Viva Energy is among the oldest energy companies in Australia. The company held a hundred and one year’s anniversary in the recent past. The company imports fuel, lubricants, chemicals, and bitumen to Australia. The company is dedicated to the provision of reliable energy and lubricants to the customers.
Viva is committed to the establishment of a long-lasting mutual relationship with customers; this evident with its vision’ transformation of the world through energy’. The vision statement “integrity and respect through customers sustainability.” The organizations’ strategic plan is to provide opportunities to the society to develop skills hence expertise (Wang, Wallace, Shen, & Choi, 2015). The expertise will generate exponential revenue for the organization.
The flow of petroleum products in the organization has been on the rise since the era of the wheel in Mesopotamia in ancient history. The supply increase in Viva Energy has been attributed to the fast advancement in the technology of automobiles and machinery (Chin, Tat, & Sulaiman, 2015). Technology has led to machine innovation using petroleum energy. Also, technology in the refining plant has enabled the organization to refine the high quantity of the products hence the ability to meet demand.
Viva Energy has a long list of reliable and convenient suppliers located in different and far geographical locations as long as they can establish long term and cost-efficient supply.
Suppliers to Viva energy are selected based on their convenience in making supplies, cost-effectiveness, and the ability to establish long term relationships as well as the ability to supply quality products. This is to ensure processes are not stalled on raw materials or stock basis.
The diagram below is a Kraljic matrix of Viva Energy.
Machine and logistic services are leveraged items, while vehicle and testing machines are strategic items of the company (Kraljic, 1983). Package delivery and peripheral electronics are not that critical, while substrates and specialized molding form the bottleneck items.
On the other hand, technology has contributed to lowered demand in various aspects. First, automobiles using solar energy have been brought in the market (Christopher, 2016). Second, tarmacked roads are less resistance hence low fuel consumption and finally knowledge on the side effect of petroleum by-products in the environment. These factors have contributed to lowered demand for the product, therefore low supply in and out of the organization.
Was it not automobile technology; Viva Energy could not be in existence today. The main customers of the organization are the automobiles owners and operators as well as machinery operating individuals at the farm or any other areas of interest. The customers of the organization are spread throughout Australia, but statistics have it that they are more concentrated in urban areas. The customers provide a market to the organization hence raising revenue for the continued operation of the organization as well as generating profit to the shareholders (Fahimnia, Sarkis, & Davarzani, 2015).
The organization’s inventory is technical, and operating; it requires expertise in the field. The platform is highly authenticated to keep off likely hood of data bleaching. Initially, the organization practiced paper inventory keeping but later switched to the offline computer software. The organization today uses an online inventory control mechanism for all the items and products it possesses to increase the reliability and integrity of information of interest pertaining to an item.
Using the online inventory mechanism is a milestone in information about the products and items of the organization. It enables live tracking of orders and supplies. The management of inventory is made easier and secure. However, the department is prone to a variety of challenges, especially where coordination between it and other departments is poor Formentini, & Taticchi, 2016). The inventory management has little knowledge of the dynamics of the market and the likely number of sales or supplies expected at a given trade period hence inconvenience. The online interface in use is advantageous but requires expertise. The expertise is not usually readily available, and it is costly to hire.
The bullwhip is a deep science in the real sense; the report will, however, not explore the science behind it. The business use of the term comes into play when demand and supply are the primary subjects for setting the equilibrium in the market. The future is unfolded; however, the business has to plan for the future hence forecasting. Similar to other sectors, forecasting in business is sensitive, and a little mistake or change in the market behavior is likely to cause variations in what is expected and the reality.
Advancement in information and technology is not predictable, yet they play a critical role in determining the future and features of a business. Viva Energy had a high expectation that technology advancement will call for high supplies due to a high number of automobiles in the market. However, solar-driven machines came into play, and a dramatic fall in demand became a big concern. The supply chain became inefficient and incapable of meeting the organization’s demand due to low sales hence profit.
The best remedy to bullwhip is initiating a close relationship with the customers, suppliers, competitors, and other firms whose product affects you in any way. Generally, Viva Energy should establish a good relationship with every player in the market. This will facilitate solid and accurate planning hence combating bullwhip.
Inventory software, which is integrated online, is the most significant information technology under implementation in the organization (Genovese, Acquaye, Figueroa, & Koh, 2017). It facilitates supply chain control through notifications to add stock and order tracking. This helps the organization in timeliness in restocking and orders delivery.
Collaborative practices between the organization and the customers, as well as the suppliers in environmental conservation, have contributed dramatically to improved communication, continuity in supply reduction in cost, flexibility, and significance of the suppliers’ voice in the market.
The supply chain of Viva Energy is straight forward and characterized by few but complex activities at their capacities. The supply chain begins literally with planning. Planning is done with consideration of the market demand, available stock, and market prediction, among other factors worth considering. After making a competent plan, actual sourcing is done, and the stock is delivered to the organization (Heizer, Render, & Munson, 2017). Here transport and logistics knowledge are critical. The final step involves reselling the stock to the consumers. This marks the end of the supply chain.
Fostering agility
Over the past few years, agility in the supply chain has become critical and wanting. The organization at hand must have sufficient capacity to switch gears in case of sudden changes in the market. Viva has managed this through sourcing only products they have sufficient market and reliable forecast behavior.
Adaptability
Viva management understands the risk and the disadvantage associated with sticking to one line of supply. There are high inconveniences that may arise with dependence on one line of product supply with the constantly changing market demand. Viva opts to be competent in adapting to new supply chains.
Alignment
Viva energy has concerns in aligning its needs with that of all the other firms in their line of supply chain. This is competent because supplies are made in volume when they are needed most and in low quantity when the market demand is low hence efficiency and competence in the market (Padmanabhan & et al., 2009).
However, well, the business is doing, there are factors worth considering, and they usually have a lot of weight and concern by the local and international society (Hugos, 2018). This is the factor not limited to one person or a group of individuals since the international community member feels their impact. For instance, any business that contradicts the morals and ethics of the international community is a threat to the future of mankind and has to be stopped with immediate effect until proper amendments are made.
As long as Viva energy is concerned, environmental issues with the high carbon byproducts issues are concerned is raised. The organization has strived in combating the situation to ensure little provocation of the international community as long as environmental conservation and green life is concerned. The organization has done this through indulging in community works like tree planting and maintenance through campaign as well as through scientific methods of controlling emissions in refining plants and the products themselves (Kshetri, 2018).
With the advancement in time and technology, most business is likely to establish and make more supplies than the prior trade periods. This is according to the fact the advancement in technology has the capacity to change the living standards of the people hence the ability to buy therefore huge supplies. On the contrary, Viva Energy should be realistic and true to the fact that the supplies are likely to reduce with a great margin gradually (Monczka, Handfield, Giunipero, & Patterson, J2015). This is evident in the need to maintain a sustainable environment and the pollution rate of carbon products in the environment.
Environmental
To ensure sustainability, Viva Energy must develop a strategy to cope with the high pollution caused by carbon emissions from its suppliers. Perhaps this can be done by developing a mechanism to control the pollutants from the reach of the environment (Lambert Cooper, Lee & et al, 2004).
Society
The products in the line of the organization must be acceptable and adhering to the morals and ethics of the society. The organization should ensure various social support mechanisms like giving back to the society through job offers, collecting and acting on society views, development of the infrastructure, among others, to ensure maintained social support (Stadtler, 2015).
Economic
This is likely to be the most significant pillar of concern in every business setting and sustainability demand. Viva Energy has no option besides ensuring the economic aspect of the products in the supply chain has economic significance inform of return at the output level. The cost of procurement should always below that supply price with an amount equal to profit and cost of other factors.
The state of affairs in the supply chain of the organization is not static. The dynamic of things are, however, a variant with that of the common market with little difference, hen e the pressure to discuss this in the article with close reference of the organization as opposed to the generalization of affairs.
Of course, buying and selling agreements are subject to change terms and conditions with the advancement in time and change in other factors in the market. The change in time in this scenario has much relevance in various dimensions (Wang, Gunasekaran, Ngai, & Papadopoulos, 2016). First, the purchasing power and need in the market may have changed due to the trends in the market with the likes of the development of a more competitive product than the one dealt with the company, among other market-related factors. The government policies may also change criminalizing, discouraging, or encouraging consumption of a certain product hence changes in the market behavior.
Viva Energy has a concrete understanding of market trends hence the urgency of establishing and making use of alignment with the customers, competitors, and fellow suppliers to avoid being a sole player in any given line (Pagell & Wu, 2009). This phenomenon is advantageous as it leads to monopoly, but where the fact is not achievable, the business may be competed out with a simple change in the market. The purpose of alignment in dynamic procurement and supplies is to ensure the organization has sufficient flexibility in operations.
Felicity is mainly a point of interest of alignment in dynamic markets; it crops up in aspects of replenishment, lean production, and continuity in operations. Competent replenishment enables the organization only to restock on then fast-moving products hence reducing losses accrued to storage or dead stock. It ensures business continuity hence, profit generation (Wang, & Cullinane, 2015).
The selection of the suppliers and distributors is critical to success in the business of suppliers and sourcing. The business has to be very conscious in selecting suppliers and distributors to avoid being blinded by short term benefits rather than long term benefits.
Viva Energy has a lot of interest in cost or the price of the suppliers and distributors than any other factor, which is woe to the organization. The organization has to ensure equitable consideration of the possibility and likelihood of establishing long term relationships with the suppliers, .and distributors to create; convenience with the customers. Otherwise, business operations will be stalled from time to time, a phenomenon that can drive away customers. Secondly, the quality factor is not a subject business can afford to compromise on. The prominent business people who have been in the field over time have argued business is the quality of the product. This is due to the fact that some individuals will not mind the cost of the product as long as the quality is satisfying. On the other hand, providing low-quality products is opening doors to the competitors.
There are sufficient shreds of evidence of operating with locals as suppliers and distributors of the organization. The management should shift from the local business and aim at going global in both sourcing and supplying.
The quality of the product is a marketing strategy by itself. Providing quality in the market makes the organization outstanding in customers’ attraction hence the high volume of sale, revenue, and thus profit. Market research has proven that customers have more consideration of the quality in comparison to the cost of the product. The customers tend to avoid buying a particular product if their prices rate very low hence creating room for quality doubt. This suggests that customer have an interest in quality, and once the organization pay special attention to these things may change.
Long term relationship allows continuity of business operations hence improved reliability and convenience with the customers. This is a strategy for establishing other more relationships on the fact happy customers come back with friends, thus massive sales.
Going global is the current trend in every business determined to succeed in the present century. Exploration of the market on sources of the raw materials is wanting and critical (Wiengarten, Humphreys, Gimenez, & McIvor, 2016). With this, the organization will be able to locate cheap, quality sources of raw material from a source with the ability and willingness to establish long term relationships hence competence in the market. It will also increase the market base for the products of the organization hence the possibility of making massive sales suggesting this will come along with the commendable return. The organization should strive to go global to increase the market base and compete with the international organization. In the end, the organization management may be surprised to dominate foreign markets more than they do in the local markets hence stability in operations.
Conclusion
This report has given in-depth insight to the subject supply chain of Viva Energy Company of Australia. The company sources and sells petroleum products, energy, lubricants, and bitumen. The report has given sufficient insight into the background of the organization also long as operations; information systems, integration, and sustainability are the subject of concern. The report has explained the criteria the organization uses in selecting suppliers and distributors hence coming up with recommendations worth implementing to counter the current state of affairs more competitively. The report has concluded with insight into the benefits of implementing the suggested improvements to the organization.
References
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Genovese, A., Acquaye, A.A., Figueroa, A. and Koh, S.L., 2017. Sustainable supply chain management and the transition towards a circular economy: Evidence and some applications. Omega, 66, pp.344-357.
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