Case Study : Supply Chain Flexibility

Recognized as one of the leading computer manufacturers, Dell uses an astonishing supply chain through pull-to-order procurement and just-in-time inventory management. Their strategy is highly efficient and drives costs to a minimum while allowing for minimal lead times and production times of under 4 hours for each order as their suppliers maintain levels of inventory based on forecasts within Dell warehouses near Dell assembly

Success for many organizations depends on the firm’s ability to balance product and process changes while exceeding customer expectations for improved cost delivery and quality. In lieu of these issues firms have started to implement principles of supply chain management. Supply chain management mainly involves managing the flow of incoming materials, manufacturing operations, and downstream distribution has to be in alignment that is responsive to change in customer demands eliminating a surplus of inventory.

A supply chain is a net work of firms. Thus, each firm in the chain should build its own supply chains to support the competitive priorities of its services or products. Two distinct designs used to competitive advantage are efficient supply chains and responsive supply chains. Efficient supply chains work best in environments where demand is highly predictable. The focus of the supply chain is on efficient flows of services and materials keeping inventories to a minimum. The firm’s competitive priorities are low-cost operations, consistent quality, and on-time delivery. Responsive supply chains designed to react quickly in order to hedge against uncertainties in demand. Work best when firms offer a great variety of services or products and demand predictability is low. Typical competitive priorities are development speed, fast delivery times, customization, variety, volume flexibility, and top quality. Tables below show the environments and design features that best suit each design.

Supply chains manage the movement of products from the acquisition of raw materials through production and finally distribution to the end user. A properly designed supply chain can create many opportunities to drive down cost and increase revenue opportunities. In order to create a supply chain that is sustainable and flexible it is necessary to identify and align company goals and initiatives with the manufacturing and distribution of products.

In order for IKEA to achieve design and sustainability objectives, they follow and balance four dimensions of design. The four different dimensions followed are form, function, quality, sustainability, and low price (Rafiq Elmansy, 2014). IKEA has already made changes by using cotton and water from sources that can be renewed. IKEA did this while posting strong sales figures. In 2014, its sales increased 5.9 percent from 2013 to $32.1 billion (Pantsios, 2015).

Supply chain management is a practice that involves the planning, supervision, and implementation of strategies and controls to direct the movement of goods and services provided to customers. The intent of this essay is to incorporate a synopsis of existing literature and to provide the reader with a general understanding of how supply chain management correlates with the organizational design and structure of modern firms. The essay comprehensively reviews the components of supply chain management and their integration with functional areas within an organization. The information presented in this essay

Starbucks has created a competitive advantage with their product quality by setting themselves apart from their competitors. “The Company has stayed with the upper-scale of the coffee market, competing on comfort rather than convenience, which is the case with its closest competitors, McDonald’s and Dunkin Donuts” (Mourdoukoutas, Panos). Consumers believe they are receiving a better product and experience when they purchase from a Starbucks as opposed to another large food service company that may sell coffee.

The profit margins in the grocery business are extremely thin, so the Kroger Company’s supply change management continually works on improving its supply chain to increase efficiency and reduce costs. Kroger utilizes a program of lean process engineering to constantly improve its supply chain. This process involves examining each individual step of the supply chain from its suppliers to product delivery at its stores and furthermore, this process has been proven to drive down waste and reduce cost (Kroger, 2008). Kroger’s supply chain management is located near the top of the organization structure since the company as a whole has a strong emphasis on improving the supply chain to reduce cost and increase profit margins. Therefore the further up the organizational structure the supply chain management team is located the more optimally it will function and the greater the influence it will have on the decision making process (Burt, Petcavage, and Pinkerton, 2010).

Starbucks not only sell coffee in their top notch coffee houses but also distribute it. Starbucks has a reputation of providing their customers with the best coffee bean available and in order to get such a high grade bean they help the coffee bean plantation owners to improve their business to provide a better quality coffee. Starbucks and coffee are an American staple.

In recent years, the importance management of supply chain has been a popular topic for a discussion and debates especially among the researchers, academician and practitioners. Still, the literature on supply chain management (SCM) especially in exploring the supply chain performance measurement is very limited. This limitation is due to the affected (in return) by many aspects of the firm’s environment and operations. The lack of investigation on understanding the supply chain measurement will affect the objectives and motivations of several supply chain concept even though there is a lot of literature on number of conceptual frameworks, discussion on characteristics, hierarchy and structure of performance measurement framework.

The mission for its customers is to promise. Managers firmly believe that sellers should have a good relationship with their customers, and always put their customers in the first place. The mission for its stores is to have sense of home. Hopefully, stores can help customers get out of their busy world, and relax for a moment with friends. The mission for its neighborhood is to lead with responsibility. Having a good connection with the neighbors benefits the partners, the customers, and the community. The mission for its shareholders is meeting profitable. The success of a company is due to its shareholders. “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Our Starbucks Mission Statement). One person represents people; one cup represents Starbucks; one neighborhood represents friend. Starbucks brings people a feeling of connection.

Starbucks is currently the industry leader in specialty coffee. They purchased more high quality coffee beans than anyone else in the world and keep in good standings with the producers to ensure they get the best beans. Getting the best beans is only the first part, Starbucks also has a “closed

coffee in the world. The goal of Starbucks is to establish the company as the premier purveyor of the finest coffee in the world while maintaining the organization’s uncompromising principles. In addition, Starbucks wants to develop its brand beyond being the preferred outlet from which to purchase coffee to becoming the preferred consumer brand.

Starbucks employs the product, promotion, place and price method of marketing. They place great emphasis on their products and have established themselves

Starbucks is and will continue to be one of the largest distributers of a cup of coffee today and into the future.  The Starbucks mission to “inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” directly correlates with the experience a customer has in each store. They have many ways to differentiate in comparison to competitors because they provide an experience while shopping for a coffee allowing them to charge a premium price.