The pull and push strategy
Supply chain management is the matrix of the activities involved in the process of a seller availing goods and services to the final consumer (Haag, S., Cummings, M., McCubbrey, D., Pinsonneault, A., & Donovan, R., 2006). It therefore entails all the processes through which raw materials are transformed into useful products and how the products will reach the final consumer.
This normally is not an easy task considering the nature of certain products and the geographical distance that may exist between the producer and the buyer. It is these challenges that create the importance of supply chain management as a subject in business. Most organizations therefore regard the concept of supply chain management very highly (Hines, T., 2004).
The push and pull strategy is a concept in supply chain management. The seller or the producer of the commodity directs it towards the consumer by ‘pushing’ towards that orientation (Simchi-Levi D.,Kaminsky P., Simchi-levi E., 2007). The consumer on the other hand attracts the commodity being directed to them by ‘pulling’ towards him.
The push and pull strategy may also imply the process of interaction between the producer and the consumer through the process of interaction. The interface connecting the push and the pull aspects creates the boundary. Production for sales in this concept is therefore pegged on the given demand and not on sales forecasts. When production is based on demand an organization will be in a position to operate efficiently reducing the costs incurred on wastages on excess supply.
The sandwich making company is confronted with a problem of increased demand. It therefore seeks the modalities to cope up with this upsurge. The push and pull strategy can effectively be used as a very important solution to the problem at hand. This is because the push and pull strategy is effective in a demand driven production process such as the case given.
On that note, the consumer is already demanding i.e. ‘pulling’ 12,000 items per week. It therefore forces the producer to supply that number of items of that period. This necessitates the sudden increase in the production process by increasing the raw materials.
Sandwiches as perishable consumable products will require a very short structured production process so as to minimize the losses. This necessitates a total redesigning of the whole production process with an objective of meeting the demand. The whole process will kick off in procurement of the ingredients used in making the sandwiches. The producers are therefore forced to acquire four times as much ingredient as before.
This may not be easy hence adequate provisions must be made. It may involve contracting additional suppliers or engaging bigger ones. The product in question is sandwich which may be required in large numbers at particular times of the day say morning. Therefore the suppliers must be able to supply adequate ingredients to meet strict deadlines and in appropriate numbers. Non perishable items may be procured in very large numbers and stored in the company.
The production process will also require a quick fix up to facilitate the production of the large output expected. There may be the need to acquire new machinery and upgrade the existing ones. This may pose financial challenges but the huge demand expected can easily guarantee more capital.
Production can also be enhanced by improving on the chain of supply. Sandwiches will require a very short chain of supply and the management can facilitate this by eliminating unnecessary procedural chains that may hinder quick delivery of the sandwiches to the retailers.
It is also imperative that the management comes up with longer or more shifts so as to create more labor hours in order to supply the increased demand. In this case, since the demand has more than tripled, it will create the need to engage more workers either on permanent or on contractual basis.
The management will also be forced to look into it’s the distribution strategy now that more sandwiches need to be supplied. It will need a good delivery scheme that will ensure that the sandwiches reach the clients on timely basis. Advertisement may none increase in demand and consequently the need to boost operations will the advertising expenses of the company.
Supply chain management only works well if the individual activities in the production process are totally integrated with one another other than operating as individual functional units. Operating an integrated supply chain requires a continuous information flow (Lambert and Cooper, 2000).
This however is not the case in many organizations where individual functional units in the organization are totally separated from each other under the banner of division of labor. This has created a lot of inefficiencies in many organizations. It is therefore important that our sandwich making company consider integrating the different functional units in the organization with one another and clearly demarcate the boundaries.
Since integration is best facilitated by communication, the marketing department can communicate to the suppliers to the increase in demand. This information should also be supplied to all the departments in the organization to enable them boost their operations. The increase in demand has created the need for increased output and the boundaries outlining the responsibly of each department should clearly be marked. However, this should be done with a lot of caution so that the process of integration is never compromised.
The cycle view
The cycle view is a perspective of looking at the supply chain question as a system involving recurrent processes that create a cyclic nature of activities. For instance, the procurement department will procure materials for use and these materials will have to be replenished once they are done.
Several cycles may exist in the organization. These cycles normally stem from the recurrent activities that are conducted during the daily operations of the company in supplying sandwiches to the consumers. The cycles may be at the production stage, supplier stage or at the procurement stage.
The sandwich making company may view shown below.
The first stage involves the seller marketing the product to attract the consumer. The consumer in this case is the, supermarkets and the other users of the sandwiches. The supermarkets will then place the order which in this case has been estimated at around 12,000 units.
After receiving the order, the company will make it possible to supply the order within the specified time frame. This will enable the management reduce the frequency of sales returns caused by delays in goods receipt. The order will then be received by the customers.
The process will therefore take place in this cyclic manner. It can be noted from the illustration that the whole cyclic process share the same information. The issue at hand is the fact that an order is needed by the customers and this creates the series of processes culminating in the provision of that commodity to the required person.
The sandwich manufacturing process entails the acquisition of the important raw materials like the chicken, lettuce and the bread. The procurement of these items is a day to day activity that requires an effective mechanism in place so as to avoid any shortages. The process of converting or preparing the sandwiches is also a routine process that will involve a structured formula conducted daily.
Provision of these finished sandwiches to the users is another process entails a routine process. The sandwiches have to be supplied to meet strict deadlines and this process has to go on daily. It therefore creates the need to make adequate provisions to be able to meet such strict deadlines. This therefore creates a cyclic version of operations.
The cycle perspective enables people to view organizations as a simple processes engaged in efficient service delivery (Lambert and Cooper, 2000). Simplicity will quicken the communication process hence allowing for faster decision making. This contrasts the normal version where organizations are complex bureaucracies with very procedural decision making processes that hinder effective operations.
The Supply Chain Operations
The Supply Chain Operations Reference SCOR provides a distinct facility that integrates the best practices, systems, technology advances and all the good aspects of the organization together. It creates a platform through which the internal operations of the business can effectively be carried on.
In addition, it facilitates and enhances the understanding of the internal workings of the organizations. Our sandwich making company can effectively apply SCOR in its systems to enhance the operations. SCOR as a reference system can enable the organization apply standardized formal system and organizational language to improve interaction and communication among the supply chain partners.
Each and every organization, good performance notwithstanding, will always be faced with a myriad challenges most of the times. This applies also to our sandwich making factory. It therefore creates the need to use SCOR as a mechanism to address the many problems that organizations face. This is because the process of SCOR strives to harmonize the business practices of different organizations into a better unified model.
The company will therefore be better placed with the SCOR strategy now that the demand expected has increased tremendously. However the strategy can only operate better if the support systems are provided and caution exercised.
Design Chain Operations Reference on the other hand is an inter-industry instrument that is often used in managing design chains across organizations. Indeed, no organization operates in isolation. At one point or another, all organizations interact with their customers, suppliers, competitors and the authorities.
It therefore creates the need to design a system that will enable this complex interaction. DCOR therefore comes in handy in this situation by providing an effective cross-boundary mechanism that effectively manages the design chain in a free manner by ensuring that organizations relate properly and effectively.
Level 1 of the DCOR model is the effective model to use in our company that is faced with strict deadlines. This model will boost the external interaction of the company so as to reduce any delays that may otherwise be met.
Reference List
Haag, S., Cummings, M., McCubbrey, D., Pinsonneault, A., & Donovan, R. (2006), Management Information Systems For the Information Age (3rd Canadian Ed.), Canada: McGraw Hill Ryerson
Hines, T. (2004). Supply chain strategies: Customer driven and customer focused. Oxford: Elsevier.
Simchi-Levi D.,Kaminsky P., Simchi-levi E. (2007), Designing and Managing the Supply Chain, third edition,New York; Mcgraw Hill.