Supply Chain Systems and Modelling - Critical Issues and Key Performance Measures

This article discusses the critical issues and key performance measures in supply chain systems and modelling through the case study of DFS, a leading furniture manufacturing company in the UK. The article highlights the high inventory level, low customer service level, high transport cost, and inappropriate utilization of performance measures as the critical issues faced by DFS. The key performance measures discussed in the article include total distance travelled and delivery on time.

SUPPLY CHAIN SYSTEMS
AND MODELLING

Table of Contents
OVERVIEW....................................................................................................................................3
TASK 1............................................................................................................................................3
Highlighting critical issues within the case study and key performance measures that will
consider for analysis....................................................................................................................3
REFERENCES................................................................................................................................1

OVERVIEW
Supply chain management refer to procedure of managing flow of products and services
that aid to increase organizational productivity and performance level, even better than last few
years or months. Within an organization, supply chain system play significant role in form of
increasing profitability and improving organizational performance successfully. This process
contributes to increase organizations capabilities, either small or large. The current assignment
will be based on specific organization case study such as DFS, which falls under the leading
furniture manufacturing companies in the UK. The study will explain critical issues within case
study and key performance measures that will be considered for purpose of analysis.
TASK 1
Highlighting critical issues within the case study and key performance measures that will
consider for analysis.
DFS is one of those furniture retail organizations in the United Kingdom, that effort to
provide quality products to customers, after considering their needs and expectations. Sofa beds,
dining tables & chairs, leather, fabric and other types sofas, are included in list of its product
portfolio. The aim of this company is to increase customers satisfaction level, in term of
designing and developing the best goods. Its mission is to strengthen business market position
that play important role in the context of organizational success and unpredictable growth in
manufacturing industry. The size of DFS is vast as it has established more than 128 outlets,
where people reach easily and chose the product that they want to purchase. It may have specific
supply chain that is formed in an appropriate structure, which include key aspects and these are;
Structure of supply chain-
An organizational supply chain incorporates number of activities, procedures and
stakeholders, who are accountable to supply or delivery goods, appropriately, by considering
deadlines or time limitations (Gualandris and et.al., 2021). The supply chain structure of DFS,
include number of factors that may put direct impact on its success and growth in the world of
business.

DFS supply chain may incorporate sustainable supplier in the UK, and its many have two
distribution centres such as in Long Eaton and Doncaster. It manufactures its products
independently and have ware house where it may remanufacture those products that unmet
customer’s needs in appropriate manner. There are different forms of benefits, chosen company
may gain while running its venture into market and operating business functions. Still, it may
face critical issues that put direct impact on its performance and productivity level in negative
manner and these challenges are;
Critical issues related to case study-
High inventory level-
The biggest issue related to supply chain is current one, which may put negative impact
on DFS success and growth in the market that lead to decrease profitability and productivity
level (Pérez Vergara and et.al., 2021). It can be said that an organization with high inventory
extent in their warehouse usually suffer to manage their inventory in appropriate manner, which
affect negatively upon the way they manage the process of fulling customer needs that is
essential for any company to do so. It may put negative impact on DFS success in form of
leading poor quality of furniture’s, that it plans and attempt to manufacture, especially for target
market context. When firm may get high extent of excess stock, the opportunity it may have low
inventory turnover, that mean it may do not turn all its stock on regular basis. Due to this issue
that associated with supply chain, company may face the worst situation in form of reducing
accessibility of cash flow and good quality of items such as sofas, and other form of furniture.
Low customer service level-
Another issue associated with similar concept is low customer service level that affect
chosen brand image and reputation in the market, which is not suitable for its competitive
venture growth. It can be said that the success a progress of any company rely on key aspects in
which customer service extent is essential (Ponte & et.al., 2020). As it helps to retain and gain
the attention of new customers who are able to purchase quality products and take pleasure of
organizational service that management plan to offer each person according to their expectations
and needs. Low customer service level may put adverse impact on customer satisfaction level
and base, which is not suitable for business rapid growth in the industry, where different types of
companies already exist. It may lead to decrease the effectiveness of company in term of

grabbing further growth chances that are accessible in bulk. Due to this issue, related to supply
chain management, organization survive in varied terms.
High transport cost-
The process of supply chain management become more complicated and critical because
of varied issues and challenges that the overall procedure encompasses. For example, high
transport cost may lead to decrease the efficieny of organization for purpose of supply its
products like furniture across national boundaries (Schorn & et.al., 2021). Transportation process
enable DFS to succeed and grow in the business world, that might become complicated because
of increase cost relatred to similar procedure. It may create more issues for organization to grow
in the market, where business growth chances exist or accessible in bulk. It can be said that
transportation cost increment may affect price of products that chosen company plan and take
initiative to produce. Therefore, it may increase the price of each item that also put impact on
customers buying behaviour in negative manner. In order to overcome the current issue,
management may make effective plan or take action to pay additional that is not good for
existing planning and strategic formulation related to manufacturing operations.
Inappropriate utilize of performance measure-
Supply chain process get more complicate because of current challenge that affect
negatively upon DFS success and continuous planning. It is important for any company or
venture to measure organizational, individual and group performance, which make them able to
take further steps according. DFS may face issue because of inappropriate usage of performance
measures and tools related to similar term, which put negative impact on its success and further
competitiveness (Saura, Palacios-Marqués & Iturricha-Fernández, 2021). Performance
measurement play important role to make a company productive, but lack of existence in the
context of same term, lead to decrease the operational and functional effectiveness of firms.
Without measuring the performance of workers and ventures, they may do not move ahead, and
also do not gain competitive advantages. The effectiveness of supply chain management rely on
performance measure as it enable manager to make list of those items that they want and plan to
utilize to manufacture a furniture according to customers need. The current issue affect
customers satisfaction and might be decrease consumer base of chosen brand. Without
measuring the organizational performance, management may do not fulfil stakeholders
expectations and retain them for longer.

Key performance measures-
There are different types of examples related to KPIs exist in the corporate world that a
company utilize for purpose of measuring their performance or success of businesses, which is
important for them to do so. In case of DFS, management may take initiative to use total distance
travelled as key performance indicator or meaure that enable them to identify how much amount,
time and other reasource are required to perform well and to reach specific location. By using the
same indicator or measure tool, firm may get chance to analyse or identify areas where essential
modification or changes are required. Another key performance measure that it may take into its
consideration is delivery on time, which affect customer satisfaction. When firm may deliver
goods on time to target audience it may increase consumer satisfatory level and customer base as
well, that enable to measure success of venture.

REFERENCES
Books and journals
Gualandris, J & et.al., (2021). The association between supply chain structure and transparency:
A large‐scale empirical study. Journal of Operations Management. 67(7). pp.803-827.
Pérez Vergara, I. G & et.al., (2021). Strategies for the preservation of service levels in the
inventory management during COVID-19: A case study in a company of biosafety
products. Global Journal of Flexible Systems Management. 22(1). pp.65-80.
Ponte, B & et.al., (2022). The implications of batching in the bullwhip effect and customer
service of closed-loop supply chains. International Journal of Production Economics.
244. 108379.
Saura, J. R., Palacios-Marqués, D., & Iturricha-Fernández, A. (2021). Ethical design in social
media: Assessing the main performance measurements of user online behavior
modification. Journal of Business Research. 129. 271-281.
Schorn, F & et.al., (2021). Methanol as a renewable energy carrier: An assessment of production
and transportation costs for selected global locations. Advances in Applied Energy. 3.
100050.

2