Advanced Supply Chain Management

This document discusses the importance of organisational leadership and research and development in supply chain management. It also provides strategies to lower transport costs and determine optimal inventory levels.

ADVANCED SUPPLY CHAIN MANAGEMENT
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Question 1
An organization that has the plans of gaining a competitive edge must look into
organisational leadership and Research and Development. The leadership of an organisation has
a lot of effects on supply chain. Unlike decades ago where an organisation could outsource all
processes of supply chain, the current business landscape has changed.1 This has seen many
organisations concentrate on their respective supply chains.2 The leadership of an organisation
gives an organisation a competitive advantage. A good example can be seen in the case of Apple
Inc. Tim Cook has adopted a complex but effect supply chain. In this case, it is evident that the
organisation has been able to excess in supply chain because of the leadership of the company.
Research and Development is a practice that has been adopted by many organisations.
The practice helps organisations to become successful and to be ahead of the competitors.
Research and Development in supply chain helps an organisation to understand the current
trends in supply chain and also to be in the best position to forecast what is likely to happen in
future as far as the supply chain is concerned. Competitive advantage is gained when an
organisation has the tools that help it to know more about the trends of an industry. For example,
if an organisation gets to know more about shifts that are likely to take place in supply chain, it is
able to plan ahead. When the shifts take place, the organisation is as hardly hit as competitors.
Question 2
The steps that would be used to lower the overall cost of transport are:
1 Monczka, Robert M., Robert B. Handfield, Larry C. Giunipero, and James L. Patterson. Purchasing and supply chain
management. Cengage Learning, 2015.
2 Mangan, John, Chandra Lalwani, and Chandra L. Lalwani. Global logistics and supply chain management. John
Wiley & Sons, 2016.

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a. Know the goods to be transported
Taking record of the goods that need to be transported is essential because it helps an
organisation to understand the best way to transport them. For example, if the products are
fragile, an organisation can opt for rail than road.3 At the same time, if the products are small in
quantity, the organisation can choose to use mini vans or mini trucks instead of trucks and trains.
b. Weigh between the transport agents
The best way to cut the costs is by making sure that only the most favorable transport
methods are used. Different methods of transport have different costs. For example, the cost of
rail can be different from the cost of trucks. In this case, it means that it would be essential to
look into all options that are available and come up with the option that best suits the
organisation in terms of costs and delivery.
c. Maximise capacity
The costs of transport increase when an organisation fails to maximise the capacity.4 For
example, an organisation might use a truck that has a maximum capacity of two tons to ship one
and a half tons.5 In this case, it is evident that zero point five tons have not been shipped. If the
trend continues, an organisation can waste a whole truck. In this case, it would be better to make
sure that each transport medium has been utilised to the capacity.
Question 3
a. What should be the re-ordering point?
3 Fredendall, Lawrence D., and Ed Hill. Basics of supply chain management. CRC Press, 2016.
4 Christopher, Martin. Logistics & supply chain management. Pearson UK, 2016.
5 Stadtler, Hartmut. "Supply chain management: An overview." In Supply chain management and advanced
planning, pp. 3-28. Springer, Berlin, Heidelberg, 2015.

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The company makes an order that is delivered after seven days. If the company needed to
make sure that it has 20% safety stock, it means that the company should be making orders two
days before the current stock runs out.6 In this case, the total number of the days that the
company should make an order before and the two number of the delivery period should be
added. Therefore, instead of making the order seven days before the current order runs out, the
company should make orders nine days before. By doing so, it means that at the time that the
next order will be delivered in the company, the company will not be out of stock but it will have
20% of its stock still intact.
b. Briefly discuss the steps the warehouse manager should take in determining optimal
inventory level
a. Understand the demand
The best way to manage inventory is by understanding the demand.7 The demand of products
gives the manager an idea of the units that he or she should order.
b. Order products before the stock is out
The manager should know the exact time to place orders to avoid the stock out situation. Time is
of essence because missing the appropriate time might leave the manager without stock in his
warehouse.
c. Know the exact quantity of order to make
6 Hugos, Michael H. Essentials of supply chain management. John Wiley & Sons, 2018.
7 Heizer, Jay, Barry Render, Chuck Munson, and Amit Sachan. Operations management: sustainability and supply
chain management, 12/e. Pearson Education, 2017.

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The manager should know the excess supply of goods that should be made. The excess is needed
in making sure that the company is safe from running out of stock.

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Bibliography
Christopher, Martin. Logistics & supply chain management. Pearson UK, 2016.
Fredendall, Lawrence D., and Ed Hill. Basics of supply chain management. CRC Press, 2016.
Heizer, Jay, Barry Render, Chuck Munson, and Amit Sachan. Operations management:
sustainability and supply chain management, 12/e. Pearson Education, 2017.
Hugos, Michael H. Essentials of supply chain management. John Wiley & Sons, 2018.
Mangan, John, Chandra Lalwani, and Chandra L. Lalwani. Global logistics and supply chain
management. John Wiley & Sons, 2016.
Monczka, Robert M., Robert B. Handfield, Larry C. Giunipero, and James L.
Patterson. Purchasing and supply chain management. Cengage Learning, 2015.
Stadtler, Hartmut. "Supply chain management: An overview." In Supply chain management and
advanced planning, pp. 3-28. Springer, Berlin, Heidelberg, 2015.