sales to minimize lead time, rationalize consumer response, and advance sale forecasting. It is as a result, that in manufacturing settings, marketing supply chains depend on the design, making, warehousing, and execution of material and gathering of consumers’ comments for incessant modification. Marketing supply chains are very important as they allow products to transform consumer demand into brand accomplishment and market deliverance.
A marketing supply chain is a scheme of associations, individuals, activities, and reserves concerned in moving a brand or a service from developer to consumer (Mentzer, et al, 2001). Supply chain involves transforming natural reserves and raw materials into final products that are distributed to the final consumer. Therefore, in manufacturing of a product, before a company makes for example a new brand of a shoe, it should first think of product mix. Product mix is a set of deed that a firm uses to advertise its product in the market. The firm should consider the product line, price, promotion and place. The aspect of the product mix in a supply chain serves as direction to verdicts concerning the addition and removal of product line and items. By elevating the steadiness of product mix, a company minimizes its cost of functions and obtains unparalleled standing in the market.
The manufacture plays a vital role in designing the shoe to be made. Product design is very important in supply chain especially in generating demand (Halldorsson, et al, 2007). Given that the product design orders multiple needs on the supply chain, once a product design is finished, it forces the structure of the supply chain map. When the product design is finished, the company deliberates on the material to use in order to come up with a product that will easily enter into the market due to its quality. Quality of the product helps it to easily penetrate to the market making this face very important in manufacturing stage. Once the material is decided, the shoe is made which is followed by advertisement of the made product to the market. Advertisement persuades the consumers to purchase the product and inform the consumers about existence of the new product. Once the consumers are aware of the new shoe in the market the manufacturer ships the shoes in bulk to the middlemen. Shipping in bulkiness makes sure that the distributor has enough products to supply to the retailers so that they can fulfill their demand which had been created by the advertisement they had made.
When the product gets to the distributor, he plays a vital role of distributing the products to all retailers so that all the customers can get the product. The distributor establishes good relationship with the retailers once he receives the goods which make the retailers to accept the credit extended by the distributor. Good relationship also enhances stability and trust to supply chain (Haag, et al 2006). Extension of credit by the distributor makes retailers to purchase good number of the products therefore increasing the sales. However, distributors are relied on more heavily on break down of the bulk shipment into small volumes of products since retailers are more likely to purchase small quantities. The distributor finally transports the purchased shoes to the retailers shop for sales. This encourages the retailer to purchase these goods more frequently as the transport cost is catered for by the distributor.
When the shoes get to the retailer, the retailer displays the shoes to costumers in a attractive manners so that the customers can be attracted by the display. An attractive display attract customers who when they get into the retail shop are persuaded to purchase the shoe. The retailer may use other methods to advertise the new shoes in the market for example offering discounts to the customers. Advertisements drive more customers into the shop therefore increasing the number of sale of the new product. The retailer may also persuade customers to purchase shoes by employing a sales person who can assist customers to make a quick choice. When the customers are assisted to make choice they make quick sale allowing more customers to purchase since there no congestion of customers. It also promotes quick movement of the new products. Once the customer makes decision of what to purchase a transaction is made and a possession of the product is transferred to the consumers therefore, transform consumer demand into brand accomplishment.
Unforeseen supply chain vulnerabilities and disruptions have adverse impacts on all parties across the supply chain by altering the flow of commodities. A key reason for the disruptions and vulnerabilities is the lack of a robust framework to identify and efficiently manage supply chain risks. Without a robust risk management model, risk awareness and response follow an ineffective reactive cycle whereby a risk event occurs, leads to a predictable rise in awareness, which is followed by a gradual return to low awareness. An effective risk management framework is one that strives to address risks proactively and optimize an organization’s supply chain response after the occurrence of a risk. A proactive-inclined risk management model positions an organization and its supply chain against risk consequently leading to both tactical and strategic benefits.
As mentioned in the introduction section, many supply chain risk management approaches seem to follow a lifecycle; a risk even occurs leading to a predictable rise in awareness followed by a gradual return to low awareness. As a result, today’s risks become tomorrow’s lessons learned (Fan & Stevenson, 2018). To break from the reactive cycle, an organization should proactively and wisely position itself and its supply chain against risk.
Notably, the supply chain risk management scope is extensive and covers all aspects of the supply chain. According to Fan and Stevenson (2018), at the tactical level, risk management should encompass continual activity detection, measurement, and assessment of potential supply chain disruption resulting from all types of supply chain risks and emanating. The process should also seek to identify risks emanating from both within and outside. Effective supply chain risk management should strive to manage, control, eliminate, or reduce potential or real risk exposure to the supply chain performance (Manhart, Summers, & Blackhurst, 2020). This allows an organization to break from the reactive approach to supply chain risk management.
The effectiveness of supply chain risk management solutions depends on compatibility with a specific organization’s business strategy, products, supply chain partners, and markets. It is imperative that a business aligns its supply chain operations with its overall organizational strategy, less the supply chain generates risks for the entire company (Sáenz, Revilla, & Acero, 2018). It is worth noting that lowering risk in one area of the supply chain can simply shift the risk to another area. Owing to such complexities, there is no one-fits-all model for supply chain risk management (Fan & Stevenson, 2018). An organization should tailor-make its supply chain risk management framework to address all types of risks that are unique to its operations.
A well-structured approach to supply chain risk management categorizes risks in terms of known and unknown risks. Known risks are those that the organization can identify and are usually possible to measure and manage over time (Fan & Stevenson, 2018). An example of a known risk is a supplier bankruptcy disrupting supply. An organization can estimate the occurrence of this risk based on the supplier’s financial history and can also quantify the impact of the risk to the organization by considering products and markets that would be affected. On the other hand, unknown risks are impossible or considerably difficult to foresee (Fan & Stevenson, 2018). For instance, the sudden eruption of a volcano that has been dormant for a very long time, which disrupts a supplier the organization did not know was in its supply chain. Predicting such a scenario is almost impossible even for the most risk-conscious organizations. An effective supply chain risk management framework covers both known and unknown risks.
For the management of a known supply chain risk portfolio, organizations can utilize a combination of digital tools and structured problem solving using four steps. Step one entails identifying and documenting the risks. For this, an organization can map out and assess all its major products’ value chains. This should be followed by a detailed assessment of each node of the supply chain –that is; suppliers, warehouses, plants, and transport routes. Identified risks should be entered on a risk register for rigorous tracking on an ongoing basis (Zhu, Krikke, & Caniëls, 2017). Notably, it is crucial to note parts of the supply chain where data is non-existent and further investigation is required.
Step two involves building a supply chain risk management framework. An organization should score every risk on the register based on three dimensions to formulate an integrated risk management framework. The three dimensions are; (1) the impact of the risk to an organization if it materializes, (2) the probability of the risk materializing, and (3) the organization’s preparedness to deal with the specific risk. Notably, tolerance thresholds should be applied to the risk scores to reflect the organization’s susceptibility to risk (Ivanov, 2018). Ivanov emphasizes that it is significantly important that organizations design and use a consistent scoring approach to evaluate all the risks. Doing this allows for effective prioritization and aggregation of the threats; thus, identifying the highest-risk products as well as value-chain nodes with the greatest potential for failure.
Step three entails risk monitoring. Persistent monitoring stands out as one of the crucial success factors in identifying risks. The emergence of digital tools owing to technological advancements has made it possible to efficiently identifying and tracking leading risk indicators even for the most complex supply chains (Ivanov, 2018). An organization must customize its monitoring system to meet its unique needs. The system should also have an early warning system that allows it to track top risks hence maximizing the likelihood of mitigating or at least limiting the impact of risk event occurrence (Manhart, Summers, & Blackhurst, 2020). Nonetheless, a successful monitoring system incorporates impact, probability, and preparedness perspectives.
The fourth and final step involves organizational governance and regular review. For this step, an organization sets up a robust governance mechanism geared designed to review the supply chain risks periodically and define mitigating actions. An effective governance mechanism should be a cross-functional board encompassing participants representing every value-chain node (Zhu, Krikke, & Caniëls, 2017). The goal of the supply chain risk management governance is to improve the resilience and agility of the supply chain risk management framework.
Managing Unknown Risks
As mentioned earlier, unknown risks are difficult or almost impossible to predict or quantify. For these reasons, it is impossible to incorporate them in the above-discussed risk management framework for known risks. The best way to mitigate unknown risks is by building strong defenses and reinforcing them with a risk awareness culture. Strong defenses range from request-for-proposal language to worker training. Having strong defenses increases an organization’s preparedness to identifying and stopping unknown risks before they cause damage to an organization (Manhart, Summers, & Blackhurst, 2020). Figure 1 below exhibits typical layers of defenses employed by organizations to manage unknown risks.
Organizations should also foster a risk-awareness culture to help them establish and maintain strong defensive layers against unknown risks. A risk awareness culture also allows for a quick response to the occurrence of an unknown risk event. Organizations must encourage a culture that empowers managers and employees to pass bad news. This openness allows for the timely identification of risks that result from mistakes in the workplace (Bailey, Barriball, Dey & Sankur, 2019). Organizational leaders also need to clearly define and communicate the organization’s risk tolerance. Such a culture allows for open sharing of warning signs of both internal and external risks. Lastly, organizations should empower their employees to identify and react rapidly to external changes. Notably, this can be enabled by cultivating organizational citizenship (Manhart, Summers, & Blackhurst, 2020). A risk awareness culture compliments the strong defenses created by an organization consequently leading to improved risk management of unknown risks.
To sum up, it is critical that organizations build robust frameworks for managing both known and unknown supply chain risks. The process should begin with breaking from the reactive cycle that renders organizations ineffective in managing supply chain risks. Organizational leaders should also recognize and acknowledge that risk management is not simply about establishing frameworks and instituting governance as it also entails cultural and mindset shifts. Employing the approaches discussed in this paper can help organizations increase their effectiveness in manage supply-chain risks while optimizing their supply-chain strategies to achieve their full value.
Japan has for a long time been known as the major source of the automotive product in the world. It holds four major automotive manufacturing plants in the world. These companies include Toyota, Mazda, Nissan and Honda. In this regard, the March 2011 earthquake that took place in Japan affected the world automotive industry a great deal. The world experienced shortage of automotive products for about six months after the earthquake, with companies such as Honda, Mazda and Toyota which were following lean production principles to the letter experiencing the greatest impact. This paper focuses on analyzing the effect of earthquake on the Toyota supply chain, and the consistency of the new Toyota measure with lean production principle. The paper also evaluates how the new Toyota plan may impact the company’s relation management in the supply chain.
Disadvantages and Advantage of Supply Chain System Used before the Earthquake
Before the 2011 March earthquake, Japanese auto companies were using a supply chain system that adhered to lean production principles. One of the observed Lean production guiding principle was that to maintain parts of inventories as low as possible. One of the major advantages of using this principle was that the companies managed a small error margin in case of supply interruption. Lean production also reduces fixed overhead cost. It also lowers operational costs, and thus playing a major part in boosting company’s restoration and increasing the company’s competitive advantage. Lean production is also believed to lower the time of manufacturing. Moreover it tries to eradicate waste space and thus, the Japan auto industry enjoyed all these benefits that are associated with lean production principles (Shpak, 2015).
One of the major disadvantages of employing the lean production principle is that the company does not have enough in store to assist it to keep on running in case of any interruption in the manufacturing process. Other disadvantages include the fact that in lean production the company has to be in a constant training of its workers to ensure continue adhering into the lean production principle. The leaders also have to remain committed to the lean production principles throughout to be able to enjoy the lean production principles advantages (Shah & Ward, 2007).
Consistency of the Toyota’s Foolproof Plan with Lean Production Philosophy
Toyota Company considered changing its supply chain system after the earthquake experience. In this case, the company considered employing foolproof system in its supply chain system. According to the plan, the system will involve standardizing the japan auto products to ensure that companies can benefit each other in case of supply problem from any company. This is basically meant to reduce chances of supply interruption. The main problem with this is that the companies may focus more on observing the set standards forgetting customers’ needs that change from time to time. Lean production focuses more on customers’ satisfaction (Ciarniene & Vienazindiene, 2012). On the other hand, customers tastes and preferences changes from time to time. They also vary from one customer to another. Standardization of auto products would lower the competition and thus, leaving the group of customers who are interested in certain unique product made by a certain company uniquely unsatisfied by the new products in the market. Therefore the new plan does not comply with the lean production
The second option involves getting a higher supply of specialized parts from its suppliers especially those obtained from one source. In this plan these location will be allowed to hold a higher volume of inventory that before. They also consider obtaining another source for those inventories. This goes against the lean production principles. This is because, the lean principle advocates for reduced level of inventories. However, the current plan goes for increasing inventories for special parts to fight supply interruption. In this regard, the current Toyota plan is not consistent with the lean production principles (Lean-manufacturing-junction, 2014).
The company also wants to reduce dependability of one supplier by ensuring that each of its regions produces their own auto products independently. This is meant to ensure that other regions are not affected by problems experienced in different parts of the world. Manufacturing in different parts increases the total wastage made during production. On the other hand, lean principles advocate for minimization of production wastage. Therefore, the current foolproof plan is not consistent with lean principles (Pettersen, 2009).
Best Recommended Best Supply Chain Strategy for Toyota
It is the aim of every company to remain viable in the market and available at all time despite of the crisis or any other problem that would influence the company’s supply chain. In this regard, the company should consider that its products are available to all its customers to any part of the world at all times. Unavailability can result to lose of a huge number of customers. Therefore, it is important for Toyota to disintegrate its manufacturing plants to ensure that the company can manage to sell its products to all its customers even when all links to a region are cut by crisis. To ensure customer satisfaction, the company should consider maintaining the production standards in all its plants despite of the integration. This can be done by having a central management, central research and design center to ensure that the company maintains the design of their products. The company should also ensure quality supply of raw materials for all its new firms to ensure uniformity, in design and quality and to eliminate the aspect of disintegration in the market. It will also ensure that the company is at the same level of development and advancement in the entire world. In this regard, constant training and engineers meeting would be necessary for the company. Each region should also consider maintaining a high level of efficiency.
Impact of Toyota’s Plan on Relation Management in Supply Chain
The previous Toyota supply chain established a great relation between the companies, its suppliers, its customers and all its workers. This relation may be broken by the current arrangement. This is because the company may need to cut their supply in Japan and get new suppliers for their firms to be established in different parts of the world. In this regard, the company will have to break its relation with a number of suppliers from japan and establish a relation with new suppliers. In addition, each regional plant will be expected to supply to its customers. In this regard, the company supply chain will be regionalized and thus there will be no intercontinental exportation of the company’s products. Therefore, the relation between a plant and customers will be regionalized. Intercontinental shipment will only happen when a regional plant is experiencing problems.
Japan auto companies have been operating under the guidance of lean production principles. However, the emergency of the 2011 March earthquake gave the company an opportunity to experience the disadvantages of employing lean production. The use of lean production principles made the company to experience shortage a few weeks after the incident. In this case the company is considering changing its operation plan. The plan aims at reducing dependency on one firm and creating a number of firms at different parts of the world with similar potential. This will assist the company in ensuring supply to all other parts of the world despite of a problem in one of its firms.
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Effective supply chain management is the backbone of every successful e-commerce business. It refers to all the interlinked processes that are required to manufacture and deliver products to consumers. It involves the development of an integrated system to manage procurement, coordination and scheduling. Furthermore, effective supply chain management requires that all procurement, production, deliveries and inventories be controlled through logistics and information processing tools. Supplying the right products to the correct location promptly improves customer service and reduce e-commerce costs in the form of refunds and returns (Xiao & Zhang 2000).
In essence, an integrated supply chain management system maintains effective control of all processes. Ideally, this control should begin from the point where raw materials are removed from the earth to the disposal of waste products and the replacement of natural resources in the earth (Xiao & Zhang 2000). The business world is evolving at a greater speed than ever before. Supply chain management practices must be flexible enough to adapt to changes if businesses are to achieve any ambitious strategic objectives (Xiao & Zhang 2000). This paper aims to provide a case study analysis of supply chain management practices at Amazon.com by identifying the company’s successes and challenges. Recommendations in line with supply chain management best practices will also be provided.
Amazon’s supply chain begins in the company’s numerous fulfilment centers and is informed by the company’s strategy to control the movement of goods across the entire supply chain and increase value to the consumer. In fulfilment centers, products are stored, picked, and packed for shipping to consumers (Kargar, 2004). In 2006, Amazon created Fulfilment by Amazon (FBA). This service allowed sellers on Amazon to send their inventory for storage in fulfilment centers and have Amazon manage shipping, customer service and returns for third party retailers. This meant that Amazon would have additional control over the supply chain and errors resulting from poor inventory management and shipping mishaps by vendors would be minimized. This led to the development of “Dragon Boat”, an initiative aimed at establishing a global delivery network that could facilitate the movement of goods from China and India to The US and UK.
However, the volume of Amazon orders was so enormous that the company could no longer rely solely on logistics provided by UPS and other carriers, especially during the holiday season. In response to this, Amazon developed a supply chain that positioned the company as a global provider of logistics services. A part of this innovative strategy, the company, purchased trucks, airplanes, drones and ships which allowed it to bypass third-party logistics providers and decrease costs significantly. Strategic considerations by Amazon today involve alteration of the supply chain management system to facilitate the company’s expansion of into consumer shipping market through shipping with Amazon.
Strengths: Amazon has over 300 million customers around the world and successfully operates bookstores, grocery stores, and provides premium digital content to consumers around the world. Since its foundation in 1994, it has grown from an online bookstore to a one-stop retailer of everything from food to furniture and entertainment. The company’ strategy to control the entire shipment process has increased value for consumers by allowing easy placement of orders and uninterrupted flow of logistics information. Amazon also expands supply chain hardware regularly to improve its fulfilment capabilities as evidenced by the drone-based delivery system offered by Amazon Prime Air.
Amazon’s sophisticated supply management software seamlessly manages inbound shipping, outbound shipping, demand and supply forecast as well as inventory planning. This synergy ensures that consumer objectives of price, selection, convenience and availability are met. Transportation in e-commerce has become especially challenging due to shorter lead times, demand for smaller delivery windows, rising freight costs and globalization. Amazon has managed to rise above all these challenges by developing the Amazon global supply chain (Sohel et al. 2014). This success has also positioned the company as a leading provider of logistics services that could rival dominant carriers such as UPS and FedEx.
Weaknesses: The massive difference between what the company charges its consumers for shipping and the costs it actually incurs have contributed to significant losses. For instance, in 2016 revenue from shipping was $8.976 billion while costs of shipping exceeded that amount by $7.191 billion. Furthermore, as more consumers become prime members, and shipping volumes increase, shipping costs are expected to increase. Strategic considerations in supply chain management should, therefore, aim to reduce these costs if any expansion into shipping is to be successful.
Threats: Collaboration between Amazon and its suppliers seems to be a threat to the success of an expanded logistics network. As shipping volumes increase and shipping costs go up, Amazon faces the daunting challenge of negotiating for better prices with its suppliers. Failure to achieve this, Amazon is likely to continue making losses in shipping, which might affect the health of the company. Moreover, giant physical distribution retailers such as Walmart are also trying to capture a share in the e-commerce market space (Mendes et al. 2014). Walmart’s also possesses sophisticated supply chain management systems that may make it a worthy rival to Amazon in the future.
Opportunities: Amazon could optimize its delivery processes by investing in new technologies to expand its logistics capabilities. Amazon could also broaden its Amazon Flex program. The cheaper transportation could offset shipping personnel costs that result from leveraging dedicated local carriers such as FedEx and UPS in existing delivery routes. The incorporation of a supply chain strategy focusing on minimizing costs and maximizing profits could assist in the reduction of shipping costs (Tummala & Schoenherr 2004). While it will be challenging to navigate a cost-driven strategy together with the present value-driven supply chain strategy, its adoption is essential to ensure that Amazon’s expansion into logistics becomes a success.
Amazon has invested considerably in innovation, which often results in impressive advances in e-commerce technology and reduction of human interference in supply chain management. However, the company’s logistic framework is not sustainable and may have contributed to the significant costs of shipping the company experiences. The company could consider investing in cheaper renewable sources of energy which could offset transportation costs. Moreover, green retailing will reduce the overall environmental costs of its planned expansion into shipping.
An adequate supply chain strategy is integral to every retail process. The strategy must be in line with the company’s strategic objectives but remain flexible enough to respond to any unanticipated changes in the business environment. Amazon.com is an example of a company that has continuously provided innovative solutions to some of the challenges facing the ecommerce business today. These achievements have created a solid foundation for the company’s plans to expand into shipping. However, current supply chain strategies have contributed to significant losses in shipping for the company. It is therefore essential that cost-driven strategic consideration is incorporated into the company’s supply chain framework.
Back in the 1990s, Dell became one of the leading companies to use its supply chain management efficiently. This was based on its direct model, which translated the make-to-stock idea to make-to-order strategy (Blanchard, 2012). This strategy assisted the company in reducing its cycle times to the level that had not been achieved by any other tech company in the industry. The model allowed Dell Inc. to carry inventory for a few days rather than the 3-4 weeks it had been accustomed. Other companies in various industries, especially the consumer-packed products industry, quickly noticed this strategy and began changing their supply chain to suit the direct model Dell had adopted. Dell’s supply chain costs $2 billion annually serving approximately 13 million customers, especially in the emerging markets (Phillips, 2015). The company focuses on a continuous optimization of its supply chain network as a focus to expand globally. This is based on the assessment of the industry, designing a supply chain network that matches the customer’s needs, stabilizing the process, and enabling the company’s capability.
Therefore, in order to make this approach successful, the company deployed the i2 software collaboration planner, i2 supply chain planner, and the i2 factory planner (Phillips, 2015). The company has been using this technology to coordinate the build-to-order strategy. As such, Dell is now able to incorporate the supply and demand side of the business, thus becoming a way of eliminating the company’s inventory surpluses. In this case, Dell is able to get the materials needed straight from the production factories every 2 hours, depending on the demand from the customers. For instance, the company uses online sales where a customer can order a custom made PC depending on their specifications, different from what was done previously (Phillips, 2015). Primarily, the just-in-time inventory strategy and the real-time scheduling ensure there is efficiency in deliveries and turnovers.
Dell’s biggest challenge has not come from the operation of its supply chain itself but from missing a shift in consumer preference. Mobile platform manufacturers such as Apple and Samsung are eating the traditional PC’s manufactures lunch and has been for several years (Gray, 2007). Combine that with built-to-order computing being less of a market differentiator than it was ten years ago and you have a recipe for declining sales in the company. Dell was founded purposely to provide the market with a specific product but has not done a great job at predicting trends or being agile enough to accommodate them.
The company’s build-to-order strategy and the cost-efficient supply chain does not provide the strategic advantage any more like the company once enjoyed. The only thing the company is doing is implementing strategies that its competitors are not doing (Blanchard, 2012). For example, the company has been strategizing on entering the consumer market where they can establish models in its retail shops, which helps the company in eating away some of the traditional costs. In addition, the company has also been producing some products with colors and new patterns, and this further assists in eroding its traditional supply chain improvement.
However, this remains a challenge since it becomes a constant reminder that the products they out into the market are not nearly as innovative as those of the competitors like Apple are. Therefore, the company has to stay relevant in the market; it has to emphasis more on creatively some of the more significant strategic challenges. For instance, the company would venture into the mobile platform market where they can be creative enough to build an operating system for Phones also an OS for the PCs (Phillips, 2015). As the IoT continues to become more prevalent, breaking into different markets would ensure the company becomes more relevant and a hike in sales.
How Dell has changed its supply chain to satisfy its customers
Over the past years, Dell Inc. decided to include retail as an additional sales channel was a good strategy as a way of satisfying its customers. Especially as most modern PC’s are more than powerful enough for the average consumer, a built-to-order machine is less of competitive advantage (Gray, 2007). The low transportation cost and instant consumer access to units sold in retail stores is a fair tradeoff for the reduced options in the configuration in the industry. That being said, I believe direct sales are still precious to the company. This is because the ability to control the customer experience is more important now than ever. With the increased use of mobile devices and social media, this strategy cannot be left to chance in the exclusive hands of a retailer. As such, the data needed to respond to quickly changing consumer preference is also vital in staying relevant in any given market. To lose the direct link with your customer’s experience and their data at the cost of its margins does not make a lot of sense, especially in the time when people are less reliant on brick and mortar retailers.
Why would a company outsource parts of its supply chain? Explain the value of this practice and why so many companies use it today. What are some operational challenges that outsourcing can present?
A company may outsource parts of its supply chain to reduce its operational costs by reducing the amount of money it pays employs as wages to handle supply chain operations. A company may also outsource parts of its supply chain to reduce regular costs associated with supply chain management. For instance, the company may outsource its supply chain operations to eliminate the need to meet the conditions of programs such as social security, Medicare, and unemployment insurance, which are non-existent for overseas operations. A company may also outsource certain parts of its supply chain to benefit from tax breaks in certain countries. For instance, outsourcing to countries such as Singapore and Taiwan would enable a company benefit from the low corporate tax rates in these countries.
Outsourcing parts of supply chain helps in reducing the operational costs of a company. It enables supply chain management to be handled by companies that specialize in this activity. Therefore, most companies are willing to outsource supply chain if it is not a core activity. This is one of the major reasons as to why e-commerce companies are reluctant to outsource supply chain management since it is a core activity to them.
Integration difficulties are some of the major challenges of outsourcing supply chain management. The transition process requires both parties to invest significant time and money. Lack of communication may lead to mishaps and delays. In addition, outsourcing supply chain management may have a negative impact on quality especially if the company hired to engage in supply chain management does not have experience.
Samsung, one of the lead providers of digital convergence and digital media. Samsung employs great operations management to actualize their philosophy of devoting talent and technology to create superior products and services which can contribute to a better global society. Creation of the highest levels of efficiency in an organization is enabled by Operations management, which is the administration of business practices. Being such a large company, Samsung electronics has employed a strong operational strategy and management. This paper will aim to analyze the operations management of Samsung electronics, highlight high-risk areas, give recommendations, and offer solutions regarding the topic.
Product life cycle is an important tool that can be utilized by strategists, business, and marketing managers in business to come up with product approaches. The process entails looking at different stages of the product lifecycle and coming up with suitable strategies. There are different phases in the life cycle of products which entail the hardware and software of their products (Christiansen, 2016). Fluctuations in sales data, delays in the data, effects of other elements, and varying market conditions are some examples of areas of weaknesses in the product lifecycle. Some of the other elements that can affect product lifecycle are the 4P’s which are price, place, promotions, and people.
Samsung electronics supply chain management contains five main components which are based on three pillars supporting them. The main pillars are economic, social, and environmental. Economic is whereby the company creates a positive competitive edge among its suppliers to enable sustainable growth. Social entails abiding by the international regulations which build transparency and accountability to all the stakeholders along the supply chain. Finally, environmental means that they only work with eco partner-certified suppliers. As such, the main pillars impact several categories in different ways to ensure their suppliers build a stronger competitive edge (Christiansen, 2016). The components are cost competitiveness which is an economic entity, together with human resources, and on time delivery. Response to risk and supplier competitiveness all entail the three major pillars.
Being a company that operates on a global scale, there are some issues that arise in the supply management which affect structuring, sourcing, purchasing, and supply chain. Some of the issues are the globalization, risk management, and fast-changing markets. Globalization is a key challenge because having suppliers in different geographical locations complicates the supply chain. The company would have to coordinate and collaborate with branches across borders regarding logistics, storage and much more. As such, the company can open branches worldwide especially in high market areas. Then launch a system that will be used to coordinate all aspects of supply chain and cover a certain geographical location. Such is better when compared to dealing with different companies (Christiansen, 2016).
Risk management and changing markets are other issues that can affect supply chain management. When the vulnerable areas in the supply chain are not taken into consideration, it can be disastrous for the company. The high-risk areas in the supply chain should be identified and mitigated. If they cannot be fully managed, structures should be put in place to contain the situation, just in case, there is an occurrence of the risk. Such an activity will ensure there is no stoppage of activities. The changing markets are also of great concern to supply chain management. Companies should do research and be ready to restructure depending on the market. The markets maybe change differently globally and as such, the company should be flexible in its supply chain management to adapt to the current market situation in a certain geographical area (Christiansen, 2016). This will ensure that there is continuous access to the preferred goods and services, also by the least time to the market. As such, the market will be satisfied which will ensure sales.
Quality management tools are important for they focus on the continuous improvement of products, operational processes, and system of management by eliminating errors that may arise in manufacturing and supply chain. There are several basic quality management tools which are used to gather and analyze data using a demanding cycle which is plan, do, study, act. The tools are usually visual and simple for everyone to understand. Some examples of the basic tools are check sheet, parent chart, flow chart, cause and effect diagram, histogram, scatter diagram, and control chart. When the tools are implemented, managing quality is very easy for the organization because the process involves everyone involved in the manufacturing and supply chain (Shah, 2009).
In a global scale like Samsung electronics, it is essential to implement an audit department in the organization. The department will be involved in all areas of the manufacturing and supply. This will enable the department to professionally analyze all areas of the company and be able to go to all branches. As such, the basic quality tools implemented by the company will be able to be evaluated and the areas of interest are dealt with properly. Furthermore, the company can also get the services of an outside audit firm which can periodically access the situation in the company (Shah, 2009). As such, the quality of the manufacturing and the supply chain will always be the best. This method may be expensive for the company but it is the best to ensure high efficiency of the company and provision of the best goods and services.
Just-In-Time policy is an inventory strategy that is used to improve the businesses return on investment by improving quality and reducing waste. There are several advantages that accrue to companies that use the just-in-time policy. Improved organizational efficiency is one of the advantages. Proper planning and scheduling of activities can be done while using the policy. As such, there will be synchronization of the production and the supply of goods by a company. This will improve the flow of goods during production and supply which will not only save in cost but improve the way work flows and thus making the process to be efficient (García-Alcaraz & Maldonado-Macías, 2016).
The just-in-time (JIT) policy is well known for reducing the costs that are accrued by a company. The policy helps in the reduction of the inventory, raw materials used and storage costs. In just-in-time (JIT) policy, it turns up side down the old notion that considers stock as an asset and now considers stock as an investment that is incurring opportunity costs. just-in-time (JIT) policy will also ensure that raw material are sourced closed to manufacturing time and ships out the product immediately saving on storage costs. As such, just-in-time policy has an advantage of smaller investments. This mostly beneficial to small companies by having an ideal inventory management structure that does not require them to purchase large quantities thus maintaining a healthy cash flow.
Just-in-time policy will affect quality in many ways. By making the production and supply system more efficient, this will ensure that better quality is delivered in production and supply of goods and services. JIT policy will develop human resources because it will require a flexible and highly skilled workforce that do not necessarily require supervision to perform their tasks (García-Alcaraz & Maldonado-Macías, 2016). The policy will also better utilize employees who have multiple skills and thus increase job motivation. The policy will also facilitate customization, which in turn will improve customer satisfaction. Customization will only be achieved when a company is producing the highest quality standards.
The qualitative and quantitative forecasting methods usually complement each other. Qualitative techniques come from experience and instincts which include interpretation of data combined with professional expertise developed with time. The quantitative technique uses historical data to be able to forecast the future by statistical modeling or trend analysis. A qualitative method that would be best for Samsung is the use of market survey. It uses interviews and surveys to judge the preferences of customers and also assesses the demand for goods and services (Arlbjørn, 2010). A quantitative method that would be suitable is the use of time-series models which attempt to predict the future based on underlying patterns contained in data.
Table: Qualitative and Quantitative Forecasting Technique
· Use of interviews, questionnaires to judge the preferences of customers.
· Uses statistical methods to analyze time series data to extract meaningful characteristics and statistics.
· Subject materials can be evaluated with greater detail
· It is an open ended process
· Enable to analyze specific insights
· Smaller sample sizes can be used which saves on costs
· It provides more content for creatives and marketing teams
· Future data value prediction capability
· Best way to deal with temporal effects
· Analysis are usually descriptive
· It is reliable especially when the data represents a broad time period
· Easy to identify seasonal patterns
· Data quality is highly subjective
· Data mining can be time consuming
· Researcher influence can have negative effect on data collected
· Replicating results can be difficult
· Unseen data can disappear during the process
· May require industry related expertise
· May require advanced statistical methods to arrive at a realistic result
· Analysis varies depending on the type of time series it is
· Most machine learning algorithms do not adapt well with time
· It is challenging, may require an expert
Samsung is a renowned global company that is renown because of its electronics. Being a large developing and manufacturing company, it is vital to have an efficient supply management system that will enable them to provide their products to their customers globally with high efficiency. Areas in the supply management enable this to happen such as the policies that they have in place, for example, the social, economic and environmental pillars. Other factors which would enable better supply chain is the quality management tools that are put in place. Also discussed is the just-in-time policy ensures delivery of quality service and saving on a lot of costs. Quantitative and qualitative forecasting techniques that would be used by the company to predict future trends in order to adopt.
Strategic Warehouse Management, Inc. (SWM) is a U.S. based warehousing organization in the construction and management of warehouse operations. The CEO’s market development team has determined that there is an opportunity to open a warehouse in Australia that could serve multiple businesses. The CEO plans to open a “non-resident company” (Land and Tax News, 2012). The CEO has also decided that the warehouse can be opened in any city in Australia. Some clients in Australia have also asked SWM to manage the flow of goods from Australia to U.S. locations. The CEO wants to get a preliminary plan developed as soon as possible before going further. The CEO asked you to design a supply chain that includes warehouse operations in any city in Australia. In addition, the CEO has a number of items he’d like to see you cover in the report. He has asked you to:
Develop requirements for the warehouse design and to provide an organization structure to manage the warehouse in Australia.
Present considerations for Workforce Management
Investigate key regulations and other key issues (e.g. labor climate) related to managing a warehouse in Australia as a foreign entity.
Develop export procedures and import procedures in the U.S.
Discuss supply chain risks and possible mitigations.
Analyze which operations Strategic Warehouse Management would outsource and which operations Strategic Warehouse Management would directly manage and explain why.
Outline the budget line items that would need to be considered (it is not necessary to develop a budget with dollar figures).
Determine the metrics you would use to measure success of the warehouse and the total supply chain.
Your report should be an eight to ten page APA style paper (not including the title and reference pages) and submitted to the CEO (your instructor) by the last day of the class. You are required to include at least 6 scholarly sources,
This paper explains the key metrics that most companies use in the management of supply chain. It is essential to note that management of supply chain requires the managing of multifaceted dependence between groups, sectors and companies that have partnerships across global boundaries; therefore it is seen as an expected zone for metrics. There are many forms of metrics, which can be utilized to measure the performances of an effective supply chain management system. They are include return on product launch and time to value the total supply chain costs as well as perfect order rate (Hugos, 2011). For a person to fully understand why this metrics are considered important, it would be necessary to determine their uses in the supply chain cycle. Considering the demand driven principle of supply chain, it is necessary that there are correlations between the demand, supply and the products in the company for the business to swiftly respond to increasing opportunities. To add on that, dimensions of measurements have to be considered, that is operational excellence as well as innovation excellence.
In order for one to measure the dimensions, hierarchies of metrics have to be used. This is where one considers which metrics are suitable for the company with respect to the type of business and products or services offered. Perfect order rate combined together with total supply chain costs provide the correct approach for measuring operational excellence, while, on the other hand, innovation excellence can be quantified using time to value, followed by return on product launch (Chopra & Meindl, 2012). The two dimensions are used because they best explain the benefits and vales of the supply chain while at the same time identifying the best performing business. Perfect order rate elaborates on the calculation of orders in the company that lack any error, and captures every phase in the ordering process. Upon identification of the errors, corrective measures are put in place which optimizes the performances in the supply chain. This explains why it is most important form of metrics in many organizations.
Return on product elaborates on the revenues earned from the sale of the product; it compares the profit margins from the product and those of the costs used in producing it. It is mainly used to measure the company’s profitability rate. Total supply chain elaborates on the time taken to fulfill a consumers order when the levels of the inventories were nil. It mainly shows the efficiencies of the supply chain and helps in identifying situations that have competitive advantages in the market (Hugos, 2011). Time to value measure elaborates on the percentages of orders that reach the customers on or before the requested time frame. This helps in promoting customer satisfaction and signposts an effective supply chain. These four metrics elaborates on the overall performances of the supply chain, and identifies opportunities that exist for the company to increase its effectiveness, investor and customer values in the supply chain.
In conclusion, it is evident that a well-designed system of supply chain metrics can increase the probabilities of a company’s success by aligning procedures across numerous firms, assist in targeting the most cost-effective market segments and obtaining a positive competitive advantage through distinguished services and lower expenditures (Chopra & Meindl, 2012). Inefficient metrics in the supply chain will eventually result in failures to meet the company’s desired expectation, missed opportunities while trying to outdo the competition and conflicts in the supply chain division.
Challenges affecting the growing marketing supply chain management of coffee from Yemen to the UK.
What are the major hurdles in the growing marketing supply chain management of coffee from Yemen to the United Kingdom?
Based on the above title, this proposal aims to highlight the major difficulties affecting the growth of marketing supply chain management of coffee from Yemen to the United Kingdom.
To find out whether the coffee managers in Yemen contribute to the challenges facing the development marketing supply chain market
To investigate the effects of coffee global market on the development of the marketing supply chain management from Yemen to UK
To find how customer value perception in coffee global market affects the development of marketing supply chain management from Yemen to UK
To find out if the legal requirements affect the development of coffee marketing supply chain management process of Yemen to UK
To find out how delivering value in uncertain market affects the market supply chain
In the recent past, the development of supply chain management has become critical issues in the global market. Therefore, coffee business stakeholders should analyse the major problems facing the development of marketing supply chain management of coffee from Yemen to the UK. Based on its relevance and complexity, the topic can be a good MBA dissertation. Through this, coffee supplier companies from Yemen to UK can utilize the findings in enhancing their competitive advantage over their rivals. When suppliers embrace supply chain management, they can greatly reduce the cost of operation. In addition, the development of supply chain management facilitates the marketing strategy, which creates a high customer value, loyalty, and satisfaction. Through this, firms can increase their profits. The development of marketing supply chain management of coffee from Yemen to UK is important to economy of Yemen suppliers. Thus, it is necessary to identify the challenges that are encountered in the development of coffee supply chain management between the two countries.