- Supply Chain and Logistic Management model – Vale
- Demand for the products
- Iron Ore Company its potential clients comprise of the structure manufacturers specializing in the making of diverse frames ranging from mass construction of bridges to the small involvement like domestic equipment. The finished products will be in diverse sizes of iron rods made for different purposes including the construction (Bode, Wagner, Petersen & Ellram, 2011). The pool of the clientele is concentrated with almost each work entailing construction and requires products from the iron ore finished products. However, the demand is seasonal having two peak times when the demand is high, since it is the time when building and construction of houses takes places. This is due to climate being conducive for construction work at then. The potential clients involve the manufacturing companies (sheet and rods making), wholesalers and private contractors specializing in building (BODE, Wagner, Petersen & Ellram, 2011).
- The plant details
- Raw material as inventories from the outside the plant are directed to the storage section where they be entering the processing unit on demand and exit from it when it is finished. The concerned personnel take the finished products to the warehouse for recording and data incorporation in the logistics office (Bode, Wagner, Petersen & Ellram, 2011). Here, the finished products are for dispatching in the distribution centers who supply the clients via wholesalers and retailers.
- Distribution centers
- Distribution centers their locations are near to the potential clients to ensure that the company has a big market share as well as serve its clients effectively. Both wholesalers and private contractors obtain products from the distribution center then selling them to the consumers at considerable prices.
- Warehouse
- This is for the storage of the finished goods where the unfinished formulas take place from the manufacturing site. The activities involved in warehouse involve recording of both incoming and outgoing finished products that are in good condition. The recording keeps in check the production capacity that the company has dispatched to the marketing and confers with the office of logistics to on the movement of the goods.
- Supplier/ customer
- The main supplying will be at the distribution centers of the company meant to provide the client with the readily available products (Bode, Wagner, Petersen & Ellram, 2011). Mainly the first supplier is the company via its distribution centers and employ other firms specialized in good and services supply.
- Inventory and information flow
- Since this is a manufacturing company and it will require constant checking of the inventory stock level to ensure that the firm does not operate below the operating level and take advantage of high inventories. Hence, making the company spend less during high season when the raw materials may be expensive due to increased demand. Information flow generally in the organization is horizontal, which enables that operations are smooth both inside and outside the firm. The sources of the information may differ variedly where the main one is from the client and that contained in the firm.
- Figure 1: supply chain model for an iron ore manufacturing company
2. Audit the current supply chain model for the product IRON ORE : - The supply chain model of the company is fully integrative of all the departments of the company. The model has close link with the warehousing and distribution centers, the purchasing department and the stores operation department. However, the model does not seem to have a close link with the buyers except through the buying centers, which has been outsourced to other companies. The management of the company does not have a close link with the customer and customers are a very important past of the supply chain model (Changkong & Hamies, 2003).
- Whereas the company is not into value addition as is done to the company by attired party, the company is losing a lot. The integrating of the supply chain department to al the department within the organization des not promises efficiency apart from micro managing the supply chain process. It is important to note that organization cannot rely on the supply chain department only without the full support of the sales department. However, the organization model is very innovative as it focuses on the suppliers, manufacturer, distributors, retailers and the consumer. Discuss issues at each links of the model for e.g:
- Manufacturing plant to Distribution center,
- The main issues between these two key points are that the distribution centre operates at optimal but the manufacturing plan cannot control their level of production, the distribution centre is overwhelmed by the storage requirement of the manufacturing concern. The distribution centre has subcontract another go down to assist in storing the goods of the client.
- Distribution Center to Warehouse,
- From the distribution centre, there is A very large lead-time leading the loss in terms if inefficiency in the process. There are hours in which the system of the company is reliable and effective to operate at optimal (Hall, 2010). Another issue sis the method and subsystem of inventory management, that lacks focus on time. The LIFO system leaves the good at the extreme end to make money as most of the good at the far end of the store e cannot be reached and is always overlooked (Hall, 2010).
- Warehouse to Supplier,
- Between these two points, the suppliers get goods when they are al most expired, the warehouse either has issues to do with poor storage space, poor storage environment. According to Beech, (2008), a good supply chain model and system should give precedence to the other consumer.
- Recommendations
- The senior logistic executives have an obligation of performing the following various duties in the supply chain. In the supply chain, two essential processes take place that include the in bound and the out bound. In the in bound process, the logistics executives have the following obligations to make:
- In Bound
- While getting goods from the supply warehouse the company out to consider cost as the first priority. The executives have to consider several ways that ought to reduce the cost of buying raw materials by either 2% or 5%. The executives might reduce the costs by choosing a supplier who offers goods with low costs.
- In regard of the factory warehouse, the executive ought to consider how the company might trim the cost per every available order. They also have to consider the possibility of increasing the capacity of goods without forming any extensions. The executives have to consider several ways that can improve service levels within the warehouse.
- On the manufacturing sector, the executives have to consider ways in which to reduce costs. One of the ways to reduce cost include considering the pricing for value. This means that the executives have to find efficient ways of managing value based processes. They can opt in requesting the company to use the 3D print technology of that help in reducing the manufacturing cost dramatically.
- Out bound
- When the company finishes processing various metal products, the logistics executives ought to come up with several ways of reducing costs in the supplier’s warehouse. Ways of reducing costs in the supplier’s warehouse that the executives ought to consider include making sure that the company produces products that will be sold within a short time.
- The executive have to consider several ways of reducing cost in the operations of authorized distributor. Several ways that the executives may consider include refusing to accept negligence made by the distributor. The executives ought also not to accept any negligence that may be because of failure made by retail distributors.
- References
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- Beech, J. (2008). The Supply - Demand Nexus : From Integration to Synchronisation (in “Strategic Supply Chain Alignment : Best Practices in supply chain management”. New York: Cengage Learning.
- BODE, C., WAGNER, S., PETERSEN, K. J. & ELLRAM, L. M. (2011). Understanding responses to supply chain disruptions: insights from information processing and resource dependence perspectives. Academy of Management Journal. 54 (4), p833-856, 24p.
- Changkong, V. & Hamies, Y. Y. (2003). Multiple Objective Decision Making : Theory and Methodology. New York: Tompkins Press.
- Hall, J. A. (2010). Accounting Information Systems. New York: Cengage Learning.
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