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Introduce the practice of decision-making in a supply chain operation, including the types of decisions required to manage a supply chain effectively.
Majorly, a supply chain involves several interlinked activities whose operations work simultaneously to ensure raw materials effectively and efficiently move through the stages of procurement, production, and their distribution into finished products (Portillo, 2016). This flow of materials from vendors, their transformation into finished goods, and finally, their transportation to distribution centers constitutes many decision-making processes (Portillo, 2016). These decisions need to work harmoniously and embrace various strategic and operational techniques to ensure successful supply chain management. Ultimately, the goal is to provide the final product or service is up to the desired standards of the targeted audience.
Several vital decisions that touch on the location, production, inventory, and transportation with the vendors and customers in mind, need to be accommodated for effective supply chain management (Portillo, 2016). Getting the best geographical placement to run business activities goes a long way in ensuring that factors of production, as well as the targeted audience, can easily reach the business premises (Azadfallah, 2016). Consequently, the location decisions aim to limit the firm’s operational costs while increasing its revenue and level of customer service. This goal is made possible where the firm is easily accessible to both customer markets and vendors. Hence, the transportation and distribution costs are drastically kept at manageable levels.
Similarly, production decisions expound on which paths the firm can capitalize on to ensure optimization in all production levels (Azadfallah, 2016). Such decisions consider the production costs, taxes, duties, tariffs, and other production limitations. Therefore, with the best production decisions, a firm can effectively utilize its machinery capacity, ensure proper equipment maintenance, and develop the best production schedules (Azadfallah, 2016). With all these considerations, the firm can equally achieve workload balancing and realize its quality control measures.
Inventory and transportation decisions are comparably important in any effective supply chain management (Portillo, 2016). Whether the inventory exists as a raw material, semi-finished or final product, it is critical in ensuring the supply chain faces no setbacks. Hence, the top management should ensure it sets up the best inventory deployment strategies at each production stage. Similarly, control policies also need to be observed to limit wastage and maintain optimal order and reorder quantities. When coming up with the best mode of transportation, several factors that dwell on convenience, reliability, cost, and safety need to be premeditated (Azadfallah, 2016). Therefore, transport decisions should critically rationalize on the best customer service levels while keeping the logistics costs involved at manageable standards.
- Assess the given supply chain production problem, and create an infographic slide that includes how each recommended decision contributes to resolving the production problem.
One of the prevalent problems in supply chain production is cost control (Azadfallah, 2016). The unpredictable, unstable, and ever-rising fuel, tax, tariff, and freight costs have pushed supply chain managers to set up emergency funds for the same. Most of these costs directly affect the transportation decisions in any supply chain management strategy. Subsequently, changes in operating costs occasioned by an increased number of global customers, advancement in new technologies, rising labor rates, and commodity prices make cost control even more challenging.
| Supplier
Vendors should be evaluated on stringent terms to ensure they provide the best quality of commodities and at competitive prices. All service providers should equally be scrutinized to measure their ability to provide the goods and services needed on and offseason. Their reliability, affordability, and convenience to the firm should be unquestionable. Similarly, where outsourcing is the best option, a firm could embrace it to reduce its supply chain costs. |
Supply Chain Flow Chart
| Raw Material
As far as raw materials are concerned, the top management needs to work effortlessly to acquire them at reduced prices to ensure higher revenues. Moreover, the system used should be both capital and labour-intensive to save on the overall costs of the factors of production. |
| Distribution
The distribution process is made cost-friendly by embracing the best mode of transport. Emphasis should be made on the transport strategy that is reliable, affordable in terms of fewer fuel costs, and convenient in reaching the consumer markets. Finished products awaiting delivery should be well packaged to avoid damages during transportation, resulting in reduced liability costs. With a streamlined ordering process using a single software package, repeated requisitions are avoided meaning less wastage of inventory supplies. |
| Customer
Through frequent customer feedback via questionnaires and surveys, the firm can adequately serve its consumers’ specific and emergent needs with minimal wastage. A study of the changing global consumer demand will also direct the firm on which areas to shift its production muscles to remain competitive and increase its revenue share. |
| Manufacturer
On the part of the firm, it should ensure that the available space is adequately utilized to offset any costs associated with leasing. Another strategy of reducing supply chain costs would be automating most of the company’s processes. This method not only makes operations efficient but also makes all project managers at each production stage to be accountable to their actions. |
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Examine a given supply chain production decision. Assess how making a different decision would improve the production process.
One critical supply chain production decision is on which product the firm will specialize in. With all factors such as vendors, revenue allocation, business location, and any other emerging factors kept constant, the choice made on the product to engage with determines a lot the success of any firm (Bulgurcu, 2018). Therefore, it is highly recommended that firms settle on the product that meets the current and future consumer needs. Furthermore, with the right choice of where to produce this product, the firm can adequately satisfy consumer markets.
By imposing a different but complementary decision such as allocating highly effective, reliable, and efficient suppliers to the manufacturing plant, the production process of the product the firm has settled on producing is highly motivated (Bulgurcu, 2018). With experienced and all-year-round vendors who offer quality services and raw materials at competitive prices ensure no production gaps emerge at any production phase. That is, there is a smooth production path until the final product is realized. Such an output process increases customers’ reliance on the firm meaning more referrals and higher profits (Bulgurcu, 2018). Moreover, the use of raw materials from licensed and certified suppliers ensures quality control of the finished product.
In summary, the top management in any firm should harness decision-making skills that enable them to effectively and efficiently monitor their supply chain processes. The ability to identify current and emerging supply chain problems and hastily tackle them should be highly prioritized (Azadfallah, 2016). Additionally, the firm should be able to identify trending opportunities in the digital space while developing and communicating better solutions to guarantee its customers efficiency, quality, and affordable products (Azadfallah, 2016). Collaboration with external elements as well as corporate teamwork should also be generated to incorporate harmony and smooth operations in the supply chain.
References
Azadfallah, M. (2016). A supplier selection using a group decision making under multiple criteria by considering individual criteria set. Journal of Supply Chain Management Systems, 5(2). https://doi.org/10.21863/jscms/2016.5.2.029
Bulgurcu, B. (2018). An Intuitionistic fuzzy group decision-making to measure the performance of green supply chain management with TOPSIS method. Multi-Criteria Methods and Techniques Applied to Supply Chain Management. https://doi.org/10.5772/intechopen.73701
Portillo, R. (2016). Designing resilient global supply chain networks. Operations Research Series, 51-83. https://doi.org/10.1201/b20114-4
