Supply Chain Management
This essay is going to discuss the concept of supply chain management using a case study of Li & Fung Company basing on various aspects like our understanding of supply chain management, competitive capabilities of Li & Fung, my doubts on the document SCM foundation, order of winners and order qualifiers in Li & Fung and the concept of smokeless factory presented by Li & Fung factory. The answers to these questions are answered as below
Supply Chain Initiative in our company
There is a supply chain management in our company and it is defined as the strategic coordination of core functions and tactics within the organization and across our partners within the supply chain for the purposes of improving the long –term performance of our organisation and supply chain as a whole. . It involves control of the flows of material, information and finance in our network consisting of suppliers, manufacturers, distributors and customers . Our supply chain reports to the head of supply chain. The major drivers of our supply chain are speed in service delivery, quality of service offered and good customer service at a competitive price. These qualities in our supply chain have made it successful in the past boasting a large number of loyal customers and suppliers. Another thing worth noting is our supply chain management is improving and developing a just in time lean strategy that will see every need within the organization served just on the stipulated time.
Comments of team D’s description of Li & Fu supply chain and what type of SC it is
Team D describes Li & Fung supply chain as a company that assists client source high-quality products at a low price. It offers one-stop-shop for foreign businesses interested in purchasing from Asia thus reduces operational cost. From the presentation, the type of supply chain that is being used by Li & Fung is efficient supply chain since the cost efficiency is the main thing driving the company.
3 .Observation regarding distinction between competitive capabilities and their source. Agreement with team D and reason
Competitive capabilities for Li & Fung is its low-cost and high-quality products. The source of competitive capability arises from social capital and informal networks generated from social networking activities and extending customers centricity. On the supplier side, it exploits informal connections with factories from low-cost production and improves quality by involving suppliers in its operation. Team D presents both competitive capability and their source and I agree with them. The reason I agree with them is since the business are internetworked with the company, a relationship between the various enterprises is created through the supply chain.
4. Question or doubts about SCM foundation that I have
My doubt is whether as claimed supply chain is the key to a company’s competitiveness since I believe the best marketing strategy can make any company be very competitive. I have doubts that the concept of supply chain might be overestimated since I think it is not the single thing that makes a company competitive.
5. The order qualifiers for Li & Fung and a rationale taking into account what we look at
The order winners and order qualifiers for Li & Fung are high-quality products, high dependable suppliers all at a low price. The rationale used is that the price offered by Li & Fung is competitive, offering also raw material and access to low-cost countries. The quality is maintained by ensuring supplier network and production are monitored and factory co-managed thus the two process makes it a trusted brand, responsive to customer needs and delivers services on schedule making it very dependable.
6. Concept of smokeless factory, its benefits and risks
i. Why Li & Fung is thought to be a smokeless factory
Li & Fung is a smokeless factory since it performs all the function of the supply chain management like designing products and bills of materials, sourcing raw materials, manages suppliers, fulfils client orders and makes delivery on time yet it does not have property, plant and Equipment assets of its own and works exclusively with its supply network.
ii. Benefits and risks of a smokeless factory from financial perspective
The benefits of a smokeless factory are that since it does not require a large space to set up, costs of starting it and maintaining it are reduced. The risks are that it might be difficult to convince clients to do business with you if they do not see the required operating space for they might feel the company has no capability to carry out the supply chain.
iii. Relationship between being smokeless of Li & Fung and its operating capabilities
Smokeless factory mostly only act as a broker, it can easily be replaced by real factories with actual space and a lot of dependencies on itself. Being smokeless is what makes Li & Fung a cost efficient company and makes it easier to operate in various companies since it just partners with the suppliers in the improvement on its quality capability.
References
Raz, G. a. S. U., 2002. Simultaneous production planning and pricing: Theory, empirical estimation and supply chain contracts. s.l.:s.n.
Sanchez-Rodrigues, V., 2006. Supply Chain Management, Transport and Environment-A Review, s.l.: Green Logistics Consortium Working Paper.
