Operations and Supply Chain Strategies

Internal Assignment Applicable for December 2023 Examination

1.How can the full set of logistical and cross-functional drivers be used to create strategic fit for a
PC manufacturer targeting both time-sensitive and price-conscious customers? (10 Marks)

Answer: Today, companies design products in one part of the world, source raw materials in another
part, manufacture or assemble finished products in another part, and sell to customers in completely
different geographies. And if you think companies can relax once such a network is designed, you
might want to think again. Indeed, this structure must continually evolve as operating conditions
evolve. This complex maze of facilities not only creates a serious management challenge, but it also
exposes companies to financial, political and natural risks that are entirely irrelevant to domestic
supply chains.

A company's supply chain must achieve a balance between responsiveness and efficiency that best
supports the company's competitive strategy. The performance of a supply chain in terms of
responsiveness and efficiency is based on the interaction between the following logistics and cross-
functional drivers of the supply chain Performance Facilities, Inventory, Transportation, Information,
Sourcing and Pricing.

It exist only as long as there is a network, meaning the interconnection of multiple elements to
provide the ability to operate profitably at scale. In contrast, one cannot really talk about a supply
chain for subsistence farming – although goods are certainly handled. Therefore, supply chains
contain real complexity, and SCM is an attempt to control and organize such complexity in the most
profitable way.

Concept & Introduction

For a PC manufacturer to target both types of customers, it is necessary to expand manufacturing to

reduce distances for time-sensitive customers, at the same time, transportation can be increased for
faster delivery. Additionally, those manufacturers can invest in new innovations with lower prices
that are suitable for price-conscious customers. However, implementing all those suggestions would
be costly for the company. Creating a strategic fit for a PC manufacturer targeting both time-sensitive
and value-conscious customers requires a well-coordinated approach that takes advantage of
logistics and cross-functional drivers. These drivers can help optimize the supply chain and overall
business operations. Here's how you can use them to achieve this strategic fit:

1. Logistics Driver:

a. inventory management: Maintain a balance between just-in-time (JIT) inventory for time-sensitive
customers and bulk inventory for cost-conscious customers. Implement sophisticated inventory
management systems to optimize stock levels.

b. Warehousing and Distribution: Utilize strategically located warehouses and distribution centers
to ensure on-time delivery for time-sensitive customers while minimizing transportation costs for
price-conscious customers.

c. transportation: Diversify transportation options to meet the needs of both customer segments.
Use faster, more expensive shipping methods for time-sensitive customers and cost-efficient
methods for value-conscious customers.
d. Information Technology: Implement advanced tracking and monitoring systems to provide real-
time visibility into inventory and shipments. This helps in making informed decisions for both
customer segments.

e. Order Processing: Streamline order processing to ensure quick response to time-sensitive

customers. For price-conscious customers, allow batch orders and longer lead times to reduce costs.

2. Cross-Functional Drivers:

a. product design: Design product lines that cater to both customer segments. High-performance,
premium PCs for time-sensitive customers and budget-friendly, standard PCs for value-conscious
customers.

b. marketing and sales: Create targeted marketing campaigns and sales channels. Emphasize quick
delivery, support and performance for time-sensitive customers and focus on competitive pricing and
value for value-conscious customers.

c. information sharing: Promote collaboration and data sharing across departments to ensure a
holistic view of customer demands. This enables accurate demand forecasting and inventory
management.

d. pricing strategy: Employ dynamic pricing strategies that can adjust based on market conditions,
inventory levels and customer segments. Offer discounts on bulk purchases for price-conscious
customers.

e. Supplier Relationship: Develop strong relationships with suppliers to secure favorable terms and
prices, which can help manage costs for value-conscious customer offerings.

f. quality management: Ensure quality control processes are in place to meet the performance
expectations of time-sensitive customers while keeping production costs in mind for value-conscious
customers.

2. Synchronization:

• The key to achieving strategic fit is synchronization. Ensure that all logistics and cross-functional
drivers work together to meet the needs of both customer segments without conflict.

3. Continuous Improvement:

• Regularly analyze and adjust logistics and cross-functional drivers to adapt to changing market
conditions, customer preferences and technological advances.

1. Customer Segmentation:

• Constantly monitor and segment your customer base to understand their growing needs. Tailor
your strategies for each segment accordingly.

2. Feedback Loops:

• Implement feedback mechanisms to collect customer feedback and align your strategies based on
their input.

Conclusion
In short, A whole host of logistics and cross-functional drivers to create a strategic fit for a PC
manufacturer targeting time-sensitive and value-conscious customers using a variety of strategies
related to transportation, inventory, pricing, information, etc. set is used. The inventory should
remain close to the customer to save both time and money, the facility should also have good
distribution network, information should be updated regularly or periodically, transportation should
also cater to the target customer. More fees should be charged to provide additional value to the
time-sensitive customer.

2. “SCOR model links business processes, performance metrics, skills and practices into a unified
structure” Comment. (10 Marks)

Answer: Introduction

The SCOR (Supply Chain Operations Reference) model is a framework used for supply chain
management and improvement. This includes delivery and order fulfillment performance,
production flexibility, warranty and returns processing costs, inventory and asset turnover and other
factors in evaluating the overall effective performance of the supply chain. The first SCOR model was
released by the Supply Chain Council in 1996. Composed of different companies, the association
seeks to optimize the value chain. Today, due to several adjustments, the SCORE model has become
an industry-independent framework for corporate and supply chain decisions. In 2017, APICS
(Association for Operations Management) published the 12th and current edition of the SCOR
model. Metadata, block chain and omnichannel are also now integrated as evaluation processes.

Concept & Application

The Supply Chain Operations Reference (SCOR) model is a comprehensive framework that integrates
various aspects of supply chain management. It involves five main areas, which are planning,
sourcing, manufacturing, distribution and returns. These areas provide a structured approach to
managing and optimizing supply chain processes. Let's explore each of these areas and describe
them using an example from the organic beauty industry.

1. Planning:

Description: Planning involves developing a strategy for the entire supply chain. It involves
forecasting demand, setting objectives, and creating a framework for decision making.

Example: In the organic beauty industry, a company can plan its supply chain by forecasting demand
for specific organic skin care products based on market trends and customer preferences.

2. Source:

Description: Sourcing focuses on purchasing the materials, components, and services needed to
produce products. This includes selecting suppliers, negotiating contracts, and managing supplier
relationships.
Example: A company in the organic beauty industry sources organic ingredients from certified
suppliers for its skin care products. These suppliers must adhere to strict quality and sustainability
standards.

3. Make:
Description: The “Make” stage is about efficiently creating and producing products. This includes
management of production facilities, quality control and process optimization.

Example: In organic beauty, the "make" step involves producing skin care items using eco-friendly
processes, ensuring the products are free of harmful chemicals.

4.Distribute:

Description: Delivery involves the delivery of products to customers. This includes managing
warehouses, transportation, order fulfillment and ensuring timely delivery.

Example: For the organic beauty industry, delivering products to environmentally conscious
consumers may require using sustainable packaging and efficient logistics to reduce environmental
impact.

5.Withdrawal:

Description: The "Return" step handles product return, recycling, or disposal. It focuses on managing
reverse logistics, handling defective items and maintaining consistency.
Example: In the organic beauty sector, companies may have a return process for eco-friendly
packaging, encouraging customers to recycle or return used containers for responsible disposal.

Example: An organic beauty company specializing in skin care products. In the "planning" stage, the
company strategies its supply chain to meet the growing demand for organic skin care. In the
"sourcing" stage, it carefully selects suppliers of organic materials, ensuring that they meet
sustainability criteria. The "make" phase involves manufacturing these ingredients into skin care
products using eco-friendly processes. In the "Deliver" phase, the company distributes its products
through sustainable packaging and efficient logistics. Finally, in the "return" stage, it encourages
customers to return used packaging for recycling or proper disposal.
This example demonstrates how the five core areas of the SCORE model can be applied to the
organic beauty industry, emphasizing sustainability, quality, and efficiency throughout the supply
chain.

Explanation:

In the response provided, the five main areas of the Supply Chain Operations Reference (SCOR)
model – planning, sourcing, manufacturing, distribution and returns – are explained in detail,
highlighting their relevance to the organic beauty industry. The example of an organic skincare
company is used to illustrate how each step of the SCORE model can be implemented with an
emphasis on sustainability and quality. This approach ensures that supply chain processes align with
strategic objectives, meet customer demand and minimize environmental impact. The structured
framework of the SCOR model allows businesses to comprehensively address various aspects of
supply chain management, which ultimately contributes to efficiency and customer satisfaction.

SCOPE OF SCOR MODEL:

The SCOR model does not attempt to explain every business process or activity. As with all business
models, there is a specific scope that the SCORE model addresses, which includes the following
sections:

Customer Engagement: The entire process of customer relationship from order entry through paid
invoice.

Product transactions: All products from a supplier's supplier to a customer's customer, including
equipment, supplies, bulk products, etc.

Market engagement: from understanding demand to fulfillment of each order.

The focus of SCOR can also be defined and measured at 3 levels of process detail.

Level 1: Defining the scope – geography, segments and context

Level 2: Configuration of the supply chain

Level 3: Process Element Description – Identifies the key business activities within the chain.

Philips Lighting, a leading supplier of light bulbs worldwide, has been using the SCOR model since
1999. He recently told the Supply Chain Council that over the past few years, incorporating the SCOR
model into their business structure has directly led to improved customer service and reduced
inventory. The SCORE model is a tried-and-true process for the manufacturing and distribution
industries that has seen success for decades. When implemented correctly, it can streamline
processes and refine your organization's supply chain.
Ultimately, the SCOR model provides an overall framework for managing and optimizing supply
chain operations. Its five core areas ensure that businesses, including those in the organic beauty
industry, can align their processes, performance metrics, practices and people skills to achieve
supply chain excellence while considering sustainability and customer satisfaction

3. Yomato is an Indian multinational restaurant aggregator and food delivery company. Company
reported first-ever profitable quarter brought a whole lot of cheer among management. Company
is also planning to expand its business to other countries as well.

a. Explain various competitive dimensions in detail that company needs to rework to get
sustainable profitability. (5 Marks)

Answer: Introduction

Companies must be competitive to sell their goods and services in the market. Competitiveness is a
key factor in determining whether a company succeeds, has a hard time, or fails. Business
organizations compete through some combination of their marketing and operations functions.
Marketing affects competitiveness in many ways, including identifying consumer wants and needs,
pricing, and advertising and promotion.

Concept & Application

To achieve sustainable profitability, Yomato needs to assess and rework various competitive
dimensions. These dimensions cover various aspects of a Yomato business that can affect its ability
to compete effectively in the marketplace.

Here are some key competitive dimensions that a company should consider and rework as
necessary:

1. Identifying consumer wants and/or needs is a fundamental input into an organization's decision-
making process, and is central to competitiveness. The ideal is to achieve a perfect match between
those wants and needs and the o Yomato 's goods and/or services.

2. Price and quality are major factors in consumer purchasing decisions. It is important for Yomato to
understand the trade-off decisions consumers make between price and quality.

3. Advertising and promotion are ways in which Yomato can inform potential customers about the
features of their products or services and attract buyers

Operations has a major influence on competitiveness through product and service design, cost,
location, quality, response time, flexibility, inventory and supply chain management, and service.
Many of these are interrelated.

1. Product and service design should reflect joint efforts of many areas of the firm to achieve a match
between financial resources, operations capabilities, supply chain capabilities, and consumer wants
and needs. Special characteristics or features of a product or service can be a key factor in consumer
buying decisions. Other key factors include innovation and the time-to-market for new products and
services.

2. Cost of an Yomato’s output is a key variable that affects pricing decisions and profits. Cost-
reduction efforts are generally ongoing in business organizations. Productivity is an important
determinant of cost. Yomato is with higher productivity rates than their competitors have a
competitive cost advantage. Yomato may outsource a portion of its operation to achieve lower costs,
higher productivity, or better quality.

3. Location can be important in terms of cost and convenience for customers. Location near inputs
can result in lower input costs. Location near markets can result in lower transportation costs and
quicker delivery times. Convenient location is particularly important in the retail sector.

4. Quality refers to materials, workmanship, design, and service. Consumers judge quality in terms of
how well they think a product or service will satisfy its intended purpose. Customers are generally
willing to pay more for a product or service if they perceive the product or service has a higher
quality than that of a competitor.

5. Quick response can be a competitive advantage. One way is quickly bringing new or improved
products or services to the market. Another is being able to quickly deliver existing products and
services to a customer after they are ordered, and still another is quickly handling customer
complaints.

6. Flexibility is the ability to respond to changes. Changes might relate to alterations in design
features of a product or service, or to the volume demanded by customers, or the mix of products or
services offered by an organization. High flexibility can be a competitive advantage in a changeable
environment.
7. Inventory management can be a competitive advantage by effectively matching supplies of goods
with demand.

8. Supply chain management involves coordinating internal and external operations (buyers and
suppliers) to achieve timely and cost-effective delivery of goods throughout the system.

9. Service might involve after-sale activities customers perceive as value-added, such as delivery,
setup, warranty work, and technical support. Or it might involve extra attention while work is in
progress, such as courtesy, keeping the customer informed, and attention to details. Service quality
can be a key differentiator; and it is one that is often sustainable. Moreover, Yomato rated highly by
their customers for service quality tend to be more profitable, and grow faster, than businesses that
are not rated highly.

Conclusion

Sustainable profitability results from an ongoing process of assessment and adaptation across these
competitive dimensions. Yomato 's situation is unique, so the specific strategies for reworking these
dimensions will vary based on industry, market conditions, and the Yomato's strengths and
weaknesses.

b. You are appointed as consultant for the Yomato. Suggest some corporate level strategies that
ultimately helps them. (5 Marks)

Answer : Introduction

It seems as if you are referring to a company called "Yomato", but I am not aware of any well-known
company with this name. It is possible that it is a fictitious or little-known organization. To provide
specific corporate-level strategies, I will need more information about the company's industry,
current challenges, goals, and resources.

Concept & Application

However, I can provide you with some general corporate-level strategies that can be adapted to
different situations:

1. Market Expansion: If Yomato operates in a relatively small or saturated market, they may consider
expanding into new geographic areas or target markets. This may include international expansion or
entry into new areas within their industry.

2. Diversification: Diversifying into related or unrelated industries can help spread the risk. Yomato
may consider acquiring or investing in businesses that complement their existing operations, thereby
reducing their dependence on a single market.
3. Product Innovation: Constantly improving and innovating its products or services can give Yomato
a competitive edge. They may invest in research and development to create new offerings or
enhance existing ones.

4. Cost leadership: Focusing on cost efficiency can be a competitive advantage. Yomato can work on
reducing production costs, optimizing supply chains, and negotiating better deals with suppliers.

5. Differentiation: Creating a unique brand or product that stands out in the marketplace can allow
Yomato to charge premium prices. This will require investment in branding, marketing and product
design.

6. Digital transformation: Adoption of technology can streamline operations and enhance customer
experiences. Yomato can invest in digital platforms, data analytics and automation to become more
agile and customer-centric.

7. Sustainability and corporate responsibility: In an increasingly environmentally conscious world,

Yomato can focus on sustainability efforts. This may include reducing their carbon footprint, sourcing
sustainable materials and supporting social causes.

8. Mergers and Acquisitions: Strategic mergers and acquisitions can help Yomato grow faster or
acquire key resources. This should be done with careful evaluation of potential targets.

9. Global alliances and partnerships: Collaboration with other companies, through partnerships or
alliances, can provide Yomato access to new markets, technologies and expertise.

10. Customer-centric approach: Prioritizing customer needs and feedback can improve product and
brand loyalty. Yomato could invest in collecting customer insights and enhancing customer service.

11. Talent development: Attracting and retaining top talent can be a source of competitive
advantage. Yomato can invest in training and development programs for its employees.

12. Risk Management: Implement strong risk management strategies to anticipate and mitigate
potential threats to the business, whether they are economic, regulatory or technological.

Conclusion

To provide more specific recommendations, I would need more information about Yomato's industry,
size, competitive landscape, and current challenges. Additionally, it is necessary for any company to
conduct thorough internal and external analysis to determine which strategies are best suited for
their specific situation.