Question 1
Explain why Nestlé’s supply chain should cope with the market challenges?
The management should be keen to improve its supply chain network due to the improvements in technology that have come in the recent past. This is especially through the use of the internet to facilitate a greater integration and globalization of its market. If the management does not try to meet competition at its level, or at a higher level it will be phased due to lack of progression. The market today is especially attracted to the use of new technologies in the provision of goods. The management should also be keen to respond to changes in consumer tastes and preferences to increase its market share.
Identify four critical reasons for Nestle to Build a Global Supply Chain Network
Justify why Finance Flow along the Supply Chain is Most Important
For any supply chain, fund should be readily available for purchase of the necessary raw materials for production to be a continuous process. Finance flow would enable the firm to always be in a position to continue its production. Furthermore, the supply chain has several employees who must be paid for the services offered. The firm must have is finance department follow up on revenue collection from its clients to ensure that the firm can meets its financial obligations. Sufficient planning should be made to consider increasing production to meet consumer demands. Research into possible production lines that might generate handsome revenues for the firm will also be beneficial to the firm.
Question 2
Define Supply Chain Management and Explain the Essential Flows Associated with SCM
Supply chain management is the strategic or business management activities involved in conversion of transformed inputs or materials to finished products delivered to the customer. The management also covers the delivery of the finished goods to the customers. The essential flow comprises of material flow. This is the flow of raw materials at the beginning of supply to finished products at the end of the supply. It may be unique or exclusive. Another essential flow is information flow that is focused on both directions. Multi-information follow may involve product schedule, demand information and forecasting flow. Finance flow is the bloodstream of the supply chain otherwise the supply chain management fails. Finance flow comes from a single entity-the customer. Sharing of the finances leads to better alignment of supply chain management. Commercial flow defines the ownership of supply from company to company. This is especially applicable whereby there is more than one company.
What is Pressure on Lead time from a Supply Chain Point of View?
Lead time is that potent delay between initiation and execution of a process along the supply chain. The pressure on lead time is at maximum level during the bullwhip effect. Customer lead time occurs between customer order time to product delivery time.
Question 3
Explain Four Inventory Strategies That Could Be Implemented In a Competitive Environment
One of the inventory management strategies that are implemented by firms is the vendor managed inventories (VMI). This involves use of electronic data interchange for communication by vendors to provide specific quantities sent to the customer using their distribution channels data. Other firms use just in time distribution (JITD) and Efficient Customer Response in distribution and management of inventories. They are similar in principle to the VMI. Other firms use make-to- order strategies that reduce and increase flexibilities and customization. Make-to-stock (traditional) strategy involves manufacture and stock of inventories until they are sold. This requires capacity planning and inventory planning. This strategy gets more granular with safety stock management. Inventory intelligent applications involve use of inventory intelligent tools to enable suppliers to best manage their inventories.
Objectives of Typical Inventory Control System
Most inventory control systems aim at avoiding over stock and out of stock (stock shortage) conditions. They also aim at offering the best management the demand and supply fluctuations. Inventory control also aims at hedging against inflation. Inventory control also hopes to ensure minimal waste and loss of inventory through pilferage.
Explain the Bullwhip Effect
This is the phenomenon whereby small changes in consumer demand on the downstream side of the supply chain result in large variations in the orders placed on the upstream side of the supply chain. It occurs when an unmanaged supply chain is not stable. Therefore, demand variability increases as one moves towards the upstream of the supply chain. This may result in increased transportation costs, increased stock and reduced turnaround time.
Question 4
Benefits of MRP
MRP leads to low levels of in-process inventories. It also enables the firm to track material requirements. Furthermore, it facilitates evaluation of capacity requirements of the firm. It also provides an effective means of allocating production time.
Inputs and Outputs of MRP
The master production schedule and the material requirement planning process are some of the MRP inputs. MRP outputs include order releases, planned orders and revision of orders.
Explain ERP
ERP refers to enterprise resource planning. It is an expanded effort to integrate standardized record keeping that will permit information sharing throughout the organization.
