The logistics management is the part of the supply chain management and refers to the activities which occur within the boundaries of the company. The supply chain management comprises a wide range of activities prerequisite to plan, control and implement products flow. The supply chain management process comprises interconnected channels, structures, and businesses for combining the provisions of the products and services required by the ultimate customers in the supply chain. The supply chain management embraces the united planning and implementation of the processes obligatory to enhance the flow of materials, information and the financial capital. The organization can be benefitted by the supply chain management as it generates efficiency, increases profits, drops costs and increases association. The supply chain management enables the company to better manage demand, carry the right amount, of inventory and keep costs lowest. The benefits of the supply chain management can be attained through the proper strategies and software. It can help to accomplish the growing complication of today’s modern supply chains. This report includes the issues faced by the Bosch in New Zealand. The report also includes the design of an optimal supply chain in order to meet or gather organizational strategies. The implementation plan is suggested for the supply chain design comprising alliances and agreements with the partners. Further, the financial impact of the supply chain options has been analyzed. Finally, the inventory control plans and processes are projected to optimize the performance.
Investigation of the supply chain issues
Bosch has a lot of moving parts in its products. The supply chain of the company is composite and continually moving because of the international economy fluctuations. Bosch has to make definite that the value chains are running appropriately and the money is rolling in the accurate direction. The key supply chain issue faced by the company is keeping inventories well stocked but not over-stocked. Due to the evolution in the automotive industry in the last few years, its tough to keep up with the enlarged volumes. This struggle causes the supply deficiencies and the problem is compounded by the capacity loss (Bichou, 2015). The issue is also faced related to the volatility of demand. Different people have different tastes in cars, household appliances, and innovative products. Bosch has to find means to account for the demand of various brands for the different tastes. The company also faces issues regarding the assembly of quality standards and guidelines which makes accountable for the safety, virtuous and environmental impacts of the company. Bosch needs to comprehend the quality demands of the industry. The company faces the issue of controlling over supply chain on a global scale. Bosch provides a wide range of products internationally. The company fails to contain costs and move towards ‘just-in-time’ operations. The company lacks to have a full visibility of each element in the supply chain. It also fails to have the necessary data in order to create a plan for the future growth.
Another concern faced in the supply chain of Bosch is the unavailability of the skilled labor. It has been observed that the average age of the employees employed in the company is around 50. It is a challenge for the company whenever new technology and processes are initiated for the manufacturing and product development. The company faces issues in maintaining skilled and attractive new talent into the sector. Another significant issue faced is the sheer quantity of recalls which have been dispensed in the past few years. Due to some reason, a large amount of product is recalled which causes higher costs for the company. The national highway traffic safety administration approximately recalled 51 million vehicles in 2015. These recalls present a primary problem to the company other than the loss of revenue. The company has to change its products to fix the issues bring in the limelight by the recalls. The company has to re-engineer its operations and sometimes whole supply chain. In order to grow business, the company tracks the geographic expansion of the customers and adds conveniences in various locations. The company faces issues in finding a logistics partner who can entirely understand the processes of the company and can execute the plan in any site (Brandenburg, Govindan, Sarkis & Seuring, 2014). The challenge is faced regarding local standards and the conditions of the region and the communication at every phase of the supply chain.
Optimal supply chain and market situation to meet organizational strategies
The optimal supply chain for the Bosch can include the following elements:
The time and resources utilized to improve inbound logistics from time to time laid back to the efforts of the outbound logistics. Regulating the inbound transportation network and assessing other network designs can decrease costs, mend service times and abate asset usage. Bosch can pull supply chain technology in order to create proficient inbound supply chains (Dubey, Gunasekaran, Papadopoulos, Childe, Shibin & Wamba, 2017).
Facility selection: Sourcing is one of the vital decisions of the Bosch. The company can make use of modeling techniques for the supplier and manufacturing location decisions. It optimizes the whole supply chain and identifies the trade-offs across all the different cost elements.
Transportation route optimization: It can be completed with supply chain optimization or imitation. The progressive algorithms can be used for the transport routes to define the minimum cost of inbound shipments along with considering realistic cost.
Consolidation center selection and analysis: Bosch is having various suppliers making diverse products in a small center. An alliance center can be used to associate smaller consignments for some larger consignments and condensed transportation costs (Cosimato & Troisi, 2015).
Facility and manufacturing
The demand for the products of the Bosch shifts over time to new regions, the suppliers and the cost structure changes as well. The facility locations and inventory levels are also required to change in order to keep in-sync.
Inventory optimization: The inventory works as a protection against inconsistency in the supply chain but one of the major sources of inconsistency is demand. The demand is extremely erratic so the inventory optimization commends end-to-end stocking levels. It results in an appropriate sized inventory level.
Product footprint: Demonstrating the production footprint and analyzing varying scenarios can help Bosch to balance existing capacity with the required investment. It promotes additional production (Fahimnia, Sarkis & Davarzani, 2015). It means investment in the added capacity in the assured localities or entirely stirring production capacity to other amenities within the network.
Network optimization: It is generally a initial point for the company to discover supply chain design and classify scope for improvements in the cost, service, and sustainability. It leads to saving costs of the supply chain by 10% or more.
The supply chain and transportation network design is designed to streamline the outbound logistics decisions making. It can be understood by the following points:
Assessing new methods, tracks, and strategies: The modeling technology can help Bosch to classify optimum DC to customer projects, define the perfect method, generate best multi-stop delivery, the fortitude of the best utilization of the assets and conduct service based Greenfield analysis.
Considering new delivery options: The company can investigate the costs and service times of exploiting the outbound logistics grid of the suppliers in order to deliver directly in its place of shipping first to other countries.
An implementation plan for the supply chain design
An operative supply chain is crucial for the achievement of an organization. An implementation plan for the supply chain design comprises the following factors:
Internal staff or change management: To get the local stakeholders, the company must make the evolution from ‘why change’ to ‘who is going to be obstructed, what is going to change and how the company is going to make it occur. This evolution cannot happen in a vacuity but need to include broad spectators in the communication process and pre-planning of the plan. The company needs to assess the changes that would mean to them and for the particular function. It sounds recognizable but it is acute to communicate carefully with team and individuals which will be most affected by the projected changes, particularly the front line employees whole execute the routine process. The early discussion and enclosure are significant for all the stakeholders and especially for the front line employees (Hazen, Boone, Ezell & Jones-Farmer, 2014). It is because they are the ones who can find excuses in the projected changes and can be more proactively addressed. It is better to indulge the appropriate individuals in the early discussions before getting into the deep project planning. The company should avoid the design changes which are generally painful and expensive (Prajogo, Oke & Olhager, 2016).
Schedule for success: It is one of the greatest ways to implement supply chain is generating and preserving a accurate schedule in order to be succeeding. The supply chain implementation generally comprises the scope, schedule, and the resources. If the management is short-term focused then it can push itself to vindicate a faster ROI. It can create an undue amount of business risk for the Bosch. The end results of the project are not fixed for success and the ROI actually takes longer to achieve. A fast implementation is something great but it is needed to balance speed along with thoughtful risk alleviation (Wang, Wallace, Shen & Choi, 2015). It also allows the company to concentrate on the important tasks and on the quality of the good work.
System choices: Bosch is required to have a strong IT team in order to keep the skillset. It maintains the solution within the business as a part of the core competency. The IT team is needed to be comprised for the implementation of the supply chain. The IT team is also required to set up and preserve essential connectivity between ERP and the 3rd party elucidation (Silva & Gouveia, 2017).
Supplier participation: The supplier participation and recognition are completely acute for the execution of the supply chain. The success of the company is tied up with its suppliers. The suppliers are willing to participate in the supply chain of the company. The company is needed to ensure that the system is easy to use and adds value to the supplier. Regardless of the size of the company, there should be benefits for all the parties (Wang & Cullinane, 2015). The one-sided benefits drive relationships into transaction-based customer interactions moderately than partner to partner. The one-sided relationships are fine in order to cut costs but it can cause issues with quality and commitment between the partners in the long run.
Analysis of the financial impact of supply chain options
The supply chain operations have a control on the financial enactment of the Bosch. When the logistics are performed effectively then it helps to advance the overall financial enactment of the company. The return on investment (ROI) is one of the key measures for the success of the company. The high ROI ratio redirects the profits and reduction in the capital invested. The profits in an organization are increased by the more sales and improving customer service. ‘On time in full deliveries’ is one of the ways Bosch can improve its customer service and achieve profits. The company can cut its costs by efficient use of the logistics operations. The costs can be reduced by reducing transport, limiting inventory holding costs and increasing labor efficiency. The amount of capital can be affected by the logistic components (Sindi & Roe, 2017). The key functions have a high impact on the stock levels comprising components, work in progress (WIP), finished and raw materials being detained by the Bosch in inventory. The impact can be initiated in stock location, policies, inventory control, orders and more. The fixed assets are also initiated in logistics and comprise warehousing, transport, handling equipment, and yards. The extent of assets and their usage are essential to logistics planning. It is possible to decrease costs and capital employment by outsourcing the logistics operations.
The financial impacts on the manufacturing of the Bosch are faced due to the high labor and overhead costs. It is observed that the trucks contribute more profits than the large luxury vehicles. The trucks are also reformed rarely so the tooling speculation per unit is comparatively low. The small cars have been less lucrative than the large ones hence there has been higher opposition in the market segment for the imports. The large cars can grasp higher prices because of size and specializations. On the other side, inbound logistics necessitates flexible manufacturing, optimum sequencing and separate division of the parts and constituents. This principle of the production is known as the Justin sequence. It defines the predefined structure of separate production strides that each act runs through various manufacturing areas from the body making to painting to final gathering. The experiment is faced in delivering appropriate motorized parts to the workplace in the production line and in the particular sequence (Wang, Gunasekaran, Ngai & Papadopoulos, 2016). If the components are not supplied on time than it costs to the company in terms of financial and time. An improved supply chain leads to the improved performance of the logistics. In turn which results in improving the performance of the company. A logistics performance model with the logistics performance works as a central idea and supply chain management as a precursor and financial improvement. The improvement in the logistics even affects the GDP of the industry nations and therefore affects productivity and energy costs (Subramanian & Gunasekaran, 2015). The logistics of the Bosch have become effective due to the technological advancements and it makes possible to deliver products on time along with reducing the costs convoluted.
Propose inventory/ stock control policies and processes to optimize performance
The inventory control can be categorized into 2 parts, first is how to protect inventory and the second is about producing the right amount of inventory. The inventory protection is all about knowing the inventory is how much and how old. The inventory can be controlled by the taking precautions like how much is made and how much is sold. There are certain inventory control policies which can be optimized by the Bosch in order to optimize the performance of the company. Bosch can opt for quality programs like ISO, lean manufacturing, Kaizen, Six Sigma and Total Quality Management (TQM). Every manager in the Bosch is required to support the quality programs and apply to its supply chain system (Touboulic & Walker, 2015). In order to apply the programs the company is required to first analyze the present inventory accuracy rate and then initiate steps to improve it. The benchmark can be established once after the implementation of the quality programs. It results in the improvement goals and can be measured in the percentages or dollars. The results should be checked in order to make sure that the improvements can be achieved and sustained. The inventory optimization process is also required to keep simple and least complex. If the Bosch is not capable of explaining components of the process then the process is considered incorrect and uncontrollable for the optimization of inventory. The entire supply chain should be inspected on the regular basis. A perfect order metric should be generated and measured from the foundation point to the final target. It is helpful in tracking the performance of inventory across the framework. It will also result in improving accuracy in the supply chain.
The processes can be replicated and the improvement strategies can be applied in all the areas of the company and it can be benefitted. Additionally, the product traceability can be settled during the distribution life cycle of the products. The whole inventory pipeline can be encompassed along with the inbound and outbound shipments. The product should not be conveyed until the action is approved and recorded appropriately (Ta, Esper & Hofer, 2015). Furthermore, the appropriate technology should be selected to suit the need of the company. A continuous cycle counting program should be executed in order to uphold a high level of accuracy. Identification of the problem areas is one of the best ways and it is helpful in eliminating the requirement for the physical inventory expenses. It should be made sure that employees of the company are properly trained and trained regarding the techniques of inventory management (Tatoglu, Bayraktar, Golgeci, Koh, Demirbag & Zaim, 2016).
From the above report, it can be concluded that an effective supply chain is helpful in bring into line flow of money, materials, and data which are distributed amongst the consumers and the partners and alliances of the company. The supply chain management executes software the day to day manufacturing operations. The logistics management and the transportation management systems for activities like handling the transport of products even across global supply chains. The inventory management software manages tasks such as chasing and improving inventory levels. It is helpful in increasing the profitability of the Bosch. It also results in coordinating various procedures by bringing into line them by scheduling, obtaining and delivering various products and services. The supply chain management is responsible for exploiting the people, processes, and technology so that the needs of the customers can be met in an effective way. The return on investment (ROI) is one of the key measures for the success of the company. It is helpful in analyzing the financial impact of the supply chain. The inventory can be controlled by categorizing into 2 parts; out of it first is how to protect inventory and the second is about producing the right amount of inventory
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