What Is The Best Practice Technique Or Process Commerce Essay

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A "best practice" is a process, technique, or innovative use of resources that represents the state-of-the-art industry behaviour. Firms making use of best practices in their supply chains can achieve significant improvements in cost, schedule, quality, performance, safety, environment, or other measurable factors that impact the bottom line in the organization. The overall aim of this study is to critically analysis of supply chain management and to see how it has an impact on NewG Furniture Company.

TASK I

OVERVIEW OF THREE ORGANIZATIONS

Toyota Motor Corporation (TMC) or Toyota is the Japanese multinational organization and the world largest automobile manufacturers, selling 7.5 million models annually on all five continents. At present, it employs 70,000 people. Like many enterprises that have made their mark in history, Toyota has been shaped by a unique set of values and principles that have their roots in the company's formative years in Japan.

In a recent study conducted by AMR Research, 25 companies were ranked accordingly to the superior supply chain capabilities and performance that they exhibit. Toyota was ranked fifth in the AMR Research Supply Chain 2007 list. This is due to the implementation of the Lean supply chain management practices into the Toyota Production System. In addition, Toyota also shares the success of the practices with other organizations .

Toyota's supply chain is classified as a pull process as it is executed in response to a customer order. In order to deliver the ordered vehicles as quickly as possible, the vehicle is efficiently built within the shortest possible period.

WALL-MART

Wal-Mart is the one of the largest supermarket chain in the US and globally. Their main activities are to offer groceries, Non-foods, home supplies, electronics, Jewellery and Pharmacy. In order to operate a retail store, Wal-Mart pushes their products to the consumers.

Wal-Mart took direct control of its factories in January 2003, for direct bring in products. Therefore, Wal-Mart changes their strategy to empowering their suppliers and developed inventory management. In order to uninterrupted supply to all their stores which are spread in all over the US, they have established own private fleet to deliver the products to the stores smoothly. They have got 6,900 driver and 5,600 truck in 48 states as well as essential transport for Wal-Mart logistics with their logistics partners Wal-Mart's logistic partner SAM'S Club. Furthermore, Wal-Mart's private fleet provides delivery with efficient transportations and devoted services to the stores. At present, the Wal-Mart private fleet transportation operates in 28 states with 36 transportation office.

DELL

Dell Computer Corporation became the first company to sell custom made computers. By 1988 Dell Computer Corporation went public, raising $30 Million in its initial public offering. 

The proper use of a supply chain can become a cost saving tool for a company.  During the recent downturn of the economy, many companies are looking for cost saving solutions within their business.  Dell is an excellent example of a company that has worked to continually improve their supply chain management to reduce the costs of their products.  Dell deployed a new supply chain system that works in real time.  By using software from both Microsoft and i2 Technology, Dell has developed a supply chain that is practical, cost effective, and has room for growth.

 Implementation of i2 supply chain software has allowed Dell to connect to its suppliers in real time via the web, and has allowed them to pulled materials to Dell's manufacturing plants.  The i2 supply chain software was deployed with the consideration of two steps of the supply chain process. The two steps are, planning and execution.  Planning involves gathering the needed materials from the suppliers' hubs near the appropriate Dell factories.  Execution requires Dell to have the right materials on hand at the appropriate factory to build the customer's order.  By using these two steps, Dell deployed the software to create a more efficient supply chain [1] .

RELATIONSHIP BETWEEN SUPPLY CHAIN MANAGEMENT AND ORGANIZATIONAL OBJECTIVES

A company's competitive strategy defines the set of customer demands that it seeks to satisfy through its products and services. A supply-chain strategy determines the nature of procurement of raw materials, transportation of materials to and from the company, manufacture of the product or operation to provide the service and distribution of the product to the customer, along with any follow-up service.

Supply chain management is essential to company success and customer satisfaction. The ultimate objective of SCM is to achieve a 'strategic fit' between the company's competitive strategy and supply-chain strategy. This strategic fit can be achieved by Understanding the customer demand, which helps the company to define costs and service requirements and understanding the supply chain that helps the company to design and manage its supply chain in accordance with the customer's demand. If any mismatch exists between what the supply chain is capable of doing with respect to customer demands, the company can either alter the structure of the supply-chain design or alter its strategies. [2] 

Supply Chain Strategies are the critical backbone to Business Organizations today. Effective Market coverage, Availability of Products at locations which hold the key to revenue recognition depends upon the effectiveness of Supply Chain Strategy rolled out. Very simply stated, when a product is introduced in the market and advertised, the entire market in the country and all the sales counters need to have the product where the customer is able to buy and take delivery. Any glitch in product not being available at the right time can result in drop in customer interest and demand which can be disastrous. Transportation network design and management assume importance to support sales and marketing strategy.

Inventory control and inventory visibility are two very critical elements in any operations for these are the cost drivers and directly impact the bottom lines in the balance sheet. Inventory means value and is an asset of the company. Every business has a standard for inventory turnaround that is optimum for the business. Inventory turnaround refers to the number of times the inventory is sold and replaced in a period of twelve months. The health of the inventory turn relates to the health of business.

In a global scenario, the finished goods inventory is held at many locations and distribution centers, managed by third parties. A lot of inventory would also be in the pipeline in transportation, besides the inventory with distributors and retail stocking points. Since any loss of inventory anywhere in the supply chain would result in loss of value, effective control of inventory and visibility of inventory gains importance as a key factor of Supply Chain Management function. [3] 

FINDINGS

In a recent study conducted by AMR Research, 25 companies were ranked accordingly to the superior supply chain capabilities and performance that they exhibit. Toyota was ranked fifth in the AMR Research Supply Chain 2007 list. This is due to the implementation of the Lean supply chain management practices into the Toyota Production System. In addition, Toyota also shares the success of the practices with other organizations.

The warehousing and transporting of Wal-Mart has 30,000 associates divisions and they have handled more 2 billions cases of freight which is worth of $85 billion. Wal-Mart is having 20 regional distribution centert for freight distrubutions across the country such as Tennessee, Shelbyville, Georgia, New York, Florida and Carrolton etc. The truck drivers of the Wal-Mart move thier trailers with the products from the warehouse or distribution centres to the retail stores. In order to efficiency in thieir logistics, they have set the timing of arrival and departure of the truck. The process of the timing usually at night which will not make any inconvinience to the customers.

In order to efficiency in thier logistic, they have brought new track device to track thier truck to find out wherabout, Furhthermore, the RFID (Radio Frequency Identification Tags) is imbedded in each product which will provide a signal to the ware house about its presence or sold out. Therefore, logistic within the Wal-Mart is very efficient includes proper plan, manage , movement of goods with the flow of information can optimize the whole supply chain management which enhance custoemrs satisfaction.

 Implementation of i2 supply chain software has allowed Dell to connect to its suppliers in real time via the web, and has allowed them to pulled materials to Dell's manufacturing plants.  The i2 supply chain software was deployed with the consideration of two steps of the supply chain process. The two steps are, planning and execution.  Planning involves gathering the needed materials from the suppliers' hubs near the appropriate Dell factories.  Execution requires Dell to have the right materials on hand at the appropriate factory to build the customer's order.  By using these two steps, Dell deployed the software to create a more efficient supply chain

HOW GOOD SUPPLY CHAIN MANAGEMENT WOULD ACHIEVE NEWG'S OBJECTIVES?

The main objective of the NewG is to bringing raw materials form different countries. The following are the suggestions would help them to achieve objectives

NewG can use more than one mode of transport to bring their raw materials in the UK such as air and sea and trucks from neighbouring countries. Toyota is having contract with Trans freight Inc, a transport company who was the responsible to move products between different stages in its supply chain. Consequently, the NewG can adopt same approach to transport the raw materials into the UK. In addition, they can follow the route planning with strict quality control and better communication between them and also implement the "pull" model of production keyed to consumer demand.

Alternatively, NewG also uses TST Expedited Services Inc. during emergencies such as when a part of the product is late, an order improperly filled, or a bad weather which threatens to disrupt the whole operation. TST steps in when parts must be rushed to the assembly line in order to keep it running. The provider too, utilizes a combination of truck and air to meet delivery commitments.

TASK II

KEY DRIVERS IN ACHIEVING THEIR SUPPLY CHAIN MANAGEMENT

Toyota manages its supply chain using its company Toyota Production System (TPS). The TPS is a set of philosophies which organizes manufacturing and logistics at Toyota, including the interaction with suppliers and customers and the TPS is the key driver of achieving supply chain management. With the implementation of the TPS, Toyota was able to greatly reduce lead-time and cost while improving quality at the same time. This enabled it to become one of the ten largest companies in the world.

The TPS is largely similar to "lean" manufacturing, to assist the company in the identification and steady elimination of waste. It is aimed at defining value, creating flow, and eliminating waste in various aspects including customer relations, product design, supplier networks and factory management. The goal of the TPS is to incorporate less low-value human effort, less inventory, less time to develop products, and less space to become highly responsive to customer demands while producing top quality, error-proofed products in the most efficient and economical manner possible.

Key Supply chain drivers

Toyota's competitive strategy is to be reliable manufacturer of different models of quality cars. This strategy dictates that ideal supply chain for Toyota will concentrate in both the responsiveness and efficiency of the operations. In order to understand how Toyota has improved its supply chain performance in terms of responsiveness and efficiency, the four supply chain drivers are needed to be examined.

Information Technology

Information technology plays a critical part in supporting and enabling the business processes. By adhering to TPS, Toyota has established sophisticated information systems to eliminate waste, operate with virtually no inventory and continually improve production.

Facilities

Toyota currently operates 13 vehicle, engine and parts plants in North America. Toyota Motor Engineering & Manufacturing North America, Inc. (TEMA) is responsible for the company's network design decisions that will have significant impact on Toyota.

In order to achieve the strategic fit, Toyota adds flexibility to each plant so as to serve markets other than the local one. The additional flexibility helps Toyota deal more effectively with changing global market conditions. This is especially true for Toyota, being in the automobile industry as the price and demand do vary over time in the global network. By making its plants more flexible to supply multiple markets, it ensures that the automobiles are shifted quickly to exporting to markets where demands remain strong across different countries. It, too allows Toyota to react fast to the fluctuations in exchange rates and local prices by altering production to maximize profits.

Besides, Toyota has made good facility decisions on where the plants should be located. One good instance will be the Toyota Motor Manufacturing Kentucky (TMMK) which is the company's largest manufacturing facility outside Japan. Toyota built TMMK in United States, Kentucky in 1988 and has used the plant since then. This particular plant proved to be very profitable for Toyota when the Yen strengthened and the cars produced in Japan were too expensive to be cost competitive with the cars produced in United States. The plant allowed Toyota to be responsive to the American market while keeping costs low.

Transportation

Transportation plays a key role in Toyota's supply chain as the cars are rarely produced and consumed at the same location.

Toyota uses more than one mode of transport to move a shipment to its destination, by air and trucks. In Canada, Toyota works with Trans freight Inc., a transport company to move the products between different stages in its supply chain. Besides delivering parts with its own fleet of 600 trailers, Trans freight is also closely involved in route planning on Toyota's behalf. Through strict quality controls and better communication between them, Trans freight successfully implemented the "pull" model of production keyed to consumer demand.

Toyota also uses TST Expedited Services Inc. during emergencies such as when a part of the product is late, an order improperly filled, or a bad weather which threatens to disrupt the whole operation. TST steps in when parts must be rushed to the assembly line in order to keep it running. The provider too, utilizes a combination of truck and air to meet delivery commitments, often within the hour.

While in United States, the transportation network is similar. VASCOR Ltd., one of Toyota's major logistics partners (LPs) is extremely critical to the successful operation of the TPS. There are 24 order slots to be used in a day depending on the supplier, the volume, the distance and the efficiencies. The 24-order network gives Toyota the flexibility to shift frequencies in response to volume changes.

Inventory

The TPS was designed to level load production to the rate of demand by creating an inventory buffer and replenishing that buffer using a levelled schedule, pull replenishment, and the smallest lot sizes possible.

In practical terms, Toyota keeps a cycle inventory of only a few hours of production between the plants and most suppliers. It manages to maintain inventories, both of parts and of finished goods, to a strict minimum by basing production on demand rather than simply on capacity. Also, by focusing on smaller production lots and producing only what customers require when they require it, Toyota is never left with the parts that it does not need as a result. The JIT system that is used produces only the necessary products in the necessary quantities at the necessary time.

Toyota builds in only a few hours of safety stock, which might increase during winter or when a supplier is located farther away. The lack of standing inventory also ensures that alternative services from providers like TST will be required from time to time. For instance, during times when planners might have failed to order enough stock, or an order didn't get through to the supplier. The entire cycle provides stability for upstream operations and keeps waste to a minimum while supporting customer demand variability. It is therefore, the above drivers are the key drivers for the supply chain management of Toyota.

RECOMMENDATIONS TO NEWG FURNITURE'S

After analysing Toyota and their competitive advantage as a result of their success of the implementation of supply chain in their operations. However, the following are the recommendations to the NewG furniture to improve their supply chain management

NewG can use more than one mode of transport to bring their raw materials in the UK such as air and sea and trucks from neighbouring countries. Toyota is having contract with Trans freight Inc, a transport company who was the responsible to move products between different stages in its supply chain. Consequently, the NewG can adopt same approach to transport the raw materials into the UK. In addition, they can follow the route planning with strict quality control and better communication between them and also implement the "pull" model of production keyed to consumer demand.

Alternatively, NewG also uses TST Expedited Services Inc. during emergencies such as when a part of the product is late, an order improperly filled, or a bad weather which threatens to disrupt the whole operation. TST steps in when parts must be rushed to the assembly line in order to keep it running. The provider too, utilizes a combination of truck and air to meet delivery commitments.

NewG can adopt same approach as Toyota in order to minimise the timing between the plants and suppliers. It manages to maintain inventories, both of parts and of finished goods, to a strict minimum by basing production on demand rather than simply on capacity. Also, by focusing on smaller production lots and producing only what customers require when they require it, Toyota is never left with the parts that it does not need as a result. The JIT system that is used produces only the necessary products in the necessary quantities at the necessary time, which is can be used by the NewG furniture.

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