Supply Chain Management: Procedure Essay.

How Supply chain management resembles a procedure for manufacturing goods from the raw materials? Explain.

 

Supply chain management resembles a procedure for manufacturing goods from the raw materials and then transforms it into the final product before delivering the final goods from point of origin to point of consumption. Effective supply chain management not only demonstrates the effectiveness of the company, but it also helps them to forecast for their better business activities. The efficiency of supply chain management relies on crucial key flows- Information Flow, Product Flow, Cash Flow and Return Flow that evaluates the production of the goods with using modern technology for better efficiency. Request for quotation, purchase order, monthly manufacturing schedules and then delivery of the final product from supplier to consumer through warehouses, dealers and retailers define the importance of information flow and product flow respectively. In this report, an electronic gadgets manufacturing organization named Flextronics International Ltd. is taken into consideration, where the “key-flows” and “process planning” will be illustrated along with the “forecasting techniques” that are used for developing the existing business approaches for a high supply of their manufactured goods.

 

Christopher (2016) illustrates that supply chain management is a process of transferring manufacturing goods from supplier to manufacturer and then manufacturer to the wholesaler and finally to the retailer to consumer. This chain management system also emphasizes on information regarding materials, information and finances. In this assignment, a Singapore based global supply chain solutions company is selected- Flextronics International Ltd. (Flextronics or Flex) that manufacture packaged electronic products, build ships and smart cars and offers a range of design and engineering services ("Flex Product and Supply Chain Solutions and Manufacturing Services | Flex", 2016). Stadtler (2015) illustrate that supply chain managements are important as it improves the bottom line of the organization, streamlining day-to-day product flows and boosts the customer services. The concerned organization gains a profit of $1.6 billion in the year 2015, which is 4.1% high, compared to the year 2014 ("Flex Product and Supply Chain Solutions and Manufacturing Services | Flex", 2016).

In this report, the key flows in the supply chain management and its effectiveness along with the information flow, cash flow, and return flow will also be described. In addition to that, the planning and material requirement for the planning process will be illustrated under the process of the manufacturing process and lastly the supply chain forecasting will be taken into consideration.

 

Product flow is a process where a product manufactured from the scratch and delivered as a final product to the clients. Monczka et al. (2015) demonstrate manufactured goods are firstly produced then supplied to the suppliers from where the products are delivered to factories then to the warehouse and outlets for sale of the products. Flextronics has a complex global network of 14,000 suppliers and an effective supporting team in a factory, who designs, manufactures and ships products to the desired destinations ("Flex Product and Supply Chain Solutions and Manufacturing Services | Flex", 2016). Moreover, Flextronics produced millions of products every month and delivered their complete product to their valuable clients like Apple Inc., Microsoft Inc. and Ford MotorCo. through the installer to local distributor to area distributor to prime distributor to the supplier to sub-supplier and then to the dealer ("Flex Product and Supply Chain Solutions and Manufacturing Services | Flex", 2016).

According to Prajogo and Olhager (2012), information flow resembles a strategy where an organization shares their manufacturing information and the facility they are providing to their clients as well as the supplier. They provide knowledge to their customers about their innovation. They have centers of excellence, Lab IX and vendors for developing innovative advancements to our core technologies. Ross (2013) mentions that the information-flow can also be depicted through their information system where store at one country can contact with headquarters through new real-time software. They utilizes this technology for informing their headquarters regarding the adverse situation like political unrest, extreme weather and natural disasters and the inability of delivering their end-products to the stores of those locations.

 

The flow of funds from the end-clients to the manufacturer and then from manufacturers to the supplier is known as Cash Flow (Wuttke et al., 2013). In Flextronics International Ltd., cash flow remains a hallmark and this can be seen through their recognition as an organization that produced positive cash flow for the 15th consecutive year in fiscal 2016 ("Flex Product and Supply Chain Solutions and Manufacturing Services | Flex", 2016). The concerned organization enhances their cash flow through effective inventory management and collaboration of the supply chain management with stakeholders. Attractive electronics products and smart fuel-efficient vehicles with innovative ideas like user-friendly, eco-friendly and energy efficient devices motivate their users to buy their products that increase their cash flow within the business (Zhu et al., 2012).
Return Flow
Dyckhoff et al. (2013) depict that in supply chain management, the process of the reusing of products is known as return flow. This not only reduces costs for the next sequence of manufacturing and helps in increasing their revenues but it also boosts the consumer loyalty. Reverse flow in Flextronics International Ltd. helps them to repurchase their 335 million shares from $2.5 billion that result in 33% reduction of their shares outstanding ("Flex Product and Supply Chain Solutions and Manufacturing Services | Flex", 2016). The organization implements the green supply-chain management concepts and practices and emphasizes majorly on the dismantling of vehicles for supporting the return flow of their supply chain management.

The managing authorities of the considered organization should focus more on the information and product flow. They must increase transparency with their clients and improve their distribution network by introduction real-time inventory management. Supply chain management can also be improved by collaborating ERP software and cloud technology with the existing system where they can monitor robust metrics available through their ERP systems. Another ERP benefit of this system is that it encourages both just-in-time manufacturing and JIT Inventory Management. It increases the inventory turnaround time and decreases inventory costs.

 

The effectiveness of a manufacturing organization can be evaluated through their potential of the entire process to supply products and services to fulfill the demand of their customers (Fredendall & Hill, 2016). Control process signifies the redesign of the process and assembling all the required resources together. Moreover, Monczka et al. (2015) in production planning, the ability of the organization for accomplishing the entire task by satisfying their customers demand in an optimal way is emphasized more.

Effectiveness of planning process
Kerzner (2013) depicts that the planning of material required for the planning process of the production comprises of manufacturing planning, plant and logistics planning, engineering procedure to select the most efficient procedure, assembly manufacturing and part manufacturing along with the manufacturing quality validation. Flextronics International Ltd. not only offer their designs and plan for building ships and packaged electronic gadgets to original equipment manufacturers but they also provide a range of design and engineering services for raw materials like metals, plastic injection molding, machining, mechanicals and precision plastics ("Flex Product and Supply Chain Solutions and Manufacturing Services | Flex", 2016).

Moreover, Ross (2015) illustrate that the concerned organization takes an initiative to develop each department under their organization so that they can scrutinize everything from the scratch and determine the difficulty of any adverse situation. Christopher and Ryals (2014) demonstrate that they also consult with professional and digital experts for gaining knowledge in the current application so that they can implement those applications in their electronic devices and smart devices to attract more customers. In this procedure, they have to invest a portion of their profit revenue in research and development departments where they planned on making their business process more reliable and delivered those products to the destination locations (Coyle et al., 2016).

Improvements in supply chain management with some theories and concept
Brandenburg et al. (2014) portrays that transformation process model resembles that the organization manufacture the raw materials like seats, steering wheels, clutch pads for cars and plastic, glass, epoxy, copper, tin, silicon, chrome and synthetic rubber for cell phones. They have an engineer to suggest them how to assemble the final product so that the efficiency of the product can be enhanced. The transformation process comprises of manufacturing and service operations to change the input into output. Moreover, Christopher and Ryals (2014) mentions that the concerned organization should majorly concentration on “three-V” strategies - Visibility, variability and velocity. If an organization aims for a demand flow manufacturing, it is important for that organization to focus on high inventory levels. They should also take consideration of the materials and the products that are customers demand the most in the market. (Fernie, 2014) depict that lack of material visibility; result in the loss of the profitability of the organization.

Variability in product development needs high variability in engineering where everyone should take responsibility for their jobs and enhance manufacturing capabilities so that a wide variety of electronics items and automobiles can be delivered to the customers (Brandenburg et al., 2014). In addition to that, velocity can affect a company’s ability to develop a supply-chain management strategy and then implement them quickly for evaluating whether it benefits the organization or not. Lastly, Flextronics should give regular training to the existing employees so that all the departments can serve their best to manufacturing the electronic gadgets.

Different forecasting model
Lin (2014) illustrate that there are different models by which Supply Chain Forecasting can be made- qualitative forecasting techniques, quantitative forecasting technique, graphical forecasting methods and trend forecasting models. Qualitative forecasting techniques and quantitative forecasting technique are the two majorly used forecasting techniques in management. In qualitative forecasting techniques, the evaluation is based solely on the judgmental ability of the authorities (Tayur et al., 2012). This method is only implemented when the production of the goods are lower than the demand. On the contrary, Kwakkel and Pruyt (2013) depicts that in quantitative forecasting technique, mathematical and statistical techniques are used to analyze the data and the situation using two categories- Time series model and casual models. Furthermore, these time series model can also be evaluated on a weekly basis, monthly basis or half-yearly basis relying on the demand and business procedure undertaken by an organization. Demand forecasting is the most crucial forecasting method that is adopted by supply chain management service provider and can be classified into two categories- short-term demand forecasting and long-term demand forecasting (Jaipuria & Mahapatra, 2014). Short term forecasting is used on a weekly or monthly basis; however, long term forecasting covers a period of three months, six months or one year.

According to Ho et al. (2015) other electronics manufacturing companies use control tower approach, where they assess production and its distribution along with the plan for reducing the complexity, cost and risk of their supply chains. Mishra et al. (2016) depicts that visibility plays a crucial role in forecasting an effective procedure for supplying their products to the customers and control tower strategy helps in freight flows that allow organizations to gain greater visibility for product movement. Apart from these advantages, Lin (2014) states that through a control tower system, logistic department of an organization offer significant benefits to customers like rigorous monitoring of manufacturing operations and 24/7 coverage of every location so that clients can get information about the delivery of their products.

Recommendation to the best supply chain model that suits the selected organization
Flextronics International Ltd. uses the quantitative forecasting technique for evaluating the progress of their organization by assessing the business proceedings at a regular interval of time and if any adversity is found, authorities are intended to solve those adverse consequences with practical procedures. The efficiency of the forecasting techniques can be analyzed depending on the whether they emphasize on make-to-order items or make-to-stock items. The second step that the selected organization is emphasizing on is to develop statistical data and graphical representation and forecast whether the production matches with some manufactured goods that the sales department expects to sell. This results in their competitiveness and improves company-wide efficiency compared to any other organization.



Flextronics International Ltd. also emphasizes on Spare Parts Forecasting for maintaining and analyzing the control process of the inventory of spare parts ("Flex Product and Supply Chain Solutions and Manufacturing Services | Flex", 2016). This is one of the less used forecasting techniques by any manufacturing organization as they rely on a third party for their spare parts. However, the concerned organization adopts a technology where they focus on every step and evaluating the progress of every activity for a better supply management model depicted in the above figure. Prajogo and Olhager (2012) stated that firm- level forecasting and product-line forecasting so that the electronic products can be assessed regularly and the product-line forecasting helps to decide which products should have priority to manufacture the most according to customer’s need. Adopting this methods, Flextronics can accomplishes production planning or scheduling, distribution, collaborative planning and strategy implementation efficiently for better productivity and profitability.

Supply chain management is a procedure where the approach of the organization for manufacturing of the goods and then assembled into the final products for delivery to the customers is known as the supply chain management. In this report, a manufacturing organization named Flextronics International Ltd. is considered. This organization manufactures designs smart cars, ships and electronic devices for its original equipment manufacturers. The major concern of this report is to analyze the key flows of the supply-chain management system for the organization and the effectiveness of the planning procedure and supply chain forecasting. Flextronics utilizes quantitative forecasting techniques for making their business procedure more effective for enhancing their performance.

They also integrate their business proceedings with the digital technology like personalized ERP software and Cloud computing that makes their customers track their orders and products through internet facility. Flextronics also monitors these activities for better customer services. They also integrate real-time software for communicating with their branch at other countries for analyzing the supply chain activities in those places and how it can be affected by the political conditions and natural calamities. Lastly, a reliable communication with all their stakeholders and conducting regular surveys from their employees and customers help them to assess their performance and provide them chances for developing themselves.

 

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