Supply Chain Management Best Practices Benchmarking
SUPPLY CHAIN MANAGEMENT 3
The research was necessitated by a desire to comprehend the integration of the theoretical aspects with the practical ones on supply chain management in the food, beverage, and service industry. The research was centered in the analysis of two companies that are among the top 10 most performing companies in the Australian food and service industry. The two companies are Teys Australian Company and the Bidivest Company.
Supply Chain Management is in defination the integration of the forward and backward movement of information by integrating the various facets of the chain to ensure that customers get quality products on time. It also ensures that the company does make justified investments with their resources that in the end will bring value to the organization (Slack, Chambers and Johnston, 2010. Pp. 12). The two companies have employed some supply chain management practices that have been integral in their escalation in the food and beverage industry ladder.
The practices include inventory management, strategic alliances, employment of the lean supply system, inbound, and outbound logistics. The technology progression has also played a key role in the streamlining of the supply chain management of organizations. It has been achieved through the creation of various software’s that are crucial in the supply chain industry they include; vendor management inventory (VMI), enterprise resource planning (ERP), customer management software (CMS) among others.
The following findings were discovered in the research. Firstly, the practices are employed to reduce the wastage that is quite common in the supply chain system. Secondly, the practices ensure that the companies can invest their finances in progressive projects that are crucial in the development of the country. Lastly, the practices ensure that the management can streamline their operations resulting in the delivery of quality services that are efficient and effective.
Best Practices research methodology
Supply chain management is such a critical factor in the business industry. In our study, we focussed on the best supply chain management practices within the food industry. The research concentrated on two companies that are Teys Australia and Bidivest. Indeed, these two are both involved in food service supply chain in the industry.
Therefore, to come up with progressive and conclusive information on this subject, secondary data was employed. The secondary data contained sufficient information on the company’s progress in Australia. The Teys Australia and Bidivest companies were ranked among the top 10 performing companies in the Australian food and beverage industry in 2015.
Additionally, to ensure that the study was comprehensive primary data was incorporated into the supply chain management best practices that the companies were employing to achieve a competitive advantage in the food industry. A structured questionnaire, divided into four parts was essential in the collection of data. There was Part A, which is the organizational profile, and part B, the extent and impact of the adoption of best practices in supply chain management in achieving a competitive edge in the industry. Part C involved establishing the impact of supply chain implementation, and part D, determining the challenges faced in the implementation of supply chain management (Hiew, 2005). The questionnaire is popular because the researcher has control over types of data at the time of data gathering.
The respondents from the companies were given descriptive statements about the management involvement in the implementation of supply chain management practices in the contribution to competitiveness; this was done with the aid of the Likert scale applied in the scoring. The reason for using the Likert scale is because it is an important tool that is used to tally up the responses provided by the respondents on the various variables identified during the data collection process. (Kothari, (2004); Hiew, (2011). A total of 46 questionnaires were taken and dropped into Teys Australia and Bidivest Company. Employees in the procurement and logistics department were provided with the questionnaires after approval was gained from their managers. The reason for the statement being that they were well positioned to comprehend the applications and benefits of implementing best supply chain management practices in their operations.
Key project findings
The Teys Australia Company has been in existence for many years. The company does participate in the production and supply of meat. The company was originally concentrating its supply chain network in South Queensland and later on branched to other areas (Teysaust.com.au., 2016). Additionally, the company has employed strategic alliance within its supply chain network to diversify its operations. The strategic alliance was between Teys Australia Company and Cargill food distribution teams. The company brings collaboration, innovation diverse global experience in the supply chain network. All these attributes are crucial in the development of the company they will help Teys Australia Company to continue to mark its mark in the industry (Teysaust.com.au., 2016).
The second aspect is that the company has employed the Just in Time (JIT) approach in its supply chain management. The JIT approach employs the pull system of the supply chain in that the company does produce and deliver its products on the customer’s demand. In the pull strategy, the production of the company is dedicated to the number of customers(Slack et al., 2010). Teys Australia Company has employed this strategy to reduce the company from holding excess inventory that often goes to waste (Teysaust.com.au., 2016).
Furthermore, the company has employed the vendor management inventory system and the customer interface management software. The two are crucial in the management of the supply chain.
The vendor management inventory (VMI) system places the responsibility of replenishing the stocks on the suppliers (Aquilano, Chase, Shankar, and Jacobs 2010.Pp 345).The suppliers and Teys Australia Company have a coordinated system where the supplier monitors their stock when the stock decreases to certain specified level between the parties the supplier automatically replenishes the stock.
It is a system that enables the supplier to know the products that are highly demanded and those that are least demanded by the customers. It enables them to utilize their resources in production and marketing effectively.(Lysons and Farrington,2006 ) Found out that VMI results in the building of long term supplier-customer relationships, reduction in inventory carrying cost and instances of stock-outs, reduced uncertainty in demand, ensures stock visibility hence enhancing the replenishment process Beamon et al. (2006).
The other aspect is the customer interface management Software. The software is used to process the orders of customers when they arrive and sends them through the company. The company, later on, integrates the information sends the orders to their suppliers. The suppliers later on deliver the products to the company who later on take them to their customers. Secondly, the system does process the queries of the customers when they come through the system. A 24-hour customer response is set in the company, the notion of the customer is King has led to Teys Australia Company taking up the top 10 position in the food and beverage industry.
Moreover, Teys Australia Company has employed the inbound logistics management. The system is integral in the management of inventory. The orders are received on time, and they are processed in the company. Later on, the company does ensure that they organize their production system in that they package and arrange the products on the demand. Teys Australian Company does package the products in bulk and sends them out to their customers (Teysaust.com.au., 2016).
Bidivest Australia company does provide wholesale food, meat, and fresh produce to the catering and food industry (Bidvest.com.au., 2016). The company employs the lean supply chain management system. The system is crucial in the eradication of unnecessary waste within their production and supply network ( Bidvest.com.au., 2016).The wastes that are eliminated with lean supply chain management include time, inventory, motion, waiting, overproduction, over-processing and defects. The above wastes once eliminated have ensured that the company can deliver to their customers’ right the products that they require right on time. Additionally, the practices play an integral role in ensuring proper investments of the company’s finances in the growth of the company (Aquilano et l, 2010).
The second practice adopted in the industry is outsourcing. The company does outsource services that are not integral in their production and supply network. The company does outsource the transportation aspect of their supply chain network to ensure that they are able to get the products from their suppliers and deliver to their customers. The company has over 56,000 food service products, food offerings of between 400 and 600 product lines (Bidvest.com.au., 2016).
Thirdly, Bidivest Enterprise Resource Planning is a business management system that through modular application software, functions or merges all the operating sections of a company (Lyson and Farrington, 2006). A marketing module is linked with the inventory module and then integrated with the transport module. The inventory module assists the warehouse administrator to know on a real-time basis the stock levels within and manages to plan for more production and can determine the location of the stock keeping units for ease of loading. Indeed, such information is important in servicing pending orders.
The ERP system picks orders on an aging sequence and keeps the distribution manager informed on stocks availability and also trucks available for loading for the next delivery. The manager can assess the stock levels through a touch of a button thanks to ERP system. The system is ideal in procurement in authorizing purchase orders and payments on approved deliveries(Lyson and Farrington, 2006).
To conclude the essay, the supply chain management system does affect the customer lead times, inventory levels, delivery time and quality. A good example is the operations taking place between Teys Australian Company and Badville Company. The two companies are leading in the food industry, and they have employed diverse best supply chain management practices to ensure they achieve a competitive advantage. The practices include enterprise resource planning, JIT, VMI, inbound logistics, customer management software, and lean supply chain management. The practices have been integral in the escalation of the companies into their present state.
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