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- Introduction
Supply Chain Management (SCM) has gained a significant presence in the industry and influences the success of an organization giving it a competitive advantage. All manufacturing companies irrespective of size, manufacturing process or the product need a controlled flow of products and services from suppliers to manufacturing and then distribution to the final customer. There are different dimensions of SCM that include customer relationship, strategic partnerships, and information sharing. An important model for SCM monitoring is SCOR or Supply Chain Operations model. Most leading companies in the industry recognize that the competing against any company requires a robust and reliable supply chain system.
The paper focuses on understanding the integrated supply chain model for manufacturing industry. A case study of a Wholesale distributor company, Noble is discussed that improved on its delivery. Noble is a worldwide wholesale plumbing supplier. Noble has a range of products including industrial, fire protection and building maintenance products. It has currently 50 odd branches and growing. Noble has 200 or more delivery trucks, and it provides 24-hour service. Noble used technology to improve its supply chain system for achieving successful client deliveries in less time. Nobel collaborated with Nuway Software in order to develop their technology solution. The paper does an analysis of the company based on various SCM parameters (Supplychain247.com).
- Understanding Supply Chain Management
According to Mentzer et al., supply chain (2001) can be understood as involvement of organizations and individuals in the flow of services, products, and information. Supply Chain Management (SCM) is a coordination of various business functions between various organizations aimed at enhancing the organization performance and the value of service. The supply chain can be of three types that are direct, extended and ultimate supply chain. It is possible that one company is a customer in supply chain for another company, a partner or supplier in another supply chain and a competitor in the third supply chain.
The below flows explains the supply chain
(Ultimate) Supplier Supplier Organization Logistic Supplier Customer (Ultimate) Customer
- SCM Case Study: Wholesale Supplier Noble
Noble is a wholesale supplier company catering into plumbing, industrial, hydronic and HVAC products. The company is the largest provider in Ontario and Toronto area. Noble expanded into adjoining regions and developing a 24/7 model of delivery. Along with the company’s growth a requirement for robust supply chain system also came. The company also looked at automating its shipping and receiving processes. Noble overhauled its delivery system, changing the whole operations process to achieve a successful and profitable model.
- Supply Chain Management Activities
The below list is the set of activities for a Supply Chain Management.
1. Integrated Actions
2. Sharing Information
3. Sharing Risks and Benefits
4. Cooperation among all stakeholders
5. Serving Customers as the ultimate goal and focus
6. Integrated Processes
7. Maintain Long-Term Relationship with Partners (Mentzer et. al., 2001).
- SCM Practices of Noble
SCM practices are the activities that an organization undertakes in order to facilitate robust supply chain management. SCM practices include partnership with suppliers, outsourcing of services, continuous process flow, cycle time compression, and sharing of information. The strategic supplier partnership is essentially a long-term partnership between an organization and the suppliers. Handling customer complaints and prompt delivery is an important aspect of SCM, and it ensures healthy and lasting customer relationships and customer satisfaction. The information sharing is to the extent where no confidential or proprietary information is shared (Li et al., 2006).
Noble implemented an upgraded its delivery system by using technology for automating the proof of delivery. An important aspect of SCM practice is management and use of technology helps in this aspect. Delivery team of Noble had a manual system delivery proof, and those proofs used to be lost or damaged. As the company grew rapidly, Noble automated the manual delivery process in order to improve an aspect of supply and delivery. Noble collaborated with a software company called Nuway to develop their automated delivery system (Supplychain247.com).
- Logistics of Noble
Logistic is an important aspect for SCM, and both together can provide a robust competitive edge to the organization. Efficient logistic and supply chain management leads to superior results in the competition and leads to customer inclination towards the organization. The activities for logistics are inbound, outbound, marketing, sales, infrastructure and human resource development, technology and procurement (Christopher, 2005).
Below is a simple depiction of logistic management process flow.
Supplier Procurement Operations Distribution Customer
As seen above, distribution is an important aspect of Logistic. A successful delivery with less challenge is very critical for any organization. Noble achieved this feat by automating the delivery process. This resulted in delivery success rate from 80 percent to nearly 95 percent for all orders for Noble. The new system also enabled the company to assist customers in the information management of the delivery cycle (Supplychain247.com).
- Integrated Supply Chain Strategy
An integrated supply chain strategy is the management of product and service flow from strategic, operational and tactical perspectives. At each stage, a coordination of people, finances, resources and facilities must be done to create a perfect supply chain management system. This integrated strategy would reap benefits and long-term results. The integrated system must also respond to issues like cost of SCM activities, inventory management, customer service management, goal setting, and conflict resolution. An effective integrated supply chain strategy for an organization can be done by close interaction among all the business functions and departments. There are said to be four stages to a complete integrated strategy.
Stage1: The first stage is distribution of activities to separate independent departments. In this stage, the planning is short term and changes frequently.
Stage2: The second stage is of functional integration focusing purely on the flow of products and services. In this stage, cost reduction is more important than performance improvement. Customer service is reactive i.e. mainly focusing to client complaints.
Stage3: The third stage involves integrating supply chain phases that are straightly controlled by the company like own goods and services.
Stage4: This is the stage when complete and comprehensive supply chain integration is completed including the suppliers and the customers (Stevens, 1989).
Noble had a manual delivery process. Integration of this part of supply chain made the company gain significant milestones in the supply process. Noble integrated IT, logistics and shipment departments in order to automate the delivery process. This automation also resulted in huge savings for the company by reducing on manual processes.
- SCOR Analysis of Noble
SCOR model enables to develop a value map, and it consists of five important process workflows. SCOR metrics allows measuring the performance of an organization. SCOR defines five attributes and three levels of measurement. Here we do a Level 1 measurement of Noble based on new POD system implemented as part of Noble’s SCM system to help in faster delivery and better customer service management.
- Lean Supply Chain Analysis of Noble
Lean Supply Chain models are used for improving customer services, reducing backlogs, increasing inventory assets and on-time delivery (Recker, & Bolstorff, 2003).
With the POD (Proof of Delivery) implementation of new software at Noble, there has been some significant improvement against the lean model for Noble. There had been some initial challenges, but overall results were satisfactory. There has been reduced processing timings and faster delivery, resulting in high customer satisfaction and low fines for the company. The success rate on orders increased to 80 to 95% and reducing the manual efforts of invoicing. The improvements of customer service process were a big advantage in terms of customer satisfaction and retention. There has been a huge reduction in customer service backlogs and improved customer service response time (Supplychain247.com).
- Conclusion
SCM is an important for every organization, and it shapes the success rate for the organization especially in manufacturing and customer service segments. An indigenously managed SCM leads to higher customer satisfaction and improved organization success in terms of revenue and reputation. A tool for analyzing SCM strategies and benefits is SCOR. Lean SCM strategies are very beneficial to determine the waste and reduce cost. Strategic integration of various channels and suppliers enable higher benefits of SCM with improved management in the supply chain industry.
As seen in the case study of the company Noble, implementing SCM strategies resulted in many benefits for the organization. Noble not only reduced its operational and delivery cost, but gained customer loyalty and satisfaction.
- References
Li, S., Ragu-Nathan, B., Ragu-Nathan, T. S., & Subba Rao, S. (2006). The impact of supply
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Mentzer, J. T., DeWitt, W., Keebler, J. S., Min, S., Nix, N. W., Smith, C. D., &
Zacharia, Z. G. (2001). Defining supply chain management.
Christopher, M. (2005). Logistics and supply chain management: creating
value-adding networks. Pearson education.
Stevens, G. C. (1989). Integrating the supply chain. International Journal of Physical
Distribution & Logistics Management, 19(8), 3-8.
Recker, R., & Bolstorff, P. (2003). Integration of SCOR with Lean & Six Sigma.
Supply-Chain Council, Advanced Integrated Technologies Group.
Supplychain247.com. (2014). Leading Wholesale Supplier Noble Implements POD System &
Streamlines Shipping Automation - Supply Chain 24/7. Retrieved 16 December 2014, from http://www.supplychain247.com/article
/leading_wholesale_supplier_noble_implements_pod_system_streamlines_shipping
/case_studies
