Supply Chain Management: Optimizing Logistics at Reitan Distribution

This report provides a comprehensive analysis of Reitan Distribution's supply chain, focusing on identifying and addressing issues within its distribution channels, both internal and external. It explores strategies for reducing delivery times from 48 to under 24 hours, optimizing the logistics system to meet buffering dates, and improving overall service levels. The report delves into forecasting methods, inventory management practices, and the impact of current and future value stream flows on Reitan Distribution's internal and external operations. Ultimately, it concludes with recommendations for enhancing operations through increased staffing and supplier diversification, contributing to a more efficient and responsive supply chain.

Running head: SUPPLY CHAIN MANAGEMENT
Supply Chain Management
Name of the Student
Name of the University
Author note

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Executive Summary
The report has assisted in analyzing the different kinds of issues in the distribution channels
of the Reitan Distribution Company along with analysis of both external and internal
influences. Furthermore, reduction of the delivery and lead time have been analyzed in which
this has helped in optimizing the logistic system in an effective manner. In order to meet the
buffering dates, this has been essential for the company in reducing the issues effectively.
The inventory management based activities of Reitan Distribution has also been analsed in
the report. The ways by which the company can improve its service levels have been
discussed in the report in a detailed manner. The report has been concluded by stating that
Reitan Distribution can improve its operations by the increasing the number of employees
and suppliers.

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Table of Contents
Introduction................................................................................................................................3
Problem Formulation.................................................................................................................3
1. Reduction of Delivery Time from 48 Hours to Less Than 24 Hours.................................3
1.1 Reaction on Change from Two Days Delivery to Daily Delivery and Lead Time in
Reitan Distribution.................................................................................................................4
1.2 Optimising Logistics System in Order to Meet Buffering Dates by Reitan Distribution 5
2. Issues in Reitan Distribution..................................................................................................6
2.1 External and Internal Influence on Reitan Distribution...................................................8
3. Types of forecasts to be made by Reitan Distribution for becoming more efficient.............9
3.1 Ways of using demand data to make forecasting...........................................................11
3.2 Forecasting method that is most accurate for Reitan Distribution.................................11
4. Ways by which Reitan Distribution can improve the service level.....................................12
4.1 Ways used by Reitan Distribution to manage inventory................................................13
4.2 Importance of seasonality to influence service level.....................................................15
4.3 Level of inventory..........................................................................................................15
5. Effects of current and future flows of value stream on internal and external view in Reitan
Distribution..............................................................................................................................16
5.1 Level of supply chain management currently and ways by which it can change in the
future....................................................................................................................................17
Conclusion................................................................................................................................18
References................................................................................................................................19

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Introduction
The report helps in the entire analysis of the internal and external value chain along
with logistical issues in Reitan Distribution Company. Furthermore, the current state of the
different operations is required to be analysed appropriately which will help in analysing the
different kinds of operations which are being undertaken by the company.
The formulation of the problem along with providing appropriate solutions is required
to be done which will help the respective distribution company in managing and reducing the
delivery time along with analysis of the issues of the distribution company effectively. Proper
improvement of the service levels is required to be analysed appropriately as to identify
current along with future value stream flows n external and internal view in Reitan
Distribution.
Problem Formulation
1. Reduction of Delivery Time from 48 Hours to Less Than 24 Hours
The delivery time can be reduced from 48 hours to less than 24 hours in the Reitan
Distribution by applying the following methods in an effective manner:
Proper usage of the domestic suppliers as this will help in automatically reducing the
lead time by more than two weeks. Proper increase in the number of suppliers for the
company will help Reitan Distribution in managing the demands of the customers and this
will lessen the potential kind of delays in the organization (Pagell and Shevchenko 2014).
This has been noticed that the customers in the market do not like waiting and this creates
frustration among the customers as well (Waters and Rinsler 2017).
Increase in the frequency of the order is the second element which can help in
reducing the delivery time from 48 hours to less than 24 hours. Proper total cost analysis is

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required to be done as this will help in determining the different orders which have been
placed by the customers in the entire market. The smaller number of products can be ordered
which will reduce the lead time and this will reduce the delays as well (Monczka et al. 2015).
Consolidation of the different suppliers is essential in nature which will help in
managing the different suppliers in an effective manner. The proper maintenance of the
relationships with the multiple suppliers in the market is essential in nature which will help in
handling multiple accounts and implementation of the management software will help in
streamlining the processes along with creating efficiencies as well (Simpson et al. 2015).
Creation of the proper incentive is essential in nature for Reitan Distribution
Company which will help in managing the different activities of the suppliers efficiently. The
lead time can be reduced from 48 to 24 hours by staying coordinated with the suppliers and
analyse the schedule of the production with the other projects effectively.
1.1 Reaction on Change from Two Days Delivery to Daily Delivery and Lead Time in
Reitan Distribution
In order to reduce the lead and delivery time, there can be different changes which
have to be faced by the company Reitan Distribution centre. There are different kinds of
implementation of changes such there will be:
Increase in the costs of the supply of the goods and services which are being
distributed from the company as there will be increase in the number of labourers in the
company and this will incur huge costs as the salaries and wages will be require d to be
provided to customers in an effective manner (Fernie and Sparks 2014).
There will be more sales of the company which a positive aspect of the company and
this will be will help the company in gaining more competitive advantage in the entire
economy (Stadtler 2015). Furthermore, this will help them in providing forecasts to the

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different suppliers relating to the different activities and the orders which are required to be
delivered to the customers within specified time.
Furthermore, the information will be automated along with the supply chain which
is being used by Reitan Distribution as this will reduce the lead time in an effective manner.
This has been seen that the process will be expensive in nature as there will be different kinds
of other expenses which are extra included in the process of the reducing the delivery time in
an effective manner (Carter,Rogers and Choi 2015).
1.2 Optimising Logistics System in Order to Meet Buffering Dates by Reitan
Distribution
The Reitan Distribution company can include different techniques which will help the
company in meeting the different buffering dates by the Reitan Distribution. There are
different kinds of analysis which is required to be done by the respective company which are
as follows:
Design of the process and development is essential in nature which helps the
company in introducing more cost-effective processes. The Reitan Distribution company has
to include the effective networks which will help in examining the operations in detail and
this will redesign the process of logistics (Carter,Rogers and Choi 2015)
Proper identification of the key drivers such as building multiple suppliers network
which will help in identifying the drivers for gaining outstanding performance effectively.
With the redesign of the process, this will help in optimization of the cost and the
opportunities can be increased to more than 25%.
Improvement in collaboration between suppliers and retailers for demand data
driven forecasting along inventory management is essential in nature which will help in
providing different kinds of opportunities for proliferation of data and this will help in proper

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connectivity and this will allow to test the optimality in ever increasing areas in an effective
manner with the usage of mobile based technology as this will help the company in directly
communicating with the different customers in an efficient manner (Monczka et al. 2015).
Furthermore, the responsive kind of supply chain is essential in nature as this will
help Reitan Distribution company in managing the programs which are required to be
performed by the organization in an appropriate manner (Fahimnia, Sarkis and Davarzani
2015). Additionally, the objectives are required to be quantified and measurable in nature
which will help in accomplishing the different requirements effectively (Simpson et al. 2015).
The technology advancement is required to be enabled in an efficient manner by Reitan
Distribution Company which will help the company in analysing the various issues which
will help in simplying the process and reduce the application complexity.
2. Issues in Reitan Distribution
There are different kinds of issues in the entire distribution channel of Reitan
Distribution Company. When the company will not perform a proper and effective research
of the market before deciding on the distribution method, there can be various issues related
to the same. The different and major kinds of issues which exists in the channel members
includes the following:
Channel Relationship Issues is one of the major issues which are being faced by
Reitan Distribution Company. Firstly, there are less and no such formal relationships which
are being maintained by Reitan Distribution Company. This has been seen that the
distribution channel of Reitan Distribution is not at all effective as there are different
loopholes as the relationship between the suppliers and the companies in which the products
and services are being delivered in an ineffective manner (Watersand and Rinsler 2017).

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Furthermore, this has been seen that there are no such long-term commitments
between the company and the different kinds of issues related to delivery of the products is
the major constraint which causes huge pressure on the respective distribution company as
well. Additionally, this has been seen that the market is changing at a fast pace and the
behaviour of the customers is being changed drastically. However, this is the main duty of the
distribution channel of the Reitan Distribution Company as due to globalization and fast
changing behaviour of the customers, this can be seen that the company is not being able to
develop marketing plans in an effective manner.
Marketing Decision Issues is the other major issue which is faced by the respective
company in relation to the distribution channel. This has been seen that there are different
issues related to product, promotion, pricing and target market issues. The nature of the
product helps the company in determining the distribution channel which will be effective for
such products (Mangan, Lalwaniand Lalwani 2016).
Furthermore, the price issues are related to the different kinds of issues which are
related to the products which require special handling and this is required to be kept in mind
by the distribution company as this creates huge effect on the final price of the products in a
negative manner (Brandenburg et al. 2014).
Additionally, the issues which is being related to the target market have to be taken
into consideration in which the primary motive of the respective company should be utilising
the channel of distribution in such a manner as this will help the products to reach the end
users (Ellram and Cooper 2014). This has been seen that there are different products which
are not being reached to the end customers and this affects the entire distribution channel of
the company in a negative manner (Waters and and Rinsler 2017).

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These are the two major issues which are required to be taken into consideration by
the company Reitan Distribution by usage of the online solutions and this will help in
establishment of proper distribution channels. Proper training is required to be provided to the
different workers who are employed in the organization which will have and create focus on
the different aspects which will help in managing the differences efficiently (Ellramand
Cooper 2014).
2.1 External and Internal Influence on Reitan Distribution
There are different kinds of internal influences of the Reitan Distribution company
which will have a positive impact on the company. In case of the marketing decision issues,
this can be analysed that there are different product, promotion and pricing issues which can
have huge negative impact on supply chain management of the organization (Qrunfleh and
Tarafdar 2014).
The promotional activities are not being taken into consideration and hence this is
creating negative impact on the company as well. However, the external influences can be
managed by the company with the proper utilisation of the different resources such as
collaboration with the channel partners (Troselj 2014).
The manager of the respective company needs to appoint different kinds of training
and developing partners along with marketing staffs which will be helpful for the company in
building and maintaining strong relationships between the customers and the suppliers of the
company and they will be able to satisfy the demands of the customers effectively (Wang and
Cullinane 2014). Furthermore, the different supplier management problems need to be solved
by making the distribution channels more effective by becoming serious in nature
(Brandenburg et al. 2014).

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On the other hand, this can be seen that there are external influences on the Reitan
Distribution Company. This can be seen that while there is issue in distribution channel, there
can be decrease in the overall sales of the company along with this will be resulting in poor
performance and the customers are not being satisfied as well. This has been seen that there is
no such motivation provided to the employees and this is one of the major causes in which
there is no such knowledge of the product regarding the channel effectively.
Furthermore, this can be seen that there are different strategies which can be
implemented by the company Reitan Distribution in which this will help in managing the
internal issues and influences effectively. This can be seen that there should be different
partners and there are different kinds of engagement which is required to be analyzed
effectively as well by the company in order to carry out the different activities effectively.
The appropriate channels of distribution internally and externally are required to be done by
the company which will assist them in analyzing the various issues and solve them in an
effective manner as well.
These are the different external and internal influences on the distribution channel of
Reitan Distribution Company. The different problems are required to be handled effectively
with proper implementation of the advancement of the technology and this will improve the
overall process in an appropriate manner. Lastly, this has been noticed that there are issues in
the distribution channels which can cause the company to lose their different target customers
in the market and this can lead to entire loss of the productivity and profitability of the
organization as well.
3. Types of forecasts to be made by Reitan Distribution for becoming more efficient
Forecasting is considered to be an imperfect science which is however useful for the
business organizations which operate in different industries. Supply chain management based

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activities of an organization are also influenced by forecasting methods that are the used.
Forecasting is thereby highly beneficial in providing the management with an insight
regarding the ways by which demands of customers can be fulfilled with the help of products
and services that are offered by the customers. The supply chain management based systems
can thereby be used by the organizations in order to forecast demands in an effective manner
(Prajogo, Oke and Olhager 2016). Different forecasting based methods that can be effectively
used by Reitan Distribution in order to analyse the needs of customers are as follows,
Survey methodology – The human resource surveys are mainly implemented for the
purpose of studying the samples of the individual units within a population. The techniques
which form an important part of surveys are survey data collection, questionnaire
construction and the accuracy of responses which are provided. The statistical surveys are
conducted by the researchers in order to make the inferences about part of the population that
is studied (Dubey et al. 2017).
Delphi method – Delphi method is considered to be a structured technique of
communication has been developed originally like a systematic and interactive method of
forecasting that relies on the panel of different experts. The experts are thereby able to answer
different questionnaires with the help of two or more than two rounds. The earlier responses
which have been provided by the experts can be changed during the second round
(Hohenstein et al. 2015).
Scenario building – The future events which can take place are analysed with the
scenario analysis. Scenario analysis is considered to be one of the processes which can help
in the projection of demands of the customers. The outcomes are able to project the ways by
which the company can be affected by the customer demands (Beske and Seuring 2014).

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Technology forecasting – The future characteristics of the technologies that are used
by the organization are analysed with the help of this process. The technology based forecast
plays an important in taking the decisions related to the usage of the technologies which are
currently used by the organization (Beske and Seuring 2014).
The four forecasting methods are thereby able to influence the ways by which the
organizations are able to operate and fulfil the demands of customers. The efficiency of
Reitan Distribution can be increased with the proper implementation of these processes. The
demands of customers are related to the raw materials that are used provided by the suppliers
(Cătălin, Bogdan and Dimitrie 2014).
3.1 Ways of using demand data to make forecasting
Data based on the demands of customer play an important role in forecasting the
demands in an effective manner. The researchers thereby need to analyze different types of
data in order to analyze the demand in an effective manner. The two types of data which are
analyzed by the researchers are primary data and secondary data. Data based on the demands
of customers is collected with the help of different methods which include, observation
method, schedule method, questionnaire method, interview method and socio-metric method
(Chaudary, Zafar and Salman 2015).
Primary data is mainly collected with the help of these methods which can help in
deciding the demands of the customers. The researchers are able to collect secondary demand
data with the help pf different methods which include, the record that have been kept by the
company, internet, government records and the print media. The data is analyzed by the
researchers so that the management is able to analyze the demands and forecast the future
strategies for the company as well (Dubey et al. 2017).