Supply Chain Management: Case Studies and Best Practices

Case Study Takeaways: Durable Industries

The Durable Industries case study provides several important takeaways (Dittmann, 2013). Four of the most significant, along with explanations of why they matter, are as follows.

First, ongoing monitoring and assessment should take place, reviewing both performance and the measurements used. This is an important takeaway because it was an inefficient supply chain that caused Durable Industries to lose a significant level of business, with the threat of losing more.

Second, there should be an integrated approach to supply chain management with inputs from different departments. Managing the supply chain requires contributions from areas such as sales (for forecasting data) and operations management. Without collaboration and integration of these inputs, the supply chain cannot be fully optimized.

Third, the firm should assess its supply chain from the perspective of customers. This is important because it is well established that firms must satisfy customer needs in order to retain business (Kotler & Keller, 2011). Unless the firm collects and assesses customer needs and perceptions of its service, it cannot ensure those needs are being met.

Applying the Four Takeaways in Practice

Fourth, there should be a comprehensive assessment of industry influences and best practices. This was selected because the firm operates in a competitive environment where it is important not only to identify internal improvements but also to remain current with changes taking place across the industry.

Each of these takeaways can be discussed in greater depth.

1. Ongoing effective monitoring was a failure at Durable Industries and directly led to the loss of business. The monitoring failed on two counts. First, there was a failure to include all relevant data in the monitoring process; subsequent analysis indicated that up to 25% of all orders were not being tracked (Dittmann, 2013). This represents a significant gap. Second, benchmarking of supply chain metrics against industry standards was also lacking. As a result, the firm became less efficient relative to competitors, with a slower inventory turnover that increased opportunity costs.

2. Integrated supply chain management can increase efficiency and therefore overall performance (Stadtler, 2014). For example, data is needed from multiple departments to manage the process effectively, including accurate forecasts from the sales department, production schedules and timing from operations, and effective logistics (Christopher, 2011). The various pieces of information and actions are inevitably handled by different departments. Where there is a high level of cooperation and integration, the potential for efficiency increases substantially. Conversely, a lack of integration can result in fragmentation, causing bottlenecks, delays, and miscommunication.

3. Assessing the supply chain from the customer's perspective is essential; if a customer is not satisfied, they will take their purchases elsewhere. Firms may believe they know what customers want and that they are delivering it, but this is a short-sighted approach. Even if it were true a year ago, customer needs change over time (Stadtler, 2014). Therefore, to maintain customer satisfaction and loyalty, the supply chain must be managed with the customer's evolving expectations in mind.

Schlumberger: Global Supply Chain Operations

4. Assessing external influences requires consideration of general factors that may affect upstream or downstream supply, allowing organizations to adapt (Christopher, 2011). Furthermore, it is essential for a company to understand what competitors are doing, as well as to identify potential opportunities as they arise. Tools such as SWOT and PEST analyses can be useful in this regard, as can the practice of benchmarking.

Schlumberger is a leading oilfield services company providing supply chain operations on a global basis, with revenue of $39.54 billion in 2011 (Cohen & Rousell, 2013). The firm delivers a range of services throughout the life cycle of an oilfield, beginning with various types of exploration, followed by development, and then production services. These services are offered at a large scale, with clients including major international corporations such as Saudi Aramco and ExxonMobil, as well as small independent producers (Cohen & Rousell, 2013). By focusing on these elements of the supply chain life cycle, the organization has been able to develop a high level of specialization in both people and technology (Cohen & Rousell, 2013).

The process begins with exploration and drilling into the bedrock, utilizing efficient processes to reinforce drilled holes and install safety valves. This requires a significant amount of equipment, human resources, and technological expertise (Cohen & Rousell, 2013). A key advantage of the company lies in how mobilization takes place, drawing resources from multiple sources and benefiting from a distributed infrastructure capable of deploying resources anywhere in the world, as well as utilizing external procurement. Some procurement may occur after operations on a new drilling platform have begun, in order to accelerate the pace of development (Cohen & Rousell, 2013).