Supply string management has gaining its importance in serving business procedures and being part of proper management of the business. Its role has been shifted from being a support office to being the central team of business with tactical importance and role to try out in overall operations of the business enterprise. In modern business community no group can sustain with no a well established, effective and successful supply chain management. The role of suppliers along with supplier management with the release of information technology is important thought for organizations.
Now with increase of proper importance of source string management the service provider is now learning to be a partner to the business, alternatively being just the vendor. The factor influencing competitive good thing about the organization is currently having the better supplier management and seller relations in the list. Therefore in coming years the importance of supply chain management is expected to increase with the upsurge in competition and globalization.
To understand the strategic supply chain management, key concepts and use of information technology to maintain the vendor relationships, this survey in presented using one of the best FMCG company Nestle. Their products range is extensive and the attention of this statement is on organization's Pakistan functions. Since Pakistan is the part of their global supply chain operations but for their dairy food they have to rely on the local dairy suppliers who aren't very much informed and well outfitted. Therefore managing them is a obstacle for the business and same problem and its own handling is under analysis in this statement. There are a few tips also given at the end so that improvements can be made in local source chain.
Assignment 2a
2ai) Current Supply Chain Strategies in Nestle
In these lines I shall be looking at the resource string management of Nestle Pakistan's procedure and would not be talking about the global source string management of the organization. The business has remarkable production facilities in the united states and they also have relished the healthy market show for last few decades. One of the reasons of the success of the business is their seller management and the intelligent distribution system.
The market in Pakistan is mainly dependent upon the circulation network and same has been handled by the organization in recent years insurance firms excellent relationship with their channel associates and logistics. Their syndication network makes sure that every product is allocated in the required areas at the mandatory time and the demand and supply doesn't have any distance. Their distribution installation is synced with their production system therefore they don't have to manage the inventory of the product for the longer period of time. This plan has saved the organization on financial area moreover they have been able to provide the product to the market at demand (Hugos, 2006).
The second aspect of their source string management is their seller management, they have applied the just with time management strategy in their raw materials procurement and sellers are extremely well synced with the procurement and procurement is synced with the creation and other support departments. This just with time management in addition has saved the organization the inventory management cost of the natural material and they're able to maintain a very low level of the inventory. Their vendor are also required to make certain that their uncooked material reaches to the business on time (Hugos, 2006).
2aii) Use of IT to Maintain Vendor Relationships
The it is serving firm to control their business businesses in different ways; the same concept can also be applied to deal with vendor relationships with Nestle Pakistan's functions.
The business can design a procurement network that is included with the many departments of the business. Along with the procurement office can have information technology based request that are also included with the systems of the sellers and are automated. Employing this system business have the idea of just with time management applied completely soul and the sellers will also be alert to the creation schedules of the organization and they will be able to plan their delivery and their own production planning regarding (Hugos, 2006).
The previously listed scenario will make it easy and convenient for the distributors to do business with the organization and they will have better interactions with the business and will continue to do business with them. With having these human relationships with the organization they'll be in a position to be lovers of the company.
Assignment 2b
2bi) Assistance from it in Resource Chain
The use of it can assist a great deal in the management of resource chain in case there is Nestle Pakistan procedures. In the global supply string nestle is utilizing supply chain management tools that are support by most advanced technology available. These tools have the ability to integrate various areas of the supply string that includes the just in time management of raw materials, automation of order generation to distributors and the logistics of fresh material from merchant to warehouse and the syndication of the completed goods to the different stations (Chopra and Meindl, 2009).
Previously all all these parts of the supply string were disintegrated or in some organization these parts were partly integrated. Now it has made can be done and easy to control all these parts of the supply string in one terminal and more over these parts and included with more automation. Exemplory case of this integration is simple, after the inventory level reaches to the pre described minimum for the uncooked materials at the creation facility, then your order management system which is connected to the inventory management system, automatically made order to the pre defined sellers. The order obtaining systems of vendors are linked with the procurement systems of the organization (Chopra and Meindl, 2009).
After owner is intimated, they manage to supply the required products and required number to organization's warehouse which has already been intimated for the order delivery. All of this process is performed via a built-in system to create ERP. The application of these it tools make the organization able to save their time and management resources and make owner the companions of the business most importantly this usage of IT bring automation in the processes which is the requirement of production focused organizations (Chopra and Meindl, 2009).
2bii) Effectiveness than it in general management of Supply String in Nestle
When we discuss the effectively using the information technology in the Pakistan market with local vendors that we see that our case company has been able to improve a lot in recent years. Because the market of Pakistan continues to be in developing period and the modern management and it tactics are yet to be designed in the forex market. Since Nestle because of their business need a team of distributors that can provide the timely supplies therefore that they had to work hard to induct the modern routines in their resource chain in relation the market conditions (Cohen and Roussel, 2004).
Apart from the existing IT tools to help the business gain the best out of their source chain management, there's a function where information technology and its own use can play an important part in the management of business, and which is still to be explored. This area relates to the supply chain management with their milk products. For his or her milk brand to create "MILK PAK" they need to acquire he milk from far and village regions of the marketplace as the milk production is mainly done in the rural regions of Pakistan.
Their dairy collection process is done on daily basis and it is still on manual basis. There may be use of information technology employing this they can keep up with the data base of their milk vendors that are small, geographically sent out and dispersed in locations. Furthermore they can also use information technology to locate their collection vehicle using global setting systems and install trekkers in them in order to make sure the protection of the milk and the vans.
Assignment 2c
2ci) Role of Logistics in Supply Chain
Logistics comes with an important role to try out in the overall supply chain management of any company. Logistics are the activities that can keep the good or services moving in one destination to the other vacation spot. This motion of goods or services can be related to the fresh material dependence on production setup, and its movements would be from seller premises to the organizational premises and this movement can even be related to movement of done good from organizational creation service to the route member facility.
In overall management of resource string the logistics part has its importance. Since the production focused business is all about timing. When the raw materials is unavailable to the development facility then the whole production cycle are certain to get disturbed and in the same way if the finished good aren't reached to the route members they will never be able to send out it on time and the result would be the complete inability of the business enterprise plan (Cohen and Roussel, 2004).
Consideration for any organization is always to have logistics setup planned and carried out that is consuming less cost of procedures more over which is integrated with the source and demand stations of the business. Capability to design such logistics set up helps the business to achieve their supply string objectives with adding least cost to it. The success of any resource chain management would depend upon the look of logistics, the smarter the look which can provide maximum in minimal cost the better the performance of source chain roles will be. Emphasis of our circumstance organization is to design the global logistics route that is able to fulfill the global business needs in minimal costs. Plus they have had the opportunity to handle this task smartly (Cohen and Roussel, 2004).
2cii) Analysis of Procurement Tactics in Nestle
Procurement routines in Nestle global as well as Nestle Pakistan are streamlined and working on the smarter management concepts. It could not be wrong to say that a person of the success factors for their profitability in the Pakistan is their seller relationships and smart procurement. Nestle Pakistan must procure different good and services from different kinds of vendor for their businesses; these good amounts from the fresh material for their finished good as well as the materials for the support departments like marketing. The entire idea of Nestle Pakistan procurement is to concentrate on quality as well as business efficiency (Hugos, 2006).
When we discuss the dairy product of the case company then we see that the procurement of the dairy from different villagers that are propagate across Pakistan is a problem and the business has been able to focus on this challenge perfectly. The important factor in the procurement of the uncooked milk is to make sure that dairy is 100 % pure, hygienic and fresh. These exact things are made sure by building a more developed supplier network that is in charge of the procurement of fresh dairy upon the above mentioned properties (Hugos, 2006).
Their procurement team has select the reliable and quality distributors that includes small to mid-sized diaries that delivers the quality milk to the business. Their procurement department also makes sure that the dairy is fresh, hygienic and above the expectations defined by the business. Their logistics have ensured that the fresh milk extends to to the creation service on daily basis. The exact same treatment and quality awareness have been practiced in other procurement responsibilities, and in a nutshell we can say that procurement procedures at the business are of high expectations (Hugos, 2006).
There are several factors that are to be considered when organizations go for researching and enhancing their logistics and procurement. The first factor that is usually to be taken care of is the bargaining electric power of the suppliers. The bigger the bargaining electricity of supplier the higher would be the requirement for the organization to keep and build good connections using their suppliers. In companies where such ability is with suppliers organizations have to create their procurement process which is dealer friendly and motivates the organizations to have good friendly human relationships with their supplier, focusing on making them their associates in business and getting the competitive edge from it (Chopra and Meindl, 2009).
The second factor which is usually to be taken into consideration is the price factor, the procurement and logistics can be costly to the organization if not designed artistically. The logistic are costly when their inbound and outbound management is not done the best way to maximize the production. Therefore when company design the procurement and logistics process they should keep in brain the cost of procuring the goods and service combined with the circulation cost of the good should be minimum amount. These costs include the time and resources costs as well.
Another important concern is related to the integration of procurement and logistics with remaining business operation. Corporation when increasing these processes also needs to make it sure the utmost integration can be done with other departments like production. They must be focusing on the automation of the procedures that should be managed by solitary hub. This way the expenses of functions will be lowest and automation and integration of all operations helps you to save time and increase efficiency in the business processes. They also needs to make sure that integration also include the vendors (Chopra and Meindl, 2009).
Assignment 2d
2di) Technique for the Improvement of Supply Chain
Presented below is the quick introduction about the strategy that can be used to increase the supply chain management of the organization. The emphasis of the strategy to improve the source chain management of Nestle Pakistan's functions. While reviewing this strategy it should be considered that Pakistan is producing country and their supplier management and logistics functions are being run on old institution management. The mentioned below point are focusing on vendor management and to improve the use of it to bring overall improvement (Chopra and Meindl, 2009).
First of all organization should work on the vendor romance management, up till now the total amount of power was with the organizations in Pakistani market, but with the intro of global current economic climate and wide open market more players are getting into Pakistan and today the value of distributors is increasing. Keeping this view at heart the Nestle should be working on increasing the business and merchant integration plus they should be produced partners in business. This can be done via having automation and integration with merchant systems and keeping them motivated to be companions with the business (Chopra and Meindl, 2009).
The second improvement which is necessary is to start the use of information technology in their resource chain management refined. Up till now the organization is using the info technology internally nevertheless they have to move away and make their supplier also utilize this tool. You can argue that currently vendors are not that move forward in using technologies but I'd say that business would have to educate their sellers and make them part of their organizational process, this way they will be able to achieve the true partnership with their suppliers and the businesses of supply string will improve a good deal (Chopra and Meindl, 2009).
2dii) Benefits of Improvement to Business Operations
The improvements recommended above have different advantages to the organizational business operations, these benefits ranges from operation to proper benefits. The first profit that corporation will have is that they can have a strategic competitive advantage by partnering with the suppliers of the organic material with their products. The business enterprise time is changing the marketplace and now other players are also getting into the same market, now the competitive advantages will be with the organizations that have strategic partnership with the suppliers as well. The boosts in competition have also made the suppliers alert to their important role and they're also feeling the moving balance of electric power. So it will be highly recommended to make the partnership before others do (Hugos, 2006).
The second improvement relates to the use of information technology in supply chain management and it has many benefits for the organization. To begin with the organization can achieve the integration between different departments participating in their part in value string. Once this is done it will save time and financial resources to the business as the operations will be streamlined and efficiency increase. The second benefit of the IT usage will be that distributors and suppliers may also be made area of the organizational functions and with supplying string overall and procurement processes in specific will be advanced. This will again help the business to get business efficiency (Hugos, 2006).
The third profit is related to circulation part of supply chain, corporation will, with the utilization of it, have the most streamlined circulation network when they have got partnered with their channel members, which will also assist in the improvement of business.
2diii) Overcoming the Barriers to Change in Improvement Strategy
Whenever there is a strategic change obstacles are always there. These obstacles should be removed with the creation of understanding and delegation. The first process is to make the management recognize that what exactly are the great things about the new strategy advised for the strategic change in resource change management. More over the management may also be informed about the difficulties it has to face if indeed they do not adjust the mandatory changes on the market. The very best management in the first stage will be made area of the process and strategic need for the change will be launched to them.
In the next phase where the top management will already be convinced about the required change, the center management will be studied into confidence, at this time the vendors may also be made area of the process so that they know about their role in the organization. This stage will also be comprising the tough drafts of the change. In this technique all the distributors and relevant departs will be inspired to provide their opinions about the suggested changes moreover their suggestion will also be noted for just about any improvement.
All this dialogue and delegation will generate the sense of possession in management and their responses can make them recognize that this is something for his or her own benefit and they will start owing it. After the ownership will there be, the barriers to improve will start lowering it and concern with unknown will be removed. With this process the execution of the tactical change will be made successful and lastly the concerned departments may also be provided with the required training.
Conclusion
In this record I've discusses various types of supply string strategies and use of it to enhance the supply chain. The organization selected for the examination was Nestle Pakistan, and their supply chain strategies were discussed briefly. The business is having impressive supply chain management however they need to concentrate on two sizes. One solution being the concentration on making the distributors partners of the organization. Second solution being increasing the use of it tools to manage their vendor human relationships.
