Ho Nguyen Nien Giao s3778482 Group 3 Final ASM Intro To Log PDF

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Introduction to Logistics andSupply Chain ManagementAssessment 3 – Group AssignmentTerm Semester 3, 2019Title of Assignment Assignment 3: Group ReportNames and student IDsHo Nguyen Nien Giao – s Le Ha Giang – s Tran Ngoc Quynh – s Pham Le Tuyet Vi – sLocation Saigon South CampusLecturer Dr Scott McD...

Description

Introduction to Logistics and Supply Chain Management Assessment 3 – Group Assignment Term

Semester 3, 2019

Title of Assignment

Assignment 3: Group Report

Names and student IDs

Ho Nguyen Nien Giao – s3778482 Le Ha Giang – s3823072 Tran Ngoc Quynh – s3803726 Pham Le Tuyet Vi – s3651316

Location

Saigon South Campus

Lecturer

Dr Scott McDonald

Word Count (Main content without the list of references, cover page, introduction, executive summary, conclusion and summary of teamwork)

3797 (Identify + Discussion A + Discussion B)

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Executive Summary Supply chain management is the involvement of organization to corporate and executive different parts from the upstream to the downstream linkages, and thus by the optimized coordination with partners, to deliver the ultimate value of products and services to end consumers (Mentzer 2001). As demonstrated by the concept of ‘supply chain management’, this report highlights the findings of critical information, which illustrates how firm pursues an integrated supply chain management in their core business and typical issues that are enhanced in the supply chain’s context. More specifically, this report conducts the findings based on a retailer Q Industries that provides a variety of hospitality’s product to Vietnam’s market. The report is divided into five parts. The first part is the introduction of the company’s background - Q Industries, the reports conduct a deep research about Q Industries’ information through the official webpage created by Q Industries; associated with the objectives in providing a consistent and excellent service of a 3PL’s retailer by developing and conducting an innovative approach in delivering their products to the end-consumers, and thus, generating a cost-effective solution for not only the business itself but also providing that benefit, to their clients. The second part highlights the identification of Q Industries’ major activities that are integrated by the company into their supply chain management, the report had found that Q Industries places heavy concentration on the flow of their activities since one process leads to another, thus, resulting in a great extent that the company focuses how consistent and reliable each process is executed. The third and fourth parts are carried out to examine whether Q Industries, as a retailer, besides the major activities are performed, the difficulties faced by the company, but it is also pointed out as a big picture to reflect the difficulties faced by other retailers in general; furthermore, assessing the importance of the relationship between Q Industries with their suppliers; the advantages of push-pull strategies associated with the implementation of advanced technologies and worldwide trending - those approaches are considered as a leverage to boost firm’s success and sustainable growth. Throughout five parts analyzed in the report, the problems are acknowledged as the difficulties in maintaining the relationship with suppliers, the extent to which Q Industries had reached regards to the accuracy of their forecasting model and continuous flow in the warehouse management. Hence, the recommendations are conducted with the highlight of keeping up to date with the market’s changes regards to customer’s demand, being aware and prepared towards the sudden dilemma and thus, being ready to integrate the advanced technologies that are required to build a sustainable growth of a retailer.

TABLE OF CONTENT Executive Summary.......................................................................................................2 2

Introduction.....................................................................................................................3 Identification of The Supply Chain Aspect/Processes.............................................4 1.

Demand Management......................................................................................................4

2.

Strategic Sourcing Procurement...................................................................................5

3.

Warehouse and Distribution Channels.........................................................................5

4.

Transportation...................................................................................................................6

Discussion A...................................................................................................................7 The Core Competence of The Supply Chain........................................................................7 The Supply Chain Network in Us – Push-pull System.......................................................7 The Relationship Between the Supplier and Buyer............................................................8 The Technological Changes/Disruptions.............................................................................8

Discussion B...................................................................................................................9 Conclusion....................................................................................................................10 Reference List...............................................................................................................11

Introduction According to Blancas et al. (2014, p,1), as a middle-income country with a speedy growing economy, national logistics cost in Vietnam lies in the range of 20.9 to 25% of GDP, which is 10% higher than the average for developing countries in the region. Along with the social and political stability after the economic reforms of the late 1980s and a favorable geographic position, has facilitated a strong trade sector performance over the past 20 years. Yet, logistics efficiency improvement still remains a challenge in Vietnam. Based in Singapore with offices in South East Asia, Q Industries is not only a 3PL company that provides hospitality solutions to the finest brands in the hospitality and F&B sector but it also owns several in-house brand itself like Q.essentials, Quantum Pro™,... They offer an extensive range of products that can be found in some of the most reputable hospitality establishments all over the world. They have been working with well-known partners in the field all over the world like InterContinental, Sheraton, Rex hotel, Suite 26, ... Moreover, Q Industries has stated on their website that they provide their clients with a unique 5D approach: Discover, Define, Design, Develop and Deliver; starting with the ‘getting to know you’ phase (discovering the client’s positioning and targeted customers) then define which approach works best for their business and, after that the design and develop process come in to maximize the overall experience. And finally, it is about time the logistics team took action, working altogether behind the scenes to ensure all the products are ready to be delivered right to the clients’ doorstep safe and sound. In short, Q Industries’ supply chain consists of four main processes: demand management, strategic sourcing procurement, warehouse and distribution channels and transportation. This report is to identify and highlight the importance of each process in the supply chain and more specifically, our chosen product line - linen; also, the report will address issues related to the process.

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Identification of The Supply Chain Aspect/Processes Material flow - Suppliers send products to Qindustries accordance to what Qindustries placed in their orders. And Qindustries send their products that received from suppliers, to their customers, through customer’s order information

Financial flow – After Qindustries recive and verify the quality of the products shipped from suppliers, Qindustries then send payment/money to suppliers. Same applied between Qindustries and their customers

Product

In – Store Pickup

Information Flow - Once Qindustries placed orders, suppliers then send Qindustries information regards to their orders including invoice, receipt, ordering number, shipping time, etc. Same applied to Qindustries via their customer’s order.

4 End Consumer Shipping the products from Qindustries warehouse to retail store using railroad

Place order Send back invoice and ordering number

Qindustries retail store in District 7, Ho Chi Minh City

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Demand Planning

2

Qindustries’ Warehouse

1

Strategic Sourcing Procurement

Qindustries places order Shipped using FOB

Suppliers send back invoice and ordering number

Supplier’s Production (Manufacturing)

E-commerce

After successfully signing the contract, suppliers then send the requirement of production accordance to Qindutstries products’ forecasting

Demand Management using Quantitative and Qualitative forecasting methods

Contacting suppliers after identify the suitable suppliers Suppliers from aboard

1. Demand Management Demand management is the integration of firms throughout the supply chain to collaborate on the core activities (Mentzer). According to Croxton et al. (2002), demand management encompasses demand planning, in which requiring firm to forecast and synchronize information. The ambiguous concept of ‘demand’ was misleading in the past as firms only concentrate on how their actions affect customers’ demand. Yet, the demand is also impacted by the market volatility (Coyle et al. 2016). As a kitchenware retailer, the first process undertaken is to look at the sales cycles in the past few years to identify the needed quantity for future stocks. Q Industries supplies linen products to mostly top luxury restaurants, resorts and hotel (B2B) in Vietnam (Qindustries n.d.). The need to stock up of Q Industries’ linen increase especially Tet holiday when tourists domestically and internationally travel to Vietnam, such as Vinperal (VietnamNews 2019). This indicates that demand planning rises the understanding of firm regards to the real market requirement of their customers. Nevertheless, Q Industries cannot just rely on historical data. Hence, the second process is to analyze the impact of market fluctuation using demand intelligence, which helps Q Industries to deal with changes in the market (Christopher 2016). For instance, in term of bed and bath linen, customer’s trend is heading towards the innovative materials such as Colton or silk, or eco-friendly interests that customers demand the linen made from organic cotton or wool (Strategyr 2019). Those are the factors that affect consumers’ behavior as they willing to experience. Thus, combing analyzing the sales cycle of linen – called Quantitative forecasting and linen’s trends in the industry – called Qualitative forecasting are two methods in the demand management that will help Q Industries build a reliable forecasting model. After conducting the forecasting model, it is known as a resource plan that Q Industries are aiming for. The resource plan lists out the essential requirement for the forecasted customer’s demand that Q Industries used as a fundamental step for their strategic sourcing. More specifically, the plan establishes the needed capacity. For instance, which suppliers

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that Q Industries needs for a particular type of linen? How many would they need to meet their demand and prevent stock-out costs? How much those products cost and are the price negotiable? The origin that customers demand, internationally or domestically? Thus, generating KPI to measure the reliability of Q Industries’ forecasting by comparing the available linen with the number of stocks.

2. Strategic Sourcing Procurement Strategic sourcing is a broader approach that involves the integration of firm with other partners to procure goods and services based on the requirement of forecasted and actual demand with the best possible low cost (Hodges 2012). The first step in the strategic sourcing of Q Industries is to establish an accurate spend area of the linen. More specifically, after developing a reliable forecasting model, Q Industries re-evaluates the quantity of the specific type of linen that the company needs. For instance, in the historical sales, the white linen might account for the highest revenue in Q Industries compared to others, this then encourages Q Industries to conduct large re-buy purchasing; or the silk cotton which brings the least profitability to the company as comes with higher purchasing costs, which Q Industries need to reconsider the quantity of purchasing and negotiate the final price with suppliers. Q Industries then need to establish ideal suppliers for the product they want. Correspondingly, when spend area is identified, it is critical that as a retailer, Q Industries is able to identify its potential suppliers that can supply Q Industries specific linen associated with the lowest risk when dealing and negotiating with partners. Specifically, establishing a critical understanding in which suppliers Q Industries are aiming to procure. As a linen’s retailer, the products are categorized into highly competitive market, which Q Industries have wide ranges of suppliers due to its competitiveness. For example, linen’s supplier plays dominance in China of up to $1.1B of export value (OEC 2019), assessing those Chinese suppliers help Q Industries generate the best cost for their products. Thus, pre-qualifying the particularly potential suppliers and requesting for information. Such as, Yongji Shanghai Textile is a Chinese supplier that provides high-end linen with the concentration of the firstclass design and sophisticated quality, which is suitable for the need of Q Industries to supply their clients – luxury hotel and resort (Q Industries n.d.). Next, after identifying suitable suppliers such as Yongji, the supplier’s sourcing strategy is generated. In particular, prior to supplier selection, this process is to establish a more detailed supplier portfolio regards to their capabilities of meeting Q Industries product’s demand. For example, Yongji will be assessed based on their quality, capability, reliability, desired quality and their financial status (conducting RFI). Those are the criteria that Q Industries as a retailer undertakes to integrate a long-term relationship. Otherwise, if the company fails research and capture deep information about their supplier’s partner, problems might occur during transactions. Yet, the most critical criteria are the cost of the product, as this is the key in the procurement process which all retail seek for, the lowest possible cost.

3. Warehouse and Distribution Channels Nowadays, the importance of warehouse and distribution channels are integrated critically in the supply network, there is no longer long-term storage’s concentration; as an alternative, firms are moving towards implementing the distribution facilities as they help firms add values in the flow of materials (Langevin & Riopel 2005). Firstly, Q Industries’ type of transportation consolidation is that the company has their own central distribution facility in

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District 7, Ho Chi Minh City; which helps Q Industries to assort and arrange the flow of linen from international suppliers efficiently. More specifically, Q Industries’ distribution facility will segment the different types of linen based on their lot number, SKU and case pack size – called sortation; and those linens are thus, concentrated on matching their availability to customers order using SKU – called allocation. As such, this includes the benefit of tracking the availability of linen, managing linen’s stock to with a strong connection to the order processing so that Q Industries is able to receive the order, track the linen’s stock, pack the linen’s product and then ships to customers (Hodges 2012). For instance, Q Industries will allocate the white blank linen associated with the order made from Vinpearl resort with the aim of separating the specific type linen’s into smaller quantity according to the client’s order for an efficient shipment. As Q Industries has one main distribution which all of their linen’s products from Yongji’s supplier flows into one place. Q Industries then needs to distribute their linen throughout Vietnam once linens are shipped to the main storage. The typical problem might occur is that if the linen’s orders placed largely in the Northern Vietnam or other provinces that is far from distribution facility’s location, costs are high in term of shipping the linen’s products. Furthermore, in term of distribution’s strategy, Q Industries linens are classified based on criteria and characteristics. For instance, their own products – Quantum Pro (glassware priority) – which is put in front, lower shell and then the best seller’s linen, such as white cotton linen which accounts for highest profits last several years, the green linen that brings the least sales or not achieving high profitability will be put behind the outstanding products.

4. Transportation Transportation is the key driving factor in the SCM as this process is the critical tool that provides the connection between organization to their customers (Langevin & Riopel 2005). Transportation is part of a customer service’s indicator as they will promote the competitiveness of firms through their delivery process. There are many modes of transportation in the supply chain, and the wide implementation for the motor carriers which comprise of for-hire and private fleet (MH&L). In Q Industries, the company also has their own transportation to deliver their linen to the end consumers. More specifically, Q Industries’ motor carriers allow firms to avoid shipping fee which reduces the variables costs. In term of inbound logistics, Q Industries procures their linen from Yongji in which the company refers to use FOB method of shipment in order to gain more control over their purchases associated with lower costs. In term of the e-commerce website, beside Q Industries’ webpage - Q.essentials, the company also present their linen through Lazada and Shopee; this involves the delivery through the external providers – Lazada and Shoppe shippers, delivery providers in Vietnam integrate last-mile delivery which focuses on delivering to the-end user ASAP – usually personal residence. As operating in Vietnam, the typical issues are enhanced through the poor infrastructure (25% of unpaved road, only 0.05% highway and 0.002% expressway, low ranking in Global Competitiveness Index on Road Quality (Schwab 2019), which restrains the punctuational customer’s delivery including delay, late shipment as well as the developing technologies which might restrain the efficient tracking of shipment.

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Discussion A The Core Competence of The Supply Chain Being a 3PLs’ firm, Q Industries puts a heavy concentration on two factors, which are sourcing management and warehouse designs. Firstly, the component takes significant place is the forecasting system (Su & rule 2010). Q Industries supply chain and their customers share information across each other regards to order’s information, invoice, customer’s database, product type, delivery date, and availability of stock through a centralized database’s platform. Thus, it is then directly and mechanically delivered to the corporate system. Moreover, this method facilitates the arrangement of transportation which reports the information regards to departures and arrivals. In future, Q Industries is going to integrate the accounting and warehouse management checker systems which the aim of ensuring Q Industries’ product - linen, is able to achieve the seven “rights” for the benefit delivered to both the company itself and their clients. All Q Industries linen’s products are managed by the barcode system, anytime the products are moved in (receiving the linen from their suppl...