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Company# 1 2 3 4 5 6
( of !usiness#
!usiness# $)*%)*%+,%+,'
$)*%)*%+,%+,' $-,%-,%+,%+,' $+,%+,%-,%-,' $)*%)*' $)*%)*' $-,%-,'
DeliveryCustomer
of Raw MaterialOrder
to the Manufacturing
Production
Facility
and conversion
Orders Arrive at the Transportati
T
Warehouse
ransportation
on an
When DP receives the customer order% it is electronically wired from the mar.eting
recorded into the information system which allows for the trac.ing and monitoring
construct optimal production schedules to reduce idle time and waste" The si/
companies listed a!ove% supply si/ di0erent chemical compounds that feed into the
production of various polymers" After receiving the raw material shipments% DP
la!eled% 2nali3ed and prepared for out!ound shipment" Delivery is then scheduled
and carried out% transportation !eing divided !etween the DP truc. 4eet and
common carriers"
The following
following is the identi2cation
identi2cation of some
some of the value producing
producing and
and value reducing
reducing
stages of the DP supply chain operations some of which should !e continued%
improved or reconsidered#
information systems
• Production and conversion process
• Favora!le Facility locations
• Pac.aging la!eling and sorting of materials $palleti3ation% shrin. wrapping'
• Rapid delivery of produce from manufacturing to company warehouse
from 9 to ) days for the order to leave the warehouse in a :ready to ship;
condition"
• Fluctuating and tentative delivery window $up to ) days' for customers
needed for the polymer production from 9 di0erent companies" The annual !idding
process determines the lowest cost suppliers that will get )*% -, and +, percent of
the !usiness respective to the cost of their materials and performance" The
minimum performance cycle time of the chief suppliers is < days" Considering DP=s
evaluative performance criteria% Companies < and , have a minimum delivery time
of < days from the date of the order and seem to !e the limiting factor in DP=s
supply chain performance cycle" Ta.ing into account the minimal ) days from the
order date of manufacturing% another - days are needed !efore the order is
the day the order leaves manufacturing until it is shipped from the warehouse and
the calculations show a total of > days minimum in DP=s 6C performance cycle"
?sing the same metrics descri!ed a!ove the ma/imum performance cycle will result
in -+ days $> days from the start date for the shipment of raw material to arrive% )
days !efore the order is shipped from the warehouse and a worst case scenario of )
?sing the -, and +, percent vendors% the performance cycle could !e improved
the year% these vendors also serve as as a protective safety net against any
the primary with the ancillary vendors% the delivery time from order and 2ll rate is
and Company 9 particularly% the delivery of - days and the high 2ll rates are
To use ancillary suppliers more e0ectively% DP should implement a more mallea!le
conditions and re1uirements of @ARP=s service window and delivery thresholds and
not having to o!lige itself to any one particular supplier for an e/tended period of
time" i.ewise% the annual !idding process should move away from the myopic
lowest cost procurement strategy and view the process through the integrated TCO
lens considering factors such as service delivery% ful2llment rates and overall
educate suppliers a!out the newly implemented changes and wor. proactively to
supplementary vendors will increase the procurement costs for the company% DP
can reconsider its inveterate inventory management procedures and loo. for ways
to reduce costs associated with inventory storage and maintenance and consider a
new approach"
This case is a perfect e/ample of what it ta.es for !usinesses to stay
competitive and how crucial and integral supply chain management has !ecome to
the success of any organi3ation" 6upply chain managers must !e a!le to adapt a
dynamic approach to the operations of their company% perceiving new trends and
!ottom line"