Supply Chain Strategies in Corporates
Table of Contents
Supply Chain Strategies in Corporates. 3
Supply Network of the Company. 3
Supply Chain Strategies in organizations. 4
Effective of Supply Strategies in Maintaining Supply Relationships. 5
Mechanism to Maintain Supply Relationships. 6
Use of IT in Supply and Logistics Management 7
E-Commerce in Supply Chain Management 7
Supply Chain Strategies in Corporates
Supply Network of the Company
The Pepsi Beverages Limited is a company dealing with the manufacturing of the low-cost non-alcoholic beverage that is supplied to the low-income bracket under the brand name Pepsi. The company uses producer/ distributor storage with retail customer picking distribution network. According to Zhao, Ji & Feng, (2020, pg.2) smarter supply chains are developed through information sharing and having seamless forecast of supply and demand from the market. Thus Pepsi beverages limited upon manufacturing the products, the distributors are supplied with the Pepsi products stored in customized crates based on package sizes as per their initial orders in bulk. The distributors store the product and supply the products in small quantities of one crate or more based on the customer’s requisition. In the company’s distribution network, the distributors or stockiest receive the products directly from the factory using their own or contracted trailers or train services based on the distance from the company’s factory. Model of the supply network is shown below.
The distributors upon receiving the products store the Pepsi in their warehouse where they break the bulk into suitable products for each final retailer who in turn sells to final consumers in the premises. The entry of the products into the retailer’s premises mark the end of the supply network for the company. This is because the soda patrons enjoy the products at the package of 300 ml or 500 ml for final consumption.
Supply Chain Strategies in organizations
Supply strategies are the approaches that are put in place by corporate organizations to match their supply needs with the prevailing market demands. The strategies sometimes entail incorporating technological innovation into the overall business model to allow for real time solutions and increase the company’s bottom line. Companies in the beverage industry both alcoholic and non-alcoholic such as Pepsi Beverages Limited have adopted the demand driven planning and business operating model strategy. According to WU, et al, (2016), the strategy makes the company to match the prevailing supply with the existing demand from the distributors who in turn represent the final retailers thus right customer, right place and right order. In the strategy, the company gets the daily market data from the distributors based on their opening and closing levels which are analyzed to predict the changes in market demand. As a result, the production capacity is aligned with the prevailing demand optimizing the storage, haulage and the company’s production capacity. Demand planning strategic model for supply chain management for Pepsi Beverages Limited is below.
According to Sukati, & et al, (2012), effective supply management is linked to supply chain performance. Thus effective company such as Pepsi Beverages Limited uses professional trade representatives to examine market trends in their respective market segments who collaborate the stock levels of the distributors to promote effective supply strategies. Thus, there is seamless engagement in all the business spheres from production, marketing and transportation. In communication Sectors, Company such as Apple are using strategies that focuses on optimizing product design and management for supply, manufacturing and sustainability. The strategy makes the company to accelerate the innovations that are profitable. The strategy has seen the company continuously innovate the product design with slim design with more telecommunication capability and storage levels with high internet speed. This is done in line to beat the prevailing competitions and address the pain points of customers (Wu, & Cheng, 2008). The mobile technology revolution occurs almost on a daily basis as the company releases new models that withstand the prevailing challenges from competitors due to the integrated features of the new product. This makes the company customers to be ever in a rush to buy the latest sleek model to match their taste and preference for a platform that address all their internet serving and communication needs.
Effective of Supply Strategies in Maintaining Supply Relationships
The demand driven planning strategy deployed by Pepsi Beverages Limited has made it possible for the company to maintain working relationship with the suppliers of crates or bottles essential for the packaging of the beverage. The strategy has made the company enter into fair pricing model with suppliers of packaging crates, and reusable or disposable bottles throughout the year. Due to better data analytic metrics, the suppliers are well informed prior to the beginning of their production and packaging cycle (Williams, Waller, 2011, pg. 23). This in turn translates well with the market demand generated from the distributors based on their sales volume to the consumer. Use of cloud approach by the company provides the production department with the ability to organize their production level in lean production system to avoid wastage of resources and increase efficiency in real time to optimize the designed supply systems. Further, the data analytics metrics makes the company organize its transportation system to ensure seamless delivery of production materials from company headquarters in Harrison in USA, empty crates from suppliers, collection of empty crates from the depots and imminent supply of the filled crates to the distributors. The approach supports a well-coordinated supply chain without any element of delay throughout the supply cycle.
The optimizing product designing and management model applied by Apple has proved effective in maintaining successful supply relationships among the stakeholders. The model based on integrating production cycles with the consumer trends has made the development department of the company to continuously research on the customers pain points in the market. As such, the production developments get insights from the product development departments. According to Battistoni, et al, (2013, pg. 2), the insights are relayed to the supply and procurement department that shop for the most modern and latest technology to support the prevailing market demands through provision of prerequisite supplies. The products are outsourced far and wide from reputable firms dealing with technological innovation to support the attainment of the desired customer needs in the market place. Also, the company contracts suppliers of specialized parts for the sleek design under development and run products clinic that inform the desired improvements of to be launched products. In case there is demand for advanced parts, the supply system is activated to facilitate the delivery of the pats in real time.
In the health sector, pharmaceutical companies that are charged in doing social goods deploy the strategy that support supply chain as guided by business goals to minimize potential risks. The supply chain strategy integrates sales and planning metrics in the overall supply strategy to manage relationships. Government hospitals are furnished with essential drug list based on their location and the most common ailments. Thus, the health facilities make orders based on their unique settings to avoid dead stock. The appointed government agency such as through guidance of the World Health Organization (WHO) vet the request for supply and optimize the delivery of the requested services (Wieland A, Handfield RB, Durach, 2016, pg. 210). The coordinating arm that links various industry players source for different orders received and organize the transportation of the same to the recipients in the health sector to promote public goods. They also provide means of disposal of the expired products on behalf of the health facilities lacking the potential to undertake the exercise. This ensures the existence of imminent supply chain with sound supply relationship.
Mechanism to Maintain Supply Relationships
The Pepsi Beverages Limited has used continuous training on financial management and production capacity for packaging materials suppliers to maintain sound relationships. Thus, the key ingredients suppliers are well trained on the expected optimal production capacity to meet the company’s demand and budgeting techniques to assure them of regular income from their efforts. This creates satisfied suppliers of raw materials (Sukati, Bakar, Hamid, Baharun, Yusoff, 2012). The company has also put packaging containers suppliers in fair pricing contract that ensures that their products will never suffer from lack of market or failing prices due to sound compensation scheme. The fair contract ensures that every production season the suppliers are compensated competitively as per the prevailing market rates. The suppliers of empty crates and bottles are entered into pre-negotiated financing agreement with the company through financial intermediaries. Therefore, the required supply of new crates and bottles as well as replacement of aging ones runs seamlessly since all financial hurdles and production specification are met prior to delivery in the company premises. The company also supports the use of continued research and innovation to support the packings manufacturers to continuously design models that are compatible with the changing climate and transport technology (Van Mieghem, 2011, pg.24). The contracted suppliers of transport services are kept abreast with the prevailing legal requirements and integrated technology that support tracking and security of the products. The Pepsi Beverages Limited facilitate the acquisition of insurance cover to cover against theft and destruction of products en-route and tracking services with central command in company headquarters. The major drawback for the contract with suppliers is the post severance compensation before contract terms end by the leaving party. This affects the morale of the participants who are not satisfied leading to compromised services.
Use of IT in Supply and Logistics Management
Technology is being applied in managing the transportation fleets used by various players in the industry. For instance, technology is used in determining the loading capacity for the transport vehicles. Also, technology is used to track goods on transit from departure to the offloading point. According to Shami, & Shin, (2016) to ensure seamless supply of materials, software that support lean production and data analytics have been deployed in companies such as Pepsi Beverages Limited. The systems ensures that market data is intertwined with production and supplier’s capacity. The use of technology has facilitated the implementation of good packaging consignments that fit well with the carrier design. As such, the technology has made it possible for fabricated transport carriers with cold facilities to be designed to transport products that are highly perishable such as fish or milk.
E-Commerce in Supply Chain Management
E-Commerce can be said to the use of integrated technology system that runs over the internet to ensure accomplishment of business goals such as sourcing for supplies, creating and opening new markets and easing movement of goods in the supply chain-Commerce is used by multinational companies to keep track of the production capacity from the suppliers of raw materials. According to Stritto, & Schiraldi, (2013), through the use of the system, the companies are able to source across the globe for reputable suppliers of certain parts or ingredients that support production process. The E-commerce also supports every step in the entire production cycle to the point of the materials reaching the warehouse of the multinational. Examples of companies using E-Commerce are Unilever to source for raw materials for its varied products line.
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