We always concern that the changes in the demand will change the quantity produced as well as the costs of manufacturing or purchasing. We afraid that we are producing too less or too much and it obviously alter the decision that we made by our assumptions. We concern that our decision might not be the right decision after all. The last section is the economic factors. What are the costs in producing in-house and producing in a co-packer?
This type of organizational change can cause companies to downsize and/or lay-off employees to cut costs (Lussier & Achua, 2015) which causes leadership and employees tremendous stress. Additionally, stressful organizational situations have a large negative impact particularly in situations that involve punishment and lack of rewards (Selart, & Johansen, 2011). Stress can cause decision makers to cut corners, become more prone to incidents, abuse, and deception (Selart, & Johansen, 2011). Several studies have connected stress to memory loss due to an increase in cortisol production. Moreover, employees can often respond to stress in a negative manner, and stress is known to lead to unethical decision making (Selart, & Johansen, 2011).
In that current situation, economic slowdown and huge inventory write-offs resulting from this lack of visibility have highlighted the need for a systematic way to predict and manage demand. Today the new technologies have introduced to the supply chain and it is help to extend supply chain visibility. Companies are looking outside sources within the enterprise, such as sales and promotions groups, to include customers in the demand management
The network is connected when customers order a product from retailers, the retailers then order from distributors, and distributors order from manufacturers, and manufacturers get raw materials from suppliers. In addition, a supply chain involves the constant flow of information, products, and funds between various stages (Chopra, Sunil & Peter Meindl 2004). SCM is about fulfilling a customer’s request of a product by sending it to the correct location, at the correct time, at a best price, as well as in the best condition. Overall, the supply chain starts when a customer place an order and ends when the customer has made his or her
The main causes which result in a bullwhip effect include demand forecast, order consignments, price fluctuation and last but not least the rationing and shortage gaming. It is not just an issue of over costing but also could lead to an overreaction by dealing with the upstream/downstream of the market. Time has a great importance as far as the bullwhip effect is being considered. The more time needed to make an order the less effective will be the forecast for demands. There are some theories which actually help to minimize the bullwhip effect.
If Target has effective risk management system to track external risk like changes in customer needs or wants, the retailer will be ready if another competitor tries to enter the marker to meet those needs. Another external risk is a lost of a supply chain which is result in late or missed deliveries of inventory. A manufacturer of a product may discontinue making a popular item or cease business operations all together. Target can monitor external market conditions of its manufacturers however they cannot control their cash flows or business operations. Target should analyze and identify the potential consequences to potential risk situations (Popescu, Gherghinescu, & Ionete,
IKEA’S SUPPLY CHAIN The analysis of the Ikea Group starts from the structure of its supply chain, which is the network between a company and its suppliers linked by continuous commercial relations, to produce and distribute a specific product. It represents the steps that the company takes to get the product or service to the customer. Supply chain management is a crucial process, because an optimized supply chain results in lower costs and a faster production cycle in fact, it identifies the sequence of operations carried out in succession, in order to transform the raw materials into a finished product. The different companies that carry out one or more of the supply chain activities can be incorporated in the vertical direction, for the
This gap will result when the service provider is unable to meet the customers’ wants and needs with the specific target standard level of service quality. The gap between the service delivery and the service quality specification is the next gap. This may occur when there is a poor training of the workers, lack of teamwork, and the unwillingness of the workers to meet the standard performance that has set by the management. Another gap is the gap between external communication and the service delivery. Normally, media advertisement will influence the customers’ expectation and they will usually rely on the external communication in order to set their expectation.
Some of the various forms of abuse are: price fixing, imposing discriminatory price, predatory pricing, limiting supply of goods or services, denial of market access, etc. It is a way of interfering with competition in the market place. Abuse of dominance occurs when a firm in a dominant position engages in practices that are aimed at stifling the level of competition
Supply chain management system (SCMS) One of the enterprise application that span across the organization is Supply chain management system ( SCMS). Supply chain management system (SCMS) is a streamline of supply activities to gain a competitive advantages and to maximize the customers value on the marketplace. Moreover, it controls the goods, information, and finances as they process among supplier to manufacturer to wholesaler to retailer to consumer. It is about integrating and coordinating all these flows within companies. The goal of any effective supply chain management system is to reduce inventory, with the assumption that products are available when needed.