Supply Chain and Management

¶ … Rewired Supply Chain ORUN is fourth generation family-owned business with different plants in three states with relatively similar product lines in the manufacturing processes. The company, which also has corporate headquarters, is regarded as a leader in the design, production, and distribution of metal cabling and its associated products. The company's products are commonly utilized in automobile and telecommunication sectors. Despite its profitability, the firm's owners including the Chief Executive Officer, Mr.

Charles O'Run, has identified several core problems/issues that need to be resolved in order to obtain competitive advantage in the market. The market comprises of several foreign and multi-national business rivals and probable customers. As a result, the company is facing the need to resolve strategic and operational problems, especially with regards to production planning and management of relevant materials. This paper examines inventory and supply chain management issues facing the company and how to resolve them in an effective manner.

Inventory and Supply Chain Management Problems Following a review of the situation with Mr. O'Run, the Chief Executive Officer, five major goals have been developed as the basis for addressing the firm's present challenges. These goals include enabling the CEO to lessen costly inventory, enhancing ORUN's overall supply chain management, and ensuring demands are met while preventing stock outs and lessening overall costs.

The other goals are standardizing business practices among the four plants with a specific supplier, and enhancing the efficiency of real-time information on company prepared orders and predictions. These goals are crucial towards ensuring that inventory and supply chain management processes in the company enhances balancing of demand and supply, which leads to fulfillment of customer demands while maintain adequate supply (Esper & Waller, 2014). In this case, the first two goals relate to inventory management while the other goals relate to supply chain management.

Based on a review of scenario, the inventory management problems at ORUN include the failure by the plant's operating results to reach the local and corporate headquarters' management in a timely manner. Additionally, there is lack of clarity on the value of contribution by vendors, lack of agreements on the profitability of some products or long-term contracts, and failure by the operating units to distribute their metrics across the firm.

On the other hand, the supply chain management problems include huge communication gaps between ORUN's headquarters and the plants, production of relatively similar product lines by the different plants, and lack of processes to ensure amalgamated supplier management. The lack of such unified supplier management processes in the company is attributable to the fact that purchasing managers in each of the plants make the decisions independently. The other supply chain management issue is variations in processes used for supply chain management, financial reporting, production, and marketing.

Addressing the Five Goals Apart from understanding the inventory and supply chain management problems, resolving the current issues at ORUN in order to enhance its competitive advantage requires addressing each of the five goals identified when analyzing the firm's current situation. The first goal is to enable the company to lessen costly inventory, which in turn helps to manage the speedily fluctuating purchase costs of materials. Minimizing costly inventory is critical because excessive inventory is a sign of a costly business process.

Some of the disadvantages of excessive inventory in a firm include increased costs of storage, shifts in demand, and uselessness and deterioration of perishable inventory (Hamel, n.d.). To address this goal, the company needs to examine the entire inventory management process, particularly forecasting aspects. For the company to address this objective, it needs to re-engineer its order-to-delivery cycle towards reduction of cycle-time. Through the re-engineering process, the company will experience huge decrease in lead times and improved control in inventory management.

The firm also needs to streamline the order-to-delivery processes to eliminate the problem of poor manufacturing scheduling. On the second goal of enhancing the overall supply chain management within ORUN, the firm needs to understand the internal processes of its supply chain. In this case, the company needs to ensure all internal stakeholders understand each section of the supply chain system and the specific functional or strategic goals. Moreover, the firm should implement communication up and down the supply chain in addition to the current framework of horizontal communication.

These communication approaches within an organization helps in ensuring that all processes are streamlined and implemented in an effective manner (Lunenberg, 2010). Through this approach, the firm will address the issue of poor communication that has affected its supply chain. For the third goal, ORUN should implement just-in-time framework and fixed re-order stock level to create the right balance in the supply chain system. Through the fixed re-order approach, the company will keep a specified minimum level of stocks and re-order when that level is reached.

On the other hand, the just-in-time framework will entail less storage of finished products and keeping ongoing inventory. The fourth goal of standardized business practices can be achieved through the creation of a unified supply chain management as previously discussed. The unified supplier management framework will ensure that purchasing managers in the individual plants are not left to make supply chain decisions at their own discretion. This would also entail establishing a primary purchase manager for all the four plants and identifying a single supplier to work with.

The primary purchase manager will help in the standardization process through making decisions on purchases or reviewing and approving purchases across the four plants while working a single supplier helps in creation of a close relationship with the supplier. Finally, improving supplier efficiency through real time time information on orders and forecasts can be achieved through using technological systems. A suitable technological system for this company is Radio Frequency Identification (RFID), which is an automated system that tracks inventory across various warehouses in an effective manner (Kakati, 2008).

The system will enhance the speed and accuracy of stock-counting and ensure accurate stock figures in the supply chain management system. Resolving the Issues A critical aspect of the implementation of these proposals is identifying and utilizing suitable measures to evaluate effectiveness or progress in resolving the issues. This would involve utilizing appropriate metrics that help in effective assessment of progress. Some of the most suitable metrics include cycle time, product quality, inventory turnover, and customer satisfaction.

These metrics will effectively evaluate the supply chain performance based on functional and end-user aspects. Inventory.