Supply chain intelligence is essential in the determination of useful procurement and distribution strategies. Every organization should know the supply chain process to enhance customer satisfaction and improve the sourcing methods. Further, supply chain intelligence reduces risks to develop organizational performance. As a result, the organization gains a competitive edge in the market. The manager seeks to produce jeans for the market using the company’s plants. Customers need quality clothing to enhance their appearance. However, the corporation has not conducted adequate analysis to determine the appropriate sourcing and procurement methods. Supply market knowledge is crucial for eliminating risks and creating a competitive advantage.
Briefing to the Senior Management
As leaders, your dedication and support is crucial to the improvement of the supply chain process. The company needs your contribution to the development of supply chain intelligence. Currently, the company is facing risks on the procurement and sourcing of jeans to the market. Also, the firm is facing competition from substitute corporations. Your support as leaders is useful in driving changes in the distribution process. It is essential to conduct a supply chain intelligence analysis to identify the knowledge gaps. Consequently, you will comprehend the research gaps and provide areas that need improvement. There are critical roles that you should play in the analysis and development of supply chain intelligence in the organization.
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The contributors to the process
The assessment and improvement of the supply chain intelligence process for:
Board managers
Senior executives responsible for the supply chain activities
Business development managers
Lessons/ Experiences
The lessons and experiences include:
Leadership roles
Risks and opportunities in the supply chain process
Developing measures to eliminate supply chain knowledge gaps
Benefits
The advantages of participating in the process include:
Demonstrate your dedication towards supply chain performance
Participate in the development project and become a role model to the subordinates
Communicate the significance of having supply chain intelligence
Supply Market Knowledge Gaps
Macro Level
At this point, the procurement officers should be aware of the macroeconomic trends in the country including tax regulations, fiscal measures, and monetary policies. The information on the economic trends is crucial in sustaining the supply at competitive costs. It is significant to know tax policies to establish the fees and duties paid to the customs authority. The procurement staff is not aware of the country’s economic situation, but they have little knowledge of the levies paid to the importation agencies. The procurement employees cannot provide a detailed description of the increase in the present taxes including the processing and harbor maintenance fee. The company has been making capital investments such as buying advanced equipment and purchasing land to expand the industry. The firm is determined to increase the supply to meet the needs of a wide market segment. The company has not been sourcing contracts to external corporations but produces the jeans in the plant. The employees conduct all the processes including manufacturing and distributing the jeans. The firms want to source activities in emerging economies to reduce production costs. As a result, companies can make high profits due to low manufacturing costs or reduce the prices of jeans to attract customers. The corporate taxes are high which threatens the growth of the company. The government has imposed unfavorable levies, and the corporation has to pay. The future technology needs will be created in the product design stage. The industry will have to design the clothing uniquely using advanced technology.
Meso Level
The company is aware of the influence of commodity prices on production costs. In case the prices of commodities are high, the company will increase the prices of the products. The main commodities used in the company include texture and power in the production process. Another commodity is fuel because the corporation has to transport raw materials and finished products to the consumers. I am not aware of the supplier who might exit from the industry. Also, I cannot predict the new company that can join the clothing sector. Any company or investor might be the new entrant in this industry. The clothing market is becoming fragmented because many people are joining the industry, where the market share is divided among the firms. The market does not have monopolistic corporations. The clothing industry is financially stable, but few corporations have long-term loans. There are many firms in the sector, but I am not aware of the locations. I assume that most of the corporations are located in the cities where there is a large customer base. I do not have knowledge on the affiliated companies and their shareholder stake. Most of the corporations operate internationally. Thus, the firms use global supply chain networks to distribute the products to the consumers. The clothing industry is not yet mature because customers’ preferences on clothing change after some time.
Micro Level
The supplier power is low because there are many vendors in the industry. Therefore, the corporation influences the suppliers’ decisions. The market share in the supplier industry is distributed equally. Each supplier has an equal chance of being selected on distributing raw materials to the companies. The suppliers are making profits when they conduct business with the clothing corporations. I have no information about the parties responsible for receiving suppliers’ ideas. The potential suppliers seem to provide quality material on time as compared to the existing vendors. The suppliers are charging the company the full cost pricing. I am not sure of the period that the suppliers will take in changing the total cost of the prices. The suppliers are charging all the clothing companies standard prices. I am not aware of the suppliers’ cost of capital and the main resources. The vendors consider partnering with the clothing corporations in the long-term. I am not aware of the companies that are conflicting with the vendors. The suppliers have little knowledge of minimizing costs in their internal and external process. Thus, the costs of the raw materials will still remain high. I am not certain about the changes that could happen in the supply sector. The change in the production equipment will influence the quality of raw materials. The clothing companies will demand quality materials to produce efficient products.
Additional Information
Our supplier companies are privately held where the annual sales volume is approximately $ 250,000 each annually. The companies deal with distributing textile to the clothing and shoe industry. The company has employed independent employees, who have not yet joined any labor union. The company allows the clients to access the financial statements to determine the stability. The clients make decisions on providing contracts to the suppliers after assessing the financial data. The company has a technical relationship with the suppliers to produce quality raw materials. The members of the senior managers of the vendor companies are board members and the chief executive officer. I have no knowledge about the clients of the supplier’s company. The company won the innovation award, and we had to select them to provide raw materials.
Recommendations
Supplier intelligence is essential in the identification of challenges and competitor information. The first step in eliminating the intelligence gaps is to conduct research with the aim of acquiring supplier information. A company should conduct the research before accepting the agreement with the supplier. The research on the supplier will provide information about the financial and organization structure of the vendor’s company (Accenture, 2013). The company can make decisions on sourcing or procuring materials from the suppliers.
Secondly, it is important to align corporate strategy with supply management activities to reduce intelligence gaps. Aligning the company and distribution strategy will ensure the procurement team acquire details about the supplier information. The procurement staff will get information about the regulations, the nature of the supply market, and macroeconomic trends (Hargraves, 2008). Integrating supply chain and organizational activities can increase the knowledge about the vendor.
Finally, a corporation can conduct a market analysis to acquire the vendors’ information. Market analysis involves the collection of vendor and consumer data. The corporation can focus on gathering supplier data including the financial performance and the companies that use the raw materials. It is crucial to gather data on the trends in the supply industry to identify and risks that can influence the production or procurement process. The market knowledge data is important in making decisions in the procurement process (Handfield, 2010). A market intelligence analysis provides information on the performance of the company in the supply sector.
References
Accenture. (2013). The market intelligence opportunity, 3-9. Retrieved from http://www.accenture.com
Handfield, R. (2010). Supply market intelligence: differently gaining an edge, 43-49.
Hargraves, D., A. (2008, May). Supply market analysis for a competitive advantage, 1-4.
