Improving Supply Chain Processes for Lohma Sports Company

This report analyzes the weaknesses in the supply chain processes of Lohma Sports Company and provides suggestions for improvement, including the development of a governing policy, inspection and supervision mechanisms, and the use of technology for distribution planning.

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INTERNATIONAL SUPPLY CHAIN MANAGEMENT
Name
Institution Affiliation
Date

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Contents
Executive Summary............................................................................................................................................... 3
Body............................................................................................................................................................................. 4
Issues with supply chain................................................................................................................................. 4
Sourcing for Raw Materials....................................................................................................................... 4
Manufacturing................................................................................................................................................ 5
Distribution..................................................................................................................................................... 5
Measures for improvement........................................................................................................................... 6
Develop an inspection and supervision mechanism......................................................................7
Develop a distribution matrix plan using technology....................................................................7
Conclusion................................................................................................................................................................. 8
References............................................................................................................................................................... 10

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International Supply Chain
Executive Summary
It is evident that Lohma Sports Company has its strength on the product quality but has
lagged in its supply chain quality. Therefore, this report concentrates on the need for Lohma
Sports to improve its supply chain processes to realize maximum profitability. It is important to
note that the supply chain process of any company also defines its relations with its consumers.
With poor supply chain processes, Lohma Sports Company risk failing to progress. That is
because it would have failed to effectively reach its consumers. This report, therefore, analyzes
the areas of weaknesses for the company’s supply chain processes, for the processes of sourcing
of raw materials, manufacturing and eventually the distribution of its final products. In every
stage of the supply chain, Lohma Sports faces problems relating to the quality of its supply chain
processes. For example, the poor management of sourcing raw materials in the manufacturing
plants overseas led to the problem of the quality of products. The company had an issue with the
zip in its ski jackets. That problem resulted from malpractices in the supply of raw materials.
Owing to the identification of the problems of the supply chain, this report provides relevant
suggestions for supply chain improvement. The main emphasis for the improvement of Lohma
Sports supply chain processes is the utilization of technology especially in the supervision of
work processes and the transportation logistics. Specifically, these reports identify the need for
the utilization of Artificial intelligence technology and the use of data analytics technology.
These technologies will help the company develop strong structures of decision making in its
supply chain management (Stadtler 2015). Appreciations of technology will also assist in real-
time tracking of transportation of goods to the distribution centers. Other suggestions are the

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formulation of strong policies and regulations that govern the supply chain processes, centrally
for maximum control of all the branches.
Body
Issues with supply chain
Supply Chain Process improvement is the specific supply chain area that widely
encompasses the supply chain situation Lohma Sports. The Company faces a lot of issues
managing the processes of the supply chain. For a better understanding of the supply chain
condition, it is better to examine the issues that Lohma Sports face in the areas of sourcing raw
materials, manufacturing and distributing the finished products.
Sourcing for Raw Materials
Lohma Sports lacks uniformity, consistency, organization, and control in the process of
getting its raw materials. For one, the company’s manufacturing plants are scattered globally
with a lack of uniformity in the manner of operations, to in all the different points of
manufacturing (Prajogo, Oke and Olhager, 2016). For the headquarters of Clothing Design and
Development which is situated in the USA, a purchasing clerk sources all the materials required.
Therefore, the purchasing clerk has control of where to purchase the materials with adequate
plan and formality. However, for the manufacturing points away from the USA, there are only a
few effective supplier agreements. That has created loads of other problems and malpractices
jeopardizing the professionalism of the company. For instance, there have been concerns of
bribery, child labor and the payment of low wages (Tiwari, Wee and Daryanto 2018). These
malpractices have resulted from the fact that the company lost control of its branches
manufacturing points. The SCOR model focuses on five supply chain areas; plan, source, make,
deliver and return (Hofmann 2017). If there is a failure in one of the steps, all the other areas will

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be affected. For example, Lohma failed to effectively plan for the processes of sourcing the raw
materials, which later affected her delivery. The fact that there were malpractices in sourcing for
materials shows that the company lost control in the management of the manufacturing branches
beyond the USA. The company has no systematic plan in terms of a well-formulated standard of
sourcing raw materials (Tan et al 2015). Therefore, the company should develop a strong policy
that is central and governing to all the branches of the manufacturing plants, on the guidelines
and regulations governing the purchase of raw materials.
Manufacturing
Lohma Sports lacks a clear structure and mechanism for the inspection and testing of
products before their release into the market. That is evidenced with the complaints of customers
about a zipper on one of the ski jackets they had purchased (Wu et al 2016). By the time the
products are sold into the market, such a problem ought to have been noted and correction
measures applied with promptness. Therefore the company should improve on the inspection and
supervision part (Christopher 2016).
Distribution
The distribution process also needs to be well improved. From the case, the company
lacks a suitable system to calculate the best combinations of routes for the orders of customers
for purposes of minimizing the costs of transportation. The main concern of the regional
distribution centers managers is to maximize the truckloads. That is meant to maximize the
number of goods transported in one trip and utilizing the truck spaces. In the long run, the
number of trips would have been cut thus rendering a cheaper transportation cost. However,
another problem has come up with this process (He 2015). Every Regional Distribution Center
normally carry more stocks than they are needed in every product line. That consequently leads
to the problem of rendering most of the remaining stock obsolete because consumers want the

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latest product. Therefore, the company needs to design a clear and effective system to manage
the distribution routes in the most efficient manner as to reduce wastage of stock and to increase
speed while reducing the cost of transportation.
The company has a good customer relationship strategy and knows how to maintain its
customers. When the customers complain of the zip in one of the ski jackets, the company spent
$45,000 in doing a product recall and sending free replacements for their customers. Another
area of strength for the company is its ability to reach the global market, especially through the
placement of manufacturing points in the countries with cheap labor. That strategy has not only
served to benefit the company in the area of labor cost but also in reaching the consumers in
those markets (Ferguson and Souza 2016). However, the overall management should have
control of all its global manufacturing branches.
Measures for improvement
To effectively address the issues above, the following offers an effective strategy for
improving the supply chain process for Lohma Sport.
Develop a universally and central governing policy for all the supply chain processes
The Lohma Sports company must develop a policy that governs every supply chain process from
the sourcing of raw materials to the distribution of finished goods. In the examination of the
issues with the sourcing of raw materials that the company faced, it is evident that the cause of
the problem was the lack of a clear policy. When the suppliers started bribing the manufacturers
and the manufacturers started to choose the suppliers based on price and time, it is clearly
evident that they acted under no regulations (Fredendall and Hill 2016). When things get out of
hand, it results in a situation where the company loses control of its operations leading to poor
quality in production. Therefore, Lohma Sports should develop a clear policy that is consistent in
all the branches and manufacturing points for the purchase of raw materials. All the major

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decisions need to be made from the company’s headquarters and any change of practice need to
be communicated to the head offices.
Develop an inspection and supervision mechanism
Lohma Sports manufactures most of its products abroad through its manufacturing plants
in countries with cheap labor. It, therefore, becomes quite difficult to monitor effectively all the
goods that are released to the market, especially from such manufacturing plants abroad.
Therefore, there should be an investment of inspection plants and management before all the
company’s products are sold (Journal of Operations & Production Management pp.220-238).
After the manufacture of all the products, they should be sent to a quality inspection plant where
all the details of quality will be inspected and given the okay to proceed for distribution or
corrective measures be done on the product.
Develop a distribution matrix plan using technology
Currently, the company does not have a clear plan which sets out all the best possible
options for the distribution of its products. That offers a dangerous undertaking since a lot of
money could be wasted on transportation. Apart from transportation cost inflation, it could also
lead to other logistical problems such as overlapping, delays, and duplication of processes.
Currently, the company utilizes an SQL database technology to manage the distribution
combinations and networks. However, more has to be done to reduce the hitches that could be
observed through technology. Therefore, the use of data analytics and engineering technologies
with the combination of artificial intelligence technologies could be of great help. The company
should have a department of data analytics and engineering where data is collected, processed
and analyzed to offer predictive results that would be useful for transport logistics (Monczka et
al 2015). One of the greatest strength with using the technologies of artificial intelligence is that
it not only provides the past results but gives insights to the predictions of future results. All the

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transport networks that the company transcends should be highlighted and with the use of
artificial intelligence technologies, real-time data and information should be provided. For
example, traffic congestions happen at different times. Other transport issues such as accidents
could serve as a hindrance of transportation (Emmett and Crocker 2016). However, with the right
utilization of artificial intelligence technology, the transport agents could be notified in real time,
the conditions of the roads and the best possible routes to take. The artificial intelligence
technologies should also help the company identify the cheapest transportation means and routes
(Wang et al. 2016). Using previous data and transportation information, AI can develop a matrix
of the best possible transportation techniques that could cut the cost of transportation in specific
times and places.
Conclusion
Lohma Sports has a great potential of growing its scope of the market. However,
effective management of the branches needs to be concentrated on. For one, the processes of the
supply chain need a lot of improvement as discussed above in detail. The company should invest
most of its resources in first streamlining the processes of the supply chain before considering
expansion into other markets. The main area of concentration for the company is the distribution
networks. The company should concentrate leveraging on technology in its quest to improve its
supply chain processes. For instance, it could cut the huge cost of movement of its managers
from one plant of manufacturing in different countries to another through the use of video
conferencing which offers real-time chat in video and audio. Cameras could be placed in
different manufacturing plants and real-time information and work processes transferred to the
inspection centers. Through that, it will be easier to undertake all the processes from the main
headquarters effectively, efficiently and cost-effectively. Lohma Sports have a great potential for

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growth if all its major and minor supply chain processes are properly managed and constantly
improved. Management has mostly concentrated on the quality of the products and somehow
forgotten the quality of the supply chain processes.

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References
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Emmett, S. and Crocker, B., 2016. The relationship-driven supply chain: creating a culture of
collaboration throughout the chain. Routledge.
Ferguson, M.E. and Souza, G.C. eds., 2016. Closed-loop supply chains: new developments to
improve the sustainability of business practices. CRC Press.
Fredendall, L.D. and Hill, E., 2016. Basics of supply chain management. CRC Press.
He, Y., 2015. Acquisition pricing and remanufacturing decisions in a closed-loop supply
chain. International Journal of Production Economics, 163, pp.48-60.
Hofmann, E., 2017. Big data and supply chain decisions: the impact of volume, variety and
velocity properties on the bullwhip effect. International Journal of Production Research, 55(17),
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Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and
supply chain management. Cengage Learning.
Prajogo, D., Oke, A. and Olhager, J., 2016. Supply chain processes: Linking supply logistics
integration, supply performance, lean processes and competitive performance. International
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Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and
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Tiwari, S., Wee, H.M. and Daryanto, Y., 2018. Big data analytics in supply chain management
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