Supply Chain 1Running Head: SUPPLY CHAIN Manufacturing and Marketing of a Supply Chain [Name of the Writer] [Name of the Institution]
Supply Chain 2 Manufacturing and Marketing of a Supply ChainIntroduction The plan is to manufacture and market a line of power hand tools, including electricdrills, saws, and sanders. A supply chain has to be established for which a business reportprepared that address the challenges of ensuring all business units (Choi, 2006). Supply chain refers to the production and distribution process involved in the rawmaterial suppliers, manufacturers, distributors, retailers and ultimately consumers and othermembers with the upstream and downstream members of the connection (linkage) compositionof the network structure. Examples of competitive priorities are low cost, quality, on timedelivery (Choi, 2006).Supply Chain Management A moderately novel management procedure that had great momentum in the past decadeand generates significant cost reductions by allowing companies greater higher profits andcompetitiveness. In the new millennium, competition occurs between supply chains rather thanbetween individual companies. The management of the supply chain revolves around theefficient integration of retailers, distributors, manufacturers, and suppliers in this way is achievedsubstantially reduce costs and at the same time improve customer service levels (Chopra, 2004).Vertical Integration For the supply chain of the power tools and drills, a vertical integrated strategy will beused. The extent at which an organization posses its buyers and suppliers is called as the Vertical
Supply Chain 3Integration. The vertical scale of an organization is a significant corporate strategy’sconsideration (Chopra, 2004). When deciding to vertically integrate, the two of the concernswhich ought to be considered are control and cost. The second issue is the impact of assetcontrol, which can impact barriers to entry and which can assure cooperation of key value-adding players. In comparison to the horizontal integration, the vertical integration is moreeffective as in horizontal integration a company has to pay too much up-front and realize toolittle on back end. In horizontal integration, it is hard to merge resources, capabilities & culturesof different firms (even within same industry).Metrics for Measuring Performance There are many metrics which can be utilized for measuring the supply chain. All ofthese metrics helps in providing an overview of the performance of the supply chain, not just inthe conditions of cost and spend but in terms of the information of the supplier as well as aspectsof the operation (Dooley, 2001). The Key common supply chain metrics used in this supplychain business will be:Cost The cost will be in terms of the cost of purchase, transportation and travel cost, cost ofthe delivery of the storied items as well as the administrating supplies and revenue costs. Costsshould be a common metric because the cost is imperative to the efficacy of the supply chain.
Supply Chain 4Forecast Accuracy The forecast of the item’s need which are to be supplied will tell about the efficiency ofthe supply chain. The more customers’ demand of the product the better is the quality.Quality/Defects Deliveries are an important part of the supply chain. The quality needs to be of goodstandards and the defects should be at a minimum. A standard measure is PPM or Defects inParts per Million.Stock outs Stock outs are pricey as they are the reason for the delays in the supply chain and have aneffect on its overall performance to the consumer. The stock out quantity will have a significanteffect in terms of transportation, costs concerns etc, which is why it is a vital metric to evaluatethe performance of the supply chain.Productivity Measuring the output of the supply chain in relation to the staff will be a vital pointerwhich will help in evaluating the performance. This might be in turns of products manufacturedor even purchase order raised. Productivity indicators can be crucial to understand theeffectiveness of the supply chain and help in understanding how to improve further.Process Risks Following risks can be encountered in the integrated supply chain
Supply Chain 5Delivery Process The customers may not be able to come to the supply chain to get their orders and if theyhave large orders it will be difficult for the customers to handle their orders. The company needsto hire or buy large shipping trucks to facilitate the customers.Creating Brand Image As this is a new company, it will be a little difficult to carter the customers as they mayalready have selected stores in which they buy their tools from. There is a strong need to attractthe customers so that a brand image is created and the company gains customers.Control Risks Following are some of the effective management methods which will be applied on theintegrated supply chain.Delivery Process Those companies, which followed the customer-oriented approach, had started this trendof giving value other than the product itself. Home delivery of these services represents a greatvalue for our customers modern (Simon, 2005). Specially designed delivery system of goodsonline stores and other organizations can deliver the goods at very reasonable customer value,and cooperation on an ongoing basis (Simon, 2005).
Supply Chain 6Creating Brand Image The main purpose of will be to assemble customer demand for assured delivery of highquality and low cost with minimum lead-time. In order to accomplish this objective, thecompany needs to have better presence and command into the whole supply chain process of thestrategy of their own as well as those of their suppliers and customers. The individual customersare more likely to select the company that is providing services at the least cost.Environmental Risks As this is a supply chain which will manufacture its own tools and deliver them, therewill be certain environmental risks due to the manufacturing process.Increase in Waste in the Environment When the company is manufacturing tools it will release toxic materials in theenvironment which can be very harmful. The company should make sure that the manufacturingprocess is done in an industrial area so that the residential areas do not get affected. Thecompany should also use environmental friendly materials so preserve the environment.Organizational Structure Following departments are needed to run the company,
Supply Chain 7Management Department The management department is an important department which will manage the otherdepartments. They will look out for any problems or issues which arise during the process. Theywill ensure that the productivity of the company is continuous.HR Department The Human Resource department is the most important department of any company. Thisdepartment ensures that proper and qualified people are recruited in the company. They evaluateeach candidate according to the job description and recruit those who are best suited for the joband the company.Finance Department The finance department is also necessary for the company as they take care of all thefinances of the company. They make sure that the company’s financial situation remains intact.Manufacturing Department The manufacturing department manufactures the goods of the company. This departmentwill have sub divisions within for different kinds of tools. Each tool will be manufactured undera different division.
Supply Chain 8Delivery Department This department will make all the deliveries of the goods to their designation. They willensure that the delivery is on time and all the quantity is what the customer asked for and that thedelivery is done to the right place.Quality Assurance Department This department will ensure that all the goods of the company are of high quality. Eachpart used in the tools is bought from a reliable company to ensure the quality of the overallproduct.Maintenance Department This department will look after all the maintenance of the company. They will do all therepairs and preservation whenever needed. They will also take care of the goods which needsrepairing.Organizational Components The following are the organizational components for the supply chain business whichwill benefit the company (Tan, 1999).Plan This is the strategic segment of supply chain management. Strategies and business plansare made in order to carry out the remaining stages efficiently. Strategies are devised by thesupply chain managers of the company devising best policies and strategies for the business.
Supply Chain 9Source The next component is the selection of suppliers who will supply the services and goods,required to produce a good or service (Tan, 1999). Build up a set of delivery, payment andpricing procedures with suppliers and generate metrics for checking and improving the terms andrelations with the suppliers. Further, one needs to design procedures for managing the inventoryof goods and services he receives from suppliers, including receiving shipments, theirverification, transference to the manufacturing facilities and approving payments of thesuppliers.Make This is the manufacturing step. One needs to plan the activities that are essential formanufacturing, testing, packaging and preparation for delivery. It is the most metric-intensivesegment of the supply chain, that measures quality levels, production output and workerproductivity.Deliver This part will include the coordination of the receipts of orders from customers,development of a network of storehouses, picking up of carriers to take goods to customers andsetting up of an invoicing system to receive payments.
Supply Chain 10Return Client/customer would return the good or product back to the company if it fails to meeteffective quality control criteria (Van, 1999). The origination gets in touch with the customer torecord and keeps a track of his/her complaints so that the companys SCM and Complaint centerdepartment together deals with the issue and get it sorted out as quickly as possible.Mass Customization Mass customization is a new paradigm that encompasses the technologies and systemsneeded to deliver products that meet individual customers’ needs with near mass productionefficiency. In order to accomplish this, the company must adopt a flexible, demand-orientedstrategy to provide a range of custom options. Efficiency is a key strategy as mass customizationis as much a business practice as it is a technology practice. Implementing mass customizationdemands new processes and services—new capabilities that are not in place in mostorganizations. To succeed, the company must design products that create enough customer valueto justify any additional customization expenses.Strategic Operations Management Typically, the supply chain business will focus on three to five forces which will help inspanning the life cycle of a supply chain strategy, from go-to-market model, to processeffectiveness, to complexity management, to nonstop improvements and manufacturingsuperiority (Van, 1999).
Supply Chain 11Effective Complexity Management The designing procedure may take longer than that of competitors as extra time will bespent to make certain that the new products conform to existing modern process and, therefore,can be accessible at comparatively lower prices.Low-Cost Manufacturing Foot Print and an Efficient Distribution Network Factories will gradually be placed in different developing nations, and comparativelyeconomical logistics approach, like container shipping and railroads, will be adopted.Mature Strategic Sourcing Approach Relationship with suppliers will be refined so that they last for a longer period which willbe valuable in volume and cost for both partners, and will be supportive so that process for allphases of the supply chain can be continuously evaluated for improvement areas.Manufacturing Excellence A definite importance will be placed on executing lean manufacturing methods in allservices.Manufacturing Facility Following are some of the ways in which cost-effectiveness of the manufacturing facilitycan be improved.
Supply Chain 12Know Your Cost A proper budget must be designed monthly or quarterly, the aim of the company shouldbe not to go over that recommended budget cost. All the materials and delivery process shouldbe done keeping the budget target in mind.Monitor Productivity The productivity of the entire workforce should be monitored; if someone is notperforming well they should be trained and coached, so that they can properly perform theirtasks.Creating Teams or Groups By creating different teams and groups to work on selected project, the company willensure more productivity. The work will be more managed and organized.Training Proper training must be given to the employees so that they perform their job moreeffectively and efficiently.Improvement in Cost Effectiveness in Supply Chain The following improvement in the cost effectiveness will surely benefit the supply chainbusiness and will help in improving the quality and standards of the chain as well as customersatisfaction (Choi, 2006).
Supply Chain 13Best Values It is one of the vital elements in proper decision making connected to purchasing. Thecompany should consider every option available. The supply chain will offer best values tocustomers as well as the best quality products which will improve customer satisfaction andhence, will improve the sales of the supply chain (Choi, 2006).Control and Management of Contracts The company ought to adequately manage the contracts. The administration will alsofirmly direct all the ventures to guarantee proper completion of the purchases of each ventureinside the allotted finances and with the observance of regulation and rules.Minimizing and Assessing Risk The risks associated with all the purchasing will be taken into deliberation and contradictmethods will be exercised to reduce the involved risks in the projects.Experienced and Qualified Staff All the staff members hired will be have the required qualification and will haveexperience in the supply chain field so that they can handle the financial, legal as well as otherissues in a better way.Conclusion Supply Chain Management is not just the completion of the order but includes all theoperations and processes that start from generating the products through the ending of life
Supply Chain 14disposal and recycling. Therefore, proper strategies and planning is needed to overcome thiscompetition. The quality and cost assurance is needed to attain the loyalty and satisfaction of theconsumer. This will ensure that this supply chain will gain profits and will achieve operationalexcellence. It will ensure the economic growth and will also ensure the competitive advantage tothis supply chain over other (Chopra, 2004).
Supply Chain 15 ReferencesChoi, T.Y. and Krause, D.R. (2006), “The supply base and its complexity: Implications for transaction costs, risks, responsiveness, and innovation,” Journal of Operations Management.Chopra, S. and Sodhi, M.S. (2004), “Managing risk to avoid supply chain breakdown,” Sloan Management ReviewDooley, K. (2001), “Organizational complexity, “International encyclopedia of business and management. London: Thompson LearningGreaver, Maurice F. (2008), “Strategic Outsourcing: A Structured Approach to Outsourcing Decisions and Initiatives,” New York: Oxford University Press.Simon, J.T. (2005), “Competitive Purchasing Policies under Price Volatility,” Advances in Competitiveness Research.Tan, A. (1999), "The use of information technology to enhance supply chain management," Production and Inventory Management Journal, Vol. 40 No.3Van Hoek, R.I. (1999), "From reverse logistics to green supply chains," Supply Chain Management, Vol. 4 No.3