Supplier Performance Improvement Plan
Instructions:-
Resources: Internet, University Library, Textbook
You are a Supply Chain Manager of a building supply company. Your company sells building materials to building contractors, home improvement construction companies, as well as the do-it-yourself weekend project homeowners.
You have been struggling with the supplier of roofing nails for several months and you are fast approaching the peak roofing season. The supplier has been late on delivering orders and when orders are delivered the boxes are damaged and the quantities of nails in the boxes are inaccurate. Each box should have 1000 nails, but you are getting complaints from your customers that they are only receiving partial quantities in the boxes. The situation with the supplier is getting so bad some of your major customers are threatening to go to another building supply company for roofing nails.
You have to get this situation under control before you lose much needed seasonal sales!
Create a supplier performance improvement plan. Include the steps that need to be taken to identify the root cause, potential containment, and corrective action. You need to include how you will monitor compliance to corrective action and if the corrective action is effective.
Write up the improvement plan in a 1,050-word document.
Format the paper according to APA standards.
Click the Assignment Files tab to submit your assignment.
Solution
Supplier Performance Improvement Plan Essay.
Introduction
The global business environment in our current time is getting more complicated by the day and this affects the processes that take place within this environment. Due to this, manufacturers have to realize that the success of their businesses greatly depend on the operational efficiency of their suppliers (Christopher 2016). Even though this is an important factor that should be considered in business, most manufacturers brush it off and do not take heed to it. In effect, the delivery of materials to the manufacturing plants becomes disrupted and does not meet the required standards by both the manufacturers and their customers. It is at this point that manufacturers would conduct a supplier performance evaluation of the lag in their suppliers’ performance in order to identify the problem and rectify it accordingly (Hugos 2011). Lest they conduct one, their businesses would be subject to detriments such as increased lead times and cycle times, production plans and schedule changes, excess inventory and operational costs and poor product quality. This paper focuses on evaluating such a situation on a company whose customers complain of receiving less number of nails than that which is specified on the package.
Root Cause Analysis
One problem that was evident was that the nails supplier was using an unreliable planning system. The ERP system that he was using had some glitches which computed the wrong number of nails required in each box thus every time a packet of nails was packed, it did not pack the recommended amount. Despite it having glitches, the supplier did not address the issue before the deliveries were made even though professional courtesy required him to do so.
High inventories were another cause of this problem. Overseeing stock goes past checking what number of boxes of nails is in the distribution centre. It includes keeping enough stock close by so the supply company can be adaptable while meeting all client and customer desires. Timing orders suitably will guarantee all items (or segments of a thing) land at the assigned time without the supplying organization confronting major deferrals. This additionally includes conveying enough stock so the organization doesn’t run out—however, less stock that benefits are influenced.
The management of suppliers was poorly done. Alongside overseeing stock comes overseeing the service providers. Supply chain managers are in charge of knowing when they require various providers for one thing, managing providers when there are postponements and guaranteeing all requests received meet quality controls. They’re additionally in charge of discovering providers with predictable and solid administration at a value that doesn’t hurt this company’s main concern.
The supply chain manager is in charge of guaranteeing his organization isn’t crushed by issues with a provider. Being excessively dependent on one provider is a big mistake especially when dealing with goods on a global scale. One becomes powerless if that provider can’t meet requests. This is what happened with our supply chain manager and he should have foreseen it coming due to the nature of the companies that he deals with.
Maintenance of the quality standards also affected the supply manager’s efficiency. The globalization of his supply network was combined with worries about the nature of items that are made in different nations (or contain segments from different nations) that may not meet the required global standards. This eventually put him in the danger of being reviewed. He did not fulfill his responsibility of ensuring that the boxes of the nails were packed according to the required standards i.e. that they should have had 1000 boxes each.
Containment and Solutions
Analytics is at the core of any supply chain management solution (Christopher 2016). This is assisted by tools for propagating teamwork and maximization of efficiency in a workplace. Basically, this supply manager should reflect on the network of processes, amenities, and people involved in the manufacture of a service or product as an unbreakable chain rather than a group of interrelated separate tasks. The larger his company becomes by being global, the more complex their chain gets (Monczka 2015). There are three simple aspects that he should consider when conducting this process-planning, evaluation and monitoring. These aspects help to develop a strategic plan which improves the efficiency of the supply firm and helps in the management of the supply chain risks hence only minimal errors may occur which could be of no significance to the flow of the company’s activities.
When we consider the maintenance of quality standards, the supply chain manager should realize that high quality begins with selecting the proper raw materials, deciding on the precise production technique in relation to global standards (Monczka 2015), and finally examining and proofing the products. He should have the nails counter checked in accredited laboratories and their quality ensured by the latest measuring equipment. Until this is done is when he will realize the maximum quality of the boxes of nails he supplies.
The supply chain manager should resort to an updated manageable ERP system which contains minimal glitches. He should consider using the SCP software which is much more user friendly and can combine other functions such as integrated forecasting, material requirements planning, distribution requirements planning and capacity planning capabilities. This software is an excellent tool that can be used to manage all the supply functions within the company (Christopher 2016).
He should also focus on getting more than one provider of raw materials than depending on only one provider. This will diversify his sources of raw materials and if any problem comes up he can get the goods he requires from another provider. This will help him manage instances of crisis in case less number of products is provided to them (Hugos 2011). It will also help him avert the complaints made by customers concerning the less number of nails contained in the boxes.
Conclusion
It is evident from this information that supply chain
managers have a multifarious series of tasks in their job. They examine all the
risks involved in their supply chain; make sure that the company has the
supplies it desires in the event it needs them. They should also always work
hard to lessen any recalls or safety issues. Supply chain management is
something that often goes undetected when it’s going smoothly those good at it
make it look simple, even though it really is difficult.
References
Christopher, M. Logistics & supply chain management. London: Pearson Higher Ed, 2016.
Hugos, M. H. (). (). Essentials of supply chain management. Vol. Vol. 62. New York: John Wiley & Sons, 2011.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. Purchasing and supply chain management. Boston: Cengage Learning, 2015.