Describe about the Supply Chain Appropriate Practices for Productive Maintenance.
Travel Blue Ltd is a UK based globally leading travel accessories producing company with the head office located in London. Established in 1986, Travel Blue Ltd focuses on the production of accessories that are essential for travelers. Its initial distribution was focused on the travel retail business like Airports, but currently has a distribution network covering more than 110 countries on the global market. As pointed out by the Flight Center travel group, Travel Blue Ltd is among the top thirteen duty-free retailers. The company values effective Supply Chain Management (SCM) as one of the most valuable ways of improving organizational performance and securing competitive advantage. Supply chain management practices are activities that are adopted in a business with an aim of promoting an effective management of the supply chain. According to Haddad (2012), competition in business is no longer between organizations but among different supply chains. Competitive advantage in return also contributes to a positive impact on the performance of the organization.
The practice and understanding of the supply chain management have thus become an essential prerequisite for ensuring effective competition in the global business market. SCM thus recognizes the strategic nature of performance between trading partners with an aim of improving the performance of the organization as well as the whole supply chain. The paper presents details of the analysis of the supply chain appropriate practices of Travel Blue Ltd. The paper presents why customers prefer the company services, delivery of the value proportions, an organization of the company in delivery, gaps in the supply chain, as well as recommendations for better performance (Sarraj et al., 2014).
The supply chain management of Travel Blue Ltd is made up of the logistics, manufacturing and supply, distribution, retailers, and consumers. The company has different consolidated warehouses globally in strategic locations so as to reduce the transportation loading period to retailers and consumers. The company has also given a responsibility to the distributors to manage the inventory and delivery on the assigned market. The distributors ensure the products reach the retailers who in turn sell to the consumers. While targeting the relevant channels of retailers, the distributors act as the medium of marketing channel. The major target customers for the company products are mainly business travelers who are the end users of the company products. As a result, Travel Blue Ltd logistics and supply chain becomes the center for the manufacture, retail, distribution, and finished product. To maintain its performance in the global market, the company should adopt the following supply chain practices;
The purpose of the governing council is giving direction and helping in the alignment of the SCM strategy along the overall strategy of the company. The membership of the council should hence include the supply chain organization leader together with the corporate executives, influential company leaders, and business unit managers as pointed out by Sarraj et al. (2014). Ideally, Travel Blue Ltd holds regular meetings to ensure the commitment and endorsement of the senior leadership.
Many SCM organizations or companies tend to struggle for recognition since their strategies and objectives differ with the stated strategies and objectives of the organization. The company has adopted a proper governing council that is necessary to prevent the delay through a provision of constant and consistent validation that the SCM strategy correlates directly with the corporate strategies. The proper governing council is also essential in removing barriers to possible success that the organization can achieve.
It is the long-term relationship between the suppliers and the organizations. It is designed for leveraging the operational and strategic capabilities of participating organizations to enable them to achieve significant benefits. It helps in emphasizing direct and long-terms associations so as to encourage problem-solving efforts and mutual planning. Such partnerships promote shared benefits among the stakeholders who are willing to share responsibilities for the success of the organization (Maria & Christina, 2012). Organizations that are strategically aligned can effectively work together in eliminating wastage of time and resources.
Effective customer relationship consists of an array of practices that are practiced with an aim of managing complaints from customers, building long-term customer relationships, as well as improving customer satisfaction. As pointed out by Haddad (2012), proper customer relationship management is an important component of supply chain practices as committed relationships inherently cubs competition barriers in different facets of the business. The growth of personalized services and mass customization is leading to an era where the customer relationship management is becoming very crucial for a corporate survival of a business according to Chong et al. (2012).
Having a good relationship with the customer chain motivates customers to effectively and successfully implement the SCM programs for a mutual benefit of the business. A close customer relationship also allows customers as well as the SCM organization to differentiate the competitors and its products, sustain the loyalty of customers, and promote a drastic extension of the value it provides to the customers. Smyth (2015) in his study points out that good customer relationship is one of the pillars of the SCM as it focuses not only one product supply but also on helping, supporting and building a sustainable community. It thus encourages shaping a better future for the market, customers, and its stakeholders to leverage genuine and collective integrity, accountability, and service delivery.
The sharing of information has two major aspects which are quality and quantity, aspects that are both essential as SCM practices that are independent constructs. The quality aspect of information sharing is defined as the extent at which proprietary and critical information are communicated to a supply chain partner. Shared information can vary from tactical to strategic in nature and from information about customer response to logistics activities and general market. Smyth (2015) points out that the key to seamless supply chain makes available up-to-date and undistorted market data in all the nodes within the supply chain. According to Smyth (2015), information sharing is a solid building block characterizing a stable supply chain and can promote the partners to expand as a single entity. It gives them strength and power to stand the needs of the end customers and timely respond to market changes. The effective use or timely and relevant information within all the supply chain functional elements is a distinguishing key competitive factor.
Empirical study findings by Salteli et al., (2013) reveal that a simplified flow of material such as streaming and making information highly visible to flow throughout the supply chain is a key to an integrated and efficient supply chain. Quality information sharing involves accuracy, adequacy, timeliness, and information credibility. Travel Blue Ltd management has based on the fact that the significance of information sharing and its impact to SCM is dependent on the kind of shared information, how and when it is shared, and the persons involved in sharing the information. The company thus understands their strategic information assets to ensure the information flows with minimum distortion or delay. Sharing of information also enables the company to identify or detect challenges and areas of improvement. The company has thus developed an information model that is responsible for integrating supply chain member that helps in the flow of the company products.
In SCM, postponement involves moving forward different operations such as production, sourcing, or delivery to later times in the supply chain program. The postponement strategy aims at two primary considerations involving the determination of how many steps or which steps to postpone. Postponement gives an organization the flexibility of developing different versions of their products so as to meet the changing customer needs, modify a demand function, or differentiate a product. The act of keeping the company products undifferentiated for a longer period helps in increasing the flexibility of the organization to respond to changes in product delivery and customer demand (Maria & Christina, 2012).
Postponement also needs to be in line with type of market demand, product, and structure within the logistics and manufacturing systems. Postponement adoption for a SCM is appropriate in different conditions such as product innovation, high monetary density products, a wide range of specialization, long delivery time markets, high demand uncertainty, and low frequency of delivery. Logistic systems or manufacturing with small economies of scales and no specialized knowledge feed can also be considered for the postponement of SCM strategies according to Butilca (2012).
With a proper supply chain strategy, Travel Blue Ltd focuses on aggressive marketing as the cornerstone of its culture and strategy. The success of the supply chain department is accorded to diversity in production to meet different demands of the client. The company does not only produce soft drinks but also serves tea, juices, energy drinks, and water. The products are then supplied to multinational while at the same time keeping a focus on other local and international markets. The company also value future development plans that motivates both employees, investors, and customers whose desired needs are met in the process. According to Salteli et al. (2013), the company has won the heart of wholesalers and retailers since it puts into practice different SCM strategies and practices to ensure the market demand is met despite the stiff completion from different companies.
All the above practices can be incorporated in the SCM depending on the type of organization involved. However, there are also basic principles that are required for best planning within the organization so as to promote the delivery of value proportion. These principles involve systematic management of the SCM data from customers, suppliers, and manufacturing resources. It thus requires mature collaboration processes for both suppliers and customers reconciling forecast, usage, or orders as well as synchronizing long-term execution and tactical planning processes, data refresh intervals, and planning horizons according to Chong et al. (2012).
The delivery of a value proportion also requires a continuous approach of improvement to understand user or consumer behaviour that is necessary to help in the promotion of a disciplined lifecycle of a product management process. It will thus help in bridging the gap between supply chain and product development. Proper SCM also involves a data-oriented understanding of the forecast inputs such as forecast error, year-end volume variation, and cumulative bias. Supply chain management organizations hence require observing the principles together with the discussed practice to realize positive results and effective completion in the global business market (Butilica, 2012).
Leading practices in effective supply chain planning are vital and abound for the success of the SCM organization. These methods involve the operation and sales planning to the demand management and material requirements necessary for vendor management inventory. With new principles evolving on the supply chain planning, a constant emergency such as demand sensing, demand shaping, and agile response needs to be considered by different SCM organizations. For a company to deliver efficiently, Chong et al. (2012) point out that it is necessary for the enterprise to pick appropriate and necessary leading practices depending on the nature of the market the company serves. The best SCM thus requires the organization to integrate different practices together with the chosen technological platforms of the organization necessary to help in the achievement of the desired competitive performance.
Travel Blue Ltd as a global company has its supply chain strategy designed into a unique SCM configuration that ensures the objectives of the company are driven forward. The company hence relies on five major building blocks that determine the activities of the supply chain management. These include manufacturing, channel, customer service, asset, and outsourcing strategies. In other circumstances, Butilca (2012) notes that gaps in the supply chain management can occur within the building blocks as a result of;
Travel Blue Ltd in the process of its SCM is affected by various issues and challenges that affect its management process. For instance, the company lacks a proper flow that initiates information sharing among the entities concerned. This is coupled with delayed updates and restricted reaction time that makes the real-time update of information haring difficult. The company also faces challenges with the forecasting and planning accuracy. As a result, these are a loss of sales as a result of OOS situation at the retail stores coupled with poor response of the retailer towards PSF Sales Return on the available space for the brand. The company thus loses distribution with the key retailers.
Whenever the gaps mentioned above occur in the process of the supply chain of an organization, it is necessary that the organization takes immediate steps that target at correcting the challenges to prevent gross impacts that might occur (Maria & Christina, 2012). Some of the short and long-term key recommendations that can be adopted include;
The company can also adopt the implementation of the 9 step CPFR Model. The model will give the company the opportunity for developing collaboration agreements, creating joint business plans, identifying sales forecast exceptions, and creating forecast on sales. The model will also help in increasing revenue through improved customer satisfaction and product availability; reduce capital investment by optimizing production and reducing storage capacity, and decreasing costs on overtime, inventory, transport cost, and wastage.
Conclusion
Supply chain management and logistics are some of the most potential ways to secure competitive advantage and improve a business performance on the currently competitive business market. As a result, the process requires the addressing of different issues before successfully implementing supply chain principles within an organization. The issues span from choosing relevant strategies that are in line with the business requirements help in defining critical strategies that are required for the execution of the plan. The whole process hence requires a professional management in logistics and supply chain who will understand the relationship between the facets involved. It is because the supply chain management process is a network that directly involves the flow of products, information, finances, and services from the customer which is a very complex task. It also covers common involvement and communication that may at times go beyond the functional and organizational boundaries.
The concept of supply chain management is increasing receiving attention from consultants, academicians, and business stakeholders. Many business organizations have recognized that SCM is a foundation to build sustainable competitive advantage for the services and products in the competitive global market. As a result, SCM practices such as outsourcing, supplier partnership, continuous process flow, information technology, and cycle time compensation among other practices have been embraced in performance improvement of different supply chain organizations.
Butilca, D. A, Performance in supply chain management, Babes Bolyai University, Cluj. Retrieved September 10, 2012 from doctorat.ubbcluj.ro/sustinerea…/Butilca_Delia_%20Ro.pdf
Chong, M. Y., Chin, J. F., & Hamzah, H. S, Transfer of total productive maintenance practice to supply chain. Total Quality Management & Business Excellence, 23,(3/4), 2012, p. 467-488. doi:10.1080/14783363.2011.637788
Flight Centre Travel Group Ltd, Flight Centre Travel Group Ltd MarketLine Company Profile, 2016, 1-19.
Haddad, L. (2012). Towards a well-functioning economy: The evolution of economic systems and decision-making. Northampton, MA: Edward Elgar Pub.
Maria, D., & Christina, A, Strengths and weaknesses of current supply chain management and initiatives for the future. Journal of Business Logistics, Volume. 22, no 2, 2012, p. 17-18
Salteli, A., D’Hombres, B., Jesinghaus, Jerry., Manca, A., Mascherini, Molo., Nardo, M., & Saisana, M, Indicators for Successful Supply Chain Management Strategies. Business as Usual? Social Indicators Research, Vol 7, 2014, p197-207.
Sarraj, R., Ballot, E., Pan, S., Hakimi, D., & Montreuil, B, Interconnected logistic networks and protocols: simulation-based efficiency assessment. International Journal Of Production Research, 52(11), 2014, p. 3185-3208. doi:10.1080/00207543.2013.865853
Smyth, Helows., Supply Chain Management and Project Business Development. Abingdon, Oxon: Routledge.Volume 3, 2015, pgs 289-309
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