Supply Chain Power Tool T3 Essay Example

commit to the process. To ensure the effectiveness of this strategy, Tyson needs to assess suppliers to guarantee they have sufficient financial stability and capabilities to meet the organization's requirements.

Tyson has conducted a comparison of the top five suppliers in the region and concluded that Suppliers C, D, and E are the most suitable. Long-term partnerships provide benefits for both Tyson and its suppliers. These advantages include less paperwork, faster payment, more accurate financial forecasts, and increased morale as suppliers can influence processes and design. In general, long-term partnerships have proven to be beneficial for all parties involved, leading to higher profits and improved efficiency. These partnerships are established based on quality, innovation, and cost reduction.

Long term partnering can have potential drawbacks, such as the risk of inadequate supplier performance affecting the rye's operations. If a supplier's performance level becomes inadequate, it may have an immediate impact on the dryer's ability to meet product demand and result in potential increased unit costs if other suppliers cannot compensate. Another challenge of long term partnering is when a supplier agrees to be an exclusive partner but later seeks additional revenue sources that hinder their ability to meet the organization's inventory needs or compromise the organization.

To mitigate these risks, open communication of expectations and contracts is essential. The advantages of long-term partnerships, such as reduced expenses, increased revenue, and enhanced innovation, outweigh the traditional approach of negotiating with multiple suppliers solely for the lowest price. However, this strategy is only economically viable in the short term and does not foster lasting relationships, long-term reduction in unit costs, innovation, and may even impact the quality

of purchased materials negatively.

In addition, the implementation of SIT and Lean Operations strategies by Tyson may result in suppliers being unwilling to deliver to work cells. This will have a negative impact on work in process and long-term unit costs. Therefore, this strategy is not advisable. Another Supply Chain Management strategy is backward integration where Tyson Tools purchases its suppliers in order to reduce delivery time and cost of purchased items. However, this approach requires significant capital investment and a talent pool already proficient in supply management.

Managing and reversing this type of strategy can lead to financial ruin, while long-term partnering eliminates the risk of the buyer needing extensive product knowledge. Evaluating supply chain performance requires considering metrics, which help align processes across all firms involved in the partnership and reduce costs for a competitive advantage.

The evaluation of a company's performance and the comparison of its capital investment and inventory with other companies are often done using supply chain metrics. Therefore, it is important to analyze all internal practices in a comprehensive and accurate manner. After assessing Tyson Tools' performance against benchmarking for each category, an action plan can be developed to enhance process outcomes. [pick] (Higher/Render Operations Management 10th edition, p. 438) The term "lead time in weeks" refers to the duration it takes for a part to travel from the supplier, go through assembly, and reach the end consumer.

Lead time is the duration it takes for a product to be delivered to the end user. It can vary from minutes to weeks. The lead time includes different stages: receiving an order from the supplier, receiving it at the

buyer's location, assessing inventory for assembling and preparing the product for shipping, and ultimately shipping it to the customer. All three components are essential in determining the total delivery time to the end user.

In order to have an accurate measurement of time, another variable that needs to be taken into account is goods in inventory, which can be seen as average days on hand. These different components can be combined and compared to industry standards. The purpose of measuring each component separately is to identify areas for improvement. Another metric currently used to evaluate the efficiency of an operation is inventory turnover.

The use of inventory turnover metrics enables organizations to identify opportunities to decrease inventory stock and enhance profitability. These metrics are compared to industry leaders but should not be compared across industries due to differences in product types. For instance, Tyson, a company in the food industry, would not want to benchmark itself against a business in another industry because the food industry typically has a higher Inventory Turnover, which is calculated by dividing the Cost of Goods Sold (as shown in the income statement) by the average Inventory at the beginning and end of the investment period (the sum of inventory for the period divided by 2). A higher inventory turnover is generally considered indicative of better performance, while a lower turnover rate suggests overstocking of products. Effective inventory management is crucial for maintaining cash flow. Holding excessive inventory may result in unsold products becoming obsolete due to technological advancements. On the other hand, insufficient inventory can lead to stockouts and may indicate poor forecasting.

It is important to measure

the percentage of assets invested in inventory. The amount invested is determined by the organization's goals and industry averages. The average assets committed to inventory in the manufacturing industry is 15% (Higher/Render Operations Management 10th edition, pig.438). Comparing inventory levels to total assets committed to inventory can help identify market trends over time. Too much capital invested in inventory reduces cash flow, while too little capital invested in inventory can lead to stock outs or indicate financial inadequacies (Higher/Render Operations Management 10th edition, pig.438). The percentage invested in Inventory is calculated using the formula: (Total Inventory Investment / total Assets) x 100.

In the previous year, Tyson had $175,000 invested in inventory and total assets of $800,000. Based on this information, Tyson has 21% invested in inventory, which is higher than the 15% industry standard. If Tyson wants to meet the industry benchmark of having 15% of its assets committed to inventory, it would need an additional $55,000 ($175,000 - ($800,000 x 0.5)). This information can also be linked to inventory turnover to determine if an increase or reduction in production or sales is needed in order to meet product demand and maintain acceptable levels of inventory turnover.C. Implementing long-term partnerships with suppliers in the supply chain can help identify and control various issues that may hinder the development of an efficient integrated supply chain. These issues include local optimization, incentives, large lots, and the bullwhip effect. By establishing strong relationships with suppliers, companies can effectively address these challenges and maintain high efficiency throughout the integrated supply chain.

Effective communication is crucial in minimizing efficiency hindrances in supply chain management. Several factors, including local optimization, incentives,

large lots, and the bullwhip effect, can impede efficiency if there is a lack of clear communication between manufacturers, suppliers, distributors, and retailers. Local optimization occurs when a supplier, distributor, or manufacturer excessively adjusts for changes in product demand. This practice leads to inaccurate product forecasts when orders deviate from the retailer's usual quantity, resulting in unnecessary inventory fluctuations.

Tyson and its long term partnership suppliers can minimize the effects of local optimization by maintaining open communication about orders that deviate from the norm. Additionally, Tyson may consider establishing recurring orders with retailers to ensure standardized transmission of information to suppliers. All participants in Tyson's supply chain should also be mindful of the consequences of sales incentives and the potential benefits of purchasing or selling items in large quantities to obtain discounts.

All participants must understand that discounts, sales incentives, and promotions do not indicate a higher demand for the products. Instead, these strategies are aimed at pushing products and their components up the supply chain in anticipation of future sales. It is essential for all parties involved to be aware of bulk buying strategies and incentives to prevent the creation of excess inventory caused by a lack of information. It is advisable for Tyson and its suppliers to refrain from pushing material up the supply chain.

Tyson and suppliers must establish a lean operation and employ a pull strategy to streamline the product's journey through the supply chain. Opting for large lots can complicate an efficient integrated supply chain. Large lots refer to holding and shipping product inventory in bulk to the buyer, reducing unit costs for both the distributor and manufacturer.

However, this approach masks actual sales figures and results in increased holding costs for products awaiting shipment.

To mitigate the bullwhip effect and lower inventory holding costs, it is advised that Tyson Tools adopts the practice of shipping to retailers in smaller quantities, aligned with their actual sales. This is because local optimization, incentives, and large lots can individually or together contribute to the bullwhip effect, which amplifies product demand fluctuations starting from the retailer and extending to the supplier. Such fluctuations negatively affect the product by increasing costs and reducing customer satisfaction throughout the supply chain.

In order to effectively manage an integrated supply chain, it is advised to implement two methods: single stage control of replenishment and CPRM. Single stage control of replenishment involves designating one member of the supply chain to be accountable for inventory management. For Tyson Tools, it is suggested to partner with retailers like Wall-Mart, Home Depot, and Low's to enable automatic replenishment of stock as it is sold.

To simplify inventory management in the supply chain, retailers have adopted a strategy known as just-in-time (JIT). This involves collaborating with all members of the supply chain to synchronize inventory and eliminate the need for multiple inventory forecasts. Instead of each member managing their inventory independently, the retailer takes responsibility for pulling the product through the supply chain based on customer demand. To facilitate this coordination, Point of Sale information is shared to efficiently stock shelves and ship materials for manufacturing the finished product.

Once the Point of Sale (POS) information is transmitted from the retailer to Tyson and other supply chain members, orders can be fulfilled using existing inventory

in progress. The retailer's replenishment control, which relies on POS and CPRM, will help eradicate the bullwhip effect and manage costs for all chain participants.

Provide an explanation of the measures that need to be implemented in order to reduce a specific potential risk in three different areas: Process, Control, and Environmental.

The management of an integrated supply chain can become more intricate when faced with variables in process, control, and environmental risks. It is crucial for organizations to analyze the risk factors of a particular region to identify any challenges before committing to financial investments. For instance, Tyson might decide against constructing a manufacturing plant in Oklahoma due to the heightened risk of tornadoes in the area. They may also need to find alternative shipping methods during hurricane season if they typically rely on Florida ports for shipments.

Organizations require a strategy to minimize disruption to the supply chain process in three main areas: process, control, and environment. Process risks refer to disruptions in the availability of raw materials and components, including logistics. These risks arise from variations in the sequence of defined processes that do not contribute value to the final product. Organizations implementing SIT or Lean operations are particularly susceptible to process risks.

Tyson needs to assess its shipping vulnerabilities, including the risk of long-term suppliers being unable to produce or ship required inventory on time. Various disruptions, such as employee strikes, natural disasters affecting raw materials, and port lock towns, can lead to interruptions. Therefore, it is crucial to consider the location of shipping materials, the transportation method used, and the associated vulnerabilities.

To reduce the risks, Tyson should consider utilizing

multiple shipping companies for product transportation to retailers. Additionally, it is advisable for Tyson to establish long-term contracts with various suppliers for materials and components, which may involve different regional resources and transportation methods. This will help mitigate disruptions in the supply chain caused by suppliers lacking resources or logistical capabilities, as alternate suppliers in different regions can fill in.

Tyson must continuously monitor and establish acceptable safety stock levels and lead time reduction procedures to mitigate process risks. In the event of a process risk driver, Tyson should also identify and distribute the risk. Additionally, they need to analyze and document the necessary steps when utilizing alternative suppliers for resource acquisition due to the volatility in the process and to ensure a return on investment.

To illustrate, utilizing a backup supplier may escalate the expense of the component, alter the transportation method and cost, and cause a delay in receiving the necessary supplies. By adopting this approach, the organization can economically procure components from different suppliers, thereby distributing the risk. Control risk stands out as a significant vulnerability for an organization. It arises when the communication system of an organization fails in dealing with financial statements, product design, and logistics.

Undesirable outcomes in predicting demand, handling inventory, and managing logistics are instances of control risks that can affect the supply chain. It is advised for Tyson to allocate resources to computer systems and software for demand and scheduling management, as well as enlist a third-party vendor for supplier audits to monitor possible process and logistic risks. Tyson should strongly consider investing in an advanced immunization system to automate restocking of products to

its retailers, suppliers, and logistic companies.

This advanced computer networking will support Tyson in maintaining precise and current financial records, tracking inventory, and becoming a competitive and dependable power hand tool manufacturer. For instance, suppose a retailer Tyson does business with intends to open two new stores and increases its order to fully stock power hand tools. With a state-of-the-art computer system, Tyson can accurately predict how the temporary increase in demand will affect safety stock, work in progress, raw material inventory, and shipping. This allows Tyson to respond appropriately to meet the demand.

To minimize logistical risk, it is crucial to implement a reliable software system throughout the supply chain to regulate the ongoing data and product flow. Hiring a third party for auditing all members of the supply chain is also recommended. Audit firms ensure suppliers' compliance with industry regulations, identify potential risks that may impact the organization, monitor for new changes that could bring new risks, and develop resolution plans.

The impact of natural disasters on material availability is substantial. When implementing the suggested supply chain strategy, which involves forming long-term partnerships with a small number of suppliers, there are two crucial factors to consider: location and flexibility. Firstly, it is essential to verify that all suppliers are capable of providing the necessary components for manufacturing your product. This approach allows the organization to switch between suppliers in case one is impacted by a natural disaster.

Moreover, it is beneficial to select suppliers from various regions to reduce the impact of potential supply chain disruptions caused by natural disasters. These calamities can also disrupt product distribution and information flow within the

supply chain. To address logistical risks, a dependable software system spanning the entire supply chain is essential. Such a system will ensure uninterrupted data and product flow even if certain members are affected by a disaster. Furthermore, transportation options such as air, land, sea, or rail should be carefully assessed considering proximity and cost factors. Implementing environmental measures is another strategy to minimize loss resulting from natural disasters. Climate changes over time can introduce new risks or worsen existing ones; thus, organizations should regularly monitor environmental changes in specific regions. In case the risk becomes too costly or additional risk factors arise, relocation may be considered after evaluating its advantages.

Analyzing potential risk actors before entering a region is not enough for an organization. Risk mitigation should be an ongoing process. It is also advised for all members in the supply chain to have and share standardized written processes and procedures that are regularly updated. This way, even those who are not accustomed to a particular task will have the necessary documentation to perform well and meet customer demand.

Can you please suggest a hierarchical functional organizational structure for the power tool manufacturing company?

In the Operations Management book, it is mentioned that the operations function of a company may include various departments. These departments can be represented in organizational charts using different structures, such as function, divisional, or matrix. The functional chart provided above shows the roles and positions within the company, along with the names of employees assigned to those roles.

The reason for establishing a hierarchical functional organizational chart is to allocate a specific department to each aspect of the business, thereby

fostering employees' deep commitment and attaining company objectives and strategies. It is advised that Tyson adopt a functional organization chart format as it arranges the company's departments based on their job or position's purposes, eliminates duplicating responsibilities, streamlines information flow within a department, and nurtures each employee's strengths in order to achieve departmental goals, ultimately leading to higher profits for the organization.

However, it is still important for departments to coordinate efforts and project knowledge as to not promote a "silo" management effect. It is recommended that Tyson have the following departments within the Operational infrastructure -

• Facilities- Manage ongoing and future construction and maintenance of real estate.
• Production/ Inventory- Manages production and inventory levels and distribution of product to retailers.
• Quality Assurance Controls- This department acts as a checks and balances for the produced product to ensure that defective materials are not used and defective products are not produced.
• Supply Chain Management- Responsible for the accuracy of data flow to all members within the supply chain and identifying trends in the industry.
• Manufacturing- Responsible for tooling, fabrication and assembly.
• Design- Responsible for determining product designs and innovations to meet customer needs.
• Industrial Engineering-Responsible for efficient use of machines, plant floor layout, and employee empowerment programs.
• Process Analysis-Responsible for the procurement and installation of tools and machinery.

Discuss strategic operations management decisions related to at least three concepts that would support the company's mission and strategy. Tycoon's business mission is to be the number one provider of power hand tools and deliver superior customer revere to its defined market segmentation.

Tyson has identified

that differentiating their products through quality and low cost is key to gaining market share. Nilsson et al. (1) emphasize the importance of implementing various operational strategies including goods and services design, process and capacity design, quality management, location strategy, layout design, human resources and job design, supply chain management, inventory management, scheduling, and maintenance. In this proposal, we will explore how three specific operational decisions - location, quality management, and human resources and job design - can give Tyson a competitive edge.

When deciding on facility location(s), it is important to take into account factors such as building design, floor space for future growth, and cost-effectiveness for the company, employees, and the community. The selection process should also consider the availability of raw materials, access to the target segment, wage rate differences, proximity to competitors, and government logistics policies in relation to real estate costs. Ultimately, Tycoon's decision regarding location can greatly impact the success or failure of the venture.

For instance, it is not advisable for an organization to acquire a manufacturing facility in the remote hills of Africa for $175,000. This is due to several factors, including the absence of a talent pool to operate the facility, insufficient resources, low demand for the product within the region, and the challenges associated with import and export bureaucracy. A wiser choice would be to invest in a more costly facility that can efficiently sustain daily operations. This includes having a plentiful supply of skilled workers, access to raw materials, proximity to suppliers and target market segment, and convenient distribution channels.

In order to determine the most beneficial facility location for the organization, a factor

rating method can be used. This method includes developing a list of critical success factors, assigning weights to each factor, creating a scale to measure each factor, scoring each location individually for these factors, and ultimately choosing the location with the highest score. Implementing location decisions will help Tyson achieve its mission and strategy by gaining a competitive advantage through access to a skilled workforce, raw materials, cost-effective logistics, and proximity to suppliers and target segments.

Quality is another important aspect of the 10 strategic operations management decisions that will contribute to Tyson becoming the leading provider of power hand tools and delivering excellent customer service to its defined market segments. Commitment to continuous quality improvement is a management process that sets Tyson apart from its competitors. By ensuring superior quality, Tyson reduces manufacturing costs associated with processes and warranty issues. The first step for Tyson Tools is to establish a goal of achievement while prioritizing the customers' definition of quality, which is also known as a Six Sigma strategy.

Tyson should aim for a 0% defective rate in both materials received and products produced. To achieve this, it is recommended that Tyson establishes an Employee Empowerment Program to enhance employee knowledge and leadership skills, resulting in reduced manufacturing costs. By involving other members of the supply chain, a zero defect quality control strategy can be implemented. The steps to develop this program include creating an environment that promotes employee empowerment, fostering the creation of high-quality products by knowledgeable employees, and focusing on customer satisfaction by defining quality. Additionally, training workshops should be implemented to enhance employee skills in areas such as process optimization, equipment maintenance,

problem-solving techniques, time management, and industry updates. Recognizing outstanding performance through employee recognition programs is also beneficial. One advantage of implementing an employee empowerment program is that it shifts decision-making authority from top management to the shop floor employees. This empowers the key employees involved in the process to make suggestions for streamlining processes or using more cost-effective components without compromising quality in order to increase organizational profits.

Employee involvement can lead to the generation of process flow ideas that will decrease the time required for manufacturing a final product or enhancing product design. Individuals who are heavily involved in a particular process possess a better understanding of its strengths and weaknesses compared to top-level management, making their insights highly valuable. We will acknowledge outstanding performance and contributions of employees on a quarterly basis, particularly those who uphold a zero-tolerance policy for defects. Recognizing such employees fosters motivation, enhances job efficiency, and boosts the sense of pride in the final product, thereby elevating both quality and profitability for our company. Additionally, human resources and job design heavily influence our decision-making strategies in operations management.

To attract and retain exceptional employees, organizations need to find a balance between competitive salary costs and the utilization of employee skills within the constraints of other MM decisions. The human resources department must assess the cost-benefit of offering salaries, pension plans, KICK plans, and healthcare coverage. It is recommended that Tyson creates job designs based on different types of skills, which will enhance the quality of their product. By organizing jobs according to skillsets, human resources can more effectively offer competitive salaries that align with industry standards. Furthermore, by grouping

positions according to skill levels, a team of employees with similar skills can foster greater innovation within a job.

From an operational perspective, it is advantageous for groups of people to work together as they can achieve greater efficiency, flexibility, and creativity in problem-solving. In regards to GIG, there is a need to deliberate on whether the company should adopt a consumer-focused mass customization process. Numerous manufacturing industries are shifting away from traditional mass production and embracing customer-focused customization manufacturing. Mass production strategies typically rely on predicting product demand, whereas customer-focused customization manufacturing entails producing a product based on the specific preferences of the customer.

Organizations are discovering the profitability of incorporating standardized components in a range of products and making modifications towards the end of the product design phase, known as postponement. This strategy usually requires a large volume and variety of products to be cost-effective, as well as a strong process relationship between sales and supply chain members, including logistics. However, there are challenges associated with customer-focused customization. These include the fact that consumers are not designers and have limited time. Consumers expect quality products that have been thoroughly tested. Some customers prefer having multiple components for a simple product, whereas others simply want to purchase an item without having to choose various components such as interchangeable blade types, handle structures, and color options.

Furthermore, customers who are not designers may unintentionally end up with a product that was not what they initially intended. This can lead to "designer's remorse" and result in customer dissatisfaction, potentially causing the company to lose repeat business. Additionally, while the idea of creating personalized tools may be

appealing, many customers do not have enough knowledge about power tools and their components. As a result, they may feel overwhelmed by the customization process. Moreover, customizing products for individual customers also presents challenges when it comes to lead time. Despite advancements in technology, lead time remains a drawback in the customization process.