Supply Chain Management analysis

Supply Chain Management analysis Introduction Supply chain management (SCM) entails the management of the flow of goods, information and finances from raw materials to the end customer. Chapter 1 of Supply Chain Management: Strategy, Planning and Operation by Chopra (2019) details how important it is that SCM reduces costs, improves efficiency and improves customer satisfaction. This post talks about few SCM conceptual aspects through different discussion questions pointing out how these SC concepts can be useful in resolving operation challenges. Now imagine you go to a convenience store to purchase a can of soda. If a customer purchased a can of soda at a convenience store, it has been through many stages in the supply chain. First of all, the raw materials such as sugar cane, water and aluminum, need to be extracted. The soda is produced and packaged in manufacturing facilities and these materials are then shipped to them. The finished product is then distributed to warehouses and then to convenience stores for the consumer to purchase. However, there are many flows involved in the process. Physical movement of soda from one stage to the other comprises material flow. Orders, an inventory data package that helps coordinate the supply chain and sales data fall into this information flow. Moreover, money is passed back & forth between suppliers of raw materials and retailer chains. Why Should a Firm Such as Dell Consider Total Supply Chain Profitability? Since their direct to consumer model relies on high levels of coordination across their entire supply chain, Dell should consider total supply chain profitability. Through the analysis of the overall profitability, Dell can explore inefficiency which could be hidden while considering the profitability of individual components. For example, the cost of inventory and supplier performance might go unconsidered in the supply chain as a whole. Through a holistic view, Dell achieves minimization of costs and maintenance of the distribution system while managing the production system choices which also improves customer satisfaction. Strategy, planning and operational decisions for an apparel retailer such as GAP The Gap, an apparel retailer must make decisions based on supply chain levels such as strategic, planning and operational levels. In terms of strategy, Gap should choose its suppliers, come up with the best manufacturing locations and must decide on product lines to correspond with market trends. On costs, the company must work with revenues to maximize sales and minimize costs that are avoidable. The supply chain cycle and the push/pull boundary for a bookstore purchase. In a bookstore, the supply chain has cycles when a customer purchases a book. This involves ordering books by the publisher and based on forecasted demand. The bookstore shelves are restocked to make sure the most popular titles are always on the shelves. Finally, once a customer makes a purchase the customer order cycle begins and the book is handed over to the customer if the latter ordered at the store, given to a delivery boy to be posted if the book is to be purchased online. The push/pull boundary in this supply chain is the bookstore inventory. Books are pulled out when the customer buys them and pushed into the store on forecasts and historical sales data. Below, I discuss how to understand this boundary so that you do not end up with too much stock or too much stock out. Push/Pull Boundary and Processes for an Amazon Book Order The push/pull boundary within the supply chain for when a customer orders a book from Amazon is the fulfillment center. During the push phase, Amazon buys books from publishers and sends them to its fulfillment centers (by demand forecasts). This ensures that there are lots of titles that can be available for quick shipping. The book is picked, packed and shipped from the fulfillment center to the address where the customer resides after the pull phase, when the customer places an order. Amazon’s success is influenced by the flows of the supply chain. Since Amazon is founded on supply chain flows which affects the speed and efficiency of delivery of the products, the plays an important role in the success of the company. This means that the information flow provided to customers is timely and the material flow ensures that products are available when customers want them. The supply chain benefits from timely transactions on Amazon, among the suppliers and finally to the customers. Two of the major decisions involved in the supply chain process are the inventory management and logistics optimization. More effective inventory management will help avoid having too much or too little inventory in stock. Strategic placement of fulfillment centers and efficient shipping methods reduce logistics costs and time for delivery. These flows and decisions mastered by Amazon will solve problems like delivery delays and costs. Strategic and planning decisions for an automotive manufacturer To manage the supply chain efficiently, automotive manufacturer must make various decisions on strategic, planning and operation levels. From a strategic point of view, the company has to choose reliable suppliers for parts and materials, choose the optimal place to deploy manufacturing plants for the company and decide on the models to produce as well as their features. The manufacturer must forecast its demand for the different models, schedule its production runs to enable it to meet that demand and then manage its inventory levels for the raw materials and finished vehicles at the planning level. Operationally, the company has to look what the production process has to do, quality control them and then distribute the vehicles to the dealerships.   References Chopra, S. (2019). Supply chain management: Strategy, planning, and operation (7th ed.). Pearson.