Supply Chain Management And Logistics Exam

Supply Chain Management and Logistics Exam

by

Sherry Robbert

Question 1: Push and Pull Supply Chain Strategies and Centralized vs decentralized strategies

a) MBD should consider implementing a push-pull strategy. This is because the company is in such a position where it needs to inform other book retailers about the services that it offers hence the need for the push strategy. However, in order to curb demand uncertainty, the company could only be delivering the books that have been requested for by the retailers. (Harrison, Hau & Neale, 2005) In order to deal with the push aspect of their distribution strategies, the company ought to invest in a lot of advertisement to its retail booksellers. It also requires a forecast of long term issues affecting the company. On top of that, it would be necessary to examine all the past orders made by customers with regard to certain warehouses so as to understand how the demand patterns works. This would also mean that the company will require large production batches and large safety stock in order to meet client requirements. However, in order to curb the negative effects of the push system, it will also be favorable to include the pull system. This is because the books delivered to specific book retailers will be the ones that are actually needed by them and what the company thinks should be sold. This aspect will require fewer inventories for the company. Additionally, MBD will need to spread their knowledge across other supply chain partners. This may require serious coordination levels but will eventually reduce the lead times that have been assigned to a specific book type. b) MBD has the option of maintaining their intermediaries through the Distribution centers when tackling distribution to superstores. Additionally, they could choose to deliver the books to these superstores personally. While the distribution centers have been enhancing communication and encouraging greater flow of money, they have been rendered powerless by the power of the retailers. Most of these superstores are dictating terms to MBD thus minimizing their profit margins. In order to reduce the losses experienced by these companies in the specific area under consideration, it would be favorable for MBD to do direct selling where they can negotiate terms and curb extra expenses. However, when dealing with the online stores, it would be favorable for the company to adopt a different distribution strategy. Since these companies usually assign MBD with the task of delivering goods to their clientele directly, then it would be favorable for the company to consider provision of certain wholesaling functions alone. In other words, in order to enhance efficiency, then it would be favorable to adopt a streamlined system for the production of most of their products. c) MBD can benefit from changes in its distribution strategies by reducing the amount of lead time that the company needs to take in order to deliver books to their clientele. Additionally, the company will benefit from greater accuracy in their distributional approach because their work will be more coordinated. It would be plausible to consider changes in distribution because it can encourage greater returns to the company. Supply chains are just as important as any other aspect of production and if managed properly, they can lead to greater output levels. Lastly, changes in distribution can also cause lead to other non-financial benefits such as increased safety or better ergonomics. (IIMM, 2007) d) Having fewer ware houses and greater centralization can add to the value offered by any given company due to the following reasons. First of all, it allows greater understanding of the logistics process thus allowing an identification of the strengths and weakness inherent in that particular company. Additionally, it allows a given company to control volumes present in its warehouses. This means that changes in inventory levels can be adequately monitored. This also implies that turn rates can also be assessed. Through these analyses, companies can then determine types of materials that are needed to meet client needs. (Gallagher, ODwyer & Maher, 2000) On the other hand, decentralization may also benefit the company because it allows greater customization of service provision. This is because there is a high degree of personalization by the companys representatives since logistical decisions do not have to pass through central logistics mangers or leaders alone. Logistics strategy a) Sometimes, internal logistics may be the best way to go for a company if supply chain management serves as a value additional point. If the latter part of production plays an important role in sustaining competitive advantage, then it would be wiser to stick to internal logistics. In other scenarios, a companys internal capabilities may be sufficient enough to handle supply chain logistics. Consequently, the need to employ external parties may not be necessary. In other words, when the technology, infrastructure and core competencies within a certain company have not been surpassed, then it is advisable to continue utilizing internal logistics expertise. (Hamilton, 2008) Sometimes, the culture within a specific company may not fall in line with that respective companys logistical strategies. This means that even if a company has assessed its logistics requirements and found that there is a need to employ external parties, prevailing organizational culture may make it impossible to do so and this may undermine the success of outsourcing. Consequently, such companies would rather stick to what they know best i.e. internal logistics expertise. b) Acquiring a company with this expertise may also be another option owing to the fact that certain challenges or opportunities may occur within a given company thus heightening the need to consult with other categories or persons. Usually, this may be necessary when the firm under consideration has specialized in a certain logistical areas. One such example is a technological company. In order to optimize large supply chains, it may be necessary for respective companies to consider alternatives such as automation or the use of information technology. Such functions may eventually become part of supply chain management and will need to be constantly monitored by those respective providers. It would therefore be plausible to acquire such companies. By doing this, companies can deliver goods at a faster pace and a lower price. c) A company would be better off developing a strategy then employing external partners to carry out their strategy for them instances where the company under consideration would like to focus its energies on its core competency functions. This means that when companies want to increase the rate at which their revenue is growing, then they should consider this as a viable option. Also, in the event that a company would like to differentiate the kind of services which they offer to the public, then it would be plausible to consider differentiation as an appropriate method for service delivery. (Hamilton, 2008) Many companies tend to turn to deployment of logistics functions so as to ensure that their internal logistics costs are transferred from them to other external parties. This allows them to stick to the overall distribution strategy but reduce economic repercussions of their logistics chains. d) In certain instances, companies may require a third partys help in developing their logistics strategies owing to the fact that some supply chain expertise may not be present internally. Usually, this may occur when a company desires to change their logistics systems to incorporate consumer demand. Additionally, it may be necessary to include third parties in strategies formation when a company chooses to go global and they lack little internal knowledge about the intricacies of global logistics. (Paul, 2007) Sometimes some companies may employ the services of an external partner in strategy formulation in the event that they want to maximize their production levels but lack the knowledge on how this can be achieved practically. Usually, this can occur when the company under consideration has been operating below its profit margins or when it has been underutilizing its resources or time. Information technology and its role in logistics Technology can be very instrumental in the process of delivering parcels for United Parcel Services Incorporated. This is usually as a result of a series of areas that may have been improved through technology. For instance, automated warehousing processes assists in stacking parcels or commodities in an efficient method and also retrieving them easily. Consequently, the driver under consideration will save time by utilizing these automated systems to retrieve books whenever there is need to deliver them. Also, storage systems can be linked to distribution systems through computerization. Consequently, the driver under consideration may have a greater chance of improving system performance through technology. Technology can also enhance the efficiency of parcel delivery by providing a tracking system. This will go long way in ascertaining that all the respective books are delivered to the right clientele and that this is done quickly and efficiently. (Harrison, Hau & Neale, 2005) Before incorporation of greater amounts of manpower in product delivery, it was necessary to employ a large employee base to deliver a number of goods. This was because the entire process of storing, retrieving and arranging parcels was done by human beings. However, with the advent of technology, this is no longer the case. The United Parcel Services driver needs not deal with a wide variety of co-workers who will only increase the bureaucracy or confusion during service delivery. It is now possible for the driver to perform all these functions through the use of automated systems. Rack structures within the delivering vehicle can be improved through employment of technology. For instance, rack structures can be improved through the use of palletized unit loads. These racks are usually standardized and greatly assist in the process of either placing books within the delivery system or retrieving them from there. Consequently, the process of unloading and loading is much faster today than it was in other decades where these technological systems had not been introduced. (IIMM, 2007) Sometimes, some companies employ the use of machines to retrieve or sore material or parcels. In this case United Parcel Services Incorporated can employ this method when performing those functions. For instance, the company could use an S/R machine whose major function is to retrieve or store parcels. It allows a series of automated maneuvers that can be conducted by the driver. Some of these include accurate positioning of the parcels, high lifts for the products and locating where the product or parcel may be. It should be noted that the machine utilized pulley systems that come in various designs. Sometimes a series of parcels can be picked by the machine at any one time or simply one unit can be retrieved. This goes a long way in enhancing the retrieval process. It is also possible to deploy the use of carousels. Carousels are applicable in cases where both vertical and horizontal movements of the load or parcel are required. Usually, vertical systems are preferred when there is a need to use a cube system. However, in cases where picking needs to be done in a conventional method, then there may be a need to employ robotic arms for this process. There are also certain methodologies that permit linkages of warehouse staff. For instance, if the driver under consideration was working with other employees, then he would have a chance of improving his communication mechanisms by talking with them through radio frequency data terminal. This technology would allow the driver to be able to determine whether the respective colleagues actually have delivered a certain book to certain clients thus minimizing the chances of collisions or time wastage. (Hamilton, 2008) International logistics strategy a) For a manager dealing with a small company, then it would be favorable to embrace a hedge strategy. b) This is because the company will be able to distribute its risk evenly in those various locations. There are a series of problems that companies have to deal with whenever they choose to direct their distributional functions internationally. For instance, there may differences in infrastructure between the mother country and the other country chosen for distribution. Besides this, there may be problems faced in the business environment such as standardized equipment post dated checks cultural differences foreign government issues requirements for success If the target company chosen is located in the third world, then chances are that those respective partners may not have sufficient infrastructure to support the logistical requirements of that company. However, it may be possible to find that that third world country may have cheap labor necessary to coordinate logistics services. Consequently in order to deal with the inefficiencies in one country, then it is necessary to offset these problems by investing in another country. For instance, if the other country chosen for investment is in the first world, then chances are that they would have better infrastructure or less cultural and political differences with the mother country. However, first world country would have high labor cost and these can be a problem. As it can be seen hedging will help the electronics company to compensate for the lack of certain features in one country through the prevalence of those features in another and this can go a long way in minimizing their risk. Small companies have minimal resources, consequently, they cannot afford to take up too much risk as it would harm them tremendously if their risk did not translated into rewards c) If the electronics firm was a large firm, then it would be advisable to employ a flexible distributional strategy. d) This is because a flexible strategy allows the company to embrace operational exposure. This is only possible if the company employing this strategy has excess capacity. Since it is a large firm then excess capacity is not a problem and it can therefore implement it. This strategy also requires a series of distribution channels and this is also plausible for a large company. Besides these, the electronic manufacturer would require numerous suppliers which is likely to be the case if it is a large firm. (Hamilton, 2008) The flexible strategies require that a companys coordinating mechanisms be improved tremendously. Again, since this is large firm, then chances are that it may have efficient coordination. A small firm would not b bale to effectively implement the flexible strategy because it requires the use of heavy capital investment which would only possible after conducting business for a long time or if there are already high levels of returns emanating from the company under consideration. This kind of strategy would assist the company in improving its political leverage within any company under consideration. It would also help them in the process of improving its availability. Dimensions related to supply chain management a) Distribution would go a long way in boosting conformance requirements. This is because through transportation functions in supply chain management, it is possible for goods to reach the consumer or retailer for intermediaries. Transportation function are essential because they can either make or break the supply chain. Their choice determines the speed with which products reached their intended consumers and also the condition of the products before reaching those receptive areas. For instance, the use of air transport would ensure that goods reach consumers in good conditions and as fast as possible. (Paul, 2007) Additionally, supply chain management ensures that goods are stored in the right manner so as to ensure that they can be easily retrieved when needed, that their volume is sufficient enough to meet consumer demand and that they keep goods in the best conditions. Supply chain management also streamlines the buying or selling process that companies must engage in. If supply chain management is not done well, then goods and services will not be produced or delivered in the right manner and this may eventually hamper conformation processes. b) Product selection is also an inevitable function in supply chain management. This is because through the latter mechanism, companies can be able to standardize their products. Also, through logistics handling, products may be graded depending on their respective categories and this goes a long way in improving marketing functions or competitive advantage. c) Supply chain management can also be linked to price through a series of ways. First of all, the decision to offer discounts to retailers can increase the competitive advantage for any one product and this can go a long way in promoting a companys ability to excel. Additionally, many retailers are well aware of the pricing of a number of competitors. Consequently, when their suppliers offer them certain low price ranges, then they may opt to take their business elsewhere and this goes a long way in promoting their performance. (Gallagher, ODwyer & Maher, 2000) d) Supply chain management can impact on a companys ability to compete though value added services. For instance, a large number of companies use the aspect of fast and efficient delivery as an item that promotes competitive advantage. Consequently, when those respective companies are able to streamline their supply chain management functions to achieve those goals, then they can boost their competiveness. e) Relationships and experiences are also another pathway that supply chain management can utilize to add to a certain companys competitive advantage. For instance, supply chain management provides a link between suppliers to a certain company prior to production and they also act as link to the respective retailers. This means that through this function, the company can easily understand the mechanisms that other companies use to source their products and this therefore enhances a certain business process. Additionally, marketing is fundamental in understanding the way the world of retail works. They usually add efficiency to these relationships and also promote a wider client reach through the processes that they institute. Reference Gallagher, S., ODwyer, M. & Maher, J. (2000): The importance of a distribution strategy within the farmhouse cheese industry, Irish marketing review, 12, 3, 67-78 Harrison, T., Hau, L. & Neale, J. (2005): The practice of supply chain management, Springer Publishers, p 35-46 IIMM (2007): Automated warehousing perspectives and trends; Associated press, p 12-30 Hamilton, S. (2008): Must Chemical companies outsource logistics to save money?, ChemLogix White paper, p 3-17 Paul, S. (2007): The impact of technology on distribution of books; Publishing research quarterly, 4, 4, 87-90

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Supply Chain Management and Logistics Exam