Analysis of FastGood Strategic Supply Chain Network Design

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Submission Number 1
Analysis of FastGood Strategic Supply Chain Network Design
Existing Supply Chain Strategy
FastGood operates as an FMCG (Fast-Moving Consumer Goods) across South-East
Asia, as illustrated in the regions that supplies are made that include Indonesia, Thailand, and
Malaysia. The entity has been experiencing increased challenges in the management of its
business portfolio, which has a certain number of retailing representations located across the
supplying regions. For instance, the company’s associated policy and its supply chain
network design lacks support for the downstream and upstream stakeholders such as the
logistic providers and suppliers. Thereby, resulting in the general financial decline as
illustrated in the 52-week financial spreadsheet on supplies distributed to the main customers
of the four ingredients (Coffee, Detergent, Facial cream, and Shampoo) in Jakarta, Bangkok,
Surabaya, Medan, Bandung, and Khota Bharu. Furthermore, the company's physical supply
chain entails 13 distribution centers and 440 customers, and the company focuses on the
above best selling products to enhance their supply chain network across these regions.
Moreover, the above is also attributed to the product’s reasonable long-lead time and stable
market demand.
A clear example is illustrated with the general decline of supplies being undertaken
over time since one observes that in one week, a total of (893+505+277+333=2008) in
Jakarta compared to the 980 or 916 or 967 supplied to Raub, Kampong Pangkal Kalong and
Tual customers respectively. The five tons, when calculated with the above value one,
observes that a total of $80,320,000 (200/5 * $200,00) was used on the above sample data.
On the other hand, one finds that the other regions would also experience declining changes
in the total pays that were made to the different areas due to the decline in supplies. Another
significant aspect is transportation, where one observes that the regions that had low

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Submission Number 2
quantities described above were located within the further latitude and longitudinal scales,
indicating that the 13 DCs that were located within the 1st leg, 2nd leg, and inter-site were
merely utilizing resources by covering other regions. Further indications point to their $100
shipment cost and $0.5 per kg/km product-distance based policy.
Moreover, the inventory carrying costs at the distribution center was 5% the product
selling price per case per month, indicating that (5/100 of $80,320,000=$816,000) was spent
on the initial week. The replenishment of the 3,500 cases per week was also included as an
inventory policy. Therefore, from the above analysis, the key challenges facing the
company's supply chain structure entailed inventory levels per distribution client, demand
fulfillment rate, transportation and distribution center costs, vehicle utility rates, number of
vehicle transportation utilized, and ELT (estimated lead time) by orders and products.
Recommended Supply Chain Network Design
With the rapid development of information technology, more and more diversified
and personalized customer requirements, and higher and higher requirements for delivery
time, market competition presents new characteristics: competition between enterprises has
transformed into competition between supply chains. And quality-based and cost-based
competition has transformed into time-based competition. Supply chain management based
on time competition has become the leading strategy of enterprises (Omar, et al 2012). The
responsiveness and response speed of the supply chain depend on the delivery time between
all links in the supply chain. Reducing delivery times has become the focus of supply chain
management and business operations. Examples of the operation of the supply chain show
that not all companies benefit from the reduction of delivery time, and many suppliers have
fallen into the trap of time because of excessive compression of delivery time. Regardless of
whether it is directly facing customers or downstream manufacturers or retailers, in a time-
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Submission Number 3
based competition environment, how to adopt appropriate delivery strategies to increase
profits while responding to downstream demand has become an urgent issue for suppliers. At
home and abroad, the research on lead time is mainly concentrated in the field of lead time
management. Existing literatures have studied lead time management in terms of the impact
of lead time on supply chain performance, influencing factors of lead time, and lead time
decision-making, and have also proposed some important theories and methods (Rimiene &
Bernatonyte, 2013). However, these studies mainly focus on the analysis of the effect of lead
time length and fluctuation on supply chain performance and the factors affecting lead time,
and relatively few studies on lead time decision-making (Petridis, 2015). In addition, most
previous researches started from the profit maximization of the party with decision-making
power, but seldom considered the impact of lead time decision on the supply chain's supply-
demand revenue or the customer's waiting cost. The lack of supply chain-based model and
downstream buyer selection. The analysis of lead time decision analysis also lacks the study
of multi-delivery strategies (Otim, et al 2012).
One recommended supply chain strategy can be the application of Just-in-Time
program that entails just supplying the right amount of produce at the right amount of time
utilizing the right amount of resources and labor by ensuring that communication and
network systems are in place and working (De Bernardi, & Azucarl, 2020). Furthermore,
agility in mass servicing of supplies is another method that can be applied within FastGood to
hasten the process of their deliveries. From, the above analysis one observes that a
combination of both agility and Just-In-time applications would be the best method of
mitigating the challenges since the company will not have to rely on a single strategy to align
to the transport tariffs and market changes (Kumar, Garg, & Agarwal, 2019). As earlier
observed, the inventory policy and inventory levels per distribution client incurred the entity's
numerous revenues.
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Submission Number 4
Furthermore, the marginal costs have also not been included since the demand
fulfillment rate had also been an issue in the company (Nosratabadi, Mosavi, & Lakner,
2020). Application of both Just-In-Time applications and coordination will assist the
company in mitigating the key challenges that had been illustrated in the initial supply chain
strategy. In an attempt to curb the maximum acceptable delivery lead time, the company
would apply Just-In-Time methods to ensure that the right number of products are distributed
to the distribution clients to reduce the amount incurred by the 2nd leg transportation costs.
Coordination can also be applied in aligning the company to the transportation tariff and
delivery changes that entail reducing transportation loads, thereby reducing the scales being
transported. Vehicle utility rates can also be included as a coordination issue, and the strategy
can assist in reducing these impacts by engaging the consumers and companies. The above
process can be manifested by checking the coordinates from the spreadsheet and maps and
noting the clustered populations then assigning a transport method that would best fit the
destination both financially and secure-wise. Furthermore, the travel measures put by
Thailand led to transport restrictions, thereby leading to checking into other cheap and
affordable means of transport.
There is a need to address information asymmetry. The supply chain stems from the
fact that enterprises only seize their core competitiveness, outsource the businesses that they
are not good at, and hand them over to more professional companies as agents for production.
The outsourcing relationship is essentially a principal-agent relationship (Openshaw &
Craddock 2012). The principal and the agent are independent legal entities and have their
own interests. In order to maximize their own interests, they handle information
economically. Such cases often result in what is termed as information asymmetry. With
information asymmetry, it is easy to produce a kind of non-cooperation and non-efficiency in
a certain sense, which is mainly reflected in two aspects: moral hazard ( asymmetric

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Submission Number 5
information after the fact ) and adverse selection ( asymmetric before the fact Information )
(Neureuther, 2012).
Contingencies surrounding the existing and proposed supply chain strategies
Contingencies surrounding both the current and proposed supply chain strategies
entail the mitigation of unpredictable calamities. The above measures are impossible to curb,
although applications of specific measures such as testing of hypothesis and probability
would assist in addressing some of the issues. Both Just-In-Time and adoption of
technological tools rely upon technological advances to manifest these changes. For example,
Just-In-Time applications require a connected and networked supply chain that applies the
Information Technology Systems and RFID tags to track their products. The above measure
could incur an increased cost to the company on the mitigation of risks such as security
measures (Zhang, Gong, Brown, & Li, 2019). Moreover, technological tools could not
possibly curb the calamities that are unexpected, particularly those experienced in East Java
in Indonesia and Thailand. The most appropriate contingency plan would entail intertwining
both the Just-In-Time applications to coordination in an attempt to curb these changes in the
market and also combine these supply chain strategy designs to the technological
advancements, thereby mitigating the losses (Pettit, Croxton & Fiksel, 2013).
The company ought to bear in mind the fact that the status of the supply chain
logistics operation actually reflects whether the supply chain is smooth and effective and
whether the process can add value. The logistics balance and balance in the system have a
great impact on the efficiency of the enterprise process. According to the constraint theory,
the supply chain can be regarded as a network system composed of a series of process
activities with internal connections. The optimization of the overall logistics performance
depends on the weakest link in the supply chain. This is the " bottleneck " in supply chain
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Submission Number 6
logistics In order to optimize the performance of supply chain logistics, we must start from
the weakest link in order to obtain significant improvement. Therefore, to improve the
logistics performance of the entire supply chain, it is necessary to find out the bottlenecks
existing in the supply chain logistics, analyze the causes, evaluate the bottlenecks, eliminate
the bottlenecks, and form a continuous and continuous state of continuous improvement
(Harrington, Boyson & Corsi. 2011). With regard to the bottleneck of logistics, many
scholars have explained it, but most of these studies simply point out some obstacles and
problems in the process of logistics operation, rather than analyzing the bottleneck from a
systematic perspective. In the strict sense, the " bottleneck " should be the weakest link in a
system composed of multiple links (Janvier-James, 2012). Whether in logistics or the supply
chain, the bottleneck problem should be analyzed from this perspective.
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Submission Number 7
References
De Bernardi, P., and Azucar, D., 2020. Innovative and Sustainable Food Business Models.
In Innovation in Food Ecosystems (pp. 189-221). Springer, Cham.
Kumar, M., Garg, D., and Agarwal, A., 2019. Cause and Effect Analysis of Inventory
Management in Leagile Supply Chain. Journal of Management Information and
Decision Sciences.
Nosratabadi, S., Mosavi, A., and Lakner, Z., 2020. Food Supply Chain and Business Model
Innovation. arXiv preprint arXiv:2001.03982.
Zhang, C., Gong, Y., Brown, S., and Li, Z., 2019. A content-based literature review on the
application of blockchain in food supply chain management.
Harrington, L. H., Boyson, S. and Corsi. T. M. (2011). X-SCM: The New Science of X-Treme
Supply Chain Management. New York, NY: Routledge.
Janvier-James, A. M. (2012). A New Introduction to Supply Chains and Supply Chain
Management: Definitions and Theories Perspective. International Business Research
5 (1): 194–206.
Openshaw, J., and Craddock A. (2012). Ready, Set, Go – London. Monocle 6 (54): 77–82.
Neureuther, B. D. (2012). Excellence in supply chain and logistics management. Journal of
Marketing Channels, 19(2), 99-100. doi:10.1080/1046669X.2012.667759
Omar, A., Davis-Sramek, B., Myers, M. B., & Mentzer, J. T. (2012). A global analysis of
orientation coordination and flexibility in supply chain. Journal of Business Logistics,
33, 128 – 144. doi:10.1111/j.0000-0000.2012.01045.x

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Submission Number 8
Otim, S., Dow, K., Grover, V., & Wong, J. (2012). The impact of information technology
investments on the downside risk of the firm: Alternative measurement of the
business value of IT. Journal of Management Information Systems, 29, 159-193.
Petridis, K. (2015). Optimal design of multi-echelon supply chain networks under normally
distributed demand. Annals of Operations Research, 227(1), 63-91.
Pettit, T. J., Croxton, K. L., & Fiksel, J. (2013). Ensuring supply chain resilience:
Development and implementation of an assessment tool. Journal of Business
Logistics, 34(1), 46-76.
Rimiene, K., & Bernatonyte, D. (2013). Supply chain management trends in the context of
change. Economics& Management, 18, 596-606.
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