Research Topics: Supply Chain Redefined

Federal Express SWOT Analysis

FEDERAL EXPRESS SWOT ANALYSIS STRENGTHS. With more than three decades of experience in providing logistics services to individuals and fellow businesses, FedEx has the strength of dependable know-how in the delivery business. They changed the nature of delivery business by reconfiguring outbound logistics (a primary activity) and human resource management (a support activity) to originate the overnight delivery business, creating value in the process. Convinced that customers would value not only overnight deliveries but also the ability to track them, FedEx developed a proprietary computerised tracking system called Customer Oriented Services and Management Operating System, or COSMOS (Hitt, Ireland & Hoskisson 2003), which introduced computer technology to the shipping industry in previously unheard-of ways and permanently altered the nature of competition within it. With this highly controlled distribution system, they are able to get their current stand in market leadership. Over the years, the company had also invested heavily in IT systems, providing them with a powerful technical architecture that had the potential to pioneer in Internet commerce. They likewise spend considerable resources in advertising campaigns designed to make the firm more known than it already is. Their campaigns are aggressive enough to overcome the advertising efforts of UPS, their stiffest competitor. The company also has its own air service inside and outside of China, making them pretty independent from other carriers. WEAKNESSES. With FedEx constantly redefining and increasing its scope of product and service offering, the company has globalised and has become remote to China, shown in their lack of strong personal relationships with the country’s clientele. Also, due to the need to fill their aircrafts with parcels, the company has been forced to take on deliveries with very low profit margins, causing FedEx little financial setbacks, which, when ignored, could blow up to proportions that would cause the organisation serious trouble. Weakness in the controls over the use of FedEx at the front end of FedEx use (i.e., when the agency employee prepares the air bill for shipment) or after the fact (supervisory review of FedEx usage) that would eliminate or minimize the opportunity for fraud, waste and abuse of this program is also observed. OPPORTUNITIES. The firm’s main opportunity is to use cooperative strategies to create value for a customer that exceeds the cost of constructing value in other ways (Desarbo, Jedidi & Sinha 2001) and to establish a favourable position relative to competition. Living examples are the two that FedEx already engaged in. In an alliance between the firm and the U.S. Postal Service (USPS), the company roughly transports 3.5 million pounds of USPS packages daily on its planes and will earn FedEx more than billion – .3 billion in transportation charges and 0 million in drop box revenue in the seven-year deal with USPS (Ulfelder 2001). The second alliance was with worldwide professional services firm KPMG, which intent is to deliver total, end-to-end supply-chain solutions to large and mid-sized companies. Another opportunity seen for FedEx is the opportunity to take advantage of the recent developments in the globalisation arena, in terms of the increasingly boundless markets which would translate to bigger and a wider scope of market for the organisation. THREATS. Their main competitor in their line of business is UPS, and the two companies compete directly against each other in several product categories. They are locked in fierce battles to dominate not only package delivery but e-commerce and logistics markets as well. Although competitive actions and competitive responses take to build or defend a firm’s competitive advantages and improve its market performance (Hitt, Ireland & Hoskisson 2003), the presence of competition, especially a tough one, is sometimes detrimental to the growth of the firm. In FedEx’s case, they were caught off guard by UPS when the latter usedits internally generated technology skills to offer e-tailers a multitude of shipping options and prices. Although both firms help customer better utilise information to track and ship inventory, UPS is pulling ahead of FedEx (Haddad & Ewing 2000). Rising fuel prices could also severely impact upon the company’s net income. PESTLE ANALYSIS POLITICAL. This aspect of the external environment affects the company in the same way that the legal aspect affects it. Laws and regulations effected within the transportation and logistics industry are dependent on the political environment which formulates such laws and regulations. The contemporary political environment is shown supportive of such technological advances in the industry under discussion to the extent that it has given impetus to the growth that the industry is experiencing now. Governmental policies and laws affect where and how companies may choose to compete, and deregulation and local government changes, such as those in the global transportation industry, affect not only the general competitive environment, but also the strategic decisions made by firms competing globally. ECONOMIC. The growth of the express transportation and logistics industry was brought about mainly by the globalisation of businesses. As businesses expanded beyond national boundaries and extended their global reach to take advantage of new markets and cheaper resources, so the movements of goods created new demands for the transportation and logistics industry. With this, the competitiveness of transportation companies depended upon their global network of distribution centres and their ability to deliver wherever their customers conducted business. Rising inflation and global competition gave rise to greater pressures on businesses to minimise the costs of operation, including implementation of just-in-time inventory management systems, etc., and also created demands for speed and accuracy in all aspects of business. SOCIAL. The ever-changing market demand for value-added services affects FedEx’s corporate level strategies tremendously in that most of the business tactics that the firm employs centre on bringing about value-added services to their customers. After all, FedEx relies largely on their customers’ loyalty to sustain their leadership in the industry that they are in. As part of their corporate social responsibilities, FedEx is practising corporate philanthropy and employee volunteerism and is constantly developing relationships with charitable institutions that share the same values as FedEx. TECHNOLOGICAL. The advances in IT and the application of new technology to generate process efficiencies also served as impetus for the growth of the express transportation and logistics industry. The ability to share information between operations/departments within a company and between organisations to generate operational efficiencies, reduce cost and improve customer service was a major breakthrough for the express transportation industry. However, of even greater significance was the way n which new technology redefined logistics. At a time when competition within the transportation industry was tough and transportation firms were seeking to achieve competitive advantages through value-added services, many of these companies expanded into logistics management services. Interconnectivity through the Internet and Intranets and the integration of systems enabled businesses to redefine themselves and re-engineer their selling and supply-chains. Information came to replace inventory. With the advent of It, express transportation became an aggregation of two main function: the physical delivery of parcels, and the management and utilisation of the flow of information pertaining to the physical delivery. LEGAL. Throughout the more than three decades of existence of FedEx, their growth was attributable to a number of external factors that the firm was quick to capitalise on, which included: (1) government deregulation of the airline industry, which permitted the landing of larger freight planes, thus reducing operating costs for FedEx; (2) deregulation of the trucking industry, which allowed FedEx to establish a regional trucking system to lower costs further on short-haul trips. Also, trade deregulation in Asia Pacific opened new markets for FedEx and expanding globally became a FedEx priority. ENVIRONMENTAL. The FedEx Corporation recognises that one of its most important corporate priorities is effective environmental management. In efforts to fulfil their responsibilities to the environment, the company is engaged in several projects which aim at protecting the environment at large. Emissions and fuel use has been a constant source of concern for the care of the environment. In line with this, the firm partnered with the Environmental Defence in 2000 to create a delivery truck that would dramatically decrease emissions and fuel use. Also, with respect to packaging and recycling, a continued evaluation of the environmental impact of their packages is on-going and the firm additionally makes sure that their packages are made from recycled materials that are equally recyclable. STAKEHOLDER ANALYSIS             The main stakeholders of the FedEx company are: (1) the company itself; (2) their clientele; (3) the community in which they operate and (4) businesses in which they extend their service to. The FedEx company is considered as one of the main stakeholders as they have a stake on what will happen to the firm, if it will continue succeeding or not, that is why they need to do everything within their power to make sure that FedEx stays on top of its game. Their clientele, obviously, is another group of stakeholders. Without them, FedEx will be a lost cause, and the firm has taken the right direction when it decided to focus on satisfying their customers through excellent service delivery. The community in which FedEx operates has a stake in the consequences of what the firm does because both exists in the same plane and has to complement with each other in order to subsist harmoniously. CORUS GROUP SWOT ANALYSIS STRENGTHS. The change in management structure due to the privatisation of the British Steel company in 1999 (which created Corus as a result of the merger of British Steel and Hoogovens) led to strengthening the manufacturing company, which, prior to the merger, had suffered serious cumulative losses between 1975 and 1984. A combination of increased investment, reduced overheads, devolved decision-making and revolutionised working practices has become the foundation of making Corus into one of Europe’s largest manufacturing companies as of date. The company, spearheaded by Brian Moffat since 1993, used a range of different approaches to global development such as joint ventures (Western Europe and USA), overseas transplants (USA, Eastern Europe and possibly Asia and South America); and continued exports of high-added value products in order to further strengthen their international presence in the manufacturing business. WEAKNESSES. In the crisis-filled years that Corus suffered, critics have commented that the company has a lack of long-term vision, evidenced by their concentration on small steel ventures in the US, when all the other competitors have been making giant alliance moves in order to give them stronger market positions in developing markets. It has not used its financial strength to spread its operations globally, in this day and time when going global is a key factor to success. Poor management prior to Moffat’s administration has also caused the firm a not-so-good image with employees, as in 2000, they were forced to reduce their workforce due to radical restructuring of its bulk steel operations. OPPORTUNITIES. With the observed inability of Corus to spread operations globally, the opportunity therefore is to take advantage of the increasingly boundless global market in order to not only increase profits for the company, but also to gain market leadership, because it is believed that the manufacturing company has got what it takes to take on a worldwide scale. They also have the opportunity to further increase their production capacities through adoption of systems which technology nowadays offers, and also to prepare for the increased demand for their products once they decided to conquer the wider international markets. The steel prices that are likely to continue to rise in the future – partly as a result of the dynamic Chinese economy’s effect on world prices – should present an opportunity for Corus to utilise to the fullest so that they could realise their true company potentials. With Philippe Varin now in the helm after Moffat announced his resignation in 2003, opportunity offered by a new organisational structure is also evident. THREATS. The strengthening of the pound against European currencies in the second half of the 1990s created a threat for the company, since by that time much of their sales were still in Europe. It is therefore a threat to the firm at this time, when the tug against who is the stronger currency still exists in the market. There is also the threat, not only for the Corus group, but for the whole steel industry as well, of the European rules with respect to opening the market of power generation, which would mean creating an unfair distortion of competition for the industry concerned. PESTLE ANALYSIS POLITICAL. The political arena is supportive of the steel industry in which Corus belongs. Public procurement policies and improvements in public infrastructures to enhance the delivery of manufactured products which benefit Corus are widely propped up by the government. the Additionally, the firm is known to adopt an open approach to dealing with external stakeholders, especially the government, through frequently updating the said stakeholder and discussing issues with national and devolved government, agencies and regulators. ECONOMIC. The increased demand for steel products is a result of the global economic recovery witnessed by businesses. The Corus group benefited from the global recovery in steel prices, and together with the development in the manufacturing performance of the company, they have more than offset higher raw materials and energy costs which are part of the production process of their steel products. SOCIAL. With its potential harm to the environment if resources are not utilised in a correct way, the steel industry is facing the wrath of the society as it is the one who will suffer the most if such problems in the environment occurs. It is the industry most faced with criticisms from a social aspect, and as such, the promise and fulfilment of corporate social responsibilities is one of paramount importance to the Corus Group. Through fulfilling their social obligations, the firm will be able to create a corporate image desirable to the community in which they are operating and thus establish a good illustration of what the Corus company is when it is not doing its normal take of business activities. TECHNOLOGICAL. The different technological trajectories in Europe, US, Japan and other late industrializing countries led to varying competitive strengths of national industries. They also gave rise to new industrial governance structures for undertaking capitalist production. The restructuring of the steel industry is the link between institutions and their responses to technological change. The decision to adopt new technologies is based on firm and state strategy, which in turn is dependent on the institutional setting and the legacy of past decisions. In late industrializing countries the decision to adopt innovations was also based on strategy, but one which was significantly determined by institutional capability. For most developing countries, acquiring modern technologies has been difficult either because their markets could not support them or because the suppliers from the advanced capitalist countries have shied away from such markets. LEGAL. There are various legal implications in the conduct of the steel business which has repercussions for the environment, society and the government. Due to the nature of the work that the steel business is in, there are potentially more hazards in the industry than in any other existing industry nowadays. There is the antidumping law in the US, which could be possibly implemented in Europe given the right government initiative, in response to the various versions of a protectionist trade policy that exists in various countries. Another issue which is highly applicable to the steel industry, not only for the Corus Group, is the Kyoto Protocol, which ENVIRONMENTAL. Corus, in their attempt to fulfill their corporate social responsibilities, is committed to environmental protection through reducing the effects of its operations through adoption of sustainable practices as well as through continuous improvement in environmental performance and control. Also, the firm is also focused on the full life cycle of its products from ore to processing, through to use and recycling. This minimises raw material usage and consume less energy, in response to the government regulation regarding energy use and the Kyoto protocol on global warming. More importantly, Corus makes contributions to environmental agencies that maintain community causes, knowing that the manufacturing industry is often stereotyped as the industry who contributes the most pollution to the environment. STAKEHOLDER ANALYSIS             Stakeholders for the Corus group would be pretty much the same as Federal Express, but emphasis should be given to the community in which the manufacturing company operates. As mentioned above, due to the higher risks in the environment and human health associated with the production of steel, the community is largely concerned even with the existence of such industries in their locality. The problem for the firm is on how to gain the community’s support in order to continue its operations. Having the steel industry is a necessary ‘evil’, as most would put it, in the development of what the world has now. The community therefore, must be made to realise that, coupled with efforts to put their concerns to rest that having such industries within the area is detrimental to their environment and health. COMPARISON AND CONTRAST OF STRATEGIES             As seen in the analyses, FedEx and Corus both have very different approaches to business growth. When FedEx goes for aggressive global expansion to support its market leadership, Corus opts to focus on small industries and builds on them to maintain their competitive edge. FedEx can be seen with excellent management directions, whereas Corus has a record of poor administration which resulted to under-average company performance. Corus, however, places great importance in fulfilling their corporate social responsibilities, different from how Federal Express accomplishes them. This is largely due to the difference in the nature of industry that these two companies are engaged in. Also, as Corus has to deal with more legal technicalities than the FedEx firm, they are more careful in the performance of their daily business activities, to spare the company from being sued over legal matters and to maintain the law-abiding public image of the firm. Changes in the economy is likewise more felt by the Corus Group, reason for their ever-changing tactics on dealing with situations which involve economic changes. Although FedEx is also affected by the rise of fuel prices, its effect to Corus cannot be overemphasised, the factor being a part of every step of the production process of the company. CONCLUSION / RECOMMENDATION After analysis of the two companies, the need to continue to focus on further expansion of the two businesses was seen fit for a recommendation. Outlining the benefits of using FedEx for intra-business shipping can be used by the company in order to give the logistics firm a bird’s eye view of what opportunities are ahead of them so that they can take advantage of it. Calling on other businesses to build relationships should be also on top of the list for FedEx, through sending representatives in countries in order to build them, as it has been seen as one of the organization’s weakness. Expanding to these businesses is essential to support the investment that they are planning in line with further expansion. With FedEx’s service guarantee as a shining example of what is possible and what customers can demand, it would not be hard to achieve. As for the Corus Group, the rapid industrialization and industrial maturity comes at a price, such as rising labour costs, due to productivity-led wage increases, and an ageing workforce, all factors which must be taken into consideration by the firm if they would want to continue what standing the manufacturing company has now, and if possible, make it better. Entrepreneurialism and innovations in the steel industry are alive and well in new and often unexpected places. In a capitalist world where industrial production is driven by commercial motives, it can only be assume that industrial expansion is a good thing and technology is a key determinant of industrial production, which the Corus Group should likewise wisely utilise, coupled with more aggressive global expansion. REFERENCES/BIBLIOGRAPHY Corus Website, accesses January 04, 2007, from <http://www.corusgroup.com/en/>. D’costa, A 1999, The Global Restructuring of the Steel Industry: Innovations, Institutions, and Industrial Change, Routledge, London. Desarbo, W, Jedidi, K & Sinha, I 2001, Customer Value in Heterogeneous Market, Strategic Management Journal, vol. 22, pp. 854-857. Fedex Website, accessed January 03, 2007, from <http://www.federalexpress.com/us/about/today/history/?link=4#2>. Haddad, C & Ewing, J 2000, Ground Wars: UPS ascent leaves FedEx scrambling, Business Week, May 21, pp. 64-68. Hasegawa, H 1996, The Steel Industry in Japan: A Comparison with Britain, Routledge, New York. Hitt, M, Ireland, R & Hoskisson, R 2003, Strategic Management, 5th edn, South-Western, Singapore. Treacy, M & Wiersema, F 1997, The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market, Perseus Publishing, Reading, Massachusetts. Ulfelder, S 2001, Partners in Profit, accessed January 03, 2007, from <http://www.computerworld.com>. Credit:ivythesis.typepad.com

Federal Express SWOT Analysis

FEDERAL EXPRESS SWOT ANALYSIS STRENGTHS. With more than three decades of experience in providing logistics services to individual...

SUPPLY CHAIN MANAGEMENT

Impacts of e-Business on Specialist Supply Chain Networks   Contents I.                    Executive Summary II.                  Introduction III.                Report Objective IV.               Subject Summary V.                 Literature Review VI.               Methodology VII.             Findings i.                       From Integration to Collaboration ii.                     Collaboration in Supply Chains iii.                   Collaboration through Advanced Technologies iv.                   E-logistics Solutions a.           Collaborative Logistics b.           E-commerce and Logistics v.                     The Human Dimension VIII.           Conclusion IX.               Recommendations X.                 References XI.               Bibliography       I.          Executive Summary             The primary function of supply chain management is to develop and enhance competitive performance by closely incorporating the internal functions within the organization and efficiently associating them with the external operations of suppliers and channel members. This research was undertaken to demonstrate the application of the theories, methods and techniques of e-logistics and supply chain management to specialist supply chain networks. A case study was conducted to know the impact of e-business on specialist supply chain networks. The findings showed that building relationships is essential to develop and implement successful e-logistics solution in order to develop and advance collaboration and integration within supply chain networks. II.         Introduction             Supply chain management has become an important part of companies, big or small, as they strive for better quality and higher customer satisfaction (., 2000; , 2001). A recent         showed that 91 percent of North American manufacturers state that supply management is very important and critical to the success of their company; however, only 2 percent of the same survey says that their supply chains are world-class (, 1999; 2001).             Supply chain management is defined by  (1998) as “the management of upstream and downstream relationships with suppliers and customers to deliver superior consumer value at less cost to the supply chain as a whole”. According to  (2002), a supply chain will consist of three primary elements. The first element is the structures which refer to the organizational units within the supply chain that interact. Structures include the company, its customers, distribution channels, design and engineering centers, manufacturing and service centers. The second element is the processes – the operational activities that transform inputs and outputs. Processes may involve demand and supply planning, forecasting, sourcing, purchasing, manufacturing and service operations, logistics, order entry, materials management and new product or service development. The last element is the linkages which connects the processes and the structures through communication, more often than not, in the form of shared information and continuous communication.             To these three elements,  (2002) also adds cross-functional teams, to coordinate the interaction between supply chain functions, and cross-enterprise teams, to coordinate the interaction the supply chain organizations. In addition, at strategic level, a supply chain operations strategy engages in making long-term decisions on some of the following elements: coordination and integration of all supply chain activities into a flawless process within and external to the organization; planning and collaboration across a distributed supply chain; and optimally delivering the right product to the right place at the right time (, 1999).             It must be noted that supply chain management initiatives are now being launched by companies to increase efficiencies and drive waste out of supply chains. These initiatives include B2B (business-to-business) integrations, e-procurement, collaborative planning and – more recently – e-logistics which presents a way of coordinating information, equipment and money flows across the supply chain, incorporating both internal and external key players into a single application environment that will enable companies to shop, commit, execute and settle their logistics service transactions electronically.             The strategic relevance of supply chain is stressed by an observation of           , vice president of materials management at        .       states that “competition is no longer company to company, but supply chain to supply chain” (, 1999). This means that success of the company is no longer quantified by a single transaction; rather, competition is assessed as a network of cooperating companies competing with other firms along the entire supply chain (, 1994; , 1997).  (2001) noted that in order for companies to be successful, firms will not seek achieving cost reductions or profit improvement at the expense of their supply chain partners but rather they will seek to make the supply chain as a whole more competitive. In addition, there have been evidences that a successful implementation of supply chain management will lead to a cutting of costs (, 1999), increasing profitability and productivity (, 2001), increasing technological innovations (., 2000), reducing risk (., 2000) and improve organizational competitiveness (, 1994;  1997; , 2000; , 2000).             This study will be exploring supply chain management in the context of e-logistics. This research will be discussing theories of collaboration and integration in supply chain management and their effects on the implementation of e-logistics. The paper will examine topical subjects and will present the findings in a form of report. The paper will paper will consider how people, leadership and culture, in addition to the supply management theory focusing on collaboration and integration issues, leadership and culture will impact the implementations of a successful e-business III.        Report Objective             The aim of this report is to show through an actual case study on electronic businesses and how they impact specialist supply chain networks. IV.       Subject Summary             The research will cover the aspects of the business such as a transaction analysis and strategic direction. In addition, collaborative and integration in supply chain management will be discussed as well as their impacts in the implementation of e-logistics. V.        Literature Review             According to authors such as  (1998), (1999) and . (2000), the significant level of supply chain management programs used across several business sectors have been very well documented in literature. Prior research on supply chain management has progressed along several paths. Some researches have highlighted the partner characteristics as an explanation for supply chain management behavior and outcomes ( 1999; , 2000;  2000). In this specific perspective, supply chain management projects are undertaken by firms in order to respond to the demand of the marketplace and the intense global competition. For example,  (2000) implied that the intense global market of the past decade has driven many organizations to create cooperative, mutually beneficial partnerships with suppliers, distributors, retailers and other firms within the supply chain. It is said that the objectives of those partnerships is to provide lower cost and higher quality products and services with greater design flexibility (, 2002).             Other researches, on the other hand, have highlighted on supply chain performance measurement (, 1998; , 1998; 1999). For instance,  (1999) suggested that the measurements for supply chain management are customer satisfaction, return on trading assets and the flexibility of supply chain management activities. In a similar vein,  (1999) recognised resource measures, output measure and flexibility measures to be the three kinds of performance measures as the required components in any supply chain performance management system. Conversely though,  (2000) recommended that one of the keys to a successful supply chain management is the creation of and agile supply chain on a worldwide level. According to     , agility implies rapid strategic and operational adaptation to large-scale, unpredictable changes in the business environment centering on destroying the bafflers to quick response.             Other academics have recognised various supply change management issues, practices and various strategies that companies undertake in establishing and effectively implementing their supply chain (., 2000;  2001; , 2001; , 2001). . (2000) state that particular enablers should be in place in order to supply chain to function efficiently. These enablers are said to apply to all parties involved and include a similar interest, openness about their practices and processes, transparency in what was expected of them and others. Other studies have highlighted manufacturers attempt in to incorporate processes and form alliances with suppliers in order for a better and efficient management of the purchasing and supply function ( 1997; ., 2000; , 2001).  (2001) highlighted the drivers and hindrances that affect how supply chains flow and perform. According to them, as the factors which drive a supply chain are essential, the hindrances necessitate more attention.  (2001) also suggested that supplier relations is a major issue in global supply chain management and accordingly, the key phrase in supplier relations is a partnership alliance, meaning, closely working together for the mutual benefits of all parties. In addition,  (2000) noted four elements as the requirements in the effectiveness in any supply chain namely planning, sourcing making and delivering. On a different perspective though,  (2001) suggested that during this era of information technology, the internet offers the opportunity for demand data and capacity data to be transparent and visible to all companies within a manufacturing supply chain; hence, companies are in the position to anticipate demand fluctuations and respond accordingly.             Despite the importance of supply chain management along with its theoretical development and popularity in the business and academic press, there is still little empirical research as to the impact of e-business in supply chain networks.  Consequently, more information is needed in order to understand and have a deeper comprehension in this specific area of research.             In order to guide this research, at the end of the paper, this particular question will be answered:             Is building relationships essential in developing and implementing successful e-logistics solutions in order to foster collaboration and integration within the supply chain networks? VI.       Methodology             In order to answer the above question, the researcher will undertake a case study on how information technology will affect logistics and supply chain management. Various literatures will be examined to support the conclusion of this research.     VII.      Findings             i.          From Integration to Collaboration             Internet technology is said to have forced companies to change the main drive of their business system architectures and organizational dynamics. Before, enterprise integration was considered to be the key to success. Then, companies started to shift to striving for achieving am extended-enterprise cooperation. At present, as web-based technologies continue to flourish and take hold, associations between members of an extended enterprise will become even tighter. As a result, businesses must now be based their models on collaboration rather than cooperation. This shift from integration to cooperation to collaboration is mirrored in the development of the several empowering technologies that successful companies have embraced. Enterprise resource planning technologies integrate all the information within the single enterprise, whereas supply chain management, enhanced by internet-based communications, foster communications. Workplaces on the other hand have allowed companies to collaborate in “value webs” which provide better products and services to their customers along the product chain and to consumers. ii.         Collaboration in Supply Chains Organizations have long known the advantages and the benefits that better relationships with customers and suppliers bring. It is said that better inter-organizational relationships both necessitate and follow from increased information sharing. In addition, information technology has long been perceived as a way of promoting better information sharing and better relationships with customers and suppliers. For instance, the electronic data interchange, an inter-organizational system, have enabled companies to exchange information and data in a more timely and frequent basis. Recently, attempts to develop information sharing with customers and suppliers have stresses on pairs of business partners. Despite the standardized efforts, electronic data interchange is usually customized and implemented on a pair-wise basis, gaining significant set up and maintenance costs. As closer coordination is sought, efforts necessitated to achieve electronic integration increase. There are three things in organizations that have change in the recent years. First, there is a rising recognition of organizations that their performance depends upon the competitiveness of their extended supply chains. Extended supply chains constitute of at least three members; they are usually a manufacturer and its suppliers and customers or a manufacturer and its first and second level suppliers. The significance of an extended supply chain relationship is illustrated by the huge inventory loss that  incurred as a result of lack of visibility into the ordering behavior of its first level suppliers. Second, organizations are starting to realize that better supply chain management necessitates information sharing that is beyond the limitations or boundaries of both the organization and their pair-wise relationships. Information sharing is very important in supply chain management and it is not being well understood by organizations. Information sharing has been found to enhance chain profits in game theoretical models. In addition, information sharing throughout the supply chain can considerably decrease inventory levels and other asymmetry costs as well. It is also reported that exchange of information in a timely and efficient way is the key driver of supply chain performance. Finally, organizations are also recognizing the new approaches to using information technology for inter-organizational information sharing. Even though information technology has been recognized as a known factor in enhanced supply chain performance since the 1980s, it only recently that organizations began to experiment on a moderate scale with “network” type information technology arrangements for business-to-business (B2B) buying and selling; for instance, to respond to      ’s problems cited earlier and be able to avoid visibility problems on future supply information,        have developed an “eHub” in order to automate the flow of information between the member of its extended supply chain, that is, the company between its contract manufacturers and its component suppliers. Arrangements such as the eHub of       engage unprecedented levels of information openness. However there are a number of inhibitors to information exchange in collaborative efforts. Capturing the advantages of tighter coordination necessitates highlighting and focusing on a bigger portion of the supply chain than familiar buyer-supplier dyads. As   (1994) have said, “If businesses networks are to possess advantages beyond the sum of the involved dyadic relations, this must be due to considerations that take place within dyadic business relationships about their connectedness with other relationships”. Optimizing the performance of the chain overall, an important feature of an extended supply chain, may result in what one partner views as a suboptimal relationship with an adjoining party. This actually means that the real advantages and benefits of improved supply chain integration may only be attained by creating a trusting environment wherein companies will not only look toward their own outcomes, but rather also toward joint outcomes. As a result, it must be noted that high quality relationships among the members of the supply chain are definitely a principal or major determinant of success of the information technology based collaborative agreements.               iii.        Collaboration through Advanced Technologies             the very apparent difference between collaboration and cooperation is that as both can occur  in near real time, collaboration mainly involves improvised, multi-directional flows of information rather than the sequential, linear flow. Collaborative technology permits an open and flexible integration within the business community. Collaborative tools are flexible and based on workflows instead of a rigid and based on processes. Collaborative technology is the next step in the e-business technology revolution as it allows human spontaneity and unpredictability that occur within disorganized business processes – those that are based on individual and community based relationships. Somehow, it imposes a kind of centralized control over the data transmitted among the value chain. In addition, it increases revenue generation as it fosters close relationships among customers, enduse customers, as well as other members of the value web who work together in order to give the best possible products and services.   iv.        E-Logistics Solutions             In efforts to respond to the need for increased performance, both shippers and carriers are turning towards e-logistics solutions hoping that efficiencies be attained through the simplification of the logistics process. Managing logistics is a very complex operation. One shipper depends on many suppliers. Service agreements are based on elements or attributes, not part numbers, which makes contracts difficult to manage. Transactions have a tendency to be long and complicated and unexpected service exemptions are the norm. for the shipper, the value in computerizing a manual business process is lessening errors and streamlining processing cycle times. As contract compliance is maximized, the shipper can reduce leakage. Optimizing service demand can facilitate in maximizing efficiency in load and truck routing. In addition, an automated process also improves the ability to track activity-based costs that can reduce billing and payment orders.             However, it must be noted that most of these automated features have been commercially traditional transportation management systems. Up to this day, the market for these systems which was first introduced in the early 1990s continues to grow. Many of these systems provide features such as optimization, contract management and automated freight payment. Yet, advantages for e-logistics solutions can be attributed to its capability to provide benefits related mainly to communication and visibility. Through the internet – cheap and easily obtainable communications tool -, shippers will be able to avoid the –the expense and intricacy of electronic data interchange. Furthermore, using the internet will allow firms to reduce considerably time-extensive fax or phone communications with logistics service providers. The ubiquity of the internet maximizes visibility as all parties are allowed to post or access updates on the logistics transaction. The real opportunity for both shippers and carriers depends on the leveraging the power of the internet as a common computing platform that will enable a completely new process: Collaborative Logistics.                         a.         Collaborative Logistics             In understanding collaborative logistics, one must identify how costs are allocated in a logistics network. Both shippers and carriers stress a lot of attention on the controlling costs in order to improve profitability. Following the conventional approach, each firm has the capability to increase its efficiencies and lessen the “individual costs” of only those business processes that are independently controlled by the firm. This means that the company does not have any control and visibility on the “hidden costs”. The challenge then for firms is to reduce hidden costs through collaborative logistics.             An example of a hidden cost wherein all members of a logistics transaction pay, but no one individually controls, is asset repositioning. Here, shipper 1 necessitates goods to be delivered at a certain time and place. Shipper 2 necessitates good to be picked up at a certain time and place. The carrier must decide how to optimally apply their asset to this situation. In addition, shipper 1 and 2 do not really understand how their relationships affect asset repositioning costs. It must be noted that no single player controls asset repositioning costs. They are hidden costs that are paid by all. By maintaining as isolated approach, members of a logistics transaction are restricted in their ability to reduce overall costs. Through collaboration, all parties can recognize hidden costs and then implement a business operation particularly designed to lessen or totally eliminate them. Firms are accountable for controlling their individual costs. Total costs comprise both individual and hidden costs. The principal aim of collaborative logistics is to reduce total costs by offering a possibility for controlling these hidden costs.             A good example that shows the advantages of collaboration can be seen in the scheduling of truckload movements between multiple shippers for. Considering a tour that is set up between two of a company’s members, through collaboration, they will create and will use a dedicated 2,500 mile continuous route encompassing different distribution centers, production facilities and retail outlets for both companies. Through the collaborative logistics network, the two member companies recognized these synergistic moves and developed a weekly route which lessens asset repositioning costs and provides the carrier drivers a repeatable schedule. This kind of route was said to result in a 19 percent savings over their company-centric model. Moreover, the carrier is said to experience higher margins through better asset utilization and lower driver turnover through more regular driver schedules. Indeed, collaborative logistics provides a win-win scenario which allows all parties of the logistics community to reduce hidden cists and share savings.             Collaborative logistics networks allow the logistics community to collaborate in a mutually beneficial environment. Characteristics of a collaborative logistics network include: (1) a single place where all parties will be able to partake in this new business, (2) must not disturb current relationships, (3) must not sacrifice privacy, and (4) must allow flexibility. The internet has made the collaborative logistics network possible. The key to unlocking breakthrough efficiencies with collaborative logistics depends in leveraging the internet to its full capacity. In addition, a collaborative logistics network uses the internet as a distributed computing environment similar to al network parties. The internet is very well appropriate to deliver the capabilities featured in the collaborative logistics network such as allowing a single scheduling system and incorporating with enterprise systems to handle transaction volume at the same time, living outside the walls of organization to maximize collaborative opportunities.                         b.         E-commerce and Logistics             Supply chain management and customer channel enhancement have dramatically impact organizations in their global logistics operations. As a whole, these two have redefined the roles and responsibilities of suppliers, buyers and third party logistics providers. Suppliers have extended there roles far beyond just shipping boxes out the door and third party logistics providers are taking on higher value-added activities including warehousing, final assembly and even PC installation at customer sites.               E-commerce has specifically accelerated the way logistics are managed by companies across the entire value chain. The size of shipments are shrinking, at the same time, shipment frequencies are increasing and the ubiquity of the internet is offering new opportunities and challenges for the companies serving customers who are geographically dispersed, difficult to predict and sensitive to price or service levels.             E-commerce has a ripple effect up the supply chain that impacts companies and their suppliers as foreign buyers work to coordinate their operations with actual customer demand. In the past, supply chains have been prepared to “push” products from suppliers to customers with limited demand. This “push” approach typically results in supply chain distortions marked by the excess inventories, unsatisfied consumer demand and an inability to forecast accurately. However, the “pulling products” across the supply chain helps to make sure that supply and demand are coordinated by feeding information about actual orders to the enterprise, suppliers and third party logistics provides. The advantages of the pull system is very apparent, however, realizing them necessitates basically rethinking how logistics should be managed throughout the entire order to delivery process.             v.         The Human Dimension             The underlying principle behind logistics is that the people are the key to business success. In the world of e-business, individuals are increasing accountable for maintaining relationships with people at companies that collaborate with their employer. It must be noted that computers in businesses has growingly allowed companies to integrate functions, activities and processes which gives each employee within the company a personal perception of the enterprise, the extended enterprise of associated business partners and the relationships among those entities. VIII.     Conclusions             There is so much more to supply management than a materials movement or transportation initiative. It is also a new approach and a new thinking about business relationships.  Supply chain management is more than a simple tool in evaluating and optimizing a supply chain. It must be noted that supply chain management is a rather complicated, structured business relationship model as it takes into account all aspects of the events necessitated to produce a company’s product or service in the most efficient and cost-effective manner possible.             The rapid introduction of e-business and supply chain management has indeed become an industrial trend in the global marketplace. The vast logistical issues that surround e-commerce and logistics support provide both a challenge and an opportunity to organizations. It must be noted that the key to implementing an efficient supply chain and to comprehend e-business excellence is the ability to control the flow of information, to integrate varied business functions and to collaborate activities across different organizations. By taking advantage on the advanced information technologies, e-logistics will be able to provide an internet-based solution for the integration of automated logistics execution, e-commerce and supply chain management. E-logistics services are primarily concerned on collaboration and online managing of the entire back-end process of logistics from the time an order is made on the web site which includes warehousing, order fulfillment, transactions, shipping and delivery and customer care.  E-logistics offers a way for collaborating information, equipment and money flows across the supply chain, integrating both internal and external parties into a single application environment which will enable companies to shop, commit, execute and settle their logistics transactions electronically.             The researcher has concluded that building relationships are essential to the development and implementation of successful e-logistics solutions. It must be very well noted that to attain a more efficient e-logistics and e-fulfillment, it is advantageous to have a trading environment that has appropriate and enough information about the goods with regards to their description and origins as well as their destinations. The sellers and the buyers must be able to supervise and track goods at every point along the way from the supplier to the consumer. Also, all stakeholders must be able to check on the internet the availability and the status of the orders. All this can only be attained if trade information is simplified, automated and fully harmonized. It also necessitates a sophisticated supply chain management system for bringing together and enabling global end to end monitoring of trade information. All this can only be attained through the help of information technology and the internet as it has been shown by other research that the implementation of e-logistics have significant changes in the attitudes of clients of customers as clients expect their logistics partners to provide them and their logistics partners to provide them and their customers accurate orders and inventory status. IX.       Recommendations             The researcher would like to recommend that more studies should be made with regards to the importance of building relationships for the development and implementation of a successful e-logistics solution. As mentioned earlier, the findings of this study reveal that the former statement is true in fostering collaboration and integration within the supply chain networks; however, little supporting literature has been found on this specific area of study. Hence, more research is definitely needed.       X.        References Credit:ivythesis.typepad.com

SUPPLY CHAIN MANAGEMENT

Impacts of e-Business on Specialist Supply Chain Networks Contents I. Executive Summary II. ...

SUPPLY CHAIN MANAGEMENT

Management Paper   Supply Chain Management               Supply Chain Management is the process of planning, implementing, and controlling the operations of supply chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption. It is a cross functional approach to managing the movement of raw materials into an organization and the movement of finished goods out of the organization toward the end consumer ().             Supply Chain management is also the combination of art and science of improving the way company finds the raw components it needs to make a product or service and deliver it to customers (). It seeks to enhance competitive performance by closely integrating the internal functions within a company and effectively linking them with external operations of suppliers and channel members. Moreover, this has been a prominent concern for both large and small companies as they strive for better quality and higher customer satisfaction. According to  and  (2001) and  (2000), supply chain management works to bring the supplier, the distributor and the customer into one cohesive process. The manufacturers, suppliers, transporters, warehouses, retailers, and customers are involved in a dynamic but constant flow of information, products, and funds ( 2002).             In a supply chain, a company links to its supplier upstream and to its distributors downstream in order to serve its customer. The goal of supply chain management is to provide maximum customer service at the lowest possible costs.             Companies now are competing supply chain-to-supply chain rather than enterprise-to-enterprise requiring for more intimately connected relationships. Customer markets and supply chains are no longer limited by physical proximity, and businesses are sourcing from and managing a greater number of far-flung partners and channels.             The global economy has redefined the dynamics of competition for modern organizations.  With product lifecycles shortening and worldwide rivalry increasing, success depends on effective global supply chain management, being able to deliver the right product to the right market at the right time. The complexity involved in managing supply chains that span continents and dominate markets demands strategies and systems that are adaptable.             Managing Supply Chain for Global Competitiveness takes a strategic look at all of the core functions of global supply chain management which includes product design, planning and forecasting, sourcing, outsourcing, manufacturing, logistics, distribution, and fulfillment.                         An example to illustrate this theory on the supply chain management is the PepsiCo, Inc. PepsiCo is under the food consumer product industry and is the world leader in convenient foods and beverages. It was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including the Gatorade in 2001.  PepsiCo offers product choices to meet a broad variety of needs and preference — from fun-for-you items to product choices that contribute to healthier lifestyles. PepsiCo owns some of the world’s most popular brands, including Pepsi-Cola, Mountain Dew, Diet Pepsi, Lay’s, Doritos, Tropicana, Gatorade, and Quaker. ().             The Pepsi brand and other Pepsi-Cola products account for nearly one-third of the total soft drink sales in the United States. In order for the company to make sure that their products reach the customers, the company needs a efficient supply chain solutions.   PepsiCo’s Supply Chain Management             PepsiCo, Inc. operates as a global snack and beverage company. It manufactures, markets, and sells a variety of salty, convenient, sweet, and grain-based snacks; carbonated and noncarbonated beverages; and foods worldwide.             When it comes to delivering high cost and perishable products to manufacturing sites, just-in-time (JIT) remains one of the most cost-effective supply chain solutions. In JIT process, on time delivery is an absolute necessity.             Just-in-Time (JIT) is a philosophy that defines the manner in which a manufacturing system should be managed. It one of many initiatives that aimed in enhancing customer satisfaction in terms of availability of options, assurance of quality, prompt delivery times, and value of money.             Pepsi-Cola in North America, the refreshment beverage unit of PepsiCo, Inc., sells refrigerated soft drink concentrate to Pepsi-Cola Bottlers in the United States and Canada. Delivered JIT fashion to companies without on-site inventory, on-time delivery of this premium ingredient is critical to keep the production lines moving.             The Pepsi brand and other Pepsi-Cola products account fro nearly one-third of the total soft drink sales in the United States. In order to ensure that PepsiCo’s concentrates reaches bottlers as needed during the production, they partnered with 3PL provider Penske Logistics to manage its transportation. Penske also provides warehouse management for two Pepsi distribution centers in North America.             According to , vice president of freight management of Penske Logistics, “in a JIT environment, leading-edge technology and optimized transportation are very important. The customer’s primary concern above all else is having a provider that can flawlessly execute the process and deliver on time, everytime.”             In connection with this, PepsiCo set two objectives for transportation management. One is to achieve an on-time delivery rate at 99.1% and another is to reduce transportation costs.             In achieving a ninety-nine percent in delivery rate requires an experienced operations team with the knowledge and skills to make the solution work in the real world. Moreover, they need to be empowered with optimized processes and technology that enable the team to perform at the highest possible level.             With the application of new technology that provides greater supply chain visibility, better organized data, and access to higher level of real time or near real time information, even the best team can improve their performance.             In 2000, Penske converted Pepsi’s transportation management technology from propriety software to i2 transportation optimization solution. i2 transportation platform was enhanced with the addition of interface between the two companies             i2 Transportation is a part of end to end solution for planning, execution, and management of the entire transportation cycle. This solution is designed to enable an organization to utilize and manage an entire transportation network, as well as reduce cost while improving transport performance. In addition, i2 transportation is designed to employ sophisticated optimization and data techniques to define and evaluate alternative transportation strategies. It is also designed to provide comprehensive data management, analytics, and reporting of key transportation cost and service trade-offs.             In addition, Penske’s partnership with Business objects provides comprehensive supply chain data from its data warehouse, analysis and management applications. Penske’s with used of i2 transportation can track performance at every stage in the process increases flexibility and provides greater control over the transportation operation. This increase in visibility makes it easier to keep track of shipments, revise routes and schedules to accommodate unforeseen changes and implement alternative plans to counter delays. By Penske’s putting a solution in place to track and measure every shipment, Pepsi has been able to provide an on-time delivery performance of well over 99 percent.             Pepsi’s transportation is consolidated to a central location to reduce costs. Penske also provided a nation wide carrier rate re-negotiation and service assessment to improve cost structure and achieve on-time delivery goal. With this centralization, this allows negotiation in a large scale to secure the best rates and services.             Furthermore, Pepsi’s orders are received electronically and optimized to ensure lowest transportation cost. Advanced technology is deployed to select the lowest cost carrier, find the best routes and consolidate shipments. Optimal load configuration ensures maximization of each truckload ( 2003).             In summary, PepsiCo used the JIT process to its supply chain management. To make this possible, Pepsi partners with Penske that has provide them with i2 transportation optimization solutions which has satisfies their consumer with the on-time delivery and with the benefit to the company for it has also reduce transportation cost.   Companies using Just-in-Time based Operation             In Just-in-time based operation, day-to-day activities are driven by continuously replenishing the customer demand driven finished goods inventory targets. JIT requires production tied more directly to short term customer demand patterns. In purchasing, it focuses on the lowest cost not only the unit cost of materials but also transportation, storage, and other related costs. The logistics manager in this kind of operation focuses with shipping smaller lots or quantities of material because full truckloads are seldom used in JIT. These methods allow transporting small quantities at the same cost per unit as larger loads but the costs associated with storing and handling bulk shipment are being reduced (, 2005).     Companies not using Just-in-Time bases Operation             When an operation of a company is not just-in-time based, the demand or production planner will strive to optimize production-oriented goals and objectives such as equipment utilization, labor efficiency, throughput and uptime. Optimizing these goals often leads to run large batch sizes that are dependent on the availability of raw materials. This optimizes the equipment and labor utilization but the production planners and managers has not been looking at the expense of the bigger picture.             The sourcing or purchasing managers strives towards reducing company’s spending overall. This manager consolidates suppliers offering products or materials  at the lowest per unit costs through buying in volume. They may even get the shipping and freight costs included in the purchase price which means the price of the commodity also would increase. Purchasing managers are focused on getting the best price, not putting into consideration the supplier performance and reliability.             The logistics/transportation manager id tacked with getting raw materials in and the finished goods out of the production process and seek to optimize the transportation and distributing network. This manager should focus on the lowest cost and reliability of the logistics or transportation solutions. But lowest cost could only be attained if the purchasing team negotiates a delivered cost package deal with the supplier and the supplier is responsible of the reliability and performance of the carriers or transporters (, 2005). References:   Credit:ivythesis.typepad.com

SUPPLY CHAIN MANAGEMENT

Management Paper Supply Chain Management Supply Chain Management is the process of planning, implementing, and control...

Management Paper

Management Paper   Supply Chain Management               Supply Chain Management is the process of planning, implementing, and controlling the operations of supply chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption. It is a cross functional approach to managing the movement of raw materials into an organization and the movement of finished goods out of the organization toward the end consumer ().             Supply Chain management is also the combination of art and science of improving the way company finds the raw components it needs to make a product or service and deliver it to customers (). It seeks to enhance competitive performance by closely integrating the internal functions within a company and effectively linking them with external operations of suppliers and channel members. Moreover, this has been a prominent concern for both large and small companies as they strive for better quality and higher customer satisfaction. According to (2001) and (2000), supply chain management works to bring the supplier, the distributor and the customer into one cohesive process. The manufacturers, suppliers, transporters, warehouses, retailers, and customers are involved in a dynamic but constant flow of information, products, and funds (2002).             In a supply chain, a company links to its supplier upstream and to its distributors downstream in order to serve its customer. The goal of supply chain management is to provide maximum customer service at the lowest possible costs.             Companies now are competing supply chain-to-supply chain rather than enterprise-to-enterprise requiring for more intimately connected relationships. Customer markets and supply chains are no longer limited by physical proximity, and businesses are sourcing from and managing a greater number of far-flung partners and channels.             The global economy has redefined the dynamics of competition for modern organizations.  With product lifecycles shortening and worldwide rivalry increasing, success depends on effective global supply chain management, being able to deliver the right product to the right market at the right time. The complexity involved in managing supply chains that span continents and dominate markets demands strategies and systems that are adaptable.             Managing Supply Chain for Global Competitiveness takes a strategic look at all of the core functions of global supply chain management which includes product design, planning and forecasting, sourcing, outsourcing, manufacturing, logistics, distribution, and fulfillment.                         An example to illustrate this theory on the supply chain management is the PepsiCo, Inc. PepsiCo is under the food consumer product industry and is the world leader in convenient foods and beverages. It was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including the Gatorade in 2001.  PepsiCo offers product choices to meet a broad variety of needs and preference — from fun-for-you items to product choices that contribute to healthier lifestyles. PepsiCo owns some of the world’s most popular brands, including Pepsi-Cola, Mountain Dew, Diet Pepsi, Lay’s, Doritos, Tropicana, Gatorade, and Quaker. ().             The Pepsi brand and other Pepsi-Cola products account for nearly one-third of the total soft drink sales in the United States. In order for the company to make sure that their products reach the customers, the company needs an efficient supply chain solution.   PepsiCo’s Supply Chain Management             PepsiCo, Inc. operates as a global snack and beverage company. It manufactures, markets, and sells a variety of salty, convenient, sweet, and grain-based snacks; carbonated and noncarbonated beverages; and foods worldwide.             When it comes to delivering high cost and perishable products to manufacturing sites, just-in-time (JIT) remains one of the most cost-effective supply chain solutions. In JIT process, on time delivery is an absolute necessity.             Just-in-Time (JIT) is a philosophy that defines the manner in which a manufacturing system should be managed. It one of many initiatives that aimed in enhancing customer satisfaction in terms of availability of options, assurance of quality, prompt delivery times, and value of money.             Pepsi-Cola in North America, the refreshment beverage unit of PepsiCo, Inc., sells refrigerated soft drink concentrate to Pepsi-Cola Bottlers in the United States and Canada. Delivered JIT fashion to companies without on-site inventory, on-time delivery of this premium ingredient is critical to keep the production lines moving.             The Pepsi brand and other Pepsi-Cola products account fro nearly one-third of the total soft drink sales in the United States. In order to ensure that PepsiCo’s concentrates reaches bottlers as needed during the production, they partnered with 3PL provider Penske Logistics to manage its transportation. Penske also provides warehouse management for two Pepsi distribution centers in North America.             According to Frank Hazeltine, vice president of freight management of Penske Logistics, “in a JIT environment, leading-edge technology and optimized transportation are very important. The customer’s primary concern above all else is having a provider that can flawlessly execute the process and deliver on time, everytime.”             In connection with this, PepsiCo set two objectives for transportation management. One is to achieve an on-time delivery rate at 99.1% and another is to reduce transportation costs.             In achieving a ninety-nine percent in delivery rate requires an experienced operations team with the knowledge and skills to make the solution work in the real world. Moreover, they need to be empowered with optimized processes and technology that enable the team to perform at the highest possible level.             With the application of new technology that provides greater supply chain visibility, better organized data, and access to higher level of real time or near real time information, even the best team can improve their performance.             In 2000, Penske converted Pepsi’s transportation management technology from propriety software to i2 transportation optimization solution. i2 transportation platform was enhanced with the addition of interface between the two companies             i2 Transportation is a part of end to end solution for planning, execution, and management of the entire transportation cycle. This solution is designed to enable an organization to utilize and manage an entire transportation network, as well as reduce cost while improving transport performance. In addition, i2 transportation is designed to employ sophisticated optimization and data techniques to define and evaluate alternative transportation strategies. It is also designed to provide comprehensive data management, analytics, and reporting of key transportation cost and service trade-offs.             In addition, Penske’s partnership with Business objects provides comprehensive supply chain data from its data warehouse, analysis and management applications. Penske’s with used of i2 transportation can track performance at every stage in the process increases flexibility and provides greater control over the transportation operation. This increase in visibility makes it easier to keep track of shipments, revise routes and schedules to accommodate unforeseen changes and implement alternative plans to counter delays. By Penske’s putting a solution in place to track and measure every shipment, Pepsi has been able to provide an on-time delivery performance of well over 99 percent.             Pepsi’s transportation is consolidated to a central location to reduce costs. Penske also provided a nation wide carrier rate re-negotiation and service assessment to improve cost structure and achieve on-time delivery goal. With this centralization, this allows negotiation in a large scale to secure the best rates and services.             Furthermore, Pepsi’s orders are received electronically and optimized to ensure lowest transportation cost. Advanced technology is deployed to select the lowest cost carrier, find the best routes and consolidate shipments. Optimal load configuration ensures maximization of each truckload ( 2003).             In summary, PepsiCo used the JIT process to its supply chain management. To make this possible, Pepsi partners with Penske that has provide them with i2 transportation optimization solutions which has satisfies their consumer with the on-time delivery and with the benefit to the company for it has also reduce transportation cost. Flow of Materials in Pepsi-Cola Production             PepsiCo uses a system and a lot of hard work in their production of Pepsi-Cola. The system starts with the finest ingredients available which are the kola nuts, vanilla beans, flavor oils, citrus, sweeteners, and the purest distilled water with the best technology and all the care to blend their ingredients.             Pepsi has also their own exacting production and quality standards, monitored with constant testing to guarantee quality and consistency in their products. They also have their own local distribution system to make sure that Pepsi you open at home is as fresh and delicious as it was when sealed in their plant.             Flavor concentrates are shipped from special Pepsi-Cola manufacturing plants in heavy duty, air-tight containers. Liquid sweeteners are transported in special tanker trucks. These ingredients are stored in clean, sanitary areas and items requiring refrigeration are kept in temperature controlled areas.             The bottles and cans that will eventually be filled with Pepsi are manufactured elsewhere, and shipped to Pepsi plants wrapped and sealed to protection. Labels, cartoons, caps, the carbon dioxide used to carbonate soft drinks and other supplies are also produced by other companies. Upon arrival, everything is subject to inspection to make certain all of the ingredients and materials meet the Pepsi standards.             Special equipment is used to uncase and depalletize incoming shipments of bottles and cans. The machines then transfer the individual packages to a conveyor belt. Once on the belt, they travel rapidly through a printer that applies a production code to each can. Then they are automatically turned upside down and rinsed thoroughly with filtered water before proceeding directly to the filler.             Water is the key ingredient in all soft drink. Pepsi-Cola take special care to purify that water it uses, a procedure that involves careful treatment, filtration and purification.             Pepsi-Cola flavor concentrate is then carefully combined with sweeteners and other ingredients in large stainless steel mixing tankers. Quality control audits are then performed by specially trained technicians to maintain the highest possible quality standards.             In the last step of the manufacturing process, as the now rinsed cans reach the filler, they are reinverted, immediately filled and the lid is applied at an average speed of 1,200 cans per minute. The filler is where the syrups from the mixing tanker are combined with the purified water from the filtration process. The liquid is then carbonated. Then after that, the cans and bottles are imprinted with a freshness date code and a final quality check is done to ensure that the package is properly filled, sealed and labeled. As the products leave the manufacturing line, they are packed in six or 12 packs, 24 or 30 can cases. The finished packages are stacked on shipping pallets and moved to temporary holding areas or to a central warehouse for shipping.   Companies using Just-in-Time based Operation             In Just-in-time based operation, day-to-day activities are driven by continuously replenishing the customer demand driven finished goods inventory targets. JIT requires production tied more directly to short term customer demand patterns. In purchasing, it focuses on the lowest cost not only the unit cost of materials but also transportation, storage, and other related costs. The logistics manager in this kind of operation focuses with shipping smaller lots or quantities of material because full truckloads are seldom used in JIT. These methods allow transporting small quantities at the same cost per unit as larger loads but the costs associated with storing and handling bulk shipment are being reduced ( 2005).     Companies not using Just-in-Time bases Operation             When an operation of a company is not just-in-time based, the demand or production planner will strive to optimize production-oriented goals and objectives such as equipment utilization, labor efficiency, throughput and uptime. Optimizing these goals often leads to run large batch sizes that are dependent on the availability of raw materials. This optimizes the equipment and labor utilization but the production planners and managers have not been looking at the expense of the bigger picture.             The sourcing or purchasing managers strives towards reducing company’s spending overall. This manager consolidates suppliers offering products or materials  at the lowest per unit costs through buying in volume. They may even get the shipping and freight costs included in the purchase price which means the price of the commodity also would increase. Purchasing managers are focused on getting the best price, not putting into consideration the supplier performance and reliability.             The logistics/transportation manager id tacked with getting raw materials in and the finished goods out of the production process and seek to optimize the transportation and distributing network. This manager should focus on the lowest cost and reliability of the logistics or transportation solutions. But lowest cost could only be attained if the purchasing team negotiates a delivered cost package deal with the supplier and the supplier is responsible of the reliability and performance of the carriers or transporters (2005).   Credit:ivythesis.typepad.com

Management Paper

Management Paper Supply Chain Management Supply Chain Management is the process of planning, implementing, and control...