The scenario considered in the supply chain model has nodes in different takes with many suppliers, manufacturers, distributors, retailer operating under the continuous review policy. Supply Chain Management (SCM) is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses and stores, so that merchandise is produced and distributed at the right quantities, to the right locations and at the right time in order to minimize system-wide costs while satisfying service level requirements.Recently, however, there has been an increasing attention placed on the performance, design, and analysis of the supply chain as a whole.
While managing a supply chain, decisions are made at three levels: strategic (long- term), tactical (medium-term), and operational (short term or day-to-day decisions). The operational decisions focus on controls and performance measures such as inventory investment, service level, quality, cost, etc. ORGAN: Our chosen company uses the Supply Chain which is in combination, as the factory itself manufactures the water and purifies it in its final form and then sells them to the consumers directly.However, it acquires its raw materials room its suppliers such as bottles, lids and chemicals, then processes the water and runs it through the process and then delivers the final product to the consumer. Now this supply chain is an efficient in nature as it helps to reduce the cost and minimize the lead time to a great extent.
Since the operations are small in scale so maintaining the cost is very crucial so every supplier of the raw material is carefully selected on basis of cost and quality both. Bottles and lids both are purchased in large quantities in bulk to overcome cost ineffectiveness.Since it a functional product the physical costs tends to rise as per the productions so to minimize these costs, Organ constantly strives to improve its efficiency and therefore gravitates towards a physically efficient supply chain. Make-or-Buy Decisions: They buy components such as bottles and lids from external sources instead of producing these internally.
Reasons for Buying are: 1 . It frees the firm’s management to deal with its core competence which in this case is mineralizes water that is further poured in bottles in the mineralizes plant. 2.The firm has inadequate managerial and technical sources to support productions of components such as bottles and lids as the plant is set up only for mineralizes water. This inadequacy is due to low investments. 3.
The firm being in introduction stage has low demand so the quantity of lids and bottles needed is also low. So setting up plant for lids an bottles is not feasible. 4. There is inadequate capacity as there is only one factory so there is no available space for setting up plants for lids and bottle: The supply chain manager uses following strategies to enhance productivity: 1 .Low-Cost Strategy: They select suppliers based primarily on cost. Which means these suppliers should have the ability to design low cost bottles and lids that meet the functional requirements, minimize inventory, and drive down lead time.
2. Few Suppliers strategy for Bottles: The firm has a single supplier for bottles namely, “Continental plastic”. 3. Many Suppliers strategy for Lids: a) There are many different suppliers for lids. The lowest cost supplier with best delivery and quality is chosen.
B) Long-Term partnering is not the goal c the firm when it comes to Lids. 4. Suppliers for chemicals:The firm use chemicals purchased from multinational companies such as Icily and White Chemicals.
Distribution System: By Road: The distribution is mainly done by road and a Seashore van is used for pick-up and delivery on time, with no damage, paper work in order and a low cost. Warehousing: For stocking inventory there is one big hall in the factory for warehousing purpose. The inventory is stocked in the following manner though; 1 . Buffer Stock: The firm uses buffer inventory to reduce the incidence or severity of stock-out situations in sales and thus provide better customer service.