Supply Chain Fundamentals Analysis and Future Strategy Report

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Fundamentals of logistics and supply chain
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Executive summary
In the commercial fields, the aids to trade are very crucial since without them, no
business. The grants to trade serve a better role in business operations. They include transport
and communication. The significant part of it is the supply chain, which ensures the movement
of goods from the factories to the consumers, among other responsibilities. In this report, it is a
discussion of supply chain fundamentals and appropriate management. The analysis is based on
fast-moving goods and the strategic supply. The main aim of the report is to ensure an advanced
and more efficient supply chain with thirteen supplies reaching four hundred and forty. With
some speculations and challenges to solve as discussed.
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Contents
Executive summary......................................................................................................................... 2
Fundamentals of logistics and supply chain....................................................................................3
Supply chain fundamentals..............................................................................................................3
Fast goods supply key challenges....................................................................................................5
Addressing the current issues on the supply chain..........................................................................6
Recommendations on the future supply chain strategy...................................................................6
Strategy............................................................................................................................................ 7
Supply chain....................................................................................................................................8
The new supply chain structure.......................................................................................................9
New cost analysis............................................................................................................................ 9
Conclusion..................................................................................................................................... 10
References......................................................................................................................................10
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Fundamentals of logistics and supply chain
Supply chain and management requires the responsible person to be updated on the
market demand and all the supply chain fundamentals. The supply chain is a facilitator of the
movement of goods from the producer to the consumer. It, therefore, needs the managing
engineer to take into consideration the available resources and the possible challenges that may
arise as a result of the supply of goods to the consumer 1. A complete and reliable supply chain
must ensure products reach the customer's destination at the right time and in the proper
condition. A supply chain must first employ the following factors for success, and they are
considered as the fundamentals of supply chain 2.
Supply chain fundamentals
The first supply chain fundament is the supply chain strategy. For every supply chain to
meet or not meet a particular market? Demand, it must follow a
specific policy. The procedure of a supply chain entails the following steps. Strategically
removing or installing grocery supply chain links. Pioneering the use of vendor managed
inventory 3. Building strategic partnerships with vendors to drive down prices. Developing
excellent supply chain collaborations. Implantation of the cross-docking in its supply network to
enable inventory reductions. Establishing the strategic use of technology to gain supply chain
efficiencies.
Secondly, is the supply chain network design. According to the multinational Fast-
moving consumer goods, the FMCG company, alongside the strategy it uses to supply products
to the many consumers, there is a crucial seed in the supply chain itself or the supply chain
network design. The main challenges are arising from the supply chain network design, which
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has some deficiencies not reaching the market demand as it has lead time, which is higher than
24 hours. The FMCG company has been operating across Southeast Asia. The company is now
facing significant challenges when managing its portfolio as a result of the poor Network design
as determined and presented by the retailers located across the operational region. If the network
is poorly designed; therefore, there will be a depicted financial downturn which may arise due to
severe operational issues in the related business. The FMCG has to consider the following
criterion for its network to operate and meet customer demand in the region. It must ensure the
following considerations. A continued process of high-powered network design analysis and
modeling. A disciplined approach to the collection, cleansing, and standardization of the supply
chain data. The perpetuation of knowledge surrounding supply chain network design and finally
developing analytical and network design skills within the company’s supply chain teams.
The other consideration is the supply chain service performance 4. The FMCG, after
monitoring the supply chain ordinance, it had been realized an enormous challenge, which is
resulting in the negative cash flow. Therefore, if the right measures are not put into
consideration, there might be a tremendous loss, which might even lead to closure or stockout
costs. The company has not leveraged its services. And hence need to do so as soon as possible
to counteract the noted challenges.
The cost of the supply chain is also a crucial consideration. The shortest chain is mostly
preferred to minimize the cost of supplying goods. If the chain has a maximum of four stages can
be favorable. The cost of the supply chain will always determine the advancement measures to
be put into operation. The FMCG has suffered significant damage, which has led to losses and
financial downturns5. The noticed problem can be solved using the available simple measures.
The measures need to be improvised using terotechnology. Some of the factors which lead to an
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inflation of the poorly managed supply chain can be observed. Some of these factors include the
following. The high transportation costs, procurement costs, inventory and storage cost, waste in
the supply chain, inadequate inventory management, and poor forecast accuracy. The business
needs to expedite the costs of supply.
Fast goods supply key challenges
The following challenges were noticed in the supply chain and therefore needed to be
solved. The estimated lead time should be reduced up to 24 hours by the products, the number of
vehicles used for transportation, vehicle utilization rates, inventory level per DC, demand
fulfillment rates, distribution centers, and transport costs 6. The company is now going to use a
revised channel, and the supply chain should be strategized according to the current situation of
the floods. The faced challenges are going to be solved using a better and sophisticated way of
close monitoring and supervision with a replacement if unrealistic stages 7.
Addressing the current issues on the supply chain
First and foremost is the communication between the fast good’s supply chain strategy
and the external stakeholders. It is imperative to have a client consultation communication within
the supply chain and the stakeholders to ensure a considerate mode of Operation 8. The business
is going to lay down a communication system that will truck both demand, supplied stock, and
even the production process rates. The lead time should be reduced to 24 hours to avoid
cancellation of order goods.
Recommendations on the future supply chain strategy
It is recommended that the company has to put in operation new measures that will
ensure goods are served, and customer demands are met. The first measure to be taken is the
selection of products to deal with in the meantime. It is proposed that the company will deal with
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the first four fast-moving goods which are, shampoo, facial cream, coffee, and detergents 9. The
company is planning to establish a well networked and strategized chain of supply. The network
will entail wharf warehouses. The wharf warehouses will enhance the smooth movements of
goods to where they are needed since they are fast-moving goods. The company will deal with
the floods that have affected the east Java region of Indonesia 10. Due to the above situation and
the decisions, the company will be supplying 440 customers through 13 distribution centers.
The supply chain company has the following fixations with the customers that they
should be supplying 5 tons of each raw material on the first day of every month 10. The
transportation is designed for beginning by transporting goods from factories to distributors and
from distributors to the customers.
The company should ensure with the new measures that have been put into action that the
orders delaying for more than 24 hours can be canceled. The company will ensure there are
wharf warehouses around the areas situated far from the factories11. The company is planning to
ensure that there are offered motorbikes to supply goods to the flood-affected areas, and hence
the products will reach safely. The operators will guarantee reliability. The company will ensure
that the resources are kept in strategic points to meet customer demand for 440 customers. The
direct clients are advised to pick the goods at the right time or earlier to avoid extended lead
time. The company will, therefore, ensure there is clear communication that will be established
and ensure it deals with sure market supply. The company needs to have a demand forecasting
system to ensure that no more failures with consumers. There are already put measures that will
ensure that the company has well-serviced transportation systems and backups that will ensure
no delays in improving reliability. The supply chain network systems are boosted by backup
warehouses, which will be infilled with goods two days before the supplying date. The
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warehouses will be filled with products and up to the distances that can be accessed and
transported with 24 hours to secure order cancellation12.
Comparison of the new proposed supply chain with the former supply chain
Strategy
In terms of the policy, the old supply chain was dealing with too many customers who
were not stable and scattered all over the region. The scattered customers made the company
suffer great looses when dealing with transportation of goods and arrangement criterion. The
transportation was costing the company more than the profits and hence it was not economical.
Now the customers are reduced to 440, which only needs from the company four top fast-moving
goods, which include shampoo, coffee, detergents, and facial cream11. The company is now
working to put a strategized arrangements on the reception of products to be earlier so that the
factory can release them as early as possible and place them on wharf warehouses where they
will be out under time utility. After that, they will be distributed to the customers on the D-Day
and not past 24 hours after orders. The company is expected to ensure the demand forecasting is
done before the supply time. So, the production can be done concerning the available resources.
The old chain had no good demand forecasting and therefore could not predict the demand
during production; hence they suffered losses during its operations, and thus the result has not
been satisfying 13.
Supply chain
Both chains are subject to customer demands. The old chain was reaching to the
customers with diverse and unassured appointments. The company was dealing with too many
products and within a poorly networked area of operation. The company now has had with
summarized operational deals that are brief and direct to the demand. And the relevant goods
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which are stated above. The company currently has 13 distributors who will ensure the
movement of the rights to the customers. The customers are located in different places; therefore,
the transported systems are developed using the proper operating system 14. The arrangements
are going to be managed under good care hence accessible, reaching if the customers. The
company will put into practice that there will be very close supervision of the activities to ensure
no much lead time and minimize the cost of supply by using the appropriate vessels, and we'll
service locomotives. The locomotives will also be monitored to avoid misuse of the resources
and ensure proper allocation of support 15. The company will also bargain on the cost of the items
where possible to ensure the funds are utilized with maximum advancements.
The new supply chain structure
New cost analysis
A B C D E F G H I
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440 customers
feed back to be given back to the suppliers placing orders to be served with five tones
every first day of every month
13 distribution centers
established warf warehouses to improve thw
survice reaching the customers within 24 hours
Factories
intermentiaris application of the top strategy

COSTINGS
PRODUCT Price $
Shampoo 12
Facial
cream
60
Coffee 1.5
Detergent 8
customers 440
Demand 2200
tons
Conclusion
The supply chain management is one of the critical roles of the business operations and
commerce sector. It aids in trade, and hence the goods are taken to the market at the right time to
ensure there are proper utilities. A well-strategized supply chain is an indicator of success and
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customer attraction. The companies can ensure there is a well laid down metrics to ensure
appropriate goods handling and supply discipline.
References
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8. Navarro, S. M.; Sibiya, A.; Nourian, M. M.; Stewart, K. A.; Ottesen, T. D.; Price, R.
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