4 pages/≈1100 words
Business & Marketing
Operations and Supply Chain Management (Essay Sample)
Explain in detail (approx 1,000 words) (1) what Supply Chain Excellence is and the associated factors that impact on it, it's principles, ground rules, processes etc. (2) Describe why sales and operations planning (S&OP) is important to an organization and its supply chain partners. source..
OPERATIONS AND SUPPLY CHAIN MANAGEMENT by (Name): Course: Tutor: Institution: City and State Date Operations and Supply Chain Management Initially, supply chain excellence was described as the lowest manufactured outlay. The principle was that the supply chain excellence might be achieved by “sweating the assets.” The set of beliefs created the basis for the proficient supply chain. Following the advancement in supply chain processes, inventory levels were lowered, costs reduced, and waste eradicated. However, every corporation reached a point at which they could no longer simply cut costs devoid of trading off customer service to clientele (Cecere & Mayer 2013, p. 12). The companies had reached their efficient frontier, which is the ability of every supply chain within every company to balance the profitability, results for growth, cycles, and complexity. After its evolution, supply chain excellence has been defined as a resilient supply chain, which can survive the shocks of supply and demand volatility (Cecere & Mayer 2013, p 14). Factors affecting Supply Chain Excellence Government Regulations and Incentives Government regulation and incentives cover numerous factors, which may affect the effectiveness of the supply chain. The government can offer some incentives to make the nation a sourcing platform. Cultural Variations Variations in cultural practices are accountable for the communication faults between the ranges of nodes in a supply chain. Endowment Factors Different countries could provide different kind of opportunities to achieve the competitive advantages concerning this factor. Because of its tertiary, primary, and secondary factors, a country may be a momentous sourcing platform in the supply chain. Arbitrage and Leverage In the field of worldwide supply chain, a firm can get the competitive advantage via leverage and arbitrage. A purchasing supervisor can influence the changing rates of exchange by sourcing from countries with lower rates of exchange. Principles of Supply Chain Excellence A competitive advantage will exist only if several key attributes exist in a supply chain. Five guiding principles are necessary for effective supply chains (Muckstadt et al. 2003). According to Muckstadt et al. (2003), these principles include: (1) Know the Customer Without a clear understanding and definition of customer requirements, a supply chain cannot be effectively constructed. To gain this understanding requires the use of classical market research techniques, the construction of an information infrastructure to capture customer transaction data, and the storage and analysis of these data from an operational perspective. The objective is to obtain a clear statement of the customer’s requirements. (2) Adopt Lean Philosophies. During the past two decades, operationally excellent companies have focused on creating lean organizations. As a consequence, these companies have shortened internal lead times and made them more predictable and repeatable, reduced work-in-process inventories from months of supply to days, implemented just-in-time delivery strategies for their most costly component materials, and have worked to dramatically reduce setup times. (3) Create an Information Infrastructure of Supply Chain An effective information infrastructure, both intra- and inter-organizationally, is necessary for a supply chain to achieve competitive advantage. Today, B2B collaboration via the Internet makes it much easier for supply chain partners to share timely demand information, inventory status, daily capacity usage requirements, evolving marketing plans, product and process design changes, and logistic requirements. (4) Integrate Business Processes. Business processes must be established both intra- and inter-organizationally to support the supply chain’s strategic objectives. These processes, coupled with the information infrastructure, support the efficient flow of material through the supply chain. While much attention has been placed on understanding business processes within organizations, it is essential to understand what processes must be built inter-organizationally to leverage and enhance partners’ capabilities. These inter-organizational processes must be designed to take advantage of the increased information that drives daily supply chain decisions. (5) Unite Decision Support Systems. Academics and software providers have designed and built Decision Support System (DSS) environments for individual companies and supply chains. These environments are based on different philosophical models. In addition, they differ in how they forecast demand, and drive production and allocation decisions. Their goal is to generate plans that simultaneously consider all elements of the supply chain (Muckstadt et al. 2003). Processes The description of supply chain processes began within the manufacturing or distribution processes of a company. At present, the center is sturdier than the ends. Vertical processes are more powerful than the horizontal processes. Unfortunately, the term supply chain may often be interpreted as the supply chain division; not as an improved way of doing commerce for a firm. It is apparent that supply chain excellence is necessary for the delivery of the company’s results. The initial goal for using supply chain processes to hook up from the suppliers’ supplier to customers’ customer has been bogged down in practical processes Importance of Sales and Operations Planning (S&OP) Sales and operations planning is an integrated management process of a business established by Oliver Wight in the 1980s, through which the executive team recurrently achieves alignment synchronization, and focus among all operations of an organization (Sheldon 2006, p. 3). Although it assists the management team to recognize how the company attained its current performance level, its focus is on the anticipated results and future actions. Companies with an integrated management process apply the S&OP process to check the implementation of the company’s tactics (Palmatier n.d). Because this plan affects several functions of the company, it is usually prepared using information from manufacturing, marketing, engineering, materials, and marketing (Dougherty n.d). If the activities of S&OP are not integrated and aligned, petite problems rapidly escalate into major challenges that adversely affect business performance. As each part of an organization jockeys to suit its priorities, precious resources and time are wasted. This eventually leads to meager customer service. The major objective of S&OP is to provide a "one plan" planning process that connects all functional areas of the business from top management to the shop floor on a regular basis (Boyer, 2004, p. 5). Traditional supply chain processes that rely on historic orders can be thrown out the window. For this reason, it is more critical than ever for cross-functional teams to work together to sense, shape, and drive a lucrative demand response. Demand-driven leaders use S&OP to make this happen (Cecere, Barrett, & Mooraj 2009). Each year, the imbalance between supply and demand costs companies billions of dollars in out-of-stocks, excess inventory and excessive discounting. Promotions, new product introductions, packaging changes, and changing demand patterns can all wreak havoc on the demand and su...
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