Assignment Sample on MOD007698 Supply Chain
1. Introduction
Nina Van Diest is a Paris based chocolatier who used to work in the largest food corporation of Europe. She was working for a food development centre of Paris and was working for MyscoBee Corporation for about twenty decades. Nina had an innovative idea of producing vegan chocolate bars in the year 1990. She requested MyscoBee to generate some funds for her new innovation of vegan chocolates, but the MyscoBee did not raise any funds as they visioned no potential for vegan chocolates in the market. After this, Nina decided to quit her job and start her own business to fund and raise the demand for vegan chocolate bars.
Nina Van diligently worked for almost five years in her small kitchen in the quest of developing vegan chocolates.She finally sold these vegan bars in the local shops and homes of her hometown of Burges in Belgium. She managed to move the production to a small-scale manufacturing facility which she purchased on a farm outside Burges to increase her production capacity of the vegan bars. Nina also managed to purchase some manufacturing equipment, but they are found to be old and worn out. This research will focus on Supply Chain Management (Casado-Vara et al. 2018). The research will also highlight the growth of Nina’s business after making the use of Supply Chain.
2. Scenario Analysis
2.1 Current capabilities within supply-chain
The supply chain which is running under Nina Van’s company is facing several issues. The research studies show that in the past Nina purchased the raw materials of the product from the local wholesalers, but due to the rise in demand the wholesalers cannot meet the supply of raw materials on time. Most of the time, the product remains out of stock. This has led to the complete stoppage of the production line and the staffs working in his company has to drive a long distance to find the key ingredients of this product (Kamble et al. 2020).
Nina’s company employs just six people who are supposed to perform all the types of work starting from taking others from the customers and it also involves working in the production line. The major problem faced by Nina’s company is that the team members are not well aware of their duties. It is witnessed that the team members are very friendly, who support production in every way, starting from working in the production line and some days packing the product.
Nina can divide the workings among the six members on rotational basis so that the work will be more efficient and no management problem will be raised. When a large order pops up in the company, the staff member finds it difficult to cope up with the large orders. Sometimes they also have to work overtime, which is another problem faced by the staff in Nina’s company. Some staff even recommended a CRM system, (Cruz-Jesus et al. 2019) so that better overviews of orders and delivery can be opted.
2.2 Opportunities for future growth
- Utilise CRM to track orders– Nina’s company needs a Cost Relationship Management (Harrigan et al. 2020) tool which is basically a data analysis tool done to acquire a large amount of information from the customers. It can be done via email, phone calls, and the company’s website to analyse the data of the potential customers. CRM helps to understand the direct response from the customers which will help Nina’s company to fix the issues easily.
- Technological advancement– Production equipment used in Nina’s company is worn out and regularly break down. It was even found that due to the worn out techniques of equipment, the staff have to operate the machines manually (Halder et al. 2019). If Nina’s company operates new technology and uses the latest modes of technology, then the production will be much faster and easier. A large amount of chocolate bars can be produced at once
- Assigning proper duties- A major problem which was seen in Nina’s company is that only six people work here and roles assigned to the staff are not properly designated. The staff is not capable of coping up with the pressure when large scale production is required. Though it was seen that staff working in this company are friendly and supportive. Nina can assign duties based on their performance and hold each and every staff responsible for their work. The staff should also be given the responsibility to take major decisions of the business and work independently (Neuhäuser and Siebke, 2020).
- Connect to a better network of global partners and delivery suppliers– Nina van sent the global products via DHL, but sometimes it was witnessed that DHL was late in delivering the products in the global markets so Nina had to take the responsibility of sending this chocolate bars where this bars where freighted via air transport which means low profit margin. Thus the company can contact other delivery partners who can deliver the products globally (Ajwani-Ramchandani, 2017).
- Stocking products two weeks before delivery– Due to the demand in Nina’s vegan chocolate bars the consumers are ordering more products on a daily basis; Nina’s company is not able to focus on stocking the product. So the company needs to stock up the inventories two weeks before delivery (Scholvin et al. 2019).
3. Supply chain strategy
3.1 The way of establishing a global supply chain strategy using SCM theory
SCOR analysis
Supply-chain operations reference (SCOR) model is basically a reference model which is required in Nina’s company for Supply Chain Management (Raisaro, et al. 2020). The SCOR model mainly focuses on business associated activities which leads to satisfying the demand of the customer. The model will help Nina’s company to understand the problems which are on-going in her company and to communicate supply chain management in order to extend her business. The six processes of the SCOR model for creating a global supply-chain for Nina are as follows:
Source: sourcing means to find out the goods and services to meet the actual demand in the market. Nina’s company needs to contact the wholesalers before the raw materials are required to make the products exhausted (Peña-Orozco and Rivera, 2017).
Make: The demand for Nina’s chocolate bars is very high and as they are of good quality and the products are vegan. Though the demand of the product is so high, it requires more workers to produce the product. Nina needs to employ more people in her company so that they can bridge the gap between demand and supply.
Deliver: Nina’s company needs to make a strong network partner in order to deliver the products in the global markets. Nina can stop the use of DHL where delay in delivery was observed. Nina’s company had to incur more expenditure by bearing the expenditure of air transport. Only an additional quantity of 5% of the demanded quantity will be sent so that excess chocolates do not get wasted.
Return: After the delivery of the product, Nina’s company can indulge themselves into the after sales service of the product which involves testing and then buying the product. If a customer does not like the taste of the product they can freely return the product without any haze. Nina’s company should also refund the prices to the customers in case they dislike the packaging and taste of the product.
3.2 Impact of the strategy on company structure
The solicitation of the above mentioned SCOR analysis will help to the efficient and effective improvement of Nina’s Company. The SCOR analysis will help to the expansion of the company in the global market with proper supply chain of the product. The company can also be funded by a Californian who is ready to fund Nina’s business. Some of Nina’s friends can also join hands in the expansion of the market in the global business. The implementation of her strategic plan will help the company to reach the area of industry 4.0 so that direct sale can be used to manage the complete supply chain, production and logistic operation.
3.3 Outsourcing
Currently, Nina’s company is facing the problem of funding; besides, the company needs to invest some money on hiring the employees who will be able to meet the requirements of the current demand. Apart from this, the company needs to invest to buy the latest machinery as the machinery used in Nina’s company is worn out and faulty (Alzoubi and Yanamandra, 2020. One activity that can be outsourced is the delivery of the goods from the local warehouse to the retailers and then end-consumers. For instance, a total of 100,232 chocolate bars were ordered in quarter 4 in Spain (as mentioned in Appendix 1 of the case study).
3.4 Risk Management
Risk is the biggest factor Nina’s company is facing due to the outbreaks of inventories. Huge loss was suffered by Nina when one vat of chocolate was thrown away as the conveyor motor failed and the staff had to do the work manually. Another risk was witnessed, when someone fell from the ladder and hurt her back. The working environment in Nina’s company should be such that the workers can work without any risk of accidents (Dubois and Ordabayeva, 2021).
3.5 Competitor Analysis
Nina’s company can get a competitive advantage because of the vegan delicacy made by her company. The competition in the chocolate industry is relatively very high; as it is liked by most of the people. The demand for making chocolates is increasing so much that the competition is also increasing very rapidly (Child, 2019).
3.6 Impact of future technologies in sharing information throughout the supply chain
Nina’s company is gradually taking a global position by competing with the other chocolate brands. The company has also been exposed in the German TV serial Nina Diest vegan chocolate bar which seems to be the most liked episode by the people. Sales for her vegan chocolates are gradually increasing and taking a lead position in the market. With the help of new technologies and the latest machineries Nina’s company can take a very good position in the global market. The company can take up the system of Industry 4.0 and CRM (Customer Relation Management) system to track the orders easily. Customer Relation Management system will help to make strategic plans and help Nina’s company to organize and access the business properly. Nowadays, managing the business relationship with their customers has become a complicated process. This will lead to overall productivity and efficiency of the day to day business of the company (Christopher, 2017).
3.7 “Strategies that could affect the supply of parts from manufacturing to the end customer”
The supply chain used in Nina’s company is faulty and faces a lot of difficulty. Nina’s company has made use of blockchain technology to track the product from the original source. This type of technology is first time used by any chocolate manufacturers. Blockchain technology needs to be tracked by a highly technical person, so involvement of a technical person is required in Nina’s company. The resource planning done in her company is also very poor. Two strategies to rectify the agile structure under this approach suitable for the company under discussion are:
- The product delivered to the customers should be routine in nature. There should be no type lapse between the demand and supply of the product.
- Nina’s company should also include valuable and quality products to attract more customers.
4. Conclusion
It was concluded from the study; that Nina’s company needs comprehensive changes as it is taking a lead position in the competitive global market. However, she has to apply lean strategies over agile ones to move beneath the problematic zone. This can be done through technological advancement, CRM practices, hiring more employees who can meet the demand for the product. To build a strong supply chain management her company needs to stock up the products so that the quench of demand can be satisfied. Building a strong network to distribute the product in the global market is the main concern which Nina’s company should focus on.
5. Recommendations
Nina’s chocolate company should focus on the lean approach against the agile approach; as it is one of the most efficient ways to handle the supply chain management techniques very easily and comfortably. This approach helps in encouraging and developing business models to achieve the best type of product which is a perfect fit for the market. Nina’s company will be helped in a way of proper optimization of people, using optimum use of resources, efforts and energy of people so that organizational goals can be achieved successfully.
Block chain technique is also a very specific and end to end system which is very helpful in the supply chain system. With the help of Block-chain system, Nina’s company can flourish in the global market.
The chocolate company should focus on ABC inventory control technique for categorization. ABC analysis can be subdivided into three categories: “A items” have an accurate record and they need tight control, “B items” needless control and “C items” need least control. Nina’s company should focus based on the priority of the customers. Nina’s company should create a value stream that helps the company to manage better flow of information (Deepak and Jeyakumar, 2019).
A system of holacracy should be set up so that a proper hierarchy is followed in the company; every employee should be held responsible for their work, they should be independent in performing their jobs. Time management system can be fulfilled with the development of SCM. Performance Metrics are also helpful to recognise the interconnected activity of SCM.
Reference
Ajwani-Ramchandani, R., 2017. Connecting the Base of the Pyramid to Global Markets Through E-commerce: A Case Study of BAIF (India). In International Business Strategy (pp. 441-465). Palgrave Macmillan, London.
Alzoubi, H. and Yanamandra, R., 2020. Investigating the mediating role of information sharing strategy on agile supply chain. Uncertain Supply Chain Management, 8(2), pp.273-284.
Casado-Vara, R., Prieto, J., De la Prieta, F. and Corchado, J.M., 2018. How blockchain improves the supply chain: Case study alimentary supply chain. Procedia computer science, 134, pp.393-398.
Child, J., 2019. Hierarchy: A key idea for business and society. Routledge.
Christopher, M., 2017. 1 Creating agile supply chains. In Gower handbook of supply chain management (pp. 301-313). Routledge.
Cruz-Jesus, F., Pinheiro, A. and Oliveira, T., 2019. Understanding CRM adoption stages: empirical analysis building on the TOE framework. Computers in Industry, 109, pp.1-13.
Deepak, R.K.A. and Jeyakumar, S., 2019. Marketing management. Educreation Publishing.
Dubois, D., Jung, S. and Ordabayeva, N., 2021. The psychology of luxury consumption. Current Opinion in Psychology, 39, pp.82-87.
Halder, P., Azad, K., Shah, S. and Sarker, E., 2019. Prospects and technological advancement of cellulosic bioethanol ecofuel production. In Advances in eco-fuels for a sustainable environment (pp. 211-236). Woodhead Publishing.
Harrigan, P., Miles, M.P., Fang, Y. and Roy, S.K., 2020. The role of social media in the engagement and information processes of social CRM. International Journal of Information Management, 54, p.102151.
Kamble, S.S., Gunasekaran, A. and Gawankar, S.A., 2020. Achieving sustainable performance in a data-driven agriculture supply chain: A review for research and applications. International Journal of Production Economics, 219, pp.179-194.
Neuhäuser, C. and Siebke, S., 2020. Dignity, Corporate Political Responsibility, and Business Legitimacy. Handbook of Business Legitimacy: Responsibility, Ethics and Society, pp.745-762.
Peña-Orozco, D.L. and Rivera, L., 2017. Sensitivity analysis of the scor metrics selected for the measurement of the management of a fruit-growing supply chain. Dyna, 84(203), pp.306-315.
Raisaro, J.L., Marino, F., Troncoso-Pastoriza, J., Beau-Lejdstrom, R., Bellazzi, R., Murphy, R., Bernstam, E.V., Wang, H., Bucalo, M., Chen, Y. and Gottlieb, A., 2020. SCOR: A secure international informatics infrastructure to investigate COVID-19. Journal of the American Medical Informatics Association, 27(11), pp.1721-1726.
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