Supply Chain Management

8 August 2016

A supply chain consists of all parties involved, directly or indirectly, in the procurement of a product or raw material. Supply chain management (SCM) involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.

In the past, companies focused primarily on manufacturing and quality improvements within their four walls; now their efforts extend beyond those walls to influence the entire supply chain including customers, customers’ customers, suppliers, and suppliers’ suppliers. Today’s supply chain is a complex web of suppliers, assemblers, logistic firms, sales/marketing channels, and other business partners linked primarily through information networks and contractual relationships. SCM systems enhance and manage the relationships. Business Dilemma Netflix reinvented the video rental business using supply chain technology.

Supply Chain Management Essay Example

Netflix, established in 1998, is the largest online DVD rental service, offering flat rate rental-by-mail to customers in the United States. Headquartered in Los Gatos, California, it has amassed a collection of 80,000 titles and over 6. 8 million subscribers. Netflix has over 42 million DVDs and ships 1. 6 million a day, on average. Netflix previously claimed to spend about $300 million a year on postage. On February, 25 2007, Netflix announced the delivery of its billionth DVD. The company provides a monthly flat-fee service for the rental of DVD movies.

A subscriber creates an ordered list, called a rental queue, of DVDs to rent. The DVDs are delivered individually via the United States Postal Service from an array of regional warehouses (44 in 29 states). A subscriber keeps a rented DVD as long as desired but has a limit on the number of DVDs (determined by subscription level) that can be checked out at any one time. To rent a new DVD, the subscriber mails the previous one back to Netflix in a prepaid mailing envelope. Upon receipt of the disc, Netflix ships another disc in the subscriber’s rental queue.

Netflix’s business is video rental, but it used technology to revamp its supply chain to completely disrupt the entire video rental industry. PROJECT FOCUS: Define a way that you can revamp or reinvent your cafe using supply chain technologies. Modern business environment, brings enormous pressure, not just sell products, but also for customers to provide satisfactory services to improve customer satisfaction. Although the Broadway Cafe is a local shop which has a long story and a majority of consumer has deeply trust in it, the Broadway Cafe has not catch up with modern technology and lost competitive strength.

So as to remain competitive advantage, the Broadway Cafe should apply supply chain technologies to revamp the Cafe. Replenishment System In the past the Cafe has checked all inventory orders through a note pad and order stocks from suppliers manually by phone. Managing inventory in this traditional system can easily lead to wrong order amounts or items. Sometimes it causes human error such as not correctly counting of stock or forgetting to order on time. Therefore it is hard to keep our order and stock accurately when we needed with suppliers.

These problems can be solved by using Dynamic Replenishment System (DRS). The proposed DRS is an integrated model that plans customer goods deliveries based on inventory and backorder levels (Magableh, 2007, 52-66). This system allows sharing information directly between both the Cafe and suppliers. It can improve the communication between the Cafe and supplier because this system will produce the requirements of stocks for next orders and transfer the needs to suppliers automatically. And supplier will implement the next stocks for us efficiently and effectively.

This system can decrease the mistake of stocking such as ordered quantities and can ensure the right product that we ordered and to avoid waste and unnecessary cost. It will help us processing the same order at the same time every week or month and saving the process of potential human error as well(Magableh, 2007, 52-66). As a result, using this system would enhance customer satisfaction because we have sufficient items to provide consumers and also increase the sales.

In order to make my business succeed that I have to create a suitable competitive advantage to face modern business and keep developing new programs and resources to help in changing marketing conditions. Making Business Decisions I Business is booming. The Broadway Cafe is operating better than ever and you have achieved your goal of driving operating costs down, which helps to drive revenues up. One of your best new products is a small coffee press from China. Customer can create a drawing on a special piece of paper that is sent to China and created as the outside of the coffee press.

Customers are ordering the presses for everything from children’s drawing for mother’s day presents to marriage proposals. You also have many customers participating in the coffee-of-the-month and tea-of-the-month club where they receive two pounds of a unique blend each month from Brazil Beans and China Teas. PROJECT FOCUS: Yesterday, a dock workers union strike began and shut down all of the west coast shipping docks from San Francisco to Canada. Work will only begin when the union agrees to new labor contracts, which could take months.

You need to quickly assess the impact of the west coast dock shutdown on the cafe. How will you keep business running if you cannot receive your shipments from Brazil Beans, China Teas, and the custom coffee press machines? What strategies do you recommend to help the business continue working while the supply chain is completely disrupted by the dock workers strike? I will keep the business running by making sure all the steps are completed. First, I will try to contact other local suppliers who may stock and provide the same items.

And it is better to order sufficient stocks to support about two or three months whatever the price would be higher except for doing harm to the profit. Furthermore, due to work will only begin when the union agrees to new labor contracts, which could take months, so we should also need to consider ordering or seeking similar substitute items from local suppliers. It is important that our Cafe doesn’t run out of our major products. Furthermore, we should inform customers that there is a problem to keep operating coffee press, coffee-of-the-month and tea-of-the-month club due to workers strike issue.

Let customers know that we may not keep providing the original products and we may offer new range tea and coffee beans until the dock worker back to work. Moreover, we should create some promotions such as discount, give some free coupon to keep customer satisfaction and consume in our Cafe. Finally, we need to start planning to build warehouse and store sufficient stocks for at least three or four months, especially Brazil Beans, China Teas, and the custom coffee press machines in order to avoid this issue happening again. (Gold, S. , Hahn, R. , & Seuring, S. 2013) Making Business Decisions II

You have decided to try a new product called coffee-on-the-go. Each morning and afternoon, a Broadway Cafe truck will drive to the office park on the end-of-town offering coffee and other items for sale. This means that the truck must drive across-town four times each day. The cost of transportation to and from the sales area, plus the power demands of the truck’s coffee brewing equipment, is a significant portion of variable costs. You are wondering if it would be worth trying to reduce the amount of driving and, therefore, the variable costs, if you leased a small cafe closer to the office park.

You currently have rent of $5,000 per month. The lease of a new cafe, closer to the office park, would cost an additional $2,500 per month. This would increase the fixed costs to $7,500 per month. Although the lease of new cafe would increase the fixed costs, a careful estimate of the potential savings in gasoline and vehicle maintenance indicates that The Broadway Cafe could reduce the variable costs from $0. 50 per unit to $0. 30 per unit. Total sales are unlikely to increase as a result of the move, but the savings in variable costs should increase the annual profit.

Consider the information provided to you in SCM_MBD2. xls. Especially look at the change in the variability of the profit from month-to-month. From November through January, when it is much more difficult to lure office workers out into the cold to purchase coffee, The Broadway Cafe barely breaks even. In fact, in December, the business lost money. Develop the cost analysis on the existing lease information using the monthly sales figures provided to you in the file SCM_MBDII. xls. Develop the cost analysis from the new lease information provided above.

Calculate the variability that is reflected in the month-to-month standard deviation of earnings for the current cost structure and the projected cost structure. Do not consider any association with downsizing such as overhead—simply focus on the information provided to you. You will need to calculate the EBIT (earnings before interest and taxes). Calculation can be made in spreadsheet as below; we can see the difference between using existing lease information and new lease information. We can see above is a cost analysis on the existing lease information. Above it is shown the cost analysis from the new lease information.

Using information given the calculation of month-to-month standard deviation of earnings for the current cost structure and the projected cost structure can be made by using excel spreadsheet After analysing these figures above, a conclusion can be made that if the Cafe decide to move the annual EBIT total is $146,263, and if they don’t move the annual EBIT total is $151,393. It means the current cost structure is cheaper than the projected cost structure, and also we can see that standard deviation between current and projected one that current one is more stable than new project.

As a result, it is better to remain in their current location. Apply Your Knowledge One of the main products that the Broadway Cafe sells are whole coffee beans. The beans are shipped from Guatemala to three distribution centers in the United States (Denver, Colorado; Santa Fe, New Mexico; and Fort Worth, Texas) and are then shipped by truck to five roasting plants  before sent to the cafe. The roasting plants are located in Salt Lake City, Utah; Chicago, Illinois; Albuquerque, New Mexico; Jackson Hole, Wyoming; and Phoenix, Arizona.

Since shipping costs are a major expense, you have begun an analysis to determine ways to reduce them. You have created an estimate of what each distribution center needs to order and how much each roasting plant will require to satisfy your orders. PROJECT FOCUS: A workbook, SCM_AYK. xls, of the shipping costs from each distribution center to each roasting plant as a baseline analysis has been created for you. Some business rules and requirements you should be aware of include: The problem presented involves the shipment of goods from three distribution centers to five roasting plants.

Goods can be shipped from any distribution center to any roasting plant, but it costs more to ship goods over long distances than over short distances. Your goal is to minimize the costs of shipping goods from distribution centers to roasting plants, thereby meeting the demand from each metropolitan area while not exceeding the supply available from each distribution center. To complete this project it is recommended that you use the Solver function in Excel to assist with the analysis. Specifically you want to: Minimize the total shipping costs. Total shipped must be less than or equal to supply at a distribution centers.

When you came into work this morning you found the following anonymous letter from one of your employees on your desk. “I received a highly inappropriate joke from a fellow employee that I found extremely offensive. The employee who sent the joke was Debbie Fernandez and I believe she should be reprimanded for her inappropriate actions. Signed – a disturbed employee. ” What is your opinion? Why do you have this opinion? What external factors influence your opinion? First, we need to investigate this issue and check whether this joke was sent from Debbie herself or Debbie’s account was hacked and sent from someone else.

If we thought that Debbie is guilty, we should prepare sufficient evidences before talk to Debbie regarding the other employee’s concern, otherwise if she didn’t do that this action will break the trust between employees and employer. After confirming, we should discuss the reasons behind why she raising this kind of situation. Make Debbie pay some penalty for her mistakes and keep this incident as secret in order to avoid Debbie feels awkward. Finally, we will provide refresher training and collect feedback to make sure every employee is satisfied with workplace and their colleagues.

Making Decisions I One day, a sophisticated business man walks into the cafe and asks to speak to the owner. He introduces himself as Brawner Smith and says that he would like to talk to you in private. Brawner has just opened a local record store down the street and would like to purchase your customer lists from music events. Brawner is offering you a rather large sum of money for the e-mail addresses and phone numbers for all of the customers who have attended concerts at the cafe over the past five years. What is your opinion? Why do you have this opinion?

What external factors influence your opinion? According to Australian Government Office of Australian Information Commissioner that we are under privacy act – businesses that sell or purchase personal information without the consent of the individual or where the disclosure or collection is not authorised or required by law. I will not sell my customers information for money, because all customers’ information is confidential and it is kind of our cafe asset and also I will never know what is he going to do and it is against the law as well.

Instead of providing the customer details to him, we may ask him to pay us so that we can help him to advertise information in our cafe about his shop to my customers who are interested in music, and if they want they can contact him or his shop. Making Business Decisions II You have been asked to join a local organization, Net Neutral, that is comprised of numerous small businesses from around your district. Net Neutral’s purpose is to save the public airwaves and keep net neutrality. If you are unfamiliar with net neutrality research the issue at http://www. savetheinternet. com/. Problem Discussion

Discuss how net neutrality could effect The Broadway Cafe along with the pros and cons of joining Net Neutral’s organization. What is your opinion? Why do you have this opinion? What external factors influence your opinion? In this day, if you want to connect to the Internet, must go through Internet access services “Internet Service Provider (ISP),” and these ISP are able to control what website you can connect. For example, if MSN connection is closed, then you would never have the opportunity to connect to MSN, unless you change an ISP, or you have to use others such as Yahoo Messenger.

Why I need to pay money for companies control what I can access for commercial reasons. it is unreasonable. And ISP is not foolish to let you sue against it, however, it will use some method to affect your connection and obtain benefits through the impact of traffic. Net Neutrality speak to those ISP company, the ISP should treat all data on the Internet equally, not discriminating or charging differentially by user, content, site and application, provide connection services for taking a neutral attitude and should not affect the user through the control connection and access to benefits, so that we can have open and free internet connection.

The Broadband Cafe is a small business and it is well protected under Net Neutrality. Therefore, we must join Net Neutral’s organization. Apply Your Knowledge You have a wide variety of employees at The Broadway Cafe. Some of the employees have been working at the cafe since before you were born and some are brand new. Some of the employees you trust as well as you trusted your grandfather, and others are new to the cafe and you are just starting to build a working relationship. Last week you were faced with a difficult situation and had to fire one of your employees.

This particular employee had a bad attitude, continually showed up late for work, and was caught stealing money out of the cash register. When the employee cleaned out his locker you noticed him stuff a thumb drive into his pocket. You were suddenly concerned with other items he might have stolen while working at the cafe. What can you do to protect your data while still building a sense of trust among your employees? Discussing the importance of creating information management policies.

Be sure to highlight each policy that The Broadway Cafe should implement and how the policy can protect the company, its employees, and its data. We should make sure we follow the discipline and dismissal procedures before fire the employee, the procedure might exist in this organization as following: First, give him a valid reason based on his performance why he is at risk of being dismissed. Second, give him warning either verbally or in writing that he risks being dismissed if there is no improvement.

And then providing him with an opportunity to respond to warning and a reasonable chance to amend the problem. Finally, if he doesn’t have any improvement, write the termination letter. Make sure Termination Checklist is all tick and once we dismiss him we are facing potential risk which is company’s confidentiality might divulge, therefore we should ensure he returns all of business items and intelligence. “In information management policy is a set of rules that control the availability and behavior of a certain type of important content.

Policy enables administrators to control and evaluate who can access information, how long to retain information, and how effectively people are complying with the policy” (Managing Information Management Policy in SharePoint Server, 2010). The most of position undertake for managing risk are compliance officers, records managers, IT staff, etc. We can set up different log in system between employer, senior employees, and brand new employee. We should separate owner system and employees system.

In order to limit accessibility to sensitive data such as recipes, financial details, customers information. And all personnel have to have their unique ID number, when they want to access computer they should use their employee ID number to log in. Furthermore, as owner we are able to see and record people who has been using computer and how long did they use it. Data is essential to any operations and management should always make sure the data is secure, protected, and backed-up in order minimize any potential risk.

Additionally, we should provide refresher privacy training for staff regularly, audit privacy risks and take steps to mitigate them, and keep updating the organization’s privacy policy. Reference list: Managing Information Management Policy in SharePoint Server 2010 (ECM), (2010). Retrieved from http://msdn. microsoft. com/en-us/library/ms499244(v=office. 14). aspx Social Networking Hiding the truth What things do you post on Facebook that might be a little ‘less truthful’? I often post things on Facebook which are self-pictures that I want to share with my family and friends and share the link that contain interesting contents.

I seldom post my real personal details for examples like: phone number- 000 , address- homeless, school-sleeping school. Is this acceptable behaviour? Yes, I just don’t want to share my personal details in case get some trouble with strangers. What if it is a corporate social networking site? If it is just for social reasons they can post anything they like except illegal items, however, If it is for business, everything must be true and need to be aware about every words should be appropriate.

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