Business Logistics Supply Chain Management

Business Logistics Supply Chain Management


Question:

Discuss about the Business Logistics Supply Chain Management.

Answer:

Introduction

Laburnum Group is known as the Australia’s largest listed company with a headquartering Victoria, Australia.  It is due to the diverse business area that the company is performing extremely well by diversifying into areas like office supplies, chemicals, energy etc. the key objective of the company is to provide a satisfactory return to all its shareholders. With the broadening portfolio company is facing problem in managing different sectors. The clothing and energy portfolio hold a strategic importance and constitute a largest share in the company.
At present these two portfolios are facing issue due in inefficiencies. There is a need to manage the issues relate to supply chain management. There are consistent necessities to address the procurement and supply chain related issues.  There need to be efficient procedure pertaining to the supply chain management so that the growth can be attained by focusing on the current inefficiency.  The current case study is related to improvement of the supply chain in one of its subsidiary Sapphire Energy.  The performance of the organization depends upon the supply chain management. There is a lack of coordination in between the energy procurement and supplies. It has become important for the company to closely see the effectiveness of supply chain process.
The current problem is related to the procurement and supply of resources. There is inefficiency in meeting the target as the company is facing a huge cap in meeting the expectations as desired. The Eastern Power storeroom obtains the cable that the company will use due to existence of contract with Sapphire Energy. In the current scenario there is an upcoming requirement that suggest that the inventory carrying cost is 10 percent of the total purchase price per unit per year.

Solution to the problem

Maintenance of the logistic supply material in upstream and downstream is a challenge. Price volatility and an increase in the operation cost are causing energy companies to scrutinize various sourcing strategies. The extraction technique requires lot of capital investment that has added complexities in the overall process. In this situation the company needs to respond towards the escalating cost by making saving in the indirect material supply chain. Company need to optimize maintenance and repair cost that will help in attain desired result. This overall process will improve the productivity and help the business in sound decision making (Christopher, 2016).
There need to be critical KPIs for managing the materials. Laburnum Group has to improve visibility in various components that ensure performance. Cautious supply chain are not prohibited and considered by the product.  It is however challenging to separate continuous price supervision and performance.  In order to create an effective indirect supply chain Laburnum Group need a big-picture view to understand the whole processes and costs. Putting the right metrics in position will helps in providing the correct solution in order to manage the indirect materials supply chain. The Comprehensive key performance indicators (KPIs) help in establishing cost-effectiveness in order to improve productivity(Ballou,2007). They need to improve tracking and panoramic supply chain view to attain effectiveness. They need to provide Level 1 KPIs as:
  • Total inventory value
  • Inventory accuracy,
  • Integrated supply chain management including warehouse efficiency, supply outs, and shipping accuracy(Carter and Rogers, 2008).

The MRO system has an enormous prospective to add to business goals.  It is significant and cost saving procedure that can typically affect the indirect material supply chain.  There is a necessity to create C-level awareness on this part of the business organization.  This will help in paving the way to success. In this manner the want to recognize and get rid of waste can be reduced.  This has gradually helped in increasing the support of the whole system in managing the cost effectiveness (Stadtler,2015).
There is a Drive for outside knowledge in the matter of management of the supply chain. In case of the cross-border supply chains it is essential to work in remote sites to use unconventional extraction methods. Evolving business environment has helped in creating awareness about the whole system (Tayur, Ganeshan and Magazine,2012).  There should be an adequate MRO know-how to contain the augmented outlook.  There are various approaches to address the challenges involved in hiring people with similar knowledge. Management of thee overall supply chain is only possible if the employees are directed to manage the overall supply and procurement procedure in an efficient manner. They do understand the involvement of the overall cost that is associated with the procedure. There is a problem in eventually supplying the energy due to unavailability of proper storage facility (Van Weele, 2009).
The current scenario needs proper procurement technique and an implementation procedure in order to manage the overall system. It is necessary that the supply chain need to be cost effective so that the overall carrying cost to supply the energy can be managed. In order to manage the overall supply it is suggested that the Sapphire Energy should evolve better placement of excess material. This will increase overall stability in case of supply of energy.  Storage of energy is a crucial task for the manager as this not only creates a burden on the whole system but creates excess pressure that requires acumen skills (Fernie and Sparks, 2014).
In case of the clothing company it is necessary to manage the supply and procurement. Diversification into different sectors creates difficulty for the organization to manage efficiency. It is however implied that implication of an efficient supply chain process will help in attaining high level of efficiencies.  The efficiency in the supply chain management however helps in attaining high level of result. The extraction technique requires lot of capital investment that has added complexities in the overall process. In this situation the company needs to respond towards the escalating cost by making saving in the indirect material supply chain (Fawcett, Ellram and Ogden, 2014). It is necessary for managing the supply chain in a business having extensive opportunities. Meanwhile it is the duty of the manager to look into the better opportunities to reduce the overall burden t manages the excess cost of carrying energy. In an extensive business atmosphere putting the right resource at the right place is necessary so that one can manage the resources more efficiently. Cautious supply chain are not prohibited and considered by the product.  It is however challenging to separate continuous price supervision and performance (Jonsson,2008). The result can be attained if the supply chain is created in a proper manner. This will however generate more capacity in the long run. The supply chain management will help in attaining both qualitative and quantitative results. It is however necessary for the organization to manage their own supply chain procedure so that they can attain result in a more effective way (Bowersox, Closs and Stank,1999).

Supply chain management technique

There should be implementation of proper supply chain management technique that involves efficient technology. The usage of technology will help in reducing the burden on manual usage. It is necessary according to the current situation that the organization needs to equip itself with various tools so that the efficiency can be attained. In the given situation it can be seen that the sector is facing problems due to efficient supply chain (Stadtler, 2015). This problem can only be resolved if a proper mechanism to implement the solution can be attained looking into the given condition. The usage of technique depends upon the necessity occurring in the surrounding. If the organization imply all the necessary tools to manage the current situation it will be easy to handle the growing issue due to the flow of supply chain (Dekker, et al 2013).

Conclusion

To conclude it is necessary to develop a proper supply chain system by focusing on every factor associated with it. It is necessary t resolve the issues that are associated with the current supply chain management. In a long run the problem can only be sorted if management implements a proper technique in order to attain efficiency. With the broadening portfolio company is facing problem in managing different sectors. The clothing and energy portfolio hold a strategic importance and constitute a largest share in the company. Increase in the portfolio requires Laburnum Group to effectively implement an efficient procedure of supply chain in both the portfolio that causing problem in the current situation. This situation can only be sorted out if the company effectively looks into the concern that is growing with the time. The major problem the company is facing is related with the ordering cost and carrying cost. In order to manage both the cost it is necessary and mange the supply chain products more efficiently. There is a need of technology to manage supply chain at work on long run to create a better example. In a diversified business organization it is however necessary to focus on those areas that are getting affected by the current situation.

References

Ballou, R.H., 2007. Business logistics/supply chain management: planning, organizing, and controlling the supply chain. Pearson Education India.
Bowersox, D.J., Closs, D.J. and Stank, T.P., 1999. 21st century logistics: making supply chain integration a reality.
Carter, C.R. and Rogers, D.S., 2008. A framework of sustainable supply chain management: moving toward new theory. International journal of physical distribution & logistics management, 38(5), pp.360-387.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Dekker, R., Fleischmann, M., Inderfurth, K. and van Wassenhove, L.N. eds., 2013. Reverse logistics: quantitative models for closed-loop supply chains. Springer Science & Business Media.
Fawcett, S.E., Ellram, L.M. and Ogden, J.A., 2014. Supply chain management: from vision to implementation. London: Pearson.
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan Page Publishers.
Jonsson, P., 2008. Logistics and supply chain management. London: McGraw-Hill Higher Education.
Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.
Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.
Tayur, S., Ganeshan, R. and Magazine, M. eds., 2012. Quantitative models for supply chain management (Vol. 17). Springer Science & Business Media.
Van Weele, A.J., 2009. Purchasing & supply chain management: analysis, strategy, planning and practice. Cengage Learning EMEA.

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