Supply Chain Management

This document discusses the concept of supply chain management and its importance in the global business arena. It covers topics such as integrated supply chains, flexibility, the purchasing process, supply chain disruptions, customs clearance, INCOTERMS, and material handling equipment. The document provides valuable insights into the various aspects of supply chain management and its impact on organizations.

Running head: SUPPLY CHAIN MANAGEMENT 1
Supply chain management
Institution
Student
Course
Date

SUPPLY CHAIN MANAGEMENT 2
Supply Chain Management
Part A
Question 1
During this era of still competition in the global business arena amongst supply chains, the
feasibility of an organization is gradually more dependent on administration’s ability to integrate
the corporation’s networks of relationships. Professionals are now defining supply chain
management as the integration of core business procedures, from raw material suppliers through
final consumers who offer information, services, and products that add value for all other
stakeholders. An integrated supply chain uses a developing set of skills, collection of tools, and
techniques for maximizing and organizing core relations, functions, and processes both within
the Original equipment manufacturers (OEMs) and amongst its consumers and suppliers to
capture and enable synergy opportunities. Global Supply-Chain Management (GSCM)
emphasizes on an integrated supply chain wherein products and services are distributed at trans-
national Corporation’s global networks to optimize profit and minimize wastes (Lambert, 2008).
The Global Supply Chain Management Forum (GSCMF) framework focuses on six areas of an
integrated supply chain namely, supply-chain coordination, operations management, logistics
management, competitor orientation, supply management, and customer orientation (Mishra,
2010). According to the GSCMF framework, a successful integrated supply chain must comply
with various global regulations initiated by different non-governmental organisations such as
The United Nations.
Question 2
Organizations that have implemented an integrated supply chain augment their flexibility
capacities to adjust to occurrences within the industry, competitors’ actions, and client

SUPPLY CHAIN MANAGEMENT 3
requirements. The capability to be flexible and accommodate various events is very pertinent in
any competitive sector (Tiwari, Tiwari, & Samuel, 2015). With an integrated supply chain in
place, a company is more flexible and can act more sinuously and swiftly than would be possible
with an orthodox logistics framework. A flexible integrated supply chain is both adjustable and
responsive. There are two types of integrated supply chain flexibility, namely, micro and macro
flexibility. Kassim, Abdullah, & Udin, (2014) refer micro flexibility as how speedily a particular
supply chain in an organization can identify and act in response to any sort of short term business
subject matters. An entity with an integrated supply chain which depicts a higher scale of micro
flexibility is able to deal with unprompted or unexpected opportunities or difficulties more
swiftly and efficiently, for example the late arrival of a distribution lorry, a consumer’s demand
for special handling or packaging. In contrast, macro flexibility is used to refer to wider
organizational policies, programs, and strategies. A business entity which has macro flexible
supply chain coordination is able to alter existing supply chains or come up with fresh supply
chains to adjust to varying customer demands with much ease. A flexible integrated supply chain
is demand driven (and can for that reason react to short-term changes in consumer demands) and
it can develop and enhance with time to fulfill ever-changing business events. One good case in
point of this flexibility is Just-in-Time method, wherein just enough shipment is used to fulfill
every day demands. This capability reduces the amount of warehouse space utilized and aids an
organization in keeping expenditures low. Whilst very valuable to a corporation’s expenses and
warehouse space, Just-in-Time approach particular can be disadvantageous if the supply chain is
not responsive or efficient enough; restricting inventories and generating delays and in the end
costing the corporation more than the savings are worth.
Question 3

SUPPLY CHAIN MANAGEMENT 4
Just like any other process in the supply chain management, the purchasing process composes of
a number of activities or steps. Every step takes information, processes it and converts in to an
output to feed the subsequent activity or phase (supplychainmechanic, 2010). Whilst the
purchasing process might differ from firm to firm, the primary fundamentals remain similar.
A process in context
Input Output
Requisition Send order
The following are the fundamental steps in the purchasing process:
1st step: Requisition or request to purchase: This particular steps deals with identification of
the need or requirement. The purchaser identifies what to purchase, how much to spend on it,
and when is needed for delivery. There are two primary types of requisition, namely, manual
requisition, created on a form or document and an automatic one, created via an Enterprise
Resource Planning (ERP) system. This requisition phase goes through an approval process
wherein authorization is provided to buy the item (or not!).
2nd step: supplier selection: Purchasers might readily be aware of which supplier to acquire the
items from. If not, supplier selection is conducted through a tender process to identify a suitable
supplier, cost and lead time.
Activity
Find Supplier Raise Order

SUPPLY CHAIN MANAGEMENT 5
3rd step: procure order: At this juncture, a purchase order is dispatched, either electronically or
through a paper copy, to the supplier informing the supplier of the intention to buy. This
purchase order identifies the item being acquired, its cost, and the required quantity. It as well
identifies the delivery address and terms and conditions which have something to do with the
order.
4th step Fulfillment: The supplier dispatches the requested items to the purchasing organization.
Lead period may be needed to permit the supplier to produce the item(s).
5th step Goods receipt: The moment the item arrives at the purchasing organisation normally
undergo some type of items receipting procedure whereby they are scrutinized to make sure that
they match what was requested and whether they are in the correct quality.
6th step: Supplier payment/invoice: During the dispatch time, the supplier normally issues an
invoice – which either goes together with the procured items or separately. This is received by
the finance department of the organization – processed and paid (presuming the delivered items
meet the needs of the buyer).

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The above steps can be represented diagrammatically as follows:
Requisition or request to purchase
supplier selection
Procure order
Fulfillment
Goods receipt
Supplier payment/invoice
Question 4
The 21st century has been remarkable for considerable supply chain disruptions which have
heightened vulnerabilities for individual corporations as well as for whole industries
internationally. One amongst main supply chain disruption risks is natural calamities such as
tsunamis, adverse weather changes, floods, and landslides among others. The 2010 volcano

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eruption in Iceland that affected very many air travelers and disrupted time-sensitive air
consignments in 2010 is a good example of this risk. Also, in 2011, floods affected the
Thailand’s supply chains of computer manufacturers thus affecting organizations who had
initiated supply treaties with companies in this country. Today, managers are obliged safeguard
their supply chains from severe and costly weather-related disruptions by mitigating this risk.
One of the tactics which deemed viable in handling these crises is enhancing supply chain
resilience and efficiency. The primary goal of supply chain efficiency is enhancing corporation’s
financial performance while that of supply chain resilience is mainly risk reduction. Though both
entail risk mitigation, recurrent perils (for example fluctuations of demand that managers are
obliged to take in hand in supply chains) necessitate organizations to concentrate on efficiency in
developing how they match demand and supply, whilst disruptive risks necessitate organizations
to build resilience in spite of additional costs. Disruptive hazards often have a domino impact on
a company’s supply chain: An effect in a particular area — for instance, a fire in a given supply
plant — moves to other areas. A risk like this one cannot be mitigated successfully by hoarding
supplementary parts inventory without a considerable loss in cost-efficiency. In contrast,
recurrent hazards like fluctuations in supply or demand tend to be quite independent. They can
usually be mitigated through good supply chain management practices, for example having the
right inventory in the right place and at the right time (Chopra & Sodhi, 2014)
Part B
Question 5 (a)
Owing to the tremendous increase of internet shopping, people of New Zealand are importing
products from out of the country by use of international and postal courier services. Regardless

SUPPLY CHAIN MANAGEMENT 8
of their country of origin, any goods entering New Zealand must go through a customs clearance
procedure since all of them are liable for Customs duties and charges. Products mailed into New
Zealand might be subject to import duties that are determined on the Customs value of the
products in NZ dollars. They might as well be subject to Goods and Services Tax (abbreviated as
GST) of 15 percent, in line with their Customs value, and including the postal/courier and duty
charges (if any). A client code might be needed if products being imported are amounting to a
value equal or more than NZ$1,000. This client code refers to a unique number which is used to
identify individual exporters and importers. The codes are only issued at New Zealand entities
like registered NZ corporations. They are normally needed as part of the export and import
entrance preparations for deliveries amounting to a value equal or greater than NZ$1,000.
Another thing is that in the customs clearance procedure, when the total revenue owed on any
given importation is less than $60 Customs, no duty or GST is collected. Nevertheless, this
exemption provision of $60 provision does not take effect on tobacco or alcohol goods. These
types of products attract GST and duty regardless of their quantity. Once the goods have arrived
in New Zealand, the owner is contracted by the shipping firm to arrange clearance. For postal
products, he/she receives either an evaluation notice notifying the amount owed, or a letter
asking him/her to produce further information or arrange clearance. When an evaluation notice
has been send, imported products are dispatched as soon as the owner pays the charges (New
Zealand Government, 2017).
Question 5(b)
The New Zealand Customs Clearance procedure can be illustrated as follows:

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1.
Complete An Import
Entry
YES
NO
NO
YES
3.
Pay the Total
Revenue Payable
2.
Get Customs
Clearance
4.
Request Safety
Clearance
Requires
Safety
clearance
Inspection
Testing
Required
5.
Give more Information
6.
Get products tested and
evaluated
7.
Get products
dispatched

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Question 5©
There are a number of documents needed for importing products in to New Zealand. These
documents are listed below:
 Commercial Invoice
 Industrial License if any
 Import License
 Bill of Lading / Airway bill
 Technical write up
 Insurance certificate
 Test report if any
 Central excise document if any
Question 6
INCOTERMS refer to are global commercial terms that are applied in the assignment of
responsibilities and costs between sellers and buyers globally. They are very sometimes mistaken
and treated as delivery terms. These INCOTERMS are categorized into 4: Category E, category
F, Category C, and Category D. The relevance of these INCOTERMS in the Global Supply
Chain cannot be underestimated. They for example help in reducing risk by getting rid of the
challenge of language barriers and meanings of terms. The use of INCOTERMS removes
language inconsistencies by providing all parties involved in the supply chain similar meaning of
certain terminologies within a trade contract (Veenstra, 2019). Consequently, the risk of
challenges in the course of the delivery is curtailed because every party clearly understands
his/her roles in performing trade under the given agreement.

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Question 7
The phrase ‘material handling equipment’ comprises of a dissimilar range of storage equipment,
tools and vehicles used for moving and storing goods in warehouse. Commonly used material
handling equipment includes industrial trucks and Bulk Material Handling Equipment. Industrial
Trucks are transportation devices used to move materials from one spot to another (Atieh et al,
2016). Common industrial trucks in warehouses include hand trucks, walkie stackers, platform
trucks, AGV, and a sideloader. Hand trucks are made in such a way to make the transportation of
small items easier. Pallet jacks are used for the transportation of inventories that are stacked on
pallets. Walkie stackers are basically designed like pallet jacks though the stackers are
motorized. The walkie stackers are used to transport small capacity items. Platform trucks are
ideal for small-to-medium sized operations and they offer speedy logistical solutions to large
firms. Order Pickers are used to retrieve and replace stacked stuff from a height ranging from 10-
30 feet. Sideloader is used to load and unload from the side section of a machine and it is best in
narrow doorways and aisles. The AGVs are mobile ‘robots’ which follows indicators in the floor
such as wires and markers by use of cameras, magnets or lasers for guidance. Bulk Material
Handling Equipment, on the other hand, move a large number of items such as conveyor belts,
bucket elevators, and grain elevators. In a conveyor belt, items are placed at one end of the belt
and then transported to their place of storage with ease. Bucket elevators are motorized devices
used to transport loose items vertically by scooping them and dispersing them at the top. Grain
elevators scoop grainy items at a lower level and deposit them safely at the required storage
facility.
Question 8

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Whenever designing and laying out a warehouse floor plan, there are various things to put into
consideration, from warehouse racking to allowing for ample space for equipment such as foot
traffic and forklifts. One of the key aspects to put into consideration whenever laying out
warehouse is aisle width since it affects the way machines and people shall maneuver throughout
the warehouse space. Thus they help to maintain safety of people using the warehouse and also
wear and tear of machines maneuvering around it (Roodbergen, Vis, & Taylor, 2015). The aisles
between shelving are primary work areas because they ensure there is smooth flow of operations
inside the warehouse. They enable workers to maneuver equipment to stock and move items
from one corner to another for a well-arranged storage. In present day’s booming economy, a lot
of business organizations are realizing they are deprived of enough space to house enough
inventories to meet consumer’s ever-increasing demands. Aisles enable them to make optimal
use of the available space and store ample inventories to satisfy any number of customers.
Sometimes the width of the aisles may need to be adjusted optimize floor space and increase
efficiency (Ackerman, 2012).

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Ackerman, K. B. (2012). Practical handbook of warehousing. Springer Science & Business
Media. Boston, MA : Springer US Publishers.
Atieh, A. M., Kaylani, H., Al-abdallat, Y., Qaderi, A., Ghoul, L., Jaradat, L., & Hdairis, I.
(2016). Performance improvement of inventory management system processes by an
automated warehouse management system. Procedia Cirp, 41, 568-572.
Chopra, S., Sodhi, M., S. Reducing the Risk of Supply Chain Disruptions. MITsloan
Management Review. Retrieved from: https://sloanreview.mit.edu/article/reducing-the-
risk-of-supply-chain-disruptions/
Kassim, U., Abdullah, S., & Udin, Z. (2014). Flexibility of Supply Chain in Industrialised
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Roodbergen, K. J., Vis, I. F., & Taylor Jr, G. D. (2015). Simultaneous determination of
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Supplychainmechanic, Published on Sep 13, 2010. Key steps of the Purchasing Process.
https://www.youtube.com/watch?v=Ph4tr_RtoJM

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Tiwari, A. K., Tiwari, A., & Samuel, C. (2015). Supply chain flexibility: a comprehensive
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