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Ready-to-eat and pre-packaged sandwiches are branded as the convenience food for many people who prefer speed of delivery and convenience in their sandwiches. Making sandwiches under a commercial condition is a precise process that works like a clock. It is just like an assembly process in a factory. Schedule of events that take place in a sandwich kitchen is very interesting. The basic process involves collecting various ingredients those are essential to make sandwiches, while the actual process used is similar to the one used all over the world.
In the present case study in question attempts to create a supply chain management plan that focuses on enhancing production goals, as well as to create more volume and profits. The company involved in this case study manufactures pre-packaged sandwiches in a commercial scale. A large super market chain wants this firm to supply high quality sandwiches for sales.
The sandwich manufacturing company has a number of departments that relate to the production of sandwiches. The main goal of the management is to evaluate and review the existing production scenarios and come up with a plan that focuses on enhancing the production from 3000 units per week to 12,000 units per week. The eventual goal is to integrate numerous supply chain components in an efficient manner and later meet the production targets to enhance the supply chain profitability.
Measure to streamline supply chain management objectives
Supply chain management is a well-organized, thoughtful coordination of the business functions and techniques spread across these functions within the ambit of a specific business firm and across businesses within the supply chain. The main goal of supply chain management is to improve and enhance long-term performance of the businesses and supply chain as a whole (Mentzer et al., 2001). This report deals with a sandwich manufacturing company that wants to enhance its production capacity from 3000 sandwiches per week to 12,000 units. To increase the production capacity to a significant level, a business improvement manager will need to create a careful strategy that relies on realistic supply chains that have solid products with many shared components, facilities and capacities.
Supply chain management is a process that sits between completely and vertically integrated business firms. In such a firm, the entire raw material and finished product flow belongs to a single firm. Here, each one of the departments operates on a specific goal. Effective management is possible only with coordination between various stakeholders. A supply chain management is an entity that is analogous to a fit athletics relay team. A relay team will be stronger when each one of its member knows how to work in a synchronized manner. The person who passes the baton to the other will be more competitive as the other person who receives it. However, the entire team has to perform well in order to win the medal.
Optimum supply chain is possible by using specific and appropriate technologies. Supply chain operations could be enhanced by using suitable push and pull management philosophies. The basic philosophy of "Push" means "Manufacturing to Stock", where the production is not carried out according to the actual demand. On the contrary, "Pull" means "Manufactured to Order" when production depends on the actual demand. To optimize supply chain management, the management may need to carry out manufacturing processes midway between push and pull philosophies, or by using a calibrated combination of both types.
In essence, supply chain management is designed to create a practical solution. Here, "supply' relates to "existing demand'. In practice, both supply chain models of "push" and "pull" types are exactly different in terms of demand and supply relationship. Today, supply chain management is gaining lot of attention because the latest information technology tools enable changing a production model from "Push philosophy" to "Pull philosophy".
Pull-type supply chain management relies in the demand side of the marketing. Two example concepts that can help the company are the Just-in-Time (JIT) and CRP (Continuous Replenishment Program), In other words, this means later production processes are assigned to actual demand for the product. On other hand, Push philosophy relies on demand forecast made by the marketing department. In our paper, either the management could manufacture sandwiches based on the actual demand or it can forecast the demand and produce the products accordingly.
One possible scenario is to keep the inventory level to the minimum most possible and supply sandwiches in short lead times and at very high production speed. At the juncture when the "Pull" philosophy starts to appear, the supply side of the business will start to work as the actual demand drives the entire production process. In fact, the situation is analogous to that of an elevator.
An elevator travels continuously without stopping and it runs even when there is just a single rider. In another scenario, a "Push" philosophy works like an escalator. An escalator will keep pushing the supply side even when there is no demand. In other words, this model mimics model for trains or busses for which supply (push) relies on the demand forecast model both by time and by route. In the case of sandwiches, there are two likely scenarios: one is a pull type of supply chain that does not show its concerns about lead-time and that start searching for chickens when an order comes through.
Alternatively, a push philosophy drives its production process by depending on the demand forecast made by the marketing department. For example, this model works well when there is a confirmed demand for the product. In this study, the sandwich company has a pending order of about 12,000 sandwich units per week. In nutshell, a push and pull system in a supply management chain, define the movement of sandwiches between two subjects. In any given market condition, the consumer usually start pulling the product that they demand to satisfy their needs while the manufacturers of sandwiches start pushing the product towards their customers. In a normal production scenario, there is a very fine and thin line between push and pull philosophies (Harrison et al, 2003).
To sum up, push production of sandwiches relies on the forecast demand while pull production is based on the actual demand for sandwiches. The dividing line o r the interface between these two points is called the pull-push boundary or decoupling point (Harrison et al, 2003). In this report, the supply side of the production may need to adjust its production levels based on the demand for the product. However, there is a confirmed demand for 12,000 units of sandwiches per week that eventually will drive the supply chain to work continuously like an assembly line.
Cycle View - An example supply chain management system
Any manufacturing activity is split into a series of sub activities that help produce or manufacture the product in an optimal manner. In our example, sandwiches could be manufactured in a standard production cycle. The cycle process of a production assembly has four components - Customer Order Cycle, Replenishment Cycle, Manufacturing Cycle and Procurement Cycle.
Fig 1: Cycle View - Sandwich Production Process
In the customer cycle part of the process, orders received by the consumers received will be scheduled for processing in the night. Orders received will entered in the retailer computer system and passed over to supply section of the retailer. Orders items will reach the customer within the set deadline. The retailer will process the order and passes on the information to the sandwich company that in turn will schedule for next production cycle.
Based on the order received, the procurement section will find out the quantum of raw materials needed and orders for them according to the shelf life of the ingredients. Manufacturing section will receive all the materials and starts producing sandwiches as per the orders received. Delivery schedule will be tight and according to the schedule set. Soon, sandwich consignments are dispatched for delivery.
Level 1 SCOR Model (Peter and Rosenbaum, 2003)
SCOR (Supply-Chain Operations Reference) is process reference meant for meaningful communication among different supply chain partners. In this paper, we will discuss about the Level I part of the model that relates to the MAKE process. In other words, the main topic of analysis will be on the processes that relate to the added-value activities that this model segregates as MAKE process.
In the context of this report, PLAN are the processes that pool demand and supply to create a course of action that best fits needs like sourcing, production and delivery. This step is trhe most important because it lays down the entire plan of sandwich business right from the consumer to retailer to procurement to manufacturing, all the while synchronizing the entire plan with sales and marketing. However, at Level I, the SCOR model deals with many processes that transform a product to its finished stage to satisfy the planned or actual demand (as determined by push and pull action plans. This step schedules the production of sandwiches.
Fig 2: Level 1 Performance Metrics