Synopsis and inventory of company problems
Most manufacturing companies depend on strong and efficient supply chain management to continuously optimize their operations. Supply chain management ensures the company achieves profits at a reduced cost. Even though, ORUN manufacturing company implements a strong supply chain management, still it experiences several challenges that affect its profitability and productivity of the company. Firstly, the independence of operation within the four plants imposes a great challenge to the line of products manufactured by the company. Furthermore, there is a communication breakdown between the corporate headquarters and the four branches that affect operations of the company. Larson (2010) argues that, the use of facsimile and email reduces speed at which the information is passed to the four plants. The headquarters’ management staff reports confusing procedures to be used in the manufacturing of the products at different branches (Larson, 2010).
In addition, the existence of different methods in supply chain management, marketing, production and financial reporting in all the four plants impose a great challenge to the board of directors. The lack of a particular method in distribution of line products to the various vendors contributes to the company's inability to distribute its products efficiently. Lastly, ORUN lacks proper strategy to consolidate uniform supplies in the four plants, and this contributes to shortages in some plants (Larson, 2010).
- Allow ORUN to minimize costly inventory
Based on the primary goal of controlling and running a cost-effective inventory, the management should adopt appropriate levels of controls to reduce risks of running costly inventory. The company management should consolidate all the operations of the company within the four plants to reduce and minimize the cost of running its inventory.
- Improve the overall supply chain management within the company
The company should involve a collaborative strategic sourcing of supplies of raw materials to all the four plants. In addition, the purchasing managers should engage each other on the sourcing of supplies in order to ensure continuous operation of all the four plants (Levi & Kaminski, 2008).
- Ensure demand requirements are met, avoiding stock outs and reducing overall costs
On ensuring market requirement is met, the company should aim at motivating the distribution vendors to ensure a continuous flow of goods to the market. Moreover, tightening the quality checks will enable the system become accommodative and responsive to the customers changing needs in the line of products (Levi & Kaminski, 2008). Nevertheless, the continuous supply of goods to the vendors will manage stock outs thereby reducing crisis distribution cost.
- Standardize business practices among plants with a given supplier
On standardizing the business practice, the company should centralize it operations by putting contracts under the supply chain function to ensure it only works with a specific supplier for all the four plants. This will enable ORUN to manage the supplies from the supplier thereby ensuring consecutive flow of raw materials to the firm (Rolf, 2008).
- Increase supplier efficiency with real time information on firm/planned orders and forecasts
The company should not only depend on the strategic sourcing of supplies but also on real time information on orders. ORUN should establish a reliable and effective online information system that enables the company to act spontaneously to the customers’ orders. The online information system should be streamlined in all the four plants to enable central control of supplies in the company (Rolf, 2008). Nevertheless, the production procedures should be streamlined to enhance effective communication across the four plants. This will avoid confusion and increase supplier efficiency in the company.
Measuring effectiveness of the strategies
Lastly, the effectiveness of these strategies can be measured through sales metric. The sales metric compares the sales target to the current sales. The performance of sales should be compared to the most recent to maximize on the financial returns to the business (Baregheh &Sambrook, 2009). In addition, the team of marketers should always raise high targets to be met since low targets may demoralize the sales team to pursue.
References
Baregheh, A. & Sambrook, S. (2009). Towards a multidisciplinary definition of innovation and application of Metrics. Management decision, 47(8), 1323-1339.
Larson, P. (2010). Logistics versus supply chain management: an international survey. International Journal of Logistics: Research & Application, 7(1), 17-31.
Levi, P., & Kaminski, J. (2008).Designing and Managing the Supply Chain: Concepts, Strategies and Case Studies. McGraw-Hill International
Rolf, G. (2007): Application of the SCOR Model in Supply Chain Management. Youngstown, New York.
