Root Beer Game - Supply Chain Essay

Changes within the supply chain can disrupt the normal flow of goods and services because each change hasn’t been fully scrutinized. A firm can plan and speculate that a change with have a certain effect on the supply chain, but until those processes have been measured it is impossible to know the true cause and effect of any disruption.

We mentioned earlier the disadvantages of supply chain management, now we will the advantages and the process of supply chain management. Supply Chain Management Solutions helps companies transform supply strategy into a competitive advantage. By combining the expertise, technology and information to help companies bring immediate value and profit. Supply management is clear and direct. The process help companies find the money in their supply base, get the money to the bottom line quickly and keep the money coming with a renewable and repeatable approach. But to make supply chain management effective companies need to:

Creating various communication channels, that will enable multiple products to ship at once thereby decreasing costs.

Having no insight of how supply chain management works and using the Responsive E-beer Game simulation gave me a keen view on how the supply chains. Team members placed materials orders to their neighbors in an upstream response to demand from their downstream neighbors. The objective of the whole game was to reduce the cost of fulfilling demand. Cost was measured on backlogs and inventory. Retailer, wholesale, distributor, and manufacturer all play their roles in getting products out to customers. Playing several rounds with team mates made me realize that throughout the supply chain that everyone needed to be on the same page on how much product needed to be ordered through the different channels.

The results showed that the greater the complexity of the supply chain model the more negatively it impacted performance. And factories that have used a simple supply chain model have shown to produce a more successful level of performance. Shah et al. (2008) used a field approach of study to examine how a particular health care supply chain was able to enhance performance by decreasing service time and increasing quality in a distributed network of health care providers. They concluded that the use of these principles improved efforts and the efficient coordination permitted a dramatic improvement to the supply chain performance. However, Fredenall et al. (2009) took the part of the opposition on the issue. His investigation into internal supply chain issues concluded that consensus between departments does not sufficiently improve workflows (Debashri & Asoke,

Information is the base to which supply chain decisions are made (Chopra & Meindl, 2010) making it imperative to performance (Forslund & Jonsson, 2007). As the key supply chain driver (Tippins & Sohi, 2004) it utilises other drivers to create an integrated, coordinated chain. Information alone does not guarantee success (Moberg, et al., 2002); reliability and validity are amongst the key fundamentals, defined in Table 1.1.

Manufacturers can improve their demand forecasting and supply planning by the improved use of their own data (Nedelcu, 2011). That is businesses can gather enough information on a timely basis to judge and predict market forces and changes thus improving profits.

Information systems can also help to reduce uncertainty by allowing information exchange among suppliers and buyers, so that they can make use of the information to forecast demand, and thus have a better planning on the inventory.

Forecasting is a method of extrapolation of quantitative and qualitative data to predict future requirements. Qualitative forecasting is subjective, whereas quantitative forecasting contains projection of historical data. Simply stated, forecasting is a technique utilized in efforts to match supply with demand. Accurate forecasts are necessary throughout the supply chain to guide decisions regarding operation activities. “Poor forecasting can result in poor inventory and staffing decisions, resulting in part shortages, inadequate customer service, and many customer complaints” (Collier & Evans, 2013, pg.227). Poor forecasting can also result in excess inventory throughout the supply chain. Since forecasting is such an integeral component of the value chain, it stands to reason that inadequate forecasting could be the basis for the various quality control issues General Motors has experienced within its supply chain.

A recent study conducted by the Forrester Research indicates that U.S manufacturers are dependent on the benefits of Information Technology to improve the supply chain, improve the cycle time and receive high efficiency in order to deliver the products to their customers within the time frame. Stevens defines Supply chain management as the “series of interconnected activities that are concerned with the planning, coordinating and controlling materials, parts and finished goods from the supplier to the customer and works as a transporting link between these facilities.” With the development of Information Technology the companies has adapted online communications which helps to increase the interaction between firm and the customer effectively. According to Bakos & Brynjyoolfsson (1993) Information Technology decreases transactional costs between the transaction costs between the buyers and suppliers and creates a more cooperative governance structure which finally results in closer buyer- supplier relations. The research revealed that the effect of information technology on Supply chain management are on 4 aspects which are purchase, logistic, firm, vendor relationship management and customer relationship management.

Key Learning:- Supply chain can be made very effective through analytic’s predictive power and any possible Bullwhip effects can be handled in a much better way.

Most supply chain management networks are very basic in it’s make up you have a factory or manufacture, a distributor or distribution center, a wholesaler and a retailer. The factory or the manufacture is responsible for making sure that it has enough inventory on hand at all times to supply the distributors that depend on them to keep them supplied with inventory. It is up to the manufacture to make sure that they have the raw materials that they need to product whatever product the distributors are relying on them to provide them.

Along with demand management, effective communication and collaboration improve overall efficiency and production of the supply chain. Good communication ensures that all of the company’s team members are on the same page, this way each member can perform his or her duty on time and respond to a change in demand. Communication between members can act as an advantage, for example if a new product becomes available they can jump on it right away and get it on the market as fast as possible. Integration provides a different type of advantage than communication and collaboration because it helps to reduce costs. For instance, Wal-Mart calls upon their suppliers to share up-to-date information on demand to route their products to Wal-Mart’s warehouses, from there the products are shipped to the stores in need, with minimum time in inventory. This integration allows Wal-Mart’s to reduce costs significantly, enabling them to offer customers highly competitive pricing.

The supply chain management basically involves processes and activities which are involved in the planning, organising, controlling and implementing the cost effective flow of goods from the point of origin to the point of consumption. The whole process will have different players like the supplier, manufacturer, distributor, retailers and the customers themselves as the end point of consumption. The supply chain has changed drastically over the years. This days they are very global in nature. Involving various complex interactions and flow of goods, data and funds between companies which are situated in different countries and continents. Even though the companies are spread across the world the manufacturing plants generally follow a similar structure which normally comprises of the suppliers, manufacturing plants, distributors, retailers, inbound and outbound logistics providers. There were a lot of challenges which arose because of the competition which made the companies to rethink their strategies in order to get the product to the right place at the right time at the lowest cost possible. The companies should always look at improving the whole supply chain and every player in the chain should coordinate with one another if they want to increase the efficiency. The organisation should realise the strategic importance of supply chain as it is a key to building a sustainable competitive edge. (Li, Ragu-Nathan, Ragu-Nathan, & Rao, 2006).

Communication technologies improvement: The improvement of communication technologies in recent years enable the customer to interact with more suppliers while receiving more information and cheaper communications cost at the same time like 20 years ago. This leads to more transparency. The vendor is in duty to follow the real-time demand and to submit all transaction