Essay: Supply Chain Management In Fresh Food And Car Manufacturing - A Comparison.

Question:

Discuss about the Compare the Supply Chain of Domino’s Pizza and Toyota and five Evolving Themes .

Supply chain management is one of the integral parts of the organization. Supply chain management is responsible through which the product of the organization reaches to the market. It is important for the organization to ensure that the product has reached in the market on time at the required place in order to meet the demand (Li, 2013). This not helps the organization to builds its reputation but also build its brand loyalty among the targeted audience. To meet the demand with the supply, company’s SCM should be efficient and effective. Supply chain management can only efficient if all the regarding the inventory is updated on daily basis. Updating the inventory helps in understanding the amount of stock of product should be kept as a backup. There exist fundamental differences in the supply chain of various organizations (Jonassen & Land, 2012). These differences can exist due to different nature of the industry or due to different types of operations. For example, the supply chain of a dairy product would be different than the supply chain of a furniture company (Wisner & Tan, 2015). The objective of this task is to discuss the analyse the supply chain of a fresh food supply chain against car manufacturing supply chain, both with global and national supply network. This task would discuss the supply chains of Domino’s Pizza and Toyota (Kocaoglu & Gulsun, 2013). Let’s compare the supply chain of these two companies against the objectives of quality, time, cost and CO2 emissions.

The comparison of the supply chain of Toyota and Dominos for different objectives or performance parameter can be discussed as:

Quality is very important performance objective. Toyota has implemented Six Sigma and known for its production strategy that delivers very high quality product. Toyota is also known for its high-quality cars worldwide. If the product quality is good, then it is quite evident that customer will prefer that good over other products (Loffi & Wallace, 2015). On the other hand, if the product quality is not good, there will be a high complain rate among customer and at the same time organization will incur the high cost in providing after sales support. Domino’s pizza focuses more on service quality rather than the product quality (Zsidisin, 2012). There are various quality management and improvement tools which are be used by Dominos to improve its quality standards and reduce the cost of poor quality. Dominos realizes that it operates in fast food sector where the goods are perishable. Therefore, it cannot let the service quality compromised (Robertson & Taczak, 2012).

Example: Toyota would source material from various suppliers. The quality of Toyota car would in turn depend on the quality of spare parts that it gets form its suppliers. Therefore, its concept of quality extends to its suppliers and partners. For Dominos, the quality definition is to provide the tasty Pizza to its customers (Carter & Liane Easton, 2011).

Comparison of Quality, Reliability, Cost and CO2 Emissions

Reliability is another important factor and it shows if your customers can rely on the company to deliver the products on time or not. Usually, no customer likes to receive their shipment late (Distelhorst & Hainmueller, 2016). Also in this age of Just-in Time supply chain, it is possible that if you supply products to your customer one day late, they will supply products to their customers few days late and thus impact become very large on the downstream supply chain processes (Friedman, 2010). The supply chain of Toyota uses time as a measurement when it has to procure the stuff from suppliers and vendors. The supply chain of Dominos considers time as a constraint when it has to deliver products to customers. Dominos has a SLA (service level agreement) to deliver pizza within 30 minutes. This in itself talks about the importance of time in its supply chain (Lengnick-Hall, 2013).

Example: Toyota does not promise any time guarantee to end consumers. There are only internal time SLAs. However, time is an integral part of Domino’s pizza as it cannot let end consumers wait for the pizza. Moreover, the goods are perishable in nature so the company has to get the delivery from its suppliers on time (Kim & Davis, 2016).

Cost is also very important another performance objective. Any organization can provide goods to its customer at a competitive rate only if it is able to make them at a competitive rate. Both Toyota and Dominos are known for providing goods and services at very reasonable cost to their customers and thus known for their cost leadership. There are also various Japanese tools that will help the organization to reduce the wastage and non-value added activities and thereby decreasing the costs (Zaslavsky & Perera, 2013).

Example: The focus on the principles of Total Quality Management has enabled that Toyota can maintain the cost leadership position in different markets. The use of an integrated supply chain, coupled with IT systems has also helped Domino’s Pizza to attain cost leadership position (Christopher & Harrison, 2016).

One of the sustainable supply chain goal for both the companies is the reduction in CO2 emissions. Toyota is committed to use green supply chain as a measure to transform the goods from one place to another. Toyota has extended this objective further wherein it is committed that its products would also comply with the CO2 emissions norms (Stadtler, 2015). Domino’s Pizza has an integrated platform where it works along with its stakeholders like customers and employees to establish and maintain the green supply chain (Sarker & Engwall, 2014).

Example: Toyota has an annual objective where it is committed to reduce the carbon emissions by 3% annually at a global level. In past, Dominos has done various road shows to educate consumers about the use of Green methods. A simple example, is that use of LED lights instead of LCD lights that Dominos uses across its stores (O'leary, 2011).

Supply chain is defined as the flow of goods or services which can help the organization to builds it brand image in customer’s mindset (Surie & Reuter, 2015). Supply chain Management helps the organization in several ways such as building their image, create the brand loyalty and meet the demands of the customers. If the supply chain of an organization is efficient, it gives and edge to the organization to stand strong among the competitors (Prajogo & Olhager, 2012). This report explains about the supply chain and its importance and contemporary issues and strategies in global logistics and supply chain management.

Examples: Toyota and Dominos

The five themes for the conference can be discussed as:

In this age of disruptive technologies where product lifecycle has comedown drastically, it is best to maintain the low levels of inventory so that obsolescence cost would be less (Qrunfleh & Tarafdar, 2015). Now, if organization is maintaining very less amount of inventory, then it has to be very fast in its supply chain in order to fulfill the customer order otherwise there will be stock out everywhere (Fawcett & Ellram, 2014). Think of a situation where mobile phone Lead time is 3 months and its product life cycle is of also merely of 4,5 months. In such cases, there will be huge wastage on inventory in transit due to high lead time. And thus, agility/speed is one of the most important factors in devising the operation strategy of the organization (Butner, 2010).

Flexibility refers to responding to change in demand levels. For the organizations operating in global environment, flexibility is the key as different nations may have different sub-set of supply chain. For example, Dell uses postponement strategy to provide customer requirements and forecasts common subassemblies and common parts and thus able to respond well to change in demand (Razmerita & Kirchner, 2014). 

There are various ways by which organization has competitive advantage. For instance, Southwest Airlines compete based on the cost leadership as it provides the best cost to its customers. Similarly, Nike is known for its high-quality athletes’ shoes and thus known for differentiation (Roh & Hong, 2014). Dell is known for its Agility and ability to respond to change in sales very well. For example, Ryanair is Europe’s largest low cost airline. It able to support low costs because it uses identical and standard parts from a single supplier which means higher ability to negotiate, it uses secondary airports where service charge is less, turnaround time at airport is very low, no time wastage in cleaning the airport after every ride, no time for loading the meals. It is probably the best example of aligning and integrating the competitive advantage of low cost with the supply chain (Martin, 2013).

The use of Information Technology helps organizations to optimize its supply chain. For example, UPS has invested heavily in Information technology, aircraft and facilities to develop capabilities of delivering at any location on the world and that too on reasonable cost. It also emphasizes on being low cost provider (Sridharan & Simatupang, 2013). The latest Information technology trends is the use of QR codes, RFID, etc. Focus on technological innovation by tracking of goods through RFID chips, buying its own fleet of planes rather to buy space in commercial flights that was expensive, total quality management and customer satisfaction (Sarac & Absi, 2010).

Information Technology can also be used by the organizations in service sector to manage the supply chain. For example, supply chain of Qantas Airways. Not only this, Information technology also helps to update customers about the flight schedules, send reminders to them about their flights and helps in providing better services. Finally, when your competitor is making use of IT and eating your market share, it becomes necessary to use technology for survival (Zahle, 2012).

Importance of Efficient Supply Chain Management

The time has come when different organizations can share the supply chain. Supply Chain Strategy plays the crucial role in Business organization today (Schonsleben, 2016). The details such as the market coverage, availability of the product at the location and ensure that the supply meets the demand depends on the effective supply chain management strategy. The organizations in APAC region can work towards an integrated supply chain. For example, Pizza Hut and Dominos can work together to get the material from Australia to be delivered in India. It would ensure that the wastage is limited and the organizations are also able to achieve their goals of sustainable supply chain with minimal CO2 emissions (Mentzer & DeWitt, 2011).

Conclusion

The above tasks compare and contrast the supply chain of Toyota and Dominos. Both the players are global player and their supply chain spread across various nations. Some things are common across their supply chains like focus on CO2 emissions. (Leuschner & Rogers, 2013) For the objective of time, Dominos has more stringent measures as compared to Toyota. With the above discussion, it can be said that the objectives or the performance indicators could be refined further with the focus on Information Technology.

The above five themes are individual topic of discussion in itself. It is critical that organizations should deeply analyze these themes before making any decisions around these themes. With the above discussion, it can be said that organizations must realize the importance of Information Technology in supply chain management. The use of IT would ensure that various objectives of cost, quality, time, etc. could be meet.

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