Select a manufacturer that familiar with & assume that you are the supply chain manager of this organization. Analyse the effectiveness of the four key flows (in the supply chain), the make process, and the supply chain forecasting.
Base on your analysis, recommend improvements by applying the theories & concepts found in supply chain management. Required to consult from the full-text databases; current affairs magazine; newspaper etc).
Supply chain management is defined as administration of movement of products and services and it consist of processes which help in transforming raw materials into finished products. The supply chain management process involves well organised and simplified business’s supply-side practices so as to enhance customer usefulness and help businesses to earn competitive advantage in the market. This report focuses on analysing the efficaciousness of the key flows in supply chain of Nutradry and providing suggestions for improvement. This report also focuses on the effectiveness of the various supply chain activities undertaken at Nutradry such as Production Planning and Materials Requirement Planning and also provides recommendations for further improvement. This report also focuses on analysing various supply chain forecasting models and techniques and accordingly recommends the best forecasting technique to the company.
Nutradry is an Australian company which manufactures and markets natural fruit powder, vegetable powder, meat powder and speciality powders which are organic in nature. The products of the company are locally grown and sourced and the company uses high quality production techniques and technologies for the manufacturing of their products. The company specializes in the production of high quality fruit, vegetable, meat and speciality powders which are widely used in the food, health and nutraceutical industries.
Key Flows in the Supply Chain
Product Flow- The product flow element of the supply chain of the company can be termed as effective in nature as the products of the company flow in a uni-directional manner to the customers of the company from the manufacturing units of the company. The efficient product flow of the company ensures that the products of the company reach the customers of the company at the required time. As opined by Wilson (2016) the recommendation to the company to improve the product flow in supply chain of Nutradry is to improvise distribution network so that the product of the company reaches to the customers at a faster and effective way. Another recommendation to Nutradry regarding improvement of product flow in supply chain is to establish information conduits in order to share important data such as tracking information with the key partners of the company.
Information Flow- The information flow element of the supply chain of the company can be termed as effective in nature as vital information of the company are available to all entities present in the supply chain which serves as connection between the various stages of the supply chain process and allows them to co-ordinate among themselves and take important decisions. As opined by Badenhorst, Maurer & Brevis-Landsberg (2013) the recommendation to the company to improve the information flow in supply chain of Nutradry is to enable real-time data access of the company in order to take informed decisions and to be informed about a great deal of diverse information about the company. The other recommendation to Nutradry regarding improvement of information flow in supply chain is to ensure security of company.
Cash Flow- The cash flow element of the supply chain of the company can be termed as effective in nature as the company not only focuses on their earnings but also specialize in cash flow management which helps in the optimization of the supply chain. The recommendation to the company in order to improve the cash flow in supply chain of Nutradry is to implement process of EBITDA (earnings before interests, taxes, depreciation and amortization) optimization which will help in enriching cash flow in the supply chain of the company. There are various strategies which can be implanted by the company in order to enrich the cash flow in the supply chain of the company through EBITDA optimization such as business process optimization, direct effort optimization, logistics optimization, machine optimization etc.
Reverse Logistics- The reverse logistics element of the supply chain of the company can be termed as effective in nature as the companies have effective processes in place in order to recapture the value of the product after the product has moved from the place of utilisation to the place of origin. According to Kumar, Amorim, Bhattacharya & Garza-Reyes (2016) the recommendation to the company in order to improve reverse logistics in supply chain of Nutradry is to implement a Returns Management Strategy in the company which will help in providing customers with multi-channel visibility.
The key flows in a supply chain are as follows:
Fig: Key flows in a supply chain
The Make Process
According to Vogel, Almada-lobo & Almeder (2017) production planning is described as management procedure which occurs inside manufacturing firms and which includes ensuring that enough raw material, staffs and additional vital resources are acquired and available to process finished goods by following specific procedure.
The production planning process at Nutradry can be termed as effective in nature as it follows all the necessary steps which are involved in the process of production planning namely forecasting the demands of their products, determining potential options for production, choosing the best production option which uses the combination of resources in a more effective manner, monitoring and controlling and adjusting. As opined by Bielecki & Gali?ska (2017) the production planning process of the company can also be termed as effective in nature as it helps the company to meet the demands of the products of the company in the market while reducing manufacture timing and production costs by improvising the process flow, lowering wait timing amid various stages of operations and streamlining the usage of machines and tools.
Recommendations for Nutradry to improve the production planning process of the company involves having an effective inventory management system or process in place so that the production planers of the company will know exactly what resources are available at any given time. As stated by Göçer, Yumurtaci, Yurt & Baltacioglu (2015) another recommendation to the company in order to improve the production planning process of the company is to increase the efficiency of the company in managing workloads as it will help in increasing the efficiency of the production planning process of the company.
Materials Requirement Planning is defined as a planning and control system for inventory, production and scheduling. As stated by Doma?ski & Adamczak (2017) the Materials Requirement Planning helps in the conversion of the master schedule of production of a company in to a detailed schedule so that the companies can purchase raw materials and components.
As opined by Rivers (2013) the Materials Requirement Planning Process which is being followed in Nutradry can be termed as effective in nature as the materials requirement planning process implemented in the company follows all the necessary steps associated with the materials requirement planning process namely identification of quantity requirements, using the Materials requirement planning calculations and completing the orders. As stated by Wang & Liu (2013) the Materials requirement planning process which is followed in Nutradry can also be termed as effective in nature as it helps the company to timely manufacture goods for the customers, reduce the equipment downtime and decrease the capital costs through lowering inventory volumes and optimum utilisation of manufacturing materials.
The main recommendation to Nutradry for improving the Materials requirement planning of the company is to implement an ERP solution with a powerful Materials Requirement Planning Technology in the operations of the company as it will help in improving the demand planning and forecasting process of the company which will help in enhancing the materials requirement planning process of the company. As stated by Li & Disney (2017) another recommendation to the company in improving the materials requirement planning process of the company is to frequently audit the vendors and suppliers of the company regarding their actual lead time vs. anticipated lead time, which will help in the enhancement of the materials requirement planning process of the company.
The Supply Chain Forecasting
There are various methods which can be used by organizations for forecasting their supply chain. The various supply chain forecasting methods are as follows:
Qualitative forecasting techniques- The qualitative forecasting techniques are the approaches towards forecasting which are based in intuitive or judgement evaluation. As stated by Ghalehkhondabi, Ardjmand, Weckman & Young (2017) the qualitative forecasting techniques are generally used when data are limited, not available or are not relevant in nature. There are various types of qualitative techniques which can be used by an organization mang which the most popular techniques are estimates of sales force, personal insights, consensus of panel, market research, visionary forecasting and the Delphi method. The common examples of qualitative demand forecasting are development of long range projections and new product development.
Quantitative forecasting technique- As stated by Ogcu Kaya & Demirel (2015) the quantitative forecasting techniques are the approaches to forecasting the supply chain by an organization where historical demand data is utilized to project and predict future demand. The quantitative forecasting technique uses intrinsic and extrinsic supply chain forecasting techniques.
Graphical forecasting method- The graphical forecasting methods utilizes visual information in order to predict pattern of sales typically involving plotting information in a graphical form. It is perceived as relatively easier to convert a spreadsheet into a graph which conveys the information in a visual manner. In the graphical forecasting models, the trends and patterns of data are easier to spot and the extrapolation of earlier demands can be used in predicting future demands.
Trend forecasting models- As stated by Maaß, Spruit & de Waal (2014) the trend forecasting models include the methods of forecasting sales data when a definite upward or downward pattern is observed. The various common trend forecasting models are regression, triple smoothing and exponential smoothing.
The forecasting method which can be suggested to Nutradry is exponential smoothing as it helps in effective demand forecasting in the supply chain of the company. As stated by Ravinder (2013, b) the exponential method of forecasting will help the company to compare the past forecast of the company with the actual past results and then will help in applying the difference between both the forecast in the next forecast of the company. Presumably, the new forecast of the company will be more accurate in nature as it accounts for actual distinctiveness in the estimations of the company and the actual results and interpreting that baseline will help to control numerous elements that are outside the control of Nutradry thus helping to reduce the margin for error in the company.
There are numerous benefits of applying Exponential smoothing method for supply chain forecasting which are as follows:
- As stated by Ravinder (2013, a) the exponential smoothing method of forecasting is convenient to understand and use as it is applied in only three forms of data for forecasting namely forecast for most current time period, real value for that time period and value of smoothing constant.
- The exponential smoothing method gives an accurate projection of one period ahead by utilising trend forecast method.
- The exponential method of smoothing gives more significance to recent observations as it neglects the random variation.
From the above report it is clear and evident that the supply chain management function of Nutradry has contributed to the growth and development of the company. The various key flows of supply chain of Nutradry namely product flow, cash flow, information flow and reverse logistics are highly effective in nature which contributes to the success of the company in the market. From the report it is also observed that the various elements of the supply chain management process such as production planning and materials requirement planning are highly effective in nature which has improved the productivity and profitability of the company. The main suggestion to the company regarding the improvement of the production planning and materials requirement planning of the company is to implement ERP software in the operations of the company which will help in streamlining the operations of the company and hence will add to effectiveness of supply chain process of Nutradry. From the report it can also be stated that there are various supply chain forecasting techniques and methods which can used by companies regarding forecasting demand in a supply chain and after analysing the operations of the company it can be stated that the best forecasting technique or method which can be suggested to the company is exponential smoothing as it helps in forecasting exact demands and requirements of the market.
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