Kuiper Leda Supply Chain Defense

Kuiper Leda Supply Chain Defense

Supply chain management is becoming one of the most powerful business tool used to reduce cost while improving production and customer satisfaction. Managing the supply chain is transforming the way manufactures purchase raw materials, run production, and distribute final products. Kuiper Leda is an electronic components manufacture faced with a growth opportunity. The company's present production capacity is insufficient to meet the additional demands and requirements needed to fill a contract with Midland Motors, an American Original Equipment Manufacturer. Kuiper will need to increase its production of Radio Frequency Identification and Electronic Control Units, or outsource part if not all the production to fill present and future contracts. Being a small manufacturing firm for 10 years, Kuiper Leda was not expecting to receive a large and urgent order from Midland Motors. Within this paper, I will provide recommendations on how to further improve Kuiper's supply chain which will help reduce costs, minimize waste, and maximize value.

Kuiper Leda Supply Chain Defense

Kuiper Leda is a small Electronic Components Manufacturer with limited manufacturing capacity, but known for its quality and delivery responsiveness. The industry of Electronics Components manufacturing is highly competitive and strives on repeat orders and supplier relations. Kuiper Leda is unable to compete to its maximum potential because most of its competitors are big, have repeat orders and better supplier relations. Kuiper received a large order from Midland Motors but does not have the production capacity in order to meet the company's supply demand. Due to this large request made by Midland Motors, Kuiper needs to make some quick decisions. The company will have to decide whether to increase production capacity or to outsource production in order to meet the time lines for order from Midland Motors.

Supply chain management can be identified by looking at companies and their overall approach to managing the entire flow of information, materials, and services from raw materials suppliers through factories and warehoused to the customer (Chase, Jacobs & Aquilano, 2005). One of the existing formats implemented within Kuiper Leda is planning which is needed to handle all products requested to meet the demands of the customer. A significant portion of planning is developing an array of metrics to monitor the supply chain so that the supply chain is well-organized, minimize cost and provide first-class service to the customers. Federal Express eliminated this redundancy through the use of hubs and an online tracking system. Kuiper Leda needs to implement a complete infrastructure makeover and centralize their warehouse. By doing these strategies they can efficiently reduce cost of manufacturing, streamline supply ordering and increase profitability because of transportation costs and supplier delivery times can be a fixed cost and predicted more efficiently.

Supply chain management and centralization of the warehouse is a good way to streamline a company and take them into the future by reducing redundancy within the organization. Federal Express has one of the most sophisticated systems available for customers to track items sent through Federal Express (Chase, Jacobs & Aquilano, 2005). The sophisticated system is available worldwide via the internet and accessible 24 hours/7 days a week. The customer is provided a tracking number for the item currently being shipped. Through the internet the customer can obtain an accurate status of each item currently being routed by the company such as the time the package was picked up, the transfer hub's in the company's network and the delivery timeframe for the package. With this effective supply chain management, Federal Express has been able to develop valuable ways to maximize the capabilities of its customers, reduce costs and optimize supply chain efficiency.

"Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. In the context of capacity planning, capacity is the maximum amount of work that an organization is capable of completing in a given period of time" (Capacity planning, 2007). Kuiper Leda needs to increase capacity in order to accept the requested order from Midland Motors. The best way for Kuiper Leda to increase capacity internally and externally is through the use of outsourcing. It's important for Kuiper Leda to increase sales and build a strong relationship with Midland Motors for future sales opportunities

"Campbell Soup has a program called continuous replenishment that typifies what many manufacturers are doing to smooth the flow of materials through their supply chain" (Chase, Jacobs, Aquilano, 2005). The continuous replenishment program was designed to strengthen the effectiveness of inventory management throughout the supply chain. Campbell establishes electronic data interchange links with retailers and offers an everyday low price that eliminates discounts. On a daily basis, retailers electronically notify Campbell of their demand for the company's products and the level of inventories in their distribution centers. The information collected from retailers is used to forecast future demand and determine which products need to be restocked. Following the collection of data, Campbell Soup replenishes the distribution centers stock the same day by shipping the products out that afternoon. Through the implementation of supplier diversity and continuous replenishment, supply chain management is incorporated to maximize the company's performance.

To identify strengthens and weaknesses within the supply chain function, a company should have a good sound supply design strategy. The Bullwhip effect magnifies the inconsistency in demand of the customer to the producer in the supply chain. Campbell Soup employed this method which has been very successful for the company. Although the strategy was successful for Campbell Soup, it may not provide the same results for Kuiper Leda. Nonetheless, Kuiper Leda can use this benchmarking to help the company make better informed decisions.

Kuiper Leda's supply chain and manufacturing is currently not configured to able to handle large orders like the one from Midland Motors. The company does not have a strong inventory management plan in place in order to handle delayed orders, re-purpose inventory for urgent orders from delayed orders and fulfill back orders from one customer with inventory from delayed orders of other customers. Kuiper Leda's does not have