QUESTION
Case Study
Pep Stores SA (Pty) Ltd
Redesign, implementation and ongoing management
of outbound distribution for PEP Stores.
Industry Retail – apparel, textiles and related products.
Background There are in excess of 1 000 Pep stores in Southern Africa, requiring up to 2 500 000 cartons of
product to be distributed annually. Due to factors beyond the control of Pep, their distribution
service provider (for 20 odd years) was unable to meet the demands of the changing logistics
environment within which their client operated. The ever increasing dependence on Pep as their
largest client, together with a rate structure below that found in the market, resulted in the
potential for a distribution cost escalation spiral, which placed increasing pressure on Pep to
respond innovatively to contain and address the problem. As the 3rd largest cost item, the impact
of any decisions made regarding their distribution process was extremely sensitive, hence Pep’s
decision to call upon experts in supply chain management to assist them. Since July 1999 Supply
Chain Solutions (SCS), a part of Barloworld Logistics, have been responsible for redesigning,
implementing, managing and operating the outbound distribution component of the supply chain,
for Pep Stores.
Problem The problems faced by Pep can be summarised as:
• Uncertainty regarding the ongoing ability of their existing 3rd party service provider to render
the desired distribution service (a parastatal organisation coming under increasing pressure
due to its unprofitable status)
• Product in-transit time (lead time between completion of the picking process to final delivery
to the stores) above the industry norm, resulting in excessive working capital tied up in the
outbound leg of the supply chain
• High degree of in-transit losses experienced with the existing service provider, resulting in high
insurance premiums and uncertainty of product availability at store level
• Proof of parcel deliveries was inconsistent and often not available, failing to assist Pep in
verifying the availability of stock at their stores
• Administration of claims taking more than six months to be completed
• Inadequate administration of customs documentation for product delivered across the SA
border, resulting in claims and assessments by the revenue authorities
• Pep were charged at a per parcel tariff, which encouraged the distribution of very large parcels
(impacting on product quality and increasing damages and breakages)
• No formal control existed over the movement of IBTs (inter branch transfers), which parcels
also incurred a distribution cost
• No one 3rd party service provider had the capacity or resources to handle Pep’s distribution
• Pep’s volumes had created a base distribution within the 3rd party service provider, for use
by competitive companies to Pep.
The need was to contain or wherever possible reduce the potential cost impact of the distribution
system whilst enhancing the performance standards and service levels.
Approach To redesign and re-engineer Pep’s distribution system SCS adopted a phased approach, whereby
SCS initially undertook the management of Pep’s existing 3rd party service provider, commencing
in July 1999. By the introduction of administrative controls and the establishment of management
information systems, SCS made an immediate impact on service levels. Simultaneously lead times
within SA as well as losses were reduced with the existing service provider, while new service
providers were introduced on the over border routes, which in turn resulted in a 50% improvement
to those lead times.
In line with the phased approach, the initial one year period enabled SCS to assess and address
the longer-term needs of Pep. The re-design of Pep’s outbound distribution network was completed
by May 2000. This strategy was presented to the Pep Board in the form of a detailed business
plan which was accepted and approved in June 2000, in terms of which SCS were instructed to
implement this second phase in the shortest possible time.
Solution The proposal was based upon avoiding the reliance on any one party to fulfil Pep’s requirements
and for Pep to retain optimum control over its distribution processes and performance requirements.
This was to be achieved by the design and establishment of a customised closed circuit distribution
network, catering exclusively for the needs of Pep Stores.
Five dedicated cross-docking Hubs with their associated infrastructure (conveying equipment,
computers, furnishings etc.) and processes (staff as well as various service providers covering
transport, security and labour) would be introduced. The Hubs in Johannesburg, Bloemfontein
and Cape Town would also serve as the consolidation points for over border traffic to the B, L,
N, S countries.
In an attempt to achieve maximum flexibility, thereby engendering ongoing innovation and focus
on satisfying the needs of the client, the structure made allowance for the separate award of
transport contracts to:
• Shuttle operators between the Pep DC’s in Cape Town and Durban and the local hubs (space
limitations & long term leases currently prohibit the hubs being located in the same premises
as the DC’s)
• Line haul operators linking the 5 hubs
• Local and regional delivery operators from each hub to the Pep stores
• Pep would lease the 5 regional cross docking hubs on a 3-year renewable basis and purchase
and install the necessary handling equipment. The dispatch functions in the DC’s and the
operation of the Hubs and management of the transport delivery functions would be under
the control of SCS acting in terms of their management agreement with Pep
• The system design is depicted in Chart “1” on the second last page.
• The solution identified the potential for material and sustainable cost savings to be achieved
at the same time as significantly enhancing speed, reliability, control and quality of information
on all deliveries to and between Pep retail outlets.
Implementation
Speed and timing of the implementation of the new system was critical as there were immediate
economic benefits accruing to Pep, should implementation be completed before the peak volume
period commenced in October 2000. Within three months of authority to proceed being given
by the Pep board in June 2000 all the infrastructural, service provider and staffing requirements
were in place:
• Materials handling equipment: production, implementation and testing
• Computer systems: development, installation and testing
• Service providers: tenders, evaluation and appointment
• Staff: interviews, evaluation and appointment
• The leasing of suitable cross dock facilities in all five major centres (A total of 23,000sqm),
Results &
Achievements
were all completed in this period.
“Production” in the five cross-docking facilities commenced on 1 October 2000, with improved
service levels and standards, achieved in all regions. Implementation was completed successfully
and a rapid operational learning curve was displayed by all centres.
All initial targets and objectives in terms of costs and performance standards were met and
subsequent refinements have added significantly to further cost savings and service enhancements.
The system allows for sustained growth and further economies to be achieved and has given Pep
control over their means of distribution process. It avoids reliance on any specific service provider.
The following summarises the key achievements:
• Distribution Costs – have not only been contained, but have also been reduced. (See chart
“2” on next page)
• Delivery Times – Pep lead times have improved by up to 40%, with scheduled and planned
deliveries thereby reducing stock in transit. (See chart “3” on next page)
• Cost Control – An environment has been created wherein distribution costs can now be better
managed. Greater visibility and control over variable costs, and optimal utilisation of resources,
allowing maximum benefit from the fixed cost component
• Losses – Claims and losses have been reduced by more than 50%, to less than 0,08% of
volume distributed, further cutting distribution costs (in the form of insurance premiums or
excesses)
• Management information regarding the status of distribution (current and historic) and various
related aspects allowing for the detailed management of the process
• Full control over inter-branch transfers
• Reliability and certainty of delivery allowing for better planning
• Proof of deliveries are available within 48 hours and fully reconciled allowing for enhanced
stock in store management
• SCS developed and introduced systems, which enable management of the complete outbound
process, whilst giving Pep access to important information. The systems were interfaced with
Pep, allowing pertinent data to be shared, and making operational information, such as proof
of deliveries, immediately retrievable. This system is customised for Pep and ongoing local
development ensures that enhancements, to meet additional needs, are expedited and
economical.
The success of a project of this magnitude has been recognised by reference to the industry leaders,
who selected this project as the “most outstanding achievement in the South African Supply Chain
Industry, for the year 2000”. SCS and Pep Stores SA (Pty) Ltd were awarded the “Logistics Achiever
Award” for the year 2001.
Chart 1: Overall Closed Circuit System Design
D.C.
EPPING
D.C.
KUILSRIVIER
D.C.
DURBAN
Direct Del
Supplier
Direct Del
Supplier
Local and regional deliveries
LOCAL HUB
CAPE TOWN
LOCAL HUB
DURBAN
Local and regional deliveries
Chart 2: Comparison of New and old Systems – Impact on Distribution Costs
160 000 000
150 000 000
140 000 000
130 000 000
120 000 000
110 000 000
100 000 000
90 000 000
80 000 000
70 000 000
Cost Comparison-Current vs Proposed
10% Escalation + 10% increase in volumes
Budget Y
ear
JHB
HUB
BLOEM
HUB
E LON
HUB
Closed Circuit Current
2000-2001 2001-2002 2002-2003 2003-2004
Closed Circuit 79 488 621 91 486 515 103 003 584 113 611 629
Current 85 031 554 102 888 180 124 494 698 150 638584
Local and regional
Local and regional
Local and regional
Chart 3: Representation of the Impact on Lead Times after SCS began managing the process
18
16
14
12
10
8
Number of Days
6
4
2
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Overall 8.34 8.13 7.84 7.84 8.02 7.72 7.84 4.87 5.27 4.91 5.03 5.10 4.66
Overborder 15.69 16.62 15.54 15.54 15.69 15.39 15.85 10.11 10.45 9.84 10.37 9.09 8.57
Local 6.86 6.41 6.29 6.29 6.47 6.17 6.12 3.81 4.14 4.46 4.34 4.24 4.00
Corporate Head Office Johannesburg
Overall Overborder Local
180 Katherine Street, Barloworld Park, Sandton
Tel: +27 11 445 1617/1610 Fax: +27 11 445 1630/1632
email: [email protected] Website: www.barloworld-logistics.com
7 days
3.7 days
SOLUTION
1. Introduction:
The essay looks at four aspects of Supply Chain Management to see how the concept fares in relation to business objectives and the changing market conditions.
- Basics of Supply Chain Management – Concept and Principles
- Comparison between the South African and Australian contexts of Supply Chain Management
- The Outbound Distribution Design and its trade-offs
- Theories in Supply Chain Management and their business applications
The paper concludes with a glimpse at how supply chain management could be measured and monitored for business success.
1.1. Logistics Vs Supply Chain Management:
Supply chain management is a process orientation to business, where operations transcend the divisions within businesses and the boundaries between organisations, resulting in cooperation between and within firms by synchronisation of processes and managing logistics.
Logistics is the arm of management that is aimed at optimising the flow of materials through the organisation, with the aim of maximising value delivery to customers. However, the value derived out of logistics could be maximised only if there is an extension of the principles of logistics upwards to reach the extents of the suppliers to the business and downwards till the flow of materials reaches the customers, which are encompassed by Supply Chain Management.
Supply chain management encompasses logistics within its folds and also includes marketing channels, creating partnerships and forming networks with institutions that would combine towards the goal of value maximisation to the consumer.
1.2. The top-down approach to logistics:
In organisations, there is the business strategy and there is the logistics strategy. The aim of business strategy is to obtain the organisational objectives in the short, medium and long terms, and the logistics strategy is dependent on the business strategy that will lead the firm towards organisational objectives (Fabbe-Costes and Colin, 2007: 34). In effect, logistics is seen as a support system that is defined based on what the global strategy of the firm is, and is designed to aid the firm towards achieving its objectives.
1.3. Key Principles in Supply Chain Management:
According to Fabbe-Costes and Colin (2007), there are three basic elements that form the critical linkages among the different players in the network that works together to create value for business – Procurement, Manufacturing and distribution. The three elements basically reflect the three major components of business in a system approach, where inputs are processed and transformed into outputs. The key to successful supply chain management depends on the successful management of these three elements, which, in turn, depend on the sub-factors that constitute the three individual elements.
1.3.1. Procurement:
If there are to be synergies realised in the realms of procurement, there is a need for businesses to embrace the concept of ‘co-makership’. The idea is to evolve beyond the individual differences and focus on the larger picture of serving the customer and maximising customer value, while retaining customer loyalty. If businesses are to succeed in a highly competitive environment, networks of organisations in the supply chain should work as one. The only way this could be achieved is by working with suppliers in terms of procurement to identify opportunities that would eliminate costs rather than merely pushing costs up the supply chain or transferring on to the distribution channel.
This is what leading organisations such as Ford and GM do, when they deploy their engineers and technicians to the supplier centres to work with them, to invent solutions to problems and to create value right up there in the supply chain.
1.3.2. Manufacturing:
The key to successful business is quality. With everything else being the same, it is the quality that would be the key differentiator in business. However, there is also the concern of costs in business, which led to two major concepts –lean manufacturing and economies of scale.
Lean Manufacturing:
Lean manufacturing, as quoted in the Logistics Magazine (2011) refers to efforts to identify and eliminate all traces of inefficiencies by getting products to customers as and when they may be needed. The concept of lean manufacturing, with associated concepts like Just-in-time Inventory, is not without its share of problems. When businesses have their supply chain management resources spread so thin to verge on the fragile, they may be able to produce quality products, they may be able to achieve cost advantages as well as realise free capital that doesn’t get locked up in accumulated inventory. However, the problem is with changing market situations. In business, managements are not dealing with static objectives but with dynamic targets. Shooting at moving objectives when businesses have already stretched their supply chain resources too thin could be asking for trouble when market situations change and when they are not in a position to adapt as fast as the market does.
Economies of scale:
The traditional system of business management had its focus on economies of scale with the idea of bringing costs down and beating the market in terms of price. Organisations tried to be competitive by building massive manufacturing facilities and racking up volume so fact that would drive down costs to a minimum. Again, the flip-side is with changing market conditions. When there are large facilities and massive production lines, a dry spell could leave businesses caught with their pants down, which could mean a huge drain on resources, resulting in organisations that bleed every second of their operations with unmanageable assets and overheads.
Flexibility is the Key:
It may sound Utopian, but the only way businesses can draw the most out of their supply chain management would be through flexibility, where the best of lean manufacturing and economies of scale are combined to give businesses the agility to respond to changing market situations and the flexibility to scale back and forth as and when demand changes. While technology can help in bringing about flexibility, one other important aspect is the ability to cut down on lead time, where processes are simplified, documentation is minimised and red-tapes and bureaucracies, eliminated. According to (Fabbe-Costes and Colin, 2007: 26), zero lead times could be achieved, as has been demonstrated by the Japanese manufacturing industry, by challenging existing assumptions and questioning prevalent procedures. A new paradigm is required for value maximisation through the best principles of supply chain management.
1.3.3. Distribution:
The third piece in the supply chain management puzzle, distribution, assumes special significance, not just because of the customer at the other end of the distribution channel, but also because of the kind of information that could be generated out of distribution, which could have an enormous impact on the other two critical elements of supply chain management – procurement and manufacturing. There are three concepts associated with distribution – demand management, quick response logistics and postponement ((Fabbe-Costes and Colin, 2007: 26).
Demand Management:
While demand cannot be determined in a free marketplace, demand could be managed through information processing and market forecasts, which go on to determine the kind of procurement to be made, inventories to be maintained and production to be effected. However, demand forecasts have traditionally proven to be elusive and accuracy has invariably been missing, which has led to the arrival of the concept of ‘Quick response logistics’.
Quick Response Logistics:
Wal-Mart has been a proponent of quick response logistics, where information from the point-of-sale is transmitted in real time through the supply chain to determine procurement, manufacturing and inventory to be in line with market demand. This is a concept that depends heavily on information technology.
Postponement:
The idea in this case is to hold inventories not as finished goods but as semi-finished products and work-in-process, where inventories could be tailor-made into customised products based on confirmed orders. When businesses do not have the final word yet on the exact kind of product that they may need to produce, it makes business sense to postpone the final production process and adapt the product to suit market demand.
2. Similarities and Differences between the South African and Australian Supply Chain Management
A study by Naude and Weiss (2011) of the supply chain management problems in the South African automotive components manufacturing industry found that some of the major problems faced by players in the industry had to do with price and operational inefficiencies that were, in part, aided by government policies as well as by the financial institutions’ reluctance to pitch in during tough economic times.
2.1. South Africa:
2.1.1. Price Inflexibility:
Local raw material suppliers tended to be monopolies, which resulted in prices of purchased materials being fixed and more in line with international prices rather than being reflections of domestic conditions or in relation to the volume of procurements.
2.1.2. Government emphasis on BBBEE:
This is an instance of government policy causing hurdles to businesses in terms of practical difficulties in achieving expected milestones. The Broad-based Black Economic Empowerment, a policy of the government of South Africa, emphasises on diversity in terms of business ownership as well as in senior management positions in businesses towards black economic empowerment (South Africa Report on BBBEE). One of the aspects of BBBEE agreement was that it was expected of businesses to pressurise suppliers to comply with the legislation, and having compliance as one of the major factors in deciding on awarding contracts to suppliers (Naude and Weiss, 88). This presents obstacles in relationship building with suppliers as well as in terms of competency and cost leadership, where business considerations might have to be compromised on account of legislative constraints.
2.1.3. Financial woes of suppliers:
Lack of government interference in providing financial boosts to ailing suppliers, along with the lack of enthusiasm from banks towards lending to financially weak players also led to lack of competitiveness in the industry.
2.1.4. Lengthy material lead time:
With unwieldy material lead times, the only option left was to stock up on inventories, which was against the principles of flexibility, apart from having financial impact in terms of cash locked up.
2.2. Australia:
On the other hand, a report on supply chain management in Australia by Braue (2011) finds out what could be improved when it comes to the information processing part of supply chain management, even as the logistics magazine has its focus on technology on the shop floor to rake up efficiencies.
2.2.1. Information Discrepancies:
One of the problems related to supply chain management in Australia has to do with lack of information systems to go with the growing demands of logistics. And such discrepancies in data handling and information management are thought to contribute to huge losses across industries and businesses, big and small.
2.2.2. High End Information Systems:
Problems with data management and growing needs of the industry to respond in real time mean that businesses are willing to invest in systems that feature unified core stock management, as is happening in the case of Australia’s leading players in the retail industry. And businesses, small and big, are getting set to invest heavily in Enterprise Resource Planning software that would put an end to their logistic woes.
2.2.3. Fragile Supply Chains:
There are also prospects of the emphasis on ‘lean and mean’ systems going awry when the unexpected happens, as in the case of natural disasters. As has been stated earlier, this is a classic case of the basic principles of flexibility in supply chain management being compromises upon, for the sake of efficiency and cost effectiveness.
2.2.4. Technology on the shop floor:
The Logistics Magazine (2011) expects a rise in the use of technology, as in the case of wireless gadgets and equipment such as printers, on the shop floor of manufacturing facilities, given the rising trend of lean manufacturing that is catching up among manufacturers who would want less on stock. Further, there could also be innovations such as utilisation of technology such as voice activated systems, which could mean a lot more savings realised and costs cut, considering the number of operations that need to be done on a repetitive, continuous basis.
2.2.5. Global Competition and need for competitive Pricing:
The threat of competition has always been on, especially in a globalised economic model, where imports tend to be much cheaper than the locally manufactured products. This necessitates cost savings and efficiency where it could be squeezed into business activities, in the realms of supply chain management. Investments in information technology and in data management go into increasing business efficiency, which could go a long way in boosting the competitive advantage of businesses as against global competition from low cost producers from around the world.
2.3. Discussions:
While the considerations in the development of supply chain management and its implementations are different in the two countries, with the focus staying on basic factors such as lead times and government policies as well as the support of financial institutions in South Africa, the considerations in Australia are more on taking supply chain management to the next level of operational and economic efficiency through optimal use of technology. However, the similarity between the two nations lies in terms of the need to stay focussed on cost so as to bring about competitive advantage for the businesses.
3. Trade-offs in Outbound Distribution:
The part of supply chain management that involves transportation of finished products from the factory to the consumer or through the distribution channel is not an easy one. It is fraught with surprises and uncertainties, on account of the fact that the product doesn’t lie within the confines of the factories anymore, but is out there in distribution channel, where there would be unlimited number of factors that it may have to encounter. It takes high levels of sophistication and specialisation to be able to come up with the right outbound distribution solutions. However, there are possible trade-offs in outbound distribution that have to be taken into consideration before designing the ideal outbound distribution solution, as indicated by Volvo Logistics.
3.1. Future business plans:
Existing outbound distribution designs may limit future business plans. If the business has ideas of expansion, increase in turnover or larger geographic area coverage, the current distribution design may not be favourable for the new plans.
3.2. New Product Development:
Most businesses would be fine in terms of outbound distribution design as long as their products remain the same. However, diversification into new businesses or launching of new products could mean a complete rethink of existing logistical arrangements. Foregoing new business opportunities or expansion plans could be the trade-offs involved in continuing with the status quo.
3.3. Economic Implications:
Businesses may be fine with their existing arrangements of outbound distribution, but may find themselves restricted in terms of having to live with higher costs of distribution.
3.4. Product Damages:
Arranging for products to be delivered to customers or end consumers and finding that a good chunk of the products turned out to be damaged en route to the customers doesn’t make good business sense. Staying on with existing arrangements that were put in place a long while back could mean that your trade-offs include losses on account of product damages, production time and resources gone into the damaged products and cost incurred in arranging for the damaged products to be returned to the base stations.
3.5. Environmental Considerations:
In an era of heightened environmental consciousness, businesses wouldn’t want to leave too many environmental footprints that the society may hold them accountable for. Continuing with age-old customs and traditions in terms of outbound distribution could mean that businesses may not be up to speed with the latest developments in terms of logistics and supply chain management that treat environmental considerations with keen interest.
3.6. International Market Access:
Outbound distribution systems may not be able to cater to the needs of an increasingly global marketplace, especially if they were put in place with a keen eye towards the domestic sectors. Living with existing logistic arrangements could mean trade-offs in terms of lost opportunities to go global.
3.7. Risk Management:
It takes continuous auditing and improvement to outbound distribution services to be able to come up with risk management strategies that are up-to-date with the latest developments in supply chain management. Insurance is an industry that has evolved tremendously over the years, and outbound distribution could involve trade-offs in terms of the consignments not being covered for new risks in the horizon.
4. Problems and Solutions in Supply Chain Management:
As could be expected, there would be shortcomings when dealing with a moving object, and that too, when it comes to an evolving field of theory, research and practice. There are calls (Harland et al, 1999) for supply chain management to become an even more all-encompassing field of theory and practice, with the idea being that field such as operations management, logistics, operations research, purchasing and supply management as well as industrial relationships and service management into the larger field of “supply strategy”. It is by leveraging the potentials of these numerous disciplines and their constituents that competitive advantage for business could be realised.
4.1. Agile Vs Lean – Product Technology and Market Conditions:
The question of which strategy would fit the best when, has long been a point of debate in Supply Chain Management Theory, when it comes to the choice between being agile and going lean. Beesley (2007) proposes that the strategy to be agile in supply chain could be chosen when there is low certainty in the environment, coupled with high levels of complexity in terms of product. In these conditions where could be fluctuating business cycles, as in the case of aircraft, it would pay to be agile to respond to changing technologies and short product lifecycles. On the other hand, when it comes to consumer goods that have stable market conditions involving high levels of competition, it is important to be cost effective to beat the competition. Given the stable market conditions, the supply chain strategy chosen would be a lean, cost-based one.
4.2. Agile Vs lean – Demand and Supply Conditions:
Hoek’s prescription of Supply Chain Strategy is based on a comparison of demand and supply conditions in the market. Comparing conditions that feature short and long lead times, which are typical supply characteristics, with the variations between predictable and unpredictable markets, which are demand-based, the supply chain strategy to be chosen when there is a long lead time in predictable market conditions would be Lean strategies, where businesses would be able to plan and execute since the market doesn’t change fast. Agile strategy has to be used in unpredictable market conditions, where the lead time is short – you need to respond to changing market conditions and execute rather than plan for the long run. Just-in-time inventory strategy would be best practised when the markets are predictable and when the lead time is short – businesses would not have to react in a hurry in stable market conditions and they could procure just in time since the lead time is short anyway.
4.3. Organisational Strategy Vs Supply Chain Strategy:
As has been discussed by Fabbe-Costes and Colin (2007: 41), supply chain strategy has to be in line with the organisational strategy, since the very idea behind supply chain management is to help attain organisational goals. Organisations choose their strategies based on numerous factors that would be in the domain of strategic planning, which could be cost leadership, differentiation, innovation or diversification, for instance. If the organisational strategy is cost leadership, the supply chain strategy would be to reduce logistics costs, pursuing an overall low cost strategy with efficiencies in systems and low levels of inventory, for example. When the organisational strategy is one of differentiation, logistics and supply chain management would have to focus on high quality service delivery, where cost minimisation would not be one of the chief considerations. When innovation is the organisational strategy, logistics has to incorporate cutting edge technology, as in the case of the first Future Logistics Living Lab of Australia, collaboration between SAP and NICATA of Australia (Logistics Magazine, 2012).
5. Conclusion:
Supply Chain Management is an evolving field despite years of its having been explored and practised. While the scope for supply chain management to make an impact on business operations is enormous, there are obvious shortfalls and pitfalls when it comes to the practical applications of its theories and practices, as could be seen through the brief comparative study done between the scenarios in South Africa and Australia. The scope for improvement in the practice has also been explored through exploration of the trade-offs in the outbound distribution model. Finally, the discussion has given a glimpse of how the theories and concepts could be applied in practice, in response to different conditions of the market, the product and the supply side factors.
For successful implementation of the principles, however, it is necessary to evaluate the effectiveness of supply chain management and its effects on organisational bottom line. Camerinelli (2009: 98)suggests the application of the performance metric chart, which incorporates four quadrants where the performance of supply chain management against key performance indicators could be monitored, along with identification of root causes for the differential between objectives and results, a discussion of the action plans that would fix the problems and finally, the impact of supply chain management and its revised measures on the business are measured and analysed. It takes a comprehensive analysis of all the factors using the performance metric chart or other similar tools to derive the best benefits to business out of successful implementation of supply chain management.
6. References:
Beesley, A (2007), ‘Time Compression in the Supply Chain’, Global Logistics: New Directions in Supply Chain Management
Braue, D (2011), ‘Supply Chain Management in Australia’, CIO, viewed on 20 May 2012
<http://www.cio.com.au/article/401242/supply_chain_management_australia_-_part_1/>
Camerinelli E (2009), Measuring the Value of the Supply Chain: Linking Financial Performance and Supply Chain Decisions
Harland, C.M. et al (1999), ‘Developing the concept of supply strategy’, International Journal of Operations and Production Management, Vol. 14, No. 6
Hoek. Van R (2007), ‘Agile Supply Chain Operating Environments – Avoiding the Pitfalls’, Global Logistics: New Directions in Supply Chain Management, 57
Logistics Magazine (2012), ‘Driving Logistics Innovation in Australia: The Living Lab’, viewed on 20 May 2012, <http://www.logisticsmagazine.com.au/features/driving-logistics-innovation-in-australia–the-liv>
Logistics Magazine (2011), ‘Lean Manufacturing: What it means for the shop floor’, viewed on 20 May 2012, <http://www.logisticsmagazine.com.au/features/lean-manufacturing-what-it-means-for-the-shop-floo>
Nathalie Fabbe-Costes and Jacques Colin (2007), Global Logistics: New Directions in Supply Chain Management, 34
Naude M J and Weiss, Badenhorst, Supply Chain Management problems at South African automotive component manufacturers, South African Business Review, Volume 15, No. 1, 2011, viewed on 20 May 2012
<http://www.unisa.ac.za/contents/faculties/service_dept/docs/SABVIEW_15_1_chap%204.pdf>
South Africa Info, viewed on 20 May 2012,
<http://www.southafrica.info/business/trends/empowerment/council-050411.htm>
South Africa BBBEEE Report, viewed on 20 May 2012, <http://www.southafrica.info/business/trends/empowerment/bbbee-170908.htm>
Volvo Logistics, viewed on 20 May 2012, <http://www.volvologistics.com/logistics/global/en-gb/Pages/home%20page.aspx
LE59
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