Supply Chain and Logistics Problems

Executive Summary 

The paper discusses a supply chain and logistics problem at a manufacturing firm leading to unnecessary delays in delivering orders made by the customers. Customer orders are made through the CRM system. However, the process makes the whole supply chain inefficient. In various functions within the organization, including the sales point, the manufacturing, engineering production as well as the logistics departments, there are unnecessary delays in working on orders that have been made. For instance, in the engineering department, it takes a week before the design work can be started. These bottlenecks have resulted in the completion time being 7-8 weeks. The main aim is to propose solutions that can be used to ensure that the completion time of an order is within 4-5 days. The management should streamline the processes at different functional areas and ensure the order is completed swiftly. Further, the paper suggests that a lean inventory tool and supplier management tool will provide that it helps in improving efficiency in the supply chain and logistics process of the firm. This will help in ensuring that the completion time taken for an order reduces from the current 7-8 weeks to at most one week. Consequently, the firm will increase its sales and profit thereon. 

Supply Chain and Logistics Problem 

Every product that reaches the final consumer represents the cumulative efforts of many entities that have made it possible to have the product manufactured and be delivered to the consumer. These firms are what constitute the "supply chain." The basic idea in supply chain and logistics management is to ensure that the order-to-deliver cycle is significantly reduced (Dallasega & Rauch, 2017). When a company fails to implement the necessary changes in its production cycle to reflect the changes that have occurred in the market, then there is a possibility that delays are going to be experienced. In many other instances, delays may occur where the different departments or divisions involved in the processing of customer orders compete with each other, instead of complementing each other. This is a significant cause of the inefficiencies that are inherent with the supply chains. The department should put concerted efforts to ensure that they can eliminate delays in the system and thus ensure that customer orders are made with speed hence increasing the company's sales and profits thereon. 

Background Information 

The company whose supply chain and logistics function is being analyzed is a firm operating in the steel industry. It is involved in the manufacturing of metal products that are used in the construction industry. Since its establishment, the firm has continually modernized its operations, with the most recent being the integration of CRM in its operations. The firm produces customized products construction materials for its clients. For the firm to start working on a customer's order, they must have specifications on what is needed so that they customize the product to meet what the customer intended. In recent months, there have been increased delays in working on customers' orders, which has prompted the management to initiate investigations to ascertain what could have contributed to the problem. This was after there were many reported cases of customers' complains about delays that have been occasioned on fulfilling their order. 

Problem Description 

This paper focuses on the delays that are experienced while delivering customer orders. In the firm, there is the CRM system that enables customers, and potential customers to interact with the organization, make inquiries, and request for specific orders. The system appears to have simplified the process because a customer will not need to travel to the actual premises of the manufacturing firm to make a particular order. They can achieve that from the comfort of their homes, indicating how the system has created efficiency for the many firms that use it. It helps them plan their production based on the flow of orders made by the customers. 

In this particular organization, it was realized that when sales orders are entered into the CRM for one week, it will take a week before the same orders are re-keyed in the manufacturing system. The implication is that some orders have delayed in the system without being processed for manufacturing. Once the orders are entered into the system, the Engineering department will need another one week for their design. The department will then take a few more days to match their drawing with the specifications of the customer. By the time orders are sent to the production department for processing, a month is almost further. 

When orders are received in the production department, they are likely to arrive in bulk Orders for a whole week that have stayed unprocessed. As expected, such a large number of requests will overwhelm the department and cause delays in their processing. When orders arrive at the production department, it has to be analyzed and be assigned a specific time when it will be processed. The analysis may even take another week to be made and schedule the production. It then takes an average of two weeks for the actual production to take place. All this time, the production team has not assessed the stock quantities of the raw materials to replenish the stock if need be. At times it is even possible that an order is scheduled for manufacturing while there is no enough stock of raw materials to finalize the order leading to further delays. 

The shortage in the supply of raw materials will require the firm to order them from suppliers. After the request for the supply of raw materials is made, it takes several days before the order is delivered. The production department then has to reschedule the processing of the order within 1 to 2 days. After the production is complete, the delivery is not made immediately but will need further 2-3 days for delivery arrangements to be made and finally dispatch the order to the customer. In this kind of set up, it will not be surprising to find out that a customer’s order will take 7-8 weeks to be complete. As per the management’s expectations, such kind of a request should be handled and finalized within four days since the time that the order is entered in the CRM system. 

As it appears, there is a problem in the supply chain of this firm. There are a lot of delays in the system that can be improved if the firm management of the firm relooks at the process and identifies a supply chain and logistic tool that can be used to increase efficiency in the whole process. It requires a change in the existing system if the process if the entire supply chain will be improved. 

Supply Chain and Logistics Management Tools/Methods 

It is evident that in each of the various functional areas, including sales point, manufacturing unit, engineering, and production departments have contributed to the inefficiency of the whole process. All of these functional areas might have their reasons as to why they operate in the manner that they do. There is no particular reason as to why there cannot be a change in unnecessary delays if a new approach is undertaken. It will need the efforts of everyone involved in the organization, including the management and the employees at every functional area, to ensure that the three can be fast delivery on orders that have been made by the customers. 

In reality, the whole process that takes place for 7-8 weeks can be reduced to be done within a record period of 3-5 days. For the management to optimize the production system, they ought to change how the whole process is done. For instance, there must be proper staff assignment of duties, and also reduce the scheduled completion time of production to within one week. This can be achieved when every employee changes how they process orders. For instance, the delivery team ought to do pre-planning on the delivery of the order and assign the delivery of that particular order while it is still being processed (Neves-Moreira, 2018). This will imply that after the completion of the order, there will not be further delays in planning on how it will be delivered to the customer. 

It is also evident that other delays are occasioned by delays in procuring raw materials to use in the production process. The firm should adopt a system that can ensure that stock is replenished, and there are enough raw materials to help in the processing of all the orders at any particular moment. For instance, adapting the Just-in-time (JIT) model will ensure that the firm always has adequate stock of raw materials to use in the production process. JIT is a lean inventory tool that the supply management can use to ensure they have sufficient stock of raw materials (Mishra et al., 2016) . The system delays that were occasioned by making orders for supply of raw materials while an order is being processed will be eradicated if it adopts the Just-in-time (JIT) production, model. JIT will help in reducing the time needed for the completion of an order made by a customer. 

Additionally, the management can adopt the use of supplier management tools such as SAP programming to enable them to track suppliers and determine how they are contributing to the current supply chain problems that are witnessed in the firm. With the supply management tool, the firm can be able to identify the best supply firms that it can rely upon. It can also use the data obtained on a different supplier to renegotiate contracts or change suppliers to reduce the production costs that are occasioned by delays caused by suppliers. 

As it appears, the system delays are not occasioned by any system failure resulting in delays. Individuals’ actions cause them. For instance, when a customer enters a request in the CRM system, the sales point personnel will take up to a week to process that particular order. This is not something that needs technological change, but the management has to streamline things and ensure that such a mode of operation from the personnel is done away with ( Gunasekaran et al., 2017). A request made by a customer should be processed immediately and send to the next department in like to work on it. The management must ensure that the main idea of the whole supply chain management is to ensure that they cut on the delivery time and ensure that the product is delivered to the customer within the shortest time possible. The aim is to ensure that the whole process is made in the most efficient way possible. If the management acts and ensures that it has the right personnel in place, then they can be assured that the process will improve. 

Application of Supply Chain and Logistics Management Tools/Methods 

The main aim for the management to adopt the lean inventory tools and the supplier management tools are part of the concerted efforts that the administration hopes to use to ensure that they can shorten the delivery of an order that has been made by a customer. It is the goal of every organization to achieve maximum customer satisfaction and obtain good reviews after that. This is important because it not only helps the firm in making more sales but also helps in creating long-term relationships, an aspect that every business aims to attain. 

The tools adopted will ensure that the firm reduces the supply time from the original 2-3 days to 1 day. This will help in ensuring that there are no delays in the production process that can be linked with delay in the supply of the required raw materials to facilitate the production of the order made by the customer. As a result, such a move will help a long way in reducing the time that is taken to produce the order. In the event, production has been scheduled when there are no adequate raw materials to use, the current system allowed for rescheduling of such orders to await the availability of raw material, and this will slow the production by another 2-3 days. If the JIT model is used, such problems will have been dealt with. There will be no occasion where a production process will be able to be altered just because there are no adequate raw materials in place. The JIT system makes it possible to recheck the available stock of raw materials and compare them with the orders that have been made. Therefore, having a supplier management tool in addition to the JIT inventory tool, there can be an assurance that the time taken to complete a customer’s order will be shortened. 

Analysis of the Expected Results 

The main idea of the whole process is to ensure that the management can deal with the unnecessary delays that are inherent with the current system. From the time a customer makes an order in the CRM system, there are delays occasioned by the personnel at different functional areas in the production personnel. All this can be avoided by streamlining activities by the management and ensuring that there is efficiency in every stage of the production process. For instance, when the customer’s order is processed to the engineering department, it is observed it took a whole week before the personnel at the department could deal with the design of the order. With the management streamlining activities, this can be reduced to 1-2 days and contribute to reducing the whole time that the order takes before it can be completed. Additionally, ensuring that there is pre-planning on the delivery of the order after its completion will also contribute to reducing the time needed for the order to be delivered to the customer (Drucker & Garn, 2016) . These efforts will help in ensuring that there is an improvement in the supply chain and logistics performance. 

The firm will benefit from this milestone in that it will be able to cut on its production costs, for instance, the cost related to the acquisition of raw materials. The firm will also be able to increase its production capacity since the time take on an order will have been reduced to a large extent. As a result, the firm's customers will be able to increase their trust in the firm. They would be able to rely on it in the future to obtain such products. More importantly, the increase in production capacity implies that the firm can make more sales hence increasing its profitability 

Conclusion 

Ultimately, it is evident that how the supply chain and logistics process is conducted in a firm has a massive impact in contributing to the success of the firm. It contributes to a firm's ability to meet its objectives of having a satisfied customer base, reducing its costs of production, and increasing its sales and profitability. It is, therefore, important that the management has to work towards bringing efficiency in the production process. Instances of inefficiencies will increase the costs of production for the organization. It can also make the organization lose its customers because of the long period that it takes to deliver on a customer's order. In the case study, there were so many system delays occasioned by the personnel's failure to act on orders immediately after they are brought to their attention. This resulted in the order taking 7-8 weeks before completion. These delays are not a system caused and do not need any technological changes to eliminate them. What the firm's manager needed is to streamline its workforce and enable each member of the workforce to understand that customers will only appreciate it when their orders are worked on faster. Customer satisfaction is key to any business, and therefore, this will likely help the company to retain customers and increase their sales. An efficient supply chain and logistics system will help in reducing the time needed to complete the whole supply cycle. This is beneficial from both the customer’s point of view and the firm’s perspective. 

References 

Dallasega, P., & Rauch, E. (2017). Sustainable construction supply chains through synchronized production planning and control in engineer-to-order enterprises.  Sustainability ,  9 (10), 1888. https://doi.org/10.3390/su9101888 

Fu, Z., Wu, G., & Yang, Q. (2020). Modern logistics and supply chain management. Sixth International Conference on Transportation Engineering. https://doi.org/10.1061/9780784482742.085 

Gunasekaran, A., Subramanian, N., & Rahman, S. (2017). Improving supply chain performance through management capabilities. Production Planning & Control: The Management of Operations, 28 (6-8), 473-477. https://doi.org/10.1080/09537287.2017.1309680 

Mishra, D., Sharma, R. R., Kumar, S., & Dubey, R. (2016). Bridging and buffering: Strategies for mitigating supply risk and improving supply chain performance.  International Journal of Production Economics ,  180 (C), 183-197. https://doi.org/10.1016/j.ijpe.2016.08.005 

Neves-Moreira, F. (2018). On improving supply chain performance through integrated vehicle routing problems (doctoral dissertation, University of Groningen). https://doi.org/10.13140/RG.2.2.32202.26568