Complex Supply Chain Networks And Supply Chain Drivers

Complex Supply Chain Networks and Supply Chain Drivers:

Abstract

The analyst in the Distribution, Engineering, Maintenance, and Productions Management Group of the Central Engineering Department for Canbide Corporation is in charge of analyzing various operations at all of Canbide’s facilities. The purpose of our group is to analyze operations, report our findings, and make recommendations for continued improvements and implementations of Operations Management (OM) tools.

The remainder of this report summarizes our findings and recommendations on three of our electronics facilities located in Oregon. It is a result of a collaborated effort by the entire group, research, analysis, observations, communications with management, and interviews with the production and inventory planning staffs at these facilities. In order to focus the report on the main findings rather than all the individual problems and associated recommendations, we’ve included a detailed outline as an appendix to this report.

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Our initial visit to the facilities allowed us to gather general information such as locations and relation to each other, facilities and production layouts, and business/operations information. It was discovered that facilities T and P were located in the same building but run as separate businesses and that S facility was about seventy miles from them. They share common customers and are dependant on each other. The S facility produces parts and sub-assemblies for facilities T and P and the “accessory” parts for the S facility are purchased by and shipped from the P and T facilities.

This creates a complex intra-company and external supply chain consisting of all business processes and information used to provide our product to the customers; this includes everything from procurement of raw materials, through production, and to distribution. Because of the relationship of these facilities they are suppliers and distributers to one another, making the need for supply chain management even more critical.

Through the aforementioned methods, we were able to uncover many issues with the supply chain and management of it. These are outlined in the appendix. The main areas that need concentrated on are communication, material and inventory handling and procedures, order entry processes, supervision at the facilities, and problems in production flow.

There is an apparent lack of communication from all levels within each facility, among the three facilities, with this division and the parent company, and along all aspects of the supply chain. The majority of the problems with the supply chain are directly or indirectly related to this lack of communication. These problems are affecting efficiency, quality, customer relations, and profits.

This seems a bit odd for a corporation as successful as Canbide who is a multi-national, publicly traded company with annual sales nearing $10 billion. Therefore, we believe all our recommendations listed in the appendix for communication are most likely being properly done at the parent company. Corporate level management needs to coordinate with the management group at these facilities to help them implement our recommendations and guide them since they are a relatively new company.

Our analysis of material and inventory, order entry, and general production flow procedures uncovered numerous problems. The problems ranged from lost, misplaced, and defective parts to problems with JIT implementation, shipping, equipment and quality control issues, inadequate flow of materials, scheduling problems, lack of proper operations, and so on. Basically, the procedures for material, inventory, ordering, and production flow are not controlled properly and has a major impact on efficiency and profits. Problems in these areas disrupted the entire supply chain as well.

To properly address these problems it is vital that communication is improved and that we hire knowledge individuals in the fields of logistics, quality control, manufacturing and production, project management, technical support, operations integration, and any other roles defined by human resources. Knowledgeable individuals in the right fields should be capable of implementing all our recommendations and be specialist in those areas. Once the proper team is put in place they will be responsible for implementing OM tools, lean production, supply chain management systems, an integrated enterprise resource management systems, identify the needs of additional tools, equipment, technology, and training of employees that will eliminate these problems.

References

Colorado Technical University Online. (2008). Retrieved January 26, 2008, from https://campus.ctuonline.edu/MainFrame.aspx?ContentFrame=/Default.aspx

Broyles, D., Beims, J., Franko, J., & Bergman, M. (2005, April). Academic Mind. Retrieved January 19, 2008, from http://www.academicmind.com/unpublishedpapers/business/operationsmanagement/2005-04-000aaf-just-in-time-inventory-management.html

Environmental Protection Agency (2008, January 28). Just-in-Time / Kanban. Retrieved January 28, 2008, from www.epa.gov/lean/thinking/kanban.htm

Schroeder, R. G. (2007). Operations Management : Contemporary Concepts and Cases (3rd ed.). New York, NY: McGraw-Hill Companies Inc.

Supply-Chain Council. (2008). Retrieved January 19, 2008, from http://www.supply-chain.org/cs/root/scor_tools_resources/scor_model/scor_model

Wise Geek (2008, January 28). What is a Bill of Lading? Retrieved January 28, 2008, from www.wisegeek.com/what-is-a-bill-of-lading.htm

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Appendix:

Communication

Problem:

1. Lack of communication from all levels within the facilities, among all three facilities, with corporate management, and along all aspects of the supply chain

NOTE: The majority of the problems are directly or indirectly related to a lack of communication and therefore, most of them are listed below.

Effect of Problem:

1. Lost Materials (Parts / WIP / Finished goods)

2. Improper Scheduling in Production and Shipping

3. Inventory left in trucks

4. JIT problems

5. Inadequate