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A Supply Chain Map is a visual representation of the flow of information, process and financial between two or more operating companies upstream and downstream in a supply chain.
Physical, information and financial flow are important elements to improving the supply chain performance. These flows are developed to analyse the chain and without adequate sharing of information, firms would have to resort to other alternatives at an increased cost.
The mapping of the Supply Chain Process Flow is done through developing an organization level supply chain map of how the product "Roti Prata" is delivered, and have identified the product, supporting functions in the map and its information flows.
This report describes the supply chain map of an Indian breakfast namely, "Roti Prata" and provides a description on the extended supply chain network that enabled the contents of the "Roti Prata".
It will also highlight the problems and issues with the Supply Chain Map for "Roti Prata" and provide suggested improvements with justification, regarding how these improvements will provide a positive impact on the end customer.
Further to this, I have provided a glimpse of the projected future state of the supply chain as I believe it should look in approximately 3 to 5 years from now.
Breakfast has been regarded as the most important meal of the day; I usually start off my day with a piece of "Roti Prata" mixed with eggs and a glass of water.
"Roti Prata" is a round pancake that is mostly sold by Indian Muslims at eating establishments. The "Roti Prata" usually costs between eighty cents to one dollar. For many Singaporeans, young and old, it serves as a staple food for the first meal of the day. (Infopedia Talk, 1999)
The basic ingredients for "Roti Prata" consist of flour, ghee and salt. Dough is formed when water is added which is then kneaded. This is an important requirement because this would allow the dough to be soft and pliable. The dough is divided into smaller manageable portions and left to rest overnight. The pancake is to be cooked and should be crisp outside and soft inside. Prata can be eaten with sugar, curries or plainly by itself. An egg can be added to the pancake to give it more variation and improve taste. (Infopedia Talk, 1999)
Main Ingredients of Egg "Roti Prata" Beverage
1) Flour 4) Egg 1) Water
Description of Ingredients in Supply Chain Map
Flour (Physical Flow)
Japan is one country that exports flour to countries all over the world and has milling factories such as Nippon Flour Mills whose core competency deals with flour milling. Their processes include using Flour silos to store the freshly milled flour. The flour then goes through a series of magnets which removes the ferrous metal that are stored in the flour. The flour then goes into a drum and a mono case shifter which separates the course and fine contaminates.
It then goes through a machine called the entoleter that destroys insects and their eggs.
After which, the processed flour would be stored in packing bins hence there is no need for a warehouse. The flour is then placed in a rotary packer that automatically fills flour into bags in accurate weights.
Flour silos Entoleter
Once the process flour is packed, it is then loaded onto trucks to be sent to the manufacturer after an order has been placed.
Based on the publication from American Palm Oil, ghee is derived from vegetable oil made solid to follow the characteristics of butter oil. It is thus compromised of wholly vegetable oil. Other ingredients like flavour, colour, vitamins and antioxidants may be added depending on the food regulations in the country in which the ghee is stored.
Physical Flow of Ghee
Based from the information and research that I have gathered from the internet, Thunderstone Singapore Pte Ltd is a company that has a core competency deals with the supply of ghee in various packings'and BabaMart Pte Ltd is an importer of ghee from India.
Ghee will be then transported to distribution companies such as Sabi Food Industries (S) Pte Ltd who will then distribute to retail outlets.
Physical Flow of Salt
Phu Pwint San Trading and PVD Salt are companies that have a core competency of supplying salt. They buy direct from Myanmar and China respectively, and their supplies include Industrial Salt, Table Salt and Crystal Fine Salt.
Physical Flow of Egg
Farms that are located close to urban demand areas would have their products transported to collection sites for the eggs to be graded and packed. The distributor would then collect the finished goods to be sold to wholesalers such as Kai Young Huat which will then be sold to chain retailers such as supermarkets. Roti Prata stall owners would then buy the eggs from the shelves of these chain retailers/supermarkets when required.
Physical Flow of Water
The Public Utilities Board core competency is to provide sustainable, efficient and adequate supply of water and is the main supplier of drinking water. Refresh Water Trading Pte Ltd who is a Manufacturer & Distributor of REFRESH Pure Drinking Water would redistribute the product to the chain retailers such as NTUC. Drink stall owners would purchase the product from chain retailers' shelves.
Financial Flow of Flour/Vegetable Ghee/Salt/Eggs/Water
Financial Flow is to be used to map the flow of funds and transactions with the supply chain. Some of the terms are stated below.
Credit Note (Letter from seller to buyer, stating a amount has been credited to the buyer's account)
Accounts Payable (Cash which a company owes to vendors for products brought on credit.)
Accounts Receivable (Cash owed to a company by a customer for products provided
Letter of Credit (A binding document, a from the buyers" bank as proof that the payment of the goods will be transferred to the seller.)
Letter of Guarantee (Document used mainly in the Far East whereby an importer obligates itself to accept and pay a bill of exchange on its presentment at a certain bank.)
Payment (Cash On Delivery)
Payment Terms (30 days)
Information Flow of Flour/Vegetable Ghee/Salt/Eggs/Water
Information is an important factor for the effectiveness within the supply chain. Listed below are some of the information data that members of the supply chain use.
Ship Pre Alert
Air Way Bill
End User Request
Update/record Inventory Levels
Identification of current problems and issues
Based on data gathered from Cereals Industry Forums (2009), reveals the following issues: -
1. Farm production factors
Production of eggs tends to be volatile due to movements in supply in response to price signals.
Product is perishable with a limited shelf life for optimum freshness.
There are long lead times to scale up production yet flock reductions can be immediate through culling.
Production profit is sensitive to fluctuations in feed costs
2. Value-chain integration
Instability of price and return for growers and marketers due to an inability to maintain a stable match between demand and supply.
Increasing inefficiency in egg farms, grading and packing operations.
Uncertainty over the extent of the future impact of the requirement on production levels and on matching of supply and demand.
3. Technology and innovation
Limited transparency of market prices and costs in the supply chain of eggs but however retail market is highly visible.
Limited new product development over recent years.
This will affect the product and service quality which will lead to poor responsiveness. If there is a general dissatisfaction in either quality, there will be a sharp fall in sales and overall revenue.
1. Communication between the companies in the supply chain must be improved
The system has been lacking market signals and that does not help the breeders of eggs on the quality that is required by the industry, but through better communication and transparency, this will help the farmers to make informed decisions,
2. Better Value Chain System
Based on the information gathered from Agriculture Food Council, through moving to a value chain approach has both rewards and risks.
The rewards of implementing a value chain approach are:
Competitive edge when the chain's products and processes are difficult to copy
Improved access to markets
Reduced time to respond to changing customer requirements, which will result to better communication with other members in the supply chain
More fruitful business relationships-collaborative versus adversarial.
Real time data and sharing of techniques such as VMI can be used to lower stock levels and smooth the flow in the supply chain and to also save costs.
The risks of implementing a value chain approach are:
Less command and control as business activities are shared with members of the chain
Longer decision making time, less flexibility and independence since more people are involved
Increase in the amount of time, effort and money to achieve a value chain
The following chart shows how a traditional supply chain differs from a value chain approach.
Supply Chain Value Chain
Communication Little or none Extensive
Value focus Cost/price Value/quality
Relationship Supply push Demand pull
Organizational structure Independent Interdependent
Philosophy Self optimization Chain optimization
Based on the suggested solutions, the positive impact on the end customer is that he will be not paying any additional costs, as he would be getting the same value for less than the amount price, which means more customer satisfaction.
Hines (2004) has stated that more environmental groups have been on the rise and in prominence for the past few years. These groups are generally concerned with the protection and the integrity of the environment. They have drawn attention to the fact that many aspects of daily life impact adversely. Energy sources such as
fossil fuels are not renewable and consumption is damaging the ozone layers in the atmosphere. Increasing distances travelled by goods reaching their market destination increases fuel consumption, waste energy and damages the environment. Many commentators have discussed this particular issue in reference to 'food miles'.
In addition to energy consumption within supply chain and issues surrounding the disposal of waste materials, there are problems concerning the design of products and supply chain delivery mechanisms. Product and services could be better designed to remove waste using reusable energy sources, reusable or recyclable materials and parts. Procurement policies particularly those of public organisations where they serve the needs of local communities through democratic processes should look after the wider interests of the community.
Reproduced from Penfield (2007)
Creating a supply chain that is environmentally friendly may not help the firm achieve its objectives. If a firm's overall goal is to be able to minimise its overall costs, then the move to a green supply chain should go hand in hand with the goals of the firm. A company should look at its business objectives and see how the change to a green supply chain can help in acquiring them.
For instance, if a firm plans to use biodegradable packaging materials for its goods which costs 30% more than traditional packaging, this would surely go against the goals of minimizing costs and this would reduce the profits of the company as well, so if business's who want to reduce energy usages can start by using energy efficient equipment and cutting the usage of what they use. (Penfield, 2007)
In the next 3 to 5 years, companies will move to a greener supply chain but the fact of the matter is changes need to be made in current processes from a supply chain standpoint so as to ensure that resources will be available for future generations to use. The advantages of having a green supply chain are to improve the profitability of companies and to help the environment. Going Green can not only be profitable, but ethical as well.
Until recently, information and financial flows were treated separately. Having both financial and information available can help in minimizing the cost of human errors, reduce reconciliation time, and create a more tightly integrated supply chain and would help companies in positioning themselves in terms of inventory and physical cost
Using these tools, it will give us important information that will help us to evaluate the situation and come to a decision based on the given data. If the information that is given is either inaccurate or distorted, it can cause significant problems from one end of the supply chain to another such as excessive inventory investment, lost revenue and missed production schedules. Hence the bull whip effect would be formed.
Although the supply chain has taken measures to improve itself and its processes, there is still a misalignment in linking the supply chain and financial aspect. Supply chain processes must be in line with the financial performance by defining between operational measures and financial metric. This would translate financial targets into operational metrics which would then be implemented in the supply chain.
I recommend value chain is the best choice as it is built on relationship strength which includes the following elements (Lindgreen, 2001)
Open book accounting
(Improving the efficiency of the supply chain and for building trust into customer relationship with supplier)
(If there is trust in the supply chain, the success rate will be high in the relationship)
Coordinated planning arrangements
Shared Risks, Goals and Culture