DEP/GARD Supply Chain Analysis: Value-Added Activities
This paper examines the DEP/GARD supply chain, distinguishing between value-adding activities — such as manufacturing, packaging, and inbound and outbound transportation — and non-value-adding activities, including idle inventory, manual order processing, excessive paperwork, and prolonged material receipt times. The paper evaluates how engaging higher-fill-rate suppliers (at the 25% and 15% tiers) can improve service levels and reduce carrying costs, despite increased unit costs. It also proposes systemic reforms, including an overhaul of the bidding process, proactive supplier communication, and the adoption of an internet-based order management system to drive efficiency and reduce waste across the supply chain.
- Value-Added and Non-Value-Added Activities: Identifies what adds or wastes value
- Supply Chain Performance Cycle: Defines minimum and maximum order cycle times
- Improving Performance Through Supplier Selection: Evaluates 25% and 15% supplier tier trade-offs
- Recommended Changes to the Procurement Process: Proposes bidding overhaul and digital ordering system
- Communicating Changes to Stakeholders: Outlines selling points for internal stakeholders
- Future of the DEP/GARD Supply Chain: Projects trends toward faster, more efficient supply chains
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What makes this paper effective
- The paper clearly distinguishes between value-adding and non-value-adding activities in the supply chain, giving the analysis a strong structural foundation grounded in operations management principles.
- It connects abstract supply chain concepts — fill rates, performance cycles, carrying costs — to concrete decision scenarios, such as choosing between supplier tiers based on reliability versus price.
- The first-person perspective in the recommendations section ("Put in the shoes of Tom Lippet") adds practical grounding, making the proposals feel actionable rather than purely theoretical.
Key academic technique demonstrated
The paper demonstrates cost-benefit trade-off analysis: it acknowledges that switching to 25% and 15% suppliers increases unit costs but argues that reliability gains reduce inventory carrying costs and potential shortages, ultimately benefiting the company. This balanced reasoning — presenting both sides of a decision before drawing a conclusion — is a key technique in business and supply chain analysis.
Structure breakdown
The paper opens with an identification of value-added versus non-value-added activities, then quantifies the performance cycle range. It moves into supplier-selection recommendations and cost trade-offs, followed by a first-person action plan for process reform. It closes by addressing stakeholder communication and projecting future supply chain trends toward higher fill rates and same-day delivery.
Value-Added and Non-Value-Added Activities
The DEP/GARD supply chain process contains several areas where value is added, including the manufacturing and packaging of products supplied to GARD, as well as inbound transportation from compound suppliers and outbound transportation to GARD. However, certain stages do not add value to the supply chain. These include inventory sitting idle in DEP warehouses and the time wasted in transmitting and handling orders manually, which causes products to remain in the warehouse for unnecessarily long periods. There is also excessive paperwork involved in the current supply chain process. The extended duration required to receive materials likewise adds no value to the DEP/GARD supply chain (Slater T., 2016).
Supply Chain Performance Cycle
The minimum performance cycle for this supply chain is an 8-day order cycle time, while the maximum is 25 days.
Improving Performance Through Supplier Selection
Performance can be significantly improved through the use of the 25% and 15% suppliers, as doing so would provide better service levels within the supply chain and result in higher rates compared to current conditions. It is important to note, however, that the existing bidding system has focused primarily on price. Allocating greater proportions of raw material supply to the 25% and 15% suppliers would therefore increase the unit cost of compounds.
This increase in cost would be offset by the fact that selecting the 25% and 15% suppliers would ensure greater reliability in inventory availability, thereby reducing the risk of shortages due to their relatively higher fill rates. As a result, DEP could potentially reduce the supply period from 7 days to 6 or even 5 days, depending on supplier reliability. This would lower inventory carrying costs significantly, balancing out the higher unit costs and ultimately benefiting the company through greater efficiency and reliability.
References
Slater, T. (2016). DEP/GARD supply chain diagram. Retrieved September 24, 2017, from https://prezi.com/x5im2yo5mvez/depgard-supply-chain-diagram/
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