Sample Essay On Supply Chain Management

Management

Supply chain refers to a network of a variety of entities, indirectly or directly interdependent and interlinked in serving the customers. Supply chains comprise of different vendors tasked with supplying raw materials, the producers whose role is converting the raw materials into the products, the warehouses, which facilitate the storing of the products, the centers of distribution, which deliver the products to the retailers, and the retailers whose role is bringing the products to different ultimate users. Supply chain encompasses the movement of the raw materials and their flow from the sources to the customers (Geunes and Pardalos 15). It includes the purchasing, the process of manufacturing, the storage facilities in the warehouses, the means of transportation, the customer services, planning of the demand, the planning of the supply, and the management of the supply chain. Most supply chains encompass three elemental functions, which include the supply of raw materials to the manufacturers, the process of manufacturing, and the distribution of the finished goods through a distinct network of the distributors and the retailers to the customers.

Supply Chain of Abdullah Albaloushi Group Limited

The supply chain of the ABG Limited encompasses the accounting of the suppliers, the manufacturing plants, the Distributors, the wholesale warehouses, and the retail stores. First, ABG Limited has experience in the construction industry of the petrochemical complexes, the cement factories, water and power projects, and gas plants in various countries. The upstream will encompass and define where the procurement or the sourcing of materials from the external suppliers takes place. The upstream will also encompass distinct upstream activities. With the assembly plants as the focus of ABG Limited’s supply chain, the primal upstream activity will encompass the suppliers of the raw materials, such as metals, including copper and aluminum. The activities of the upstream can also encompass the mining of the raw materials by the suppliers to fulfill the orders (Christopher 18). The focus of upstream activity would most likely involve the mining or excavation of the requested as efficiently and quickly as possible. Another essential upstream activity is the transportation of the raw materials to the assembly plant. The processes in the upstream focus on the company and supplier interface in the management of the sources of supply. That is; it encompasses the sourcing itself, the negotiation with the suppliers, and the collaboration with the supply and design.
On the other hand, the downstream involves the distribution, usually by the external distributors, and the sales the customers take place. The downstream activity from the plant of assembly encompasses the distributors, the shipping partners, and the stops of point-of-sale along the chain, including the retailers and the wholesalers. Inventory management is one elemental downstream activity. The distributors, the wholesalers, and the retailers make efforts to carry inventories in the quantities required to fulfill the orders of the customers without instances of overstocking. When the operations run efficiently and smoothly, the distributors transport or deliver the orders in time. When the orders cannot be filled in time, stock-out exists and the activities stagnate. Customer services in the retail stores are another example of the downstream activity as well when the products eventually reach the consumers. Downstream deals with warehousing and logistics, the transportation and distribution, the sales, and marketing.

Purchasing

The ABG Limited undertakes purchasing as an elemental stage in the supply chain. Purchasing involves the acquisition of the raw materials from the suppliers. Nevertheless, before the purchasing, ABG Limited goes through a distinct process as well as steps for the actual acquisition of the raw materials from its suppliers. First, the company identifies the opportunities, which are often triggered by its business requirement for the product to satisfy the demand for its products and gain financial benefits from the sales (Christopher 23). The material requirements that the company considers include the equipment, the components, and the raw materials. Second, the Company conducts an analysis of the situation, which includes the requisitions of the purchase. These requisitions include the description of the raw materials, the quantity required, the estimated unit costs, and the operating accounts to be charged.
Supplier evaluation is also important during the purchase. The Company conducts an in-depth evaluation of the purchases. This stage starts with listing potential suppliers while maintaining the current suppliers with good records. The criteria of the supplier assessment begin with the facilities and equipment. Under this segment, the company analyzes whether the facilities and the equipment are up-to-date or whether they have the capacity of expanding in the future. The systems of planning and control of the suppliers are also elemental before the actual purchase. These systems include those that are involved in releasing, scheduling, and controlling the flow of work. As such, the complexity of these systems can have immense effects on the performance of the supply chain. For this reason, ABG Limited management determines whether the suppliers have well-developed systems or programs for planning personnel, capacity needs, and material. The compliance to the environmental regulations by the suppliers is another important aspect (Christopher 29). The ABG Limited evaluates the ability of the suppliers to comply with the regulations of the environment because it is an essential criterion for the company’s alliances in the supply chain. The materials purchased by ABG Limited vary, including, blocks, cement, pavers, bricks, adhesives, tiles, metal, glass, stone, concrete, and floors.

Warehousing

Warehousing involves the storage process and facilities of the acquired raw materials at the plant. The storage facilities are important because they preserve the materials, which are then manufactured into fine products that await distribution to various regions. Some of the storage facilities include the gas tanks, water tanks, containers, and trailers. These storage facilities are essential because they keep the form and maintain the utility of the raw materials. Warehousing in the company covers both the raw materials and the fine products (Geunes and Pardalos 19). That is, when the materials are purchased from the suppliers, they are stored in different storage facilities as they wait for the manufacturing process. In addition, after the manufacturing, the finished products are then stored in another place or storage facility waiting for distribution. For this reason, the ABG Limited management ensures proper management of the storage facilities.

Production and Manufacturing

The process of production at the ABG Limited encompasses the conversion of the inputs into the outputs through a variety of chain operations. On the other hand, the manufacturing process encompasses the operations for which the consumption of resources, including financial and human resources, is necessary. Production at the company encompasses the materials being produced outside or within the industry (Christopher 30). These materials include the building materials such as pillars, water projects, floors and tiles among others. Manufacturing involves the actual conversion of the raw materials into the finished products, and it occurs within the company. Manufacturing is more elemental than production at the company (Geunes and Pardalos 22). Nevertheless, each of these stages is important in the supply chain of the company.
The production encompasses such elements as the resources required in producing the products. The management of ABG Limited evaluates the costs and the financial and human resources required for the successful operations of the process. Similarly, the management evaluates the manufacturing process to determine the type of equipment and machines required, the timeline and the repair mechanisms of the machines, the risks involved in handling the machines by the employees, and the approaches to mitigation or prevention of the same.

Distribution

Distribution plays an essential role in the supply chain of the company. The ABG Limited has a variety of distribution centers as well as the distributors who facilitate the movement of the products to the wholesalers. The Company management plays a role in the distribution of the products to the wholesalers. Distribution encompasses different channels of distribution and transportation elements. The ABG Limited management has a distinct channel of distribution, which includes the identification of the various distributors and distributor centers. This identification is important because it enables the company to understand the specific modes of transportation as well as the means of transportation. Negotiations are a part of the distribution process where the company negotiates for the prices. The distributors play an elemental role in the supply chain because they bring the products closer to the consumers (Christopher 41). As such, the ABG Limited management conducts an evaluation of the control and planning systems of the potential distributors to determine the effectiveness and suitability of their storage systems.

Weakness of the Supply Chain

The ABG Limited strives to maintain an effective and continual supply to satisfy the needs of the customers and realize the economic and financial benefits of the establishment of the organization. Nevertheless, sometimes, breakdown in the systems affect the entire supply chain to stall the capacity of delivering the products to the consumers and realizing financial benefits. For instance, weaknesses may arise when the suppliers fail to provide the required amount of supplies, when the machines break down and they need maintenance, which slows down the process of manufacturing, or when the inventories in the warehouses cannot be located. Outsourcing of one of the stages of the supply chain, such as the sales, materials, and production, the business can be disrupted (Geunes and Pardalos 29).

Improvement and Benchmarking

Improving the supply chain of the ABG Limited can involve differentiating the corporate strategies and supply chain. The supply chain has to assist in the delivery of the key elements of the strategy of the company. As such, bringing together a variety of leaders in different departments of the company can assist in improving the supply chain through differentiated ideas. Another way of improving the supply chain could be though the establishment of an end-to-end organization of supply chains, which promotes the leadership and responsibility of performance evaluation for delivering the projects of improvement (Geunes and Pardalos 38). McCarthy Building Companies Inc. is one of the successful and well-established construction companies. The Company has 150 years of building and construction industry having been established in 1864. On the other hand, the ABG Limited has only 21 years experience. As such, the McCarthy Building Companies Inc. has strong and well-established systems of operation and supply chains because of the years in the industry. The key differentiator of McCarthy Building Companies Inc. is that the supply chain of the company majorly encompasses the company’s own resources, both financial and human. That is, the company itself handles all the aspects of the projects, including the preconstruction, the services of self-perform, the management of the project, the risk management, and the legal and safety services. As such, the company distributes its own products to its own wholesale points, which are then distributed to other retail points owned by the company to the final consumers. This aspect makes it better than ABG Limited, which relies on other distributors, wholesalers, and retailers.

Works Cited

Christopher, M. "Logistics and Supply Chain Management." (2009): Print.
Geunes, Joseph, and P M. Pardalos. Supply Chain Optimization. New York: Springer, 2005. Print.