Shovel’s Multi-Tier Supply Chain Analysis

The article discusses the multi-tier supply chain of a shovel manufacturing company. It covers the upstream and downstream structure, supply chain uncertainty, risk management, and suggestions for improvement. The company can make use of technology enablers such as RFID for tracing of its products.

RUNNING HEAD: SHOVEL’S MULTI-TIER SUPPLY CHAIN
SHOVEL’S MULTI-TIER SUPPLY CHAIN
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RUNNING HEAD: SHOVEL’S MULTI-TIER SUPPLY CHAIN
Executive Summary
In the competitive global economy the supply chain has becomes key factor
competitiveness. Manufacturing companies make use of various supply chain strategies for
driving profitability in their businesses. In the current case analysis, manufacturing of a shovel’s
supply chain is undertaken. Its upstream and downstream supply chain factors have been
analysed. The company manufacturing the product will be able to gain significant advantages or
profitability in case it is able to produce the product and its parts in-house. The company also has
to apply several supply chain strategies such that it is able to generate profitability and
competence in the market.
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RUNNING HEAD: SHOVEL’S MULTI-TIER SUPPLY CHAIN
Table of Contents
SHOVEL’S MULTI-TIER SUPPLY CHAIN.................................................................................1
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Structure of Supply Chain...............................................................................................................5
Upstream and Downstream Structure..........................................................................................7
Supply Chain Uncertainty & Inventory...........................................................................................8
Supply Chain Consideration & Suggestions for Improvement.......................................................8
Conclusion.....................................................................................................................................13
References......................................................................................................................................13
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RUNNING HEAD: SHOVEL’S MULTI-TIER SUPPLY CHAIN
Introduction
The supply chain is controlled by suppliers, factories, distributors, wholesalers and
retailers (Christopher, 2016). The goal is to deliver end products to consumers with useful
means. Consumer’s inconsistency in the product affects a large part of the chain. There are
various factors which impacts the supply chain. Capability to integrate various features and
functionalities within the supply chain will provide considerable amounts of benefits for
businesses. A supply chain in product manufacturing for any company includes raw material
suppliers, supplier of spare parts, then manufacturing processes with raw materials sourced from
the inventory, which is then shipped to final and customers. In the current scope of analysis,
manufacturing of a shovel has been considered. Shovel is a product that is in high demand
across Australia due to its multi-purpose usage (Olhager, 2010). A large number of companies
produce shovels, but in this current analysis manufacturing for a single company has been taken
into consideration. The focus of the company is on its supply chain such that it is able to
manufacture and sell its product at a cost-effective and high profitability rates. A brief discussion
of the company’s manufacturing assembly along with several risks considerations has been
undertaken.
Figure 1: Shovel
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RUNNING HEAD: SHOVEL’S MULTI-TIER SUPPLY CHAIN
Structure of Supply Chain
The company manufacturing shovel through various processes. It is integral to analyse all
these processes that goes into manufacturing for shovel which forms the basis for its supply
chain structure (Council, 2008). The structure will allow determining the multi-layer framework
through which manufacturing of the shovel takes place. The structure of the supply chain for the
Company, which is into manufacturing of shovels, includes the following.
 Demand forecasting: The Company makes use of software for the purpose of demand
forecasting. Demand forecasting is done in accordance with the past trends and predicting
future demands in manufacturing and other industries.
 Supplier of Raw Material: There are three distinct suppliers, which provides raw
materials for the final product, shovel. Supplier for rubber grips, bolts and that for metal
socket and grip.
 Warehouse Management: All raw materials are transported by suppliers and are stored
in warehouse of the company, from which they are taken into batches for manufacturing.
 Production and Assembly: The plant present within the company makes product
assembly by using of various processes. This helps make the final product.
 Inventory Management: Once the final product is made, then the products are shifted
into inventory from where they are transported in batches to various different retailers
and distributors.
 Transportation and Delivery: The product is packed in huge cartons and then shipped
to various retailers and distributors of the product.
 Retailers, Dealers & Distributors: The retailers, dealers and distributors of the products
receive finished products from the company and then sell it to their final customers at a
margin.
 Customers: The final customers of the product are building workers, contractors,
gardeners and retail customers as well.
 Repairs & Returns: The Company provides opportunity for returns and repairs in case
of default products.
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RUNNING HEAD: SHOVEL’S MULTI-TIER SUPPLY CHAIN
The below diagrammatic representation depicts the multi-tier supply chain structure for
manufacturing of shovel for the company.
Figure 2: Multi-Tier Supply Chain Structure
Upstream and Downstream Structure
The activities that are performed within the supply chain comprises of upstream and
downstream processes. The supply chain focuses on the assembly plant and raw material
suppliers, which are not, processed materials at the top of the production chain. For example,
metals such as aluminum and copper are raw materials. At the beginning of the deal there could
be managers who study these materials for ordering (Zhou, Benton Jr, Schilling & Milligan,
2011). Assume the materials are good but not manual. The upstream processes comprises of all
processes that is required for the final product in reaching the market. It encompasses
contractors, dealers, suppliers, manufacturers and so on. Dealers, suppliers and sales outlets,
such as wholesalers and retailers, are far from being merged. An important consideration is the
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RUNNING HEAD: SHOVEL’S MULTI-TIER SUPPLY CHAIN
inventory. Retailers, wholesalers and distributors try to provide the necessary business
opportunities to make orders to their customers. When the operation is slow, distributors deliver
orders on time. When the command cannot be performed in a timely manner the operation ends.
In downstream customer supply chain analysis is conducted, whereas upstream the supplier’s
supply chain. The suppliers for raw materials to the company, further receives their supplies
from certain suppliers. Such as the supplier providing the company with bolts and other metal
parts gets raw material iron from some supplier. The supplier which provides the rubber handle
gets its rubber from another supplier. Thus, the company needs to ensure that information flows
dynamically through its entire supply chain processes such that it is able to manufacture without
much interruptions. Integration of upstream and downstream supply chain is especially integral
in case of a multi-tier supply chain framework. The company needs to identify and diagnose
some of the uncertainties and risks which might disrupt its supply chain processes.
Supply Chain Uncertainty & Inventory
Supply chain process and demand are uncertain and has a significant impact on
production function. Uncertainty grows through the network and leads to inefficient processing
and added disability. This uncertainty is based upon clients and number of products. The spread
of uncertainty stimulates the decision to create protective strategies over time, capacity or
inventory to avoid poor performance. The definition of the temporal uncertainty chain is based.
Five requirements for effective system management as per De Leon (2000). If one or more of
these requirements do not exist manufacturers can make personalized decisions on the supply
chain. Experience the uncertainty that is ineffective as the administrative system is intended for
similar presentation indicators to direct the supply the chain in the right direction. It is necessary
to evaluate future stocks. Any inflated stock need to be evaluated and then appropriate demand
forecasting has to be formed. Information on the environment and the current time chain way can
provide significant advantage to the supply chain. Data processing should be sufficient to
provide the ability to manage environmental and environmental information. State of the
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RUNNING HEAD: SHOVEL’S MULTI-TIER SUPPLY CHAIN
production chain needs to be determined as well. In order to guide the controlled system to the
supply chain managers need be able to evaluate alternative strategies. This requires a model
system to show the connections of an available redesign. Variables and performance indicators
have to be determined as well for the wide-ranging monitoring measures should be sufficient.
Supply Chain Consideration & Suggestions for Improvement
The entire supply chain that has been depicted in the above processes has to be taken into
consideration (Foster Jr, 2008). Then possible strategies that might allow the company overcome
its supply chain risks have to be adopted by the company. Some of the key supply chain
considerations that the company has to undertake include;
o Bullwhip Effect: In a growing supply chain on average, there are between six and seven
layers between end customers and raw material suppliers. Everyone strives to protect
themselves from losing customer inventories and orders by providing additional supplies
to protect themselves from changing supply chains. This results in large reserves of up to
six months between customers and raw material suppliers. Positive effects ultimately lead
to uncertainties for manufacturers with higher production, so that estimates that lead to
higher inventories are less accurate (Sarkis, Zhu & Lai, 2011). Every industry especially
in manufacturing of shovel has unique supply chains, warehouses and complexities. After
standardization, the number of inventions can fall from 10% to 30% and the case between
15% and 35%. In order to overcome bullwhip effect, the first and most important step to
improve is to identify the existence of a whip effect. Many companies do not realize that
there are large volumes throughout the supply chain. View items that are not actively
saved Supply chain managers can investigate sources of excess inventory, find excuses,
and set standards. Another strategy includes improving the warehouse planning process.
Inventory planning is a good combination of historical demand trends, future demand,
new product launches, and longer product cancellations. The adjustment of the guarantee
deposits and the minimum inventory must be duly assessed and corrected. Stocks are
available throughout the network. The storage system and the early warning should be
used in case of large deviations from the given storage standards. Improve the resource
planning process. Purchasing managers often order in advance. Raw material planning
must be directly related to the production plan under general production conditions. The
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RUNNING HEAD: SHOVEL’S MULTI-TIER SUPPLY CHAIN
basis for a large number of suppliers to improve delivery and delivery reliability. This
leads to a decline in raw material stocks. Collaboration and information exchange
between managers. There may be contradictory goals between purchasing managers,
production managers, logistics managers and sales managers. By prioritizing shared
connections, the evaluation of performance goals improves collaboration between
different departments. Regular and structured departmental meetings will also improve
information sharing and decision-making. Optimize minimum order quantities and offer
stable prices. Some products have a high minimum order quantity for end users. Create
more order templates. Prices are stable for a year, not frequent and predictable issues.
Figure 3: Bullwhip Effect
o Risk Management: Risk management in the chain supply chain addresses the risk of
complex and dynamic supply and demand networks. As in this case, there are
considerable risks identified across multi-tier systems within the supply chain. Risk
management in the supply chain involves presentation methods for managing daily and
unusual supply risks based on ongoing risk assessment to reduce vulnerability and ensure
continuity. In other words, SCRM should use risk management tools, supply chain
companies or one to solve the risks and uncertainties that arise or affect the chain or
delivery process. SCRM attempts to reduce supply chain vulnerability with a coordinated
global perspective that includes the actors supply chain that identifies and identifies risk
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RUNNING HEAD: SHOVEL’S MULTI-TIER SUPPLY CHAIN
factors for transmission errors. The supply chain consists of unpredictable natural
falsification risks that ensure quality, safety, vitality and productivity. Risk management
plans may include transport, data security, and finance and risk management. The
ultimate goal is to ensure continuity in the supply chain in the event of a scenario that
would otherwise have fallen from normal transactions and profitability. Sometimes,
supply chain optimization, such as supply chain optimization, may be the risk of
contingency plans that would otherwise reduce overall supply chain risk. It is also more
common for companies, especially manufacturers, to use a good software vendor to
integrate all levels in the supply chain. This method increases transparency, reduces costs
and improves operating efficiency.
o Risk Pooling: The combination of risks begins in the chain of supply chain development
and management. According to the statistical concept, which shows that demand
volatility is declining with increasing demand, place, product, or time can be added
(Wang, Chan & Pauleen, 2010). It is a statistical expression that shows that aggregation
reduces differences and uncertainty. Adding an app to multiple locations may most likely
meet the customer's request to resolve additional issues. Reducing volatility will lower
security inventory and reduce average inventory. Thus, through risk polling the demand
for shovels can be aggregated across varied locations.
o Sustainability: Supply chain management is an indispensable part of a business
operation. Knowing the environmental, social and economic impacts and the continued
existence of its suppliers and customers is becoming more commonplace as all industries
are on their way to a more sustainable future. It is likely that the president of the
government is the driving force behind this change, but has tried to regulate the supply
and livelihood business. One of the ways in which a company works is the contempt for
the entire product process, which uses raw materials that are taken over by the entire
process. In the current case, the company can make use of raw materials sourced in
sustainable manners. Moreover, the company can optimize use of its transport in bets
possible ways.
o Quality Management: Quality management is essential in supply chains. As any
changes or disruptions into the raw material might affect the final product’s quality. This
might lead to customer dissatisfaction, who in turn might want to sway away to another
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RUNNING HEAD: SHOVEL’S MULTI-TIER SUPPLY CHAIN
company’s shovel product. As competition in Australian companies producing shovel is
immensely high, consumer switching costs is low.
o Technology Enablers: The Company can make use of technology enablers such as RFID
for tracing of its products. RFID technologies are very well known and have immense
applicability across manufacturing industries. In the current scope, it can allow the
present company y to save its costs by tracking customer orders or in stopping production
at any time.
o Supply chain management: Managing of the entire supply chain along with logistics is
the key to having effective multi-tier supply chain systems. In the current production
management, the company needs to design product in a manner such that it is able to
manage across various processes within its supply chain framework.
o Supply chain integration: Integrating downstream and upstream supply chain is the key
to success for any supply chain. In manufacturing and marketing of shovel, the company
has to ensure that its supply chain processes are integrated across all processes and
people. This can be undertaken through dynamic exchange of information, which can
easily be implemented by the company.
o Collaborative planning and forecasting: Through collaborative planning and
forecasting along with various participants in the supply chain, supply chain managers
can gain significant advantages. This would allow understanding strengths and
weaknesses within each process, in turn allowing for scheduling by including delays, cost
overruns and so on.
o Supply chain performance: Determining supply chain performance is of utmost
importance. In the current state, the company has to determine whether its supply chain is
able to respond and react to customer demands or not. It will allow the Company is
designing and establishing a dynamic supply chain.
o SCOR Model: The SCOR (Supply Chain Operations Model) is a management tool for
assessing, improving and reporting supply chain management solutions in companies,
companies and customers. The model describes the business processes that are necessary
to meet the needs of the customers (Li, Su & Chen, 2011). It helps to explain processes
throughout the production chain and serves as a basis for optimizing these processes. The
SCOR model was developed by the Supply Chain Advisory Committee which includes
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RUNNING HEAD: SHOVEL’S MULTI-TIER SUPPLY CHAIN
70 leading manufacturing companies around the world. This is called the most promising
model of the temporary strategic decision-making chain. The model combines business
concepts in terms of redesign, benchmarking and measurement. This structure applies to
five types of security chains: plans, origin, production, delivery and return. Depending on
the delivery service, this process varies depending on the supplier to the customer plan.
Implementing SCOR model for the current product will include the following;
This first phase involves planning and managing demand and efficiency. Elements include
resource balancing with requests and setting chains (Millet, Schmitt & Botta-Genoulaz, 2009).
Resource planning has to take place efficiently. Describing ways of dealing with the warehouse,
the network provider, suppliers and suppliers. At the action stage production is the focus. The
production phase includes production, packaging, layout and publication. This includes the
management of the production network, equipment, equipment and transport. Confirmation,
maintenance of my administration without delivery. This includes the evaluation of customer
orders and the receipt of the product. This section covers all materials, consumables,
consumables, product life cycles, and import and export requirements. Return of the product
includes removing packages. The purchases relate to the rules of the Company regarding the
repatriation of stocks, goods, supplies and legal requirements have to be well-defined. The
SCOR process goes through different parts of both processes so that the company can analyze
the supply chain. This offers companies the opportunity to develop a share network. This process
helps companies understand how suppliers, companies and customers repeat 5 steps.
Conclusion
Analysing the multi-tier supply chain for manufacturing and production of shaft, it can be
said that the company in order to get maximum possible profitability has to integrate its
processes across upstream and downstream supply chain processes. Moreover, the company has
to overcome the possible risks facing its supply chain that might disrupt one or any of its
processes. Such disruption in processes might lead to and result in loss in profitability, there
SCOR model application can provide the company with substantial benefits.
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RUNNING HEAD: SHOVEL’S MULTI-TIER SUPPLY CHAIN
References
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