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OPM 530: OPERATION MANAGEMENTARTICLE REVIEW ON:Case Study on Logistics PerformanceNAME: NUR SYAZANA BINTI SHAHABUDDINSTUDENT NUMBER:CLASS:ASSIGNMENT 2:2019351183AS2465AARTICLE REVIEWLECTURER’S NAME: MADAM NUR SYAHIRA BINTI ABD LATIFDATE OF SUBMISSION: 19 TH JUNE 2020Article Review of “Case Study on ...

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OPM 530: OPERATION MANAGEMENT ARTICLE REVIEW ON: Case Study on Logistics Performance

NAME: STUDENT NUMBER:

NUR SYAZANA BINTI SHAHABUDDIN 2019351183

CLASS:

AS2465A2

ASSIGNMENT 2: LECTURER’S NAME: DATE OF SUBMISSION:

ARTICLE REVIEW MADAM NUR SYAHIRA BINTI ABD LATIF 19 TH JUNE 2020

Article Review of “Case Study on Logistics Performance” by Shahryar Sorooshian, Manimekalai Jambulingam and Javad Dodangeh. 2013. International Journal of Engineering Business Management.

ABSTRACT The purpose of this study is to highlight the importance of supply chain management, specifically the objective of this study is to understand logistics and measurement in the logistics and supply chain. This study examines the supply chain performance of the selected company which is Kian Joo Can Factory Berhad (KJCF). The methodology of this case study is specifically for those who want to have a better understanding of a business environment before starting their own business or for benchmarking practice during strategic planning. In this study, the problems faced by the KJCF company’s current supply chain performance and suggestion on provided recommendations for improvements Supply Chain Performance of the firm will be discussed. There are great opportunities for logistics cost reduction and performance improvement within firms and across the supply chain. Firms should collaborate with their trading partners to implement appropriate measures of logistics and supply chain performance. This study provides a benchmark for organizations assessing the quality of their logistics performance measurement practices and helps identify opportunities for significant improvement.

INTRODUCTION SCM is the coordination of supply chain logistics, location, manufacturing, inventory and both of logistics and supply chain performance are involved. Khot, A.P. & Kulkarni, P.P.’s study (as cited in Sorooshian S. et all, 2013) states SCM is defined as a network of facilities and distribution options that performs the functions of procurement of materials, transformation materials into intermediate and finished products and the distribution the finished products to customers. Hayes A. (2019) states in SCM, the supply chain manager coordinates the logistics of all aspects consisting of five parts which are the plan or strategy, the source (of raw materials or services), manufacturing (focused on productivity and efficiency), delivery and logistics, and the return system (for defective or unwanted products). Khot, A.P. & Kulkarni, P.P.’s study (as cited in Sorooshian S. et all, 2013) states it has been proved that well-done supply chain performance measurements lead to improvements in a company's overall performance. According to Hayes A. (2019) by managing the supply chain, companies are able to cut excess costs and deliver products to the consumer faster.

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qualitative

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supply chain relevance to Kian Joo Can Factory Berhad’s (KJCF) operations. Said, E. stated that “Obtaining and maintaining information on the supply chain is an essential task in any organization. The supply chain operations include sharing of information throughout the chain, planning, resource synchronization and performance measurements” (as cited in Sorooshian S. et al, 2013). According to Lindner C. (2009), the central key of supply chain is exchange of information in the form of standardized data between all the chain participants, and supply chain performance measurement is directly linked to specific objectives, such as achieving efficiency and effectiveness. KJCF’s analysis (as cited in Sorooshian S. et al, 2013) has about eight manufacturing facilities, means that they need to pay close attention to their supply chain and logistics, as they need to move materials from one state to another and even to another country. Supply chain performance of KJCF is through Warehouse Management System (WMS) that record all movements within the warehouse. Data such as inventory collection, container arrival and departure times and employee check-in and check-out times are kept in the database. KJCF’s analysis (as cited in Sorooshian S. et al, 2013) mentions the flow of this information through the company's database makes it easy to access. Besides, supply chain performance also measure by maintaining the inventory turnover rate. The company's efficiency ratio shows that KJCF inventory turnover is lower between the years which is 2.97 times lower in 2011 that means KJCF holds a high inventory. Rao C.M & Rao K.P., (2009) states inventory turnover ratio measures the number of times a company sells its inventory during the year. A high inventory turnover ratio indicated how the company is doing its best to sell its products economically. Secondly, MS ISO 9001:2000 define criteria for a quality control system for qualitative results. Lindner C. (2009) states ISO 9001:2000 specifies requirements for a quality management system where an organization needs to demonstrate its ability to consistently provide product that meets customer satisfaction and applicable regulatory requirements. Moreover, one of KJCF’s main subsidiaries has been awarded Hazard Analysis and Critical Control Points (HACCP) certificate system for contract packing services. With this HACCP system certification, customers are sure that KJCF practices high standards when dealing with consumables packaging.

For the recommendation in improving the Supply Chain Performance, KJCF continuously maintain their supply chain performance in qualitative aspect, as they received certifications like HACCP and ISO 9001:2000. GS1 Hong Kong said “by sharing data between trading partners, KJCF could transfer data across the supply chain” (as cited in Sorooshian S. et al, 2013). This would be much easier for the group to implement data sharing, thus contribute to improved time management by increasing efficiency, leading to better planning, cost reduction and improved information flows. Lindner C. (2009) stated that information sharing would improve the entire system’s performance, because each supply chain participant can improve its performance. Heizer, J. & Render, B.’s study (as cited in Sorooshian S. et al, 2013) said another recommendation is to start implementing lean manufacturing techniques like Just-In-Time (JIT). Hilton & Ronald W. (2013) states an effective business should implement JIT purchasing. Under this approach, materials and parts are purchased from outside vendors only. This will avoids the costly and wasteful buildup of raw material inventories. According to Hilton & Ronald W. (2013), key features of JIT purchasing are only a few suppliers can result in less time spent on vendor relations and only highly reliable vendors are used, who can deliver high quality goods on time. This could help make the manufacturing process more efficient, thereby reducing costs and making a higher profit. In conclusion, logistics and supply chain performance is a vital aspect of supply chain management. Supply chain management is used as a method for improving their overall efficiency in many organizations. Rising income is also helpful by reducing cost and satisfying the end-customer. Supply chains occur virtually in any organization but are especially apparent in manufacturing industries which have an obvious flow of products from suppliers to manufacturing facilities to end customers.

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REFERENCES Adam Hayes. (2019). Supply Chain Management (SCM). Investopedia. Retrieved from https://www.investopedia.com/terms/s/scm.asp C. Madhusudhana Rao and K. Prahlada Rao. (2009). Inventory Turnover Ratio as a Supply Chain Performance Measure. Serbian Journal of Management. Vol 4, No. 1, pp 41-50. Retrieved from http://www.sjm06.com/SJM%20ISSN1452-4864/4_1_2009_May_1-136/4_1_4150.pdf Christoph Lindner. (2009). Supply Chain Performance Measurement; A research of Occurring Problems and Challenges. Jonkoping International Business School. Retrieved from https://www.diva-portal.org/smash/get/diva2:221082/FULLTEXT01.pdf Hilton, Ronald W., Just-In-Time Management (JIT). Managerial Accounting, McGrawHill,Inc

(2013).

Retrieved

from

https://msu.edu/course/prr/473/oldstuff/Inventory

%20Management.htm#jit Shahryar Sorooshian, Manimekalai Jambulingam and Javad Dodangeh. (2013). Case Study on Logistics Performanc. International Journal of Engineering Business Management. Vol 5, No.14, pp 1-5. Retrieved from https://doi.org/10.5772/56264...