Strategic Assessment Of Supply Chain Management In China
It is suggested for any organization to review, reassess any existing supply chain management or any delivery techniques, before developing new supply chain method so that any exposure to high risk of failure is reduced. Somerset as a company taken advantage of outsourcing and transferred it product manufacturing to China leveraging low cost labor and raw material. The labor cost and other cheap material reduces Somerset overhead cost, but there is always risk of not delivering product on time due to the foreign country political climate, change in tax and tariff and local economy.
Initially the Somerset furniture company established China as a manufacturing hub with low risk assessment. …show more content…
This way Somerset need not start with a completely new supply chain, but to start with existing supply chain strategy of manufacturing its furniture in China that influenced its initial outsourcing success and focus on making improvements. The improvement could be new technology, software, integration of systems, new process and knowledge from specialist who are experts in global and country specifics logistics.
The Supply Chain Management and the Enterprise Resource Planning CM helps integrate various supplier and vendors that can reduce, order forecast, online survey to capture trend, develop a purchase order and process them.
There is an opportunity to each event of the existing supply chain to increase efficiency and reduced time needed to complete an event. The blow table lists Somerset 's proposed changes to the existing supply chain events. The events includes possible new automation, technology update such as RFID, bar code, ERP and SCM software to integrate suppliers, retailers, corporate office and end users.
Somerset - proposed changes to the existing supply chain …show more content…
The average time required to complete each step also came down by 50% to 8 days. The manufacturing furniture improved 60% with the automation and preassembly parts and the transportation inland China came down as well. The distance between China and U. S remains same and unless we change the transportation by plan the overseas transport still remains same. The Somerset time line proposed changes to the existing supply chain is shown as below.
Somerset - proposed changes to the existing supply chain time line
The supply chain starts with the upstream supply of raw material similar to the existing supply chain and possibly a new suppliers south of China. The ERP and SCM allow faster forecasting, placing new purchase order, processing a purchase order and custom clearances. The delivery to the intermediate step like loading, clearance, transportation and unloading forces improved and reduces the needed inventory.
Somerset –proposed flow changes to the existing supply chain steps/events
The above diagram shows the proposed flow of events, its upstream and downstream s duration for Somerset to manufacture its products using new flow to the existing supply chain step events. There is no significant changes to the steps except the duration of each step came down average by