1. Executive Summary
Supply Chain management is the network of activities where the raw material is purchased then transformed into the usable goods and then finally delivered to the customers through the distribution systems. Schriskoope is the Holland based fresh chicken supply Chain Company and has approximately two hundred employees. Holland is one of the biggest producers of the poultry in the European countries. They import the butchered chicken to the various parts of the countries. There are few issues that are faced by the company like the poor quality of the end products, high competition, supply and demand not able to meet and issues related to the 3PL and since the competition is growing, it is important to take actions on the issues. The goals of the company include understanding the strategies, fighting the competition, reduction of cost and also the logistics to be managed.
The report consists of the evaluation process of the performance of the supply chain management. The performance can be evaluated by the company with the help of quantitative and qualitative measures. The evaluation will help the supply chain company to overcome the poor performance. The performance measurement criteria consist of the customer satisfaction, supplier performance, integration of material flow and the information. The performance is also evaluated on the basis of finance of the company as well. It is analysed that the performance evaluation helps in further improving the strategies of the company for the better competitive advantage.
The report also analyses the strategies that the supply chain Management Company should adopt in order to perform better and improve continuously in the process and procedures of the supply chain management. The report gives the structure, benefits and the limitation of different strategies that can be used and applied to the company’s supply chain to improve the quality of the end product and services which will definitely increase the profitability of the company. The strategies explored in the report are lean and agile strategy which analyses the lean management followed by agile management. Next is a logistics strategy where the points are explored on logistic management that the company should apply. The purchasing and the procurement strategies as well as the marketing strategies for the supply chain are also analysed in the report.
It is vital for the company to have sustainability in the global supply chain as it will help in maintaining the competitive advantage. In this report the factors are considered that will help the supply chain in developing and maintaining the sustainability of the company.
Schriskoope is the Holland based fresh chicken supply chain Management Company. The company gets its chicken from the polish farms. Holland is one of the biggest exporters of meat products in the neighbouring European countries. The company had issues related to the logistics, cost of poor quality products and supply and demand of the products. The report is the analysis of strategies of the supply chain management and also the factors that can help in developing and maintaining the sustainability of global supply chain.
3. Structure and the Measures of the Supply Chain Management
3.1 Structure of the Supply Chain Management
Supply Chain management is the integration of supplier, manufacturer, distributor and the customer. The supplier sends the raw material to the manufacturer who in turns manufactures the products and then sends the delivery to the customers.
Holland is one of the biggest suppliers of poultry in the European continent and the production and processing of the poultry is one of the largest. (Green, N. M. (2004). The market of the poultry is so big that they export the poultry to the neighbouring countries like Germany and Britain and some of the other European countries. (Henry & Rothwell (1995). Poultry productions have gone up in the Holland as the consumption of beef has gone down in the European Country. The number of small manufacturing enterprises (SME) is still large in number throughout the supply chain. The firm is considered as small manufacturing enterprise if the number of employees is less and therefore the number of SME are more as they have around or more 100 employees like Schriskoope as it also have 200 employees working twenty four hours. The competition in the market is high as there are large enterprises that have almost 90 percent market share in Holland. The poultry market in Holland has more profit as compared to any other meat. (Beamon, BM (1998). Also the raw material in the poultry processing is cheaper. The size of the enterprises is small yet the number is more. Therefore, the competition in the market is tough. (Wijnands, Meulen & Poppe (2007). Also, the company is providing fresh chicken to the market hence the poultry sold is comparatively more as it is fresh. It is very important for the supply chain management to have their own transportation so that they do not rely on the outsourced companies as is the case with Schriskoope. The supply chain management is based on the demand management. (Buhr, B. L. (2003). As mentioned earlier, the demand of the poultry is high therefore it is vital for the company to cope with the demand and supply management in order to sustain in the market.
3.2 Measure the Performance of the Chicken Supply Chain management
Schriskoope can evaluate the Supply chain performance in terms of Quality and quantity and following parameters can help in evaluating the supply chain performance for the company:
3.2.1 Qualitative Measures would include the following:
Satisfied Customers: Customer plays an important role in the supply management as the end product goes to the customer. They should be happy and satisfied with the end product and also the services. (Chen, IJ & Paulraj, A (2004). The customer satisfaction can be divided into three elements like before transaction satisfaction, satisfaction at the time of transaction and satisfaction after the transaction. The customers who are satisfied will give more business.
Integration of material flow and the information: In the company the supply chain management should be able to communicate the information correctly and also the transportation of materials should happen smoothly. (New, S. (2004). The information exchanged should be accurate, adequate and timely.
Risk Management should be effective: another way in which the company can evaluate the performance is by the risk factors minimization as there are number of risks involved in the supply chain. If the risks are managed properly, they increase the sustainability of supply chain in the market. (New, S. (2004).
Supplier Performance: it is important for the company to have the supplier who is efficient and have good time management. Apart from this the relationship between the supplier and the company is also important. (Sadler & Hines (2002). It is important to have good relationship between the chicken supplier and the chicken processors.
3.2.2 Quantitative measure would include the financial and non financial performance measures like:
The non financial measures will include the level of customer service, level of inventory and utilization of resources. (Slone RE. (2004). Also the waste management is one of the evaluation factors in the manufacturing industry and especially in chicken supply chain.
The financial measures check the performance of the supply chain on the basis of maximum profit and minimum loss. (Henry & Rothwell (1995).
4. Supply Chain Improvement Strategies
It is important for the supply chain to produce and process the fresh chickens at the right place and at the right time in order to gain the competition advantage and also it is important for the survival therefore there is a need of strategies and their application. (Chopra S, Meindl P (2007). Once these strategies are understood by the company then only the application of supply chain will be successful. (Stacey, R.D. (2000). The strategies that can be applied to improve the supply chain in the Schriskoope include the following:
4.1 Lean and Agile Strategy to the Supply Chain: Leanness is used in the supply chain in order to increase the performance and improve the performance and also helps in competitiveness in the market. However agile is the next step to the leanness, which needs to be applied after the lean. (Askin & Goldberg (2002). The lean and agile together form leagile supply chain where they both are beneficial to the company and especially in the chicken supply chain as all the parts of the chicken can be used. The wastes of the lean production are essential for the agile production. Therefore, both of them clubbed together can be capitalised.
- The application of lean and agile in supply chain of the company will reduce the work time as the company will pay more attention to the value added work and less to the non value work.
- The quality of work is increased as the wastage is less and the value added activities are maximised.( Cousins, P., Lamming, R., Lawson, B and Squire B. (2008).
- It also facilitates the continuous improvement of the quality of product and services.
- Competitive advantage is sustained as the application of agile and lean will increase the productivity of the company.
- The training cost will be high.
- For lean and agile application, it is important to have skilled labour.
- Efforts for improvement have to be made at all level in supply chain. (Towill & Mccullen (1999).
4.2 Logistic Strategies: The key to success of the supply chain is directly related to the logistics of the company. Therefore it is vital for the company to have the logistic strategies in place. It is important for Schriskoope to make the decisions strategically on the logistics. The strategies need to be planned on the basis of distribution centres, transportation modes that the company will use. (Cousins, Lamming, Lawson and Squire (2008). The smaller companies like Schriskoope uses the third party logistics as it is more cost effective. It is important to choose the correct 3PL as logistics is the important part of the supply chain. If required, the company can change the outsourced logistic company and can contract the new logistic company. The company should check for the facilities offered by the logistic company, technological advancement of the company, the company’s storage space and also if the 3PL is financially sound.
- It is good for the smaller enterprises to have 3PL as it eliminates the investment in the logistics.
- Access to the resources, processes and technology increases.
- Customer satisfaction is increased.
- Logistics cost as well as the logistic operations can be identified clearly.
- With the 3Pl there is a possibility that they are flexible to the changing market trends.( Lummus, Krumwiede & Vokurka (2001).
- Because of the distance between the clients, the human touch is missed.
- It is the possibility that there is the difference in opinion and perception of the third party provider.( Heizer, J & Render, B (2005).
- Logistic functions are not controlled.
4.3. Purchasing and Procurement Strategies: Purchasing and procurement plays a vital role in the supply chain. The reduced rates of the raw material can increase the margin of profits in the end product that is chicken. If the fresh chickens are purchased as considerable prices, it is apparent that the profit will be more and this will increase the competitive advantage of the company. Also, it is very important to have the clear objectives for the purchasing and the procurement. (Lummus, Krumwiede & Vokurka (2001). Purchasing is related to the raw material purchase from the farmers and the procurement is related to the outsourcing companies. Total Quality Method (TQM) should be adopted by the company here the vendor provide the services and the products with zero defect and error. (Hitt M, Boyd B, Li D. (2004). The purchasing department should have a mix of farmers who supplies chicken so that the optimization is more.
- If the purchasing and the procurement strategies are followed, it is apparent that the operation cost will reduce as the purchase of the raw material will be at low price.
- The service quality is improved if the strategies are followed.
- The supplier relationship with the company will be stronger if both the departments will work effectively. (Hitt M, Boyd B, Li D. (2004).
- If the purchase strategies are wrong then the possibility of increased inventory will increase. In the industry of fresh chicken the company cannot afford to have more inventory as it will affect the business and the profits. (Wagner & Kaufmann (2004).
- Similarly, the procurement department made the contract without evaluating the third party can bring trouble to the company.
4.4 Marketing Management Strategies: The marketing strategies of the company should include the customer value, customer value delivery and customer value delivery process. (MacIntosh and MacLean. (2001). The strategies should include the understanding of the customer and their needs and requirements.
- Brand recognition is developed.
- The company will have a roadmap to reach to its targeted customers.
- The challenge is to understand the customer’s requirements and delivering the products with the consistency.
- Another limitation is the delivery of fresh chicken as requested by the customer; this could be affected if the logistics are not in place.
5. Sustainability of Global Supply Chain
The globalization had affected the ways in which the companies were managed strategically and also operationally. Though the globalization of supply chains has happened, the risks and challenges have emerged for the same. The risk starts at the poor quality of the product and ends at the supply distractions. (Meyer & Cramon-Taubadel (2004). To add to these risks are the political, social and the environmental issues which arises due to the work process. The issues and the impacts that are considered vary from waste reduction, recovery of the products, working conditions, child labour. (Handfield, Walton, Sroufe & Melnyk 2002). The companies that fail to addresses these social and environmental issues rendered themselves in operational risks. (Samaranayake P (2005). It is important to have a global supply chain in the company that can sustain the competition in the market. The sustainability can help the company in responding to the demands of the customers, can face any supply distraction and can mitigate the risks. In order to build a sustainable supply chain it is important to follow the framework that comprises of three steps. The steps involved are identification of the motivators, assessment of levers and improvement of practices. (Corbièr-Nicolliere, Ferrari, Jemelin, & Jolliet (2003).
Identification of Motivators: It is important to identify and address the social, political and environmental issues in the company’s supply chain. Once these issues are understood, it will be easy to set the goals and prioritize the work. The reasons that are cited are firstly the customers, as it is imperative for the company to retain the customer by providing the end products on time and of good quality. (Lee HL. (2004). Second is the compliance that is understand and following the rules and regulations and also the government laws. Third is the cost that is maximum productivity by correct purchasing, mitigation of risks and the efficiency to perform. Fourth is the competitive advantage, in order to have sustainable supply chain, it is imperative to have a competitive advantage over the other competitors. (Davis & Spekman 2004). Fifth is the conscience that is the company should follow the values and core principles of the company.
Assessment of Levers: There are total seven levers that can help the company to develop and maintain a sustainable supply chain. (Wawszczak, Hermans & Cesati, (2003). These levers are divided into internal and external levers. The internal levers include purpose, policy (the policies should be well documented and communicated widely to the employees) and people and the external levers include peer, partners, public policies and the power.
Improvement of practices: this will include code of conduct establishment, getting the third party certification, selection of the suppliers and monitoring of the suppliers.
Below is the figure showing the practices that are used in building and maintaining the sustainable supply chain.
Figure 1. Developing a Sustainability of Global Supply Chain
Creating the expectations meaningfully: It is vital for the company to enhance the capability of the company in order to foresee the issues and the challenges which may arise in the supply chain. (Manning, Baines & Chadd (2008). This can be done by scanning the issues related to the environment. Also, involve the stake holders while making the code of conducts so that the policies are more enhanced in terms of authority and applicability. It is very important to invite the suppliers to the company and have conversations with them. Try to figure the cultural and social issues if any with the supplier.
Selection of the Supplier: it is important of the supply chain to have the suppliers on the list. Also, the company should less rely on them and concentrate more on the consultation of the supplier and also the development. (Fisher, M. L. (1997). It is imperative for the company to have detailed key performance indicators in consultation with the supplier. These KPI’s should be benchmarked to the suppliers and also internally in the company for later scrutiny.
Supplier’s Evaluation and the Development: It is important to inform the suppliers of the expectations that is whether they are met or not. (Delgado, Narrod & Tiongco (2008). The suppliers should be evaluated on the basis of meeting the deadlines and processing the work.
Learning and Improvement: development of transparency and also the accountability is important in the supply chain. The company’s performance should be reviewed on the basis of practices of management and also the expectations. (Godfrey PC, Hill CWL. (1995). It is imperative for the company to continuously improve their supply chain practices through the communication and taking the quality measures.
In the above report, the analysis has been made on the strategies and there benefits and limitations. It is analysed that it is vital for the company to have the good strategies if they want to maintain their sustainability in the competitive market. The approaches to the application of the strategies are in concern with the chicken company that is Schriskoope. It is analysed that the company should use these strategies in order to maintain and improve the performance of the supply chain and also develop and maintain the sustainability of the supply chain. If these factors and approaches are applied by the company, they would be able to reduce the cost of the productivity and also meet the customer requirements. Company will also be able to enhance the logistics for the company and for the distribution system. The strategies for the operations will also help in the supply and demand management.
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Most of all, I want to acknowledge and thank to Allah SWT with my deepestgratitude for the miracles He has performed in my life for the completion of thispractical report. I am able to complete this assignment which facilitated thecompletion on this Industrial training report. This Industrial training report would havenot been carried successfully without the cooperation from many parties whocontributes in preparing and completing this study.My sincere thanks and gratitude are extended to my dedicated andunderstanding advisor Cik Nuradilah bt Abas, the lecturer of Politeknik Tuanku SyedSirajuddin, for her guidance and assistance, understanding and commitmentthroughout the duration of this work. Her encouragement, understanding suggestionand criticisms were helpful and essential in completing this Practical report.I am also deeply indebted my supervisor Mr.Suhaidi b. Abd Ghani, ExecutiveHousekeeper, Mr.Ramzi b. Zakaria, HR Manager and all staffs at Swiss Inn SungaiPetani for cooperation in providing materials and information for this practical report.A special word of appreciation goes to all individuals and my friends who involveddirectly or indirectly in giving useful information and valuable comments for me incompleting the practical report.Not to forget, I am grateful to have very understanding family member whoalways support my concern about my practical report. Here, I am honored to statemy family member and giving me courage. Thank you very much once again for allpeople have been involved during the completing process in my practical report. Thecooperation are kindly appreciative.