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Now due to unexpected demand their different models company wants to hold information which is vital to decouple their material along the supply chain. The unfinished goods are left to await order and demand at certain points along this supply and are ready to be assembled as soon as the customer`s order has been received. The company`s stable Management information system processes the requirement of the order send from the dealer, ordered by the customer. This information is then sending to the assembly point with different modifications attached to specific model. Assembling department makes the model just as the customer has ordered and the car has been delivered to the customer with less than a week`s time.
We can suggest that The wings and legs should consider keeping the material decoupling point as earliest along their supply chain as possible as keeping the chickens in generic form before packaging and labeling could help them to be more flexible to the demand of end customer shopping at the retail store and the approach of their first tier customer which is the retail store itself. During the later phase of the supply chain which is the packaging and labeling the company would have to use more agile approach than lean approach as this is the turning point of the supply and by being more reactive to the predicted and actual demand they can reduce the lead perishable time and deliver the poultry to the retailer`s warehouse and then finally to the end customer, having more longer expiry time. Wing and Legs will have to make the packaging and labeling phase faster keeping it cost effective at the same time as this part is the climax phase of this supply chain. So the conclusion would be that keeping the information up to date from retailer by sharing strategic promotional information, keeping the past sales and future predictions under account. Then decoupling this information with the phase as the poultry is in its generic form. From there the firm will have to apply agile approach strategy in creating products according to the customer demands which could possibly save the revenue of the firm.
QNo: 3: Most managers of Wings & Legs see the exchange of tactical information about (price) promotions between Wings & Legs and the retail companies as difficult to accomplish. What are the advantages for the retail companies to exchange information about promotions with Wings & Legs timelier and more accurate?
Ans: ADVANTAGES TO EXCHANGE INFORMATION FOR THE RETAIL COMPANIES ABOUT PROMOTIONS WITH WINGS & LEGS
Exchange of information is becoming an essential and more or less conventional way of business today. Not only exchange of information is important between the supplier and retailer but also a network which is secure and safe is also a department of all top retailers across the world.
For example if we take example of Tesco plc which is the United Kingdom`s top retailer cannot operate without a stable management information system. Due to fast pace of the nature of this industry, without sharing tactical information within the company and its supplier`s, Tesco cannot achieve £6 approx profits per annum.
Due to high competition between companies in every field especially in retail sector with which Wings and legs is dealing, confidentiality is of foremost importance .As leakage of tactical information can leave the retail group suffering from big losses which small suppliers are not able to keep confidential at certain times.
Confidentiality has to be treated in a way that it should be seen as a personal property of the customer which is obviously the retail sector companies which wings and legs are dealing along. For example sensitive commercial tactical information e.g. future promotional information, pricing and packaging decisions, should only be available to the regulatory and supervisory personnel within the company to avoid its exposure. To further seal off the possibility of getting the financial information available to non related personnel there has to be an agreement between both parties to set guidelines of this relation of exchange of information. This relation can only be achieved by building a trust between the two parties.
E commerce can serve as a medium to exchange this information in a secure way electronically minimizing the possibility of exposure to any one not related to the information.
Wings and legs can form a network with its customers to transfer the orders and sales data using the secure internet protocol codes.
There are numerous advantages of using the strategy of transfer of confidential sales data information between the two vendors. Having accessibility to this secure information is itself a lifeline for wings and legs as it has been discussed and concluded in the case study. Having information of the daily and future promotional activities of retailers can provide wings and legs with a clear idea of how to implement its strategies of agility and leniency with a knowledge of where and when to apply it along the supply chain map of the company. The company would know which product with appropriate packaging is more in demand which can help the company to transfer the buffering phase as later along the supply chain map as possible leaving more long life of its perishable raw chickens in reformed condition. Using the Electronic networking systems to exchange information with customers would give more accurate information with the speed of transmission which wings and legs can use to auto predict the future activity by applying the given information to the management systems, which would in return demand less focused supervision from the main supervisors and all subordinates would get up to date and revised data for their future efforts to put into produce desired products. This would end up wing and legs managers having better opportunities to organize their horizontal and vertical operations rather than putting all of their abilities to try to sell un needed raw products which could not be needed anymore and end up selling it to the giant retailers on their own conditions and them making huge profits by using those products for promotional activities within super markets.
QNo: 4: The network-based approach of an agile operations strategy could solve part of the matching problem by Wings & Legs. In supply chain management much attention is paid to improvement of the vertical processes in a supply chain. However, Wings & Legs also outsource part of production (they buy poultry products from other poultry processors) which means that horizontal processes and horizontal co-operation are of importance.
A: What advantages are for Wings & Legs in outsourcing part of their Production to other poultry processors? What advantages are there for these other poultry processors?
B: How should Wings & Legs outsource part of production to other poultry processors, with respect to production planning, quality control and product Specifications?
Ans: A: ADVANTAGES FOR WINGS & LEGS IN OUTSOURCING PART OF THEIR PRODUCTION
Almost every business could analyst has to out-source something at some or all points along its supply chain management. This could be services or technology, hardware or even human resources.
'Whenever a company produces something internally that others can buy or produce more efficiently and effectively, it sacrifices competitive advantage'
(Quinn, Doorley & Paquette, 1990, cited in Domberger, 1998, p33)
Out sourcing has become one of the most important forms of activity across business today. Out sourcing is generally defined as a building of contractual relationship between a firm and an external vendor in such a way that external vendor takes full responsibility to carry out one or more functions across the supply chain of the firm`s business. (White & James, 1996).
As the business expands every company across the globe has to face the monumental problems like reorganizations, advancement of technology and globalization. As companies tend to focus more on their core competencies the need to outsource becomes more inevitable for the firm to carry out its essential business processes. Same is the case with Wings and legs as company has to outsource raw material from sub contractors due to unexpected demand from its customers.
ADVANTAGES FOR WINGS AND LEGS
Outsourcing will help Wings and Legs to focus more on their core business values like priorities of operations and corporate strategy.
Wings and Legs will be able to take advantage of expertise from its external subcontractors by outsourcing its raw chicken material, if and only if a typical road map has been adopted to outsource. For example Toyota New Zealand and Fijutsu have signed a contract in which Fujitsu will provide latest hardware and software technology to the company which will help Toyota to improve the expertise in its own field due to more focused work just due to outsourcing.
By out sourcing the Wings and Legs will be able to free up more cash flow as it does not always needs to out source its raw material. Thus, The Company will not have to invest more money to upgrade its existing hatchery and processing plant capacities which could possibly tie up huge amount of cash flow. As soon as the work is done, the company can opt out the horizontal out sourcing from its supply chain management.
The company will need more man power to carry out occasional extra work which could be solved be outsourcing and there will be no need of recruitment and new contracts with new man power.
ADVANTAGES FOR CONTRACTORS
Small poultry processors can take advantage of expertise of the wings and legs by being part of their supply chain management.
By keeping a close eye on the processes of Wings and legs Sub contractors can compare their own supply chain with the Wings and Legs which will help them to achieve the expertise within the processes they lack.
By delivering a continuous exceptional and up to the standards services to the Wings and Legs the sub contractors could be successful in gaining permanent contractual relationship and could create a permanent financial relationship with the main company as, if wings and legs would deliver good service to its customer, it will be able to demand more services from the sub contractors.
B: OUT SOURCING
Out sourcing is an important business process across the supply chain which has to be road mapped in a way that it should not leave negative effects on the whole supply chain as in-efficient management of the out sourcing processes could end up the main firm to loose its grip over the whole supply chain processes. Here, buyer is only demanding a certain level of quality from Wings and legs, he is not concerned whether Wings and Legs out source its chickens or not. So it`s the company`s responsibility to procure and construct its own steps to achieve an effective out source service. Out sourcing could generally be mapped by the diagram shown below.
AGENCY STRATEGIC PLAN
Analyses Options to Achieve Outcomes
Define Agency Needs and Outcomes
Establish Requirements & Measures for outsourcing
Manage End-Of-Contract Transition
Select Vendors and Negotiate Contracts
Manage transition to outsourcing
Wings and legs will have to list down the needed requirements and the options available to achieve the desired objectives. The agency will have to further note down the requirement of outsourcing activities, select suppliers which come up to the standards of the company and negotiate the appropriate prices for services needed to bring about the operations. The company then is going to finalize the contracts and start receiving out sourcing services from the suppliers. Wings and Legs will have to adopt a strategy to manage these suppliers and to keep a check and balance. During the last phase ,Wings and Legs is going to sign up the contracts and close agreement along with the legal matters i.e. payments and other formalities and asses the end result matching it with the required need of the company i.e. what they have asked for is achieved or not according to the specifications.
QNo: 5: The information decoupling point only concern information about changes in the demand and market this is information that flows upstream the supply chain. In the poultry supply chain living chicken and perishable products are exchanged wings and legs therefore not only have to take into account variations in demand but also variation in supply what information should flow downstream the supply chain (to the poultry processor)so that wings and legs is able to match supply with demand in a better way?
ANS: DOWNSTREAM INFORMATION FLOW
Flow of material moves downstream adds value through fulfillment of order
INFORMATION EXCHANGE PLATFORM
Information to Supplier
Information from customer
INFORMATION THAT FLOWS DOWNSTREAM IN POULTRY SUPPLY CHAIN
High delivery reliability causes a downstream effect on decoupling point
Short delivery time causes a downstream effect on decoupling point.
Unpredictability of demand causes a downstream effect on decoupling point
Wings and Legs high lead times cause a downstream effect on the decoupling point
Therefore information on delivery reliability, delivery times, demand patterns and lead times should flow downstream in order for Wings and Legs to match supply and demand.
"In supply chains analyses and in the identification process of innovative supply chain design using the leagility and decoupling point's concepts proves to be very helpful. The relationships between raw materials quality requirement and products in food industry and supply chain logistics are of outmost importance, in the poultry supply chain quality requirements limit flexibility. A more intensive collaboration between food-technologists and operations management scientists could be worthwhile"