Assignment Sample on Supply Chain of Raw Material
Introduction
Supply chain management is a system that is used to manage the flow of goods and services along with the processes involving the transformation of raw materials to final products that can be delivered (Shakhbulatov et al., 2020). It is a process that is used by the companies to actively channelize the supply-related activities in a business to increase the value of customers and finding an advantageous position among the competitors.
Lithium is one of the key raw materials that is used in great proportion. Also, lithium has great value in the daily life of humans. Batteries are mostly made of lithium ions. The value of batteries in daily life is very big. From mobile phones to any electronic gadget, everything needs battery power and for the production of batteries, lithium is the key component (Lumineau and Oliveira, 2020). Like any other minerals, lithium has a lot of challenges to face. It is available in abundance but is very difficult to extract. The supply chain of lithium is a global chain with Australia, China, Japan, and South Korea being among the countries to process it. The US is the chief importer of these materials and they are the highest producer of lithium batteries. Panasonic is a global company that uses lithium to a large extent in producing its range of products. They make lithium-based batteries that provide high voltage output. They develop batteries for products of wide range like a wristwatch, LED light, Electronic thermometer, calculator, electronic toys and lot more.
Discussion and Analysis
Factors for procurement
Different factors are needed to be taken care of while procuring the raw material. Lithium is produced in a large quantity in Australia, China, and the US. Since lithium is a mineral, it is needed to note that safe packaging is done before they are exported. Lithium is a natural mineral so wastage of the element cannot be an option (Sánchez-Flores et al., 2020). So an important factor that is important to check before procurement of the raw material is its packaging. Another important factor that needs to be taken care of while procuring the raw material is the quality of the items that are being delivered. Though a natural mineral, there could be added impurities by the suppliers to gain more money. It is important to have a quality check of the products that are being brought in before buying them. This will ensure quality.
Before selecting a supplier it is important to check about the whereabouts of the suppliers. It is important to make sure that the products that are delivered are good and safely delivered. This will also help in recognizing a good and loyal supplier. The principles that are to be followed are discussed further.
- Creating a supplier scorecard based on the supplier characteristics, important strategic factors aligning to the values, Business policies, and checking if any resistances are provided.
- Identifying good suppliers through evaluating them based on the performances of previous suppliers, competitors, and business relationships.
- Negotiation must be done after selecting the potential suppliers so that cost can be effectively cut down
If the supply has to be done to the UK, the US will be the best location to get the supply from. It is because of the geographical locations. Lesser distance and less resistance would be faced than compared to supplying from China or Australia.
Other suitable supply areas on the list will be China, South Korea, Japan, and Australia. The US has a geographical and transportation advantage over the other regions.
Drawbacks of single sourcing
The main drawback with single sourcing is that the suppliers in single sourcing have control in bargaining. In addition, there are only limited opportunities to lower the price and have access to a diverse range of raw materials. In the case of single sourcing, when the supplier faces an emergency, it can leave the company in a critical and problematic situation, looking for new suppliers. This can lead to loss of time and in the worst scenario further delay in lining up a new supplier (Yildiz and Ahi, 2020). For a single source, the supplier knows that and they can offer fewer incentives to the company and sell at a relatively high price.
Recommendation
The company must start using multiple sources. A good reason is that the suppliers would compete against each other and provide the best that they can. Low cost, better incentives, and better quality products are the advantages of having multiple sourcing. Also, if one supplier faces any difficulty, there would not be any pause to the proceedings of the country.
Conclusion
Managing the supply chain is an important aspect of doing a business. It helps in the entire function of supply thereby increasing the chances of productivity and profit.
References
Sánchez-Flores, R.B., Cruz-Sotelo, S.E., Ojeda-Benitez, S. and Ramírez-Barreto, M., 2020. Sustainable Supply Chain Management—A Literature Review on Emerging Economies. Sustainability, 12(17), p.6972.
Shakhbulatov, D., Medina, J., Dong, Z. and Rojas-Cessa, R., 2020. How Blockchain Enhances Supply Chain Management: A Survey. IEEE Open Journal of the Computer Society, 1, pp.230-249.
Shakhbulatov, D., Medina, J., Dong, Z. and Rojas-Cessa, R., 2020. How Blockchain Enhances Supply Chain Management: A Survey. IEEE Open Journal of the Computer Society, 1, pp.230-249.
Yildiz, K. and Ahi, M.T., 2020. Innovative decision support model for construction supply chain performance management. Production Planning & Control, pp.1-13.
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