Companies with strong and divergent supply chains, broad inventories, income, and sales can achieve their goals. Also, they can manage to achieve the changing economic policies as they continue to meet their strategic goals. DLA is a huge defense logistics agency that offers support during wartimes and peacetimes to the military services. The company controls nine supply chains and five million items, such as clothing, medical, spare parts, and subsistence. The agency has managed to maintain accuracy and efficiency in managing its operations, enabling it to acquire numerous benefits.
The agency has managed to minimize its procurement requests and investments in inventory. Managing procurement standards helps companies cut their procurement cost and streamline their efficacy without compromising customer service and procurement cos ts (Munyimi, 2019) . The implementation of PNG standards has helped the agency minimize its workload buyer, demand planner, and investments on its inventories. The company decision-makers have chosen balance curves with predicted benefits of minimizing unfilled orders by 30% of its sub-population items. The reduction has helped minimize the agency's procurement workload by 50%and reduced the inventories by 180 million dollars. Through implementing the PNG, the agency has managed to minimize its inventories and maintain and improve the procurement workload and customer service.
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DLA has been able to improve on its customer service operations. DLA's planners have the ability to control its demand prediction units. Demand forecasting is essential in an organization as it provides them with a source of planning information and decision-making (Abolghasemi et al., 2019). PNG’s ability to reduce demand evenness helps in reducing exceptions reported. Additionally, the PNG’s implementation helped on minimizing the demand predictions by approximately 60%. Moreover, the PNG has helped boost the buyer's performance through its reduction in the size of procurement requests. Equally important, DLA's implementation of the PNG standards has helped it moderate its buyer’s workload; thus, helping it on saving huge amounts due to a good spares’ investment.
Moreover, the agency has managed to handle challenges for its items with frequent demands and high evenness. DLA uses the control systems incorporated with prediction models, which help calculate the demands in lead-time and safety standard computations that safeguard it against demand variance. Additionally, the systems contain the economic order quantities, which helps it to reduce investments. NextGen has enabled the company to base the buying decision on the empirical distribution for interarrival periods and demand volumes other than theoretical prospects distribution. Nextgen also helps an organization avoid its theoretical likelihoods and manage the uncertainties in the demand process. The agency uses the real customer demand history to evade imbalances led by a probability distribution. It helps them model its supply with high loyalty and adequately minimize its inventory expenditure needed to sustain customer service standards.
Finally, DLA has been able to mitigate risks on its stock levels and prepare for demand spikes. According to Prakash et al. (2015), an organization should have a common understanding of the risks involved in the supply chain and respond to unexpected imbalances and maintain production. The company's use of the peak policy may have helped it in handling risks on its stocks. The policy sets high and low levels of consumable items with an unusual demand. The company's use of the policy has helped it optimize and simulate the tradeoff the risks between excess inventories and stock disruptions. The peak policy contains the critical input patterns, demand patterns, and item attributes to the simulation runs. The simulations run the inventory measures for every price category. After that, the company uses a mixed-integer accumulation problem to identify peak frameworks which helps it to improve on the production position of the items that are rarely demanded by customers.
References
Abolghasemi, M., Gerlach, R., Tarr, G., & Beh, E. J. (2019). Demand forecasting in supply chain: The impact of demand volatility in the presence of promotion. https://www.researchgate.net/publication/336147095_Demand_forecasting_in_supply_chain_The_impact_of_demand_volatility_in_the_presence_of_promotion
Munyimi, T. F. (2019). The role of procurement quality controls in procurement performance in the energy sector in Zimbabwe. 6 (1). https://doi.org/10.1080/23311916.2019.1631563
Prakash, S., Singh, S., Soni, G., & Rathore, A. P. (2015). Mitigation strategies for risk management and sustainability in supply chain. National Conference on Sustainable Manufacturing . https://www.researchgate.net/publication/272785252_Mitigation_strategies_for_risk_management_and_sustainability_in_supply_chain
