Unit 4 - Supply Chain Management - Case Study - WA PDF

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Running Head: Unit 4 - Supply Chain Management - Case Study

Unit 4 - Writing Assignment Supply Chain Management - Case Study BUS 5116 – Operations Management Anonymous University of the People

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Running Head: Unit 4 - Supply Chain Management - Case Study

Introduction In order for a business to grow and develop sustainably, it must have a sustainable competitive advantage in itself. This competitive advantage can be the company's strategy, ecosystem (Google, Facebook, Amazon), unique product (Tesla), brand (CocaCola), etc and supply chain advantage can be considered a sustainable competitive factor for businesses. In an enterprise's supply chain, the COO(chief operations officer) must decide how the supply chain should be operated to benefit the business. From there, the business will increase profits and satisfy customers' requirements more and more. The paper will analyze a case study of specific supply chain enterprise selection decisions. From that point out why this business is chosen. Case study briefing The company decided to outsource a supplier to manufacture a complex part of the company's value chain. As a purchasing manager, I need to analyze, select and present the reasons to the board about which supplier to be selected. The company is operating in a mature market where the qualifying and winning factors are in turn quality and time coming to the customer. And the outsourcing contract will be scheduled for 3 years. Key issues should be addressed Based on factors of the case study. The first point is that the company is operating in a mature market. According to Lu (2011), an important element of a mature market is that the company can fully predict the development of the market. Therefore, the company can fully predict the number of products to be produced to meet the needs of the market including inventory, display goods, and production plans. Second, the key to the company's products to be successful are product quality and time to customer respectively. Therefore, these will be the two keys to being able to choose the right supplier. Finally, in case the company changes its business strategy. The product will focus on price and quality in order to increase the company's profitability while still meeting customer requirements. How this change will affect the choice of suppliers. The theoretical basis for making a decision First, we need to consider planning. According to James (2011), Operational Planning and Control is the reconciliation of market requirements (demand) with the resources (supply) of business operations. Especially in the mature market, the company can fully predict the industry's growth and market demand. In addition, the controls during implementation are the decision on what action should be taken if there is a significant deviation from what should have happened (James, 2011). Here, the company can plan orders

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Running Head: Unit 4 - Supply Chain Management - Case Study for all three short-term (1-4 weeks), medium-term (1-18 months), and long-term (18 months +). In addition, according to Lu (2011), the predictability of demand for goods and services can range from the baseline situation of dependent demand (i.e. predictable demand) to the extent to which unpredictable high (independent demand). But in the mature market, in my opinion, it can be done with great precision. The second is inventory. Because an important characteristic in the success of products is that the company needs to deliver on time to customers. Hence a supplier with an agile production and delivery capability will be an important factor in evaluation and selection. In addition, reducing inventory also brings less risk to the company in managing old products. Finally is cooperation time. In my opinion, a period of three years is enough for the company and the supplier to form an alliance. Companies and suppliers can work together and share information related to aspects such as system planning and development of products and processes (James, 2011). This allows for close coordination and control over aspects such as quality and on-time delivery. In addition, suppliers can trust from a long-term strategic relationship and confidently invest in resources and focus on production. In summary, the above three theoretical bases will be the three keys to choosing the right supplier for the company's needs. In addition, other factors related to the selection are price, the ability to meet the required product quality, and delivery time which will be analyzed in detail in the following section. Supplier analysis According to case study, we have three suppliers to analyze with the following information.

Supplier

Price

Quality

Delivery

Others

A

90

90

95

Overseas supplier (transport lead time 3 weeks)

B

105

100

100

Supplier facing financial issues

C

85

85

95

Proximity supplier (transport lead time 3 hours)

For supplier A, their strong point is the good production cost (90% target price of the company). And suitable for short, medium, and long-term planning (transport lead time 3 weeks). But in terms of product quality, they did not meet 100% of the company's requirements (reaching 90% of the target quality) and only reached 90% of the ability to deliver the finished product on time. But the company can fully control this through strict planning and control. For supplier B. It has the ability to produce quality finished products and on-time delivery as required by the company. This seems to be the perfect choice in terms of company and market requirements. The weak point of this supplier is the price (105% company target price) and the financial capacity is in trouble. The company may face risks when working with this partner. 3

Running Head: Unit 4 - Supply Chain Management - Case Study For supplier C. Although the production cost is very good and the delivery time is super (3 hours), the quality of products and finished products are accepted too low (85% parts accepted vs. accepted vs. part delivered). This company has not yet met the needs of the company and the market but will be an optimal choice to back up. Suggest a company selection and rationale for election. For the company's initial requirement of quality and on-time delivery, I would choose company B. But the critical point is that company B is in financial trouble and will be very risky for the company to deliver 100% of the order to this partner. Although the three-year contract is long enough for them to confidently improve their financial ability, this is not enough. Besides, supplier B will give better production costs and can be completely controlled through optimal planning. In addition, supplier C will be the company's contingency plan. I propose to work with all three manufacturers with 40% of the product are made by supplier A, 50% of the product are made by supplier B, and 10% of the product are made by supplier C. I believe that, with this choice, a company can completely balance the needs of the company and the market with the capabilities of its suppliers. Besides, the division will bring competition to all suppliers and they will increase their production capacity to compete with each other. In addition, the company will minimize the risk of over-reliance on a certain supplier. If the company’s factors changed to price and quality. Supplier selection changing recommend. In case the company changes its strategy to factors of price and product quality. There will be a change in my choice. I still propose to work with all three manufacturers with the changes as below. 45% of the product are made by supplier A, 25% of the product are made by supplier B, and 30% of the product are made by supplier C. I will transfer part of the order to supplier C with a price that is more optimal. In addition, I would recommend the company increase predictability and control to have a plan to work with suppliers A and C to force them to increase product quality and on-time delivery. Conclusion Through the above case study. It can be said that supplier selection is a very important decision in the supply chain. If the forecast and control are not good, the company's production ability may be affected. Each supplier has certain advantages that, if applied well, the company will optimize costs and increase product quality.

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Running Head: Unit 4 - Supply Chain Management - Case Study

References James, T. (2011). Operations Strategy. Bookboon. Lu, D. (2011). Fundamentals of Supply Chain Management. Bookboon.

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