Supply Chain Product Plan Comprehensive Essay Paper Example
The MRP plan highlights the materials and components required to manufacture tissue paper. The MRP plan entails:
- Taking inventory of manufacturing materials and components on hand
- Identifying which materials and components are needed
- Scheduling production or purchase
The materials needed to manufacture tissue paper at startup include:
- Tree pulp
- Chemicals for extracting fiber
- Bleach, particularly choline diozide
To produce one ton of tissue paper, the company will require at least 17 trees, 20,000 gallons of water, and 200 individual chemicals, including epichlorohydrin, melamine, urea-formaldehyde, and polyamines.(Supply Chain Product Plan Comprehensive Essay Paper Example)
Logistic planning will help time and position inventory. It combines order management, inventory, transportation, warehousing, material handling, and packaging. Raw materials ordering, storage, and production constitute physical supply. Warehousing and markets constitute physical distribution.(Supply Chain Product Plan Comprehensive Essay Paper Example)
The logistic plan includes:
- Defining logistics goals and objectives
- Performing a needs analysis
- Defining methods of delivery
- Selecting suppliers for different delivery methods
- Defining frequency of transport
- Identifying warehousing requirements and needs
- Selecting supporting technology
- Conducting a feasibility study
The location plan considers nearness to raw materials as well as the markets. The manufacturing plant will be located in a non-residential area because of the noise of machines used in making tissue paper. The business location will be an industrial cluster with adequate and efficient power and water supply.(Supply Chain Product Plan Comprehensive Essay Paper Example)
Distribution planning will help ensure the delivery of tissue paper products to different distribution centers is appropriately done, detailing the quantity supplied, at what location, and the desired time. The business will use four distribution channels: sell directly to the customers, sell through intermediaries, use dual distribution, and adopt reverse logistic channels. The distribution channel will primarily utilize hypermarkets and supermarkets, specialty stores, online retail stores, and other retailers like small businesses.(Supply Chain Product Plan Comprehensive Essay Paper Example)
The distribution plan entails:
- End-user evaluation
- Identifying potential marketing intermediaries
- Researching potential marketing intermediaries
- Narrowing on the profitable distributi(Supply Chain Product Plan Comprehensive Essay Paper Example)on channels
- Managing the distribution channels
The Importance of having a Robust Standard Material Requirement Planning (MRP) Program
A robust standard MRP program helps ensure the right inventory is available when needed in the production process and at the lowest possible cost. A robust standard MRP enhances efficiency, flexibility, and profitability for all production operations. It makes employees more productive, enhances product quality, and minimizes material and labor costs (Essex, 2017). Such an MRP also assists manufacturers to respond promptly to increased demand for the products and prevent production delays and inventory stock-outs that can lead to lost customers, hence contributing to revenue growth and stability. Generally, a robust standard MRP helps: reduce customer lead times and improve customer satisfaction, reduce inventory costs, optimize inventory management, improve manufacturing efficiency, enhance labor productivity, and ensure competitive product pricing.(Supply Chain Product Plan Comprehensive Essay Paper Example)
Forecast of Demand
Forecast of demand refers to the process of utilizing predictive analysis of historical data to predict and estimate consumer future demand for the product. It helps the business develop better-informed supply decisions that predict the total sales and revenue for a period in the future. For instance, the tissue business refers to the last 12 months of actual sales and, based on the expected growth, predicts the short-term demand for the following 12 months for acquisition, production, and inventory planning.(Supply Chain Product Plan Comprehensive Essay Paper Example)
A firm order refers to orders that cannot be amended, revoked, or canceled. It is also called a confirmed order. When an order is firmed, the manufacturer is responsible for the item and can manually control the item replenishments. The release of a firmed order prompts the planning process to treat it as a firm scheduled receipt.(Supply Chain Product Plan Comprehensive Essay Paper Example)
Engineering Design Changes
Engineering design changes include modifications to the product that usually occurs when the product is in the production stage. Engineering design changes follow a similar engineering design process that includes: identifying a need, researching the problem, developing possible solutions, selecting the most promising solution, constructing a prototype, testing and evaluating the prototype, communicating the design, and redesigning. For instance, an engineering design change in tissue paper wrapping design to enhance the surprise and elegance feature desirable by many customers.(Supply Chain Product Plan Comprehensive Essay Paper Example)
Location, Logistics, and Distribution Risks
Business location risks include power outages and short water supply. Other risks include regulations and tax rules in particular areas and security issues involving vandalism, theft, and robbery. The business location can also be far from the markets, and products take longer to reach the end-user. The logistic process is also full of risks. Every component of the logistic process, including transportation, warehousing, shipping, and inventory management, carry risks. There are management risks related to logistic functions and supply chain operations. Risks in distribution channels include property damage, legal penalties, product liability, theft, equipment breakdown, and incident tracking.(Supply Chain Product Plan Comprehensive Essay Paper Example)
A robust risks assessment program is required to identify potential risks before they occur and advise effective strategies to mitigate or minimize the impact. Before selecting an appropriate location, the business will have to conduct a detailed location analysis to recognize the risks and benefits. It should ensure the place faces minimal power outages or cuts and has an adequate water supply throughout the year. It should also check on security details and how effective they are in curbing any security concerns. Distribution risks can be addressed by evaluating and identifying current risks, conducting a business impact analysis for every risk, and developing a recovery plan and exercises. The business will diversify suppliers and distributors to minimize the risk of depending on one supplier or distributor. A risk identification system that assesses the value chain of all significant components of the logistic [process will help mitigate logistics risks.(Supply Chain Product Plan Comprehensive Essay Paper Example)
Quality management, Six Sigma, and Lean plan for Tissue Paper Manufacturing
Quality Management Plan
The quality management plan includes all the necessary information to manage product quality from planning to production to delivery effectively. It entails policies, procedures, criteria, and roles and responsibilities of the quality management team. Key components of the plan include:
- Product deliverables and production process
- Deliverable quality standards
- Customer satisfaction(Supply Chain Product Plan Comprehensive Essay Paper Example)
- Process quality standards
- Stakeholder expectations
- Quality assurance activities
The following steps will help manage the quality of the tissue paper:
Six Sigma Plan
Six Sigma includes methods and tools that help improve business processes and quality management. It helps enhance quality by identifying defects, determining the underlying causes, and improving processes (Hakimi et al., 2018). The business will apply the DMAIC methodology of the Six Sigma model to improve business processes. The DMAIC process aims to improve the current business processes incrementally. The methodology involves:
- Defining the customer needs, requirements, and business goals
- Measuring core aspects of existing business processes(Supply Chain Product Plan Comprehensive Essay Paper Example)
- Analyzing data from the measurements
- Using the analysis results to improve the processes and testing and verifying the improvements
- Controlling quality improvements and future implementations to eliminate the chances of mistakes or risk of reoccurrence
Lean Plan For Quality Improvement
The Lean model will help the business with continuous quality improvement efforts. It will enable the business to continuously increase customer value, eliminate waste, and optimize operations. It will also help the business establish a culture that respects all people, allowing them to pursue opportunities to improve skills and knowledge and share perspectives for continuous improvement. Generally, the Lean model will help improve work processes quality, reduce errors, reduce costs, improve process flow, simplify complex processes, reduce lead time, and improve morale.(Supply Chain Product Plan Comprehensive Essay Paper Example)
The company will implement the Lean model using five steps:
Step 1: Specifying the value: this step will involve defining the value from the customers’ perspective and expressing the value in the particular product to meet the consumer’s needs at a specific price and time.
Step 2: Mapping: mapping entails identifying the value stream, specifying actions required, including problem-solving, information management, and physical transformation tasks, and creating a map of the current and future state of the product’s value stream. The maps identify wastes in the current state.
Step 3: Flow: this step involves eliminating functional barriers and establishing a product-focused organization with significant improvement in lead time.(Supply Chain Product Plan Comprehensive Essay Paper Example)
Step 4: Pull: This step will allow the customers to pull the product as needed, scrapping the need for sales forecast.
Step 5: Perfection: this step will require the business to repeat the process to ensure it offers nearly what the customer needs and want.
Dimensions of quality
Dimensions of quality specific to tissue paper include performance, features, reliability, conformance, durability, serviceability, aesthetics, and perceived. Performance defines the expected functional attributes of the tissue paper, for instance, ease of breakage. Features include all attributes that make the product appealing to the customer, such as tissue paper wrapping design. Reliability of the tissue paper includes aspects such as perforation, puncture, and disintegration time. Conformance is about how the tissue paper conforms to the customers’ expectations and whether it functions and has all characteristics as specified. For instance, the customers will assess whether the tissue conforms to the softness described in the product description part. Durability does not apply to tissue paper typically, but it is about whether the tissue paper products can perform under the conditions specified in the product description. Serviceability does not include tissue paper as they are not products that need maintenance or repair. Aesthetics comprises products looks that contribute to the identity of the brand. For tissue paper, it is all about how the paper feels. Perceived quality includes customers’ opinions on the quality of the product. It is often the product’s attributes compared to other similar products of competitors. (Supply Chain Product Plan Comprehensive Essay Paper Example)
Concepts of Six Sigma
The Six Sigma model eliminates defects and enhances business processes to boost growth and profits. The model focuses on cycle-time improvements while minimizing manufacturing defects to at most 3.4 occurrences per million units or events. Core Six Sigma concepts include 1. Critical to quality: describing attributes most vital to the consumers, 2. Defect: defining failure to deliver what consumers want and need, 3. Process capability: describing what the business processes can deliver, and 4. Variation: detailing what consumers see and feel (Hakimi et al., 2018). These concepts can be applied to stabilize operations, ensuring consistent, predictable processes to enhance what the consumer sees and feels.(Supply Chain Product Plan Comprehensive Essay Paper Example)
The DMAIC Methodology
The DMAIC methodology involves five steps: define, measure, analyze, improve, and control (Hakimi et al., 2018). The company can utilize this methodology to improve processes. The process involves:
- Defining the problem, improvement activity, improvement opportunity, project goals, and customer requirements
- Measuring process performance, including capability analysis that assesses whether processes meet expectations and frequency of problems or causes analysis
- Analyzing the processes to identify root causes of defects and variation
- Improving process performance by addressing and removing the root causes
- Controlling the enhanced processes and future process performance
Value Stream Map
Value stream mapping is a lean tool that adopts a flowchart highlighting all steps in a process. The company can utilize the value stream map to identify waste, minimize process cycle times, and implement process improvement. It combines material processing steps with information flow and other critical data to maximize the available resources and efficiently utilize materials and time (Rohac & Januska, 2015). The value stream map will be critical in analyzing, designing, and managing material and information flow to successfully bring the product to a customer. The steps the company will adopt while utilizing the value stream map to improve the manufacturing process include:(Supply Chain Product Plan Comprehensive Essay Paper Example)
- Documenting the current process
- Identifying and listing every step in the process
- Recognizing customer value
- Defining the attributes of a perfect process
- Identifying the parts of the current process that are limiting perfection
- Identifying crucial initiatives to minimize or eliminate waste
- Assigning tasks and responsibilities
For instance, a value stream map can be used in supply chain and logistics to eliminate waste and costly delays at the different points on the supply chain. Such as value stream map identifies defects in inventory, shipments, production, and distribution. It highlights suppliers’ weekly orders, weekly production schedules, and customers’ monthly forecasts. The business can identify defects or performance issues from the map, leading to inventory stock out or unmet customer demand. The map can also help identify takt time and any bottlenecks or constraints in any component of the supply chain and decide whether to reduce inventory or increase distribution channels, improve flow, and improve the reliability of the equipment used in making tissue paper.
Global Sourcing and Procurement Plan
Global sourcing refers to a procurement plan or strategy that the company adopts to identify the most cost-effective location for tissue manufacturing, even if it will be in a foreign country or marginal area. The global sourcing planning will involve studying international markets across geopolitical boundaries for cheap raw materials and skilled labor from low-cost nations to minimize the production cost and enhance profits. The following steps constitute global sourcing and procurement plan:
- Build a team: the management will establish a cross-functional professional team from operations, finance, sourcing, and other stakeholders that will make decisions on commodities and skills being sources
- Conduct market research: this step involves researching international markets of suppliers and assessing the current conditions. The supplier market intelligence will help decide which suppliers can deliver commodities and skills under the stipulated conditions(Supply Chain Product Plan Comprehensive Essay Paper Example)
- Strategic development: the team will build a supplier evaluation scorecard that rates the suppliers based on management capability, financial health/strength and cost structure, technological capacity, manufacturing capacity, regulatory compliance, and quality.
- Competitive bidding process, negotiations, and contracts: this step entails putting the project out to bid. The potential suppliers will be under a Memo of Understanding (MOU) that lists the full scope of services they provide and the company’s expectations.(Supply Chain Product Plan Comprehensive Essay Paper Example)
- Supplier relationship management: the suppliers are critical elements of the company’s global outsourcing and procurement strategy. The company will maintain and manage supplier relationships to ensure consistent pricing, quality, and delivery reliability.
Inventory Management Plan
Inventory planning is a fundamental component of the company’s supply chain management strategy, including warehouse operations, order management, accounting, and customer management. Inventory planning will help know how much inventory is required and when to order to ensure continuous production. The planning includes
- Demand forecast: utilizing historical sales data, variables, and KPIs such as market predictions, seasonality, and promotions to establish data-driven forecasts.
- Cost controls include selecting suitable suppliers, implementing an automated purchase order process, and reducing cash tied in slow-moving stocks.
- Storage efficiency: the company will assess the supply and demand and decide on the right amounts of raw materials and finished products to store to optimize production and order fulfillment.
When these elements of the inventory plan are in tandem, they will ensure a continuous, seamless, and efficient inventory flow.
Inventory costs comprise all costs to order and hold inventory and produce the linked paperwork. They include ordering, holding, carrying, shortage, and spoilage costs (Mohammaditabar et al., 2016). The company will assess inventory costs to decide how much inventory to hold. Managing inventory is costly, and the company can minimize inventory costs by:
- Getting the appropriate reorder point (right rime and right volume)
- Making minimum order quantities work for the company
- Avoiding overstocking
- Getting rid of dead stock as soon as possible(Supply Chain Product Plan Comprehensive Essay Paper Example)
- Decreasing supplier lead time
- Investing in inventory management software to increase accuracy and efficiency
The Delphi forecasting model relies on group assumptions about the future rather than individuals. It is often applied when historical data is not available or unreliable (Flostrand et al., 2020). A group of experts, in this case, inventory managers, supply chain managers, market researchers, and others, are called upon to assess the company and its market nature to gain consensus. The model can be used in the overall inventory and cost management. It can help with forecasting the amount of inventory required and the time required. These forecasts from experts can help reduce unwanted holding costs or prevent stock-outs due to holding less than required inventory.(Supply Chain Product Plan Comprehensive Essay Paper Example)
The bullwhip effect occurs when the retailers are extremely proactive or highly reactive about demand and extend the expectations to other parties along the supply chain, including the manufacturer and wholesalers (Wang & Disney, 2016). It can originate from a variance of orders greater than that of sales. The company can adopt the following steps to mitigate the bullwhip effect:
- Enhancing visibility and collaboration across parties in the supply chain
- Optimizing processes with technology like supply chain automation software
- Evaluating inventory constantly
- Reducing lead time and delays
- Reducing order sizes and offering stable forms of pricing
- Improving forecasts
Green sourcing describes the ways the company can reutilize or reduce waste. Green sourcing would mean that the company acquires some of the manufacturing materials from eco-friendly sources (de Sousa Jabbour et al., 2015). Green sourcing opportunities available to the tissue-making company include getting some tissue-making materials from waste paper like newspapers, no longer used books, and other paper materials. This strategy would minimize the number of trees cut down to make tissue paper, protecting the environment. Making tissue from recycled paper uses less energy, water, and landfill space. It also reduces emissions. This strategy is cost-effective and would help reduce the overall tissue-making cost.(Supply Chain Product Plan Comprehensive Essay Paper Example)
Walking through the supply chain process for tissue paper manufacturing was a wholesome experience that will be critical to my individual and professional development. I have gained tremendous knowledge and skills and engaged in various supply chain management concepts, including inventory management, forecasting, quality management, logistics, location, and distribution planning, sales planning, and other aspects. I have read many materials to complete the assignments and enhance my understanding of the concepts. There is no better experience in the whole course than this assignment. They have widened my understanding of the supply chain and shown how deep the process can go, not merely the movement of goods from suppliers to the end customers. The learning materials, the experience, the engagement with the concepts in the form of assignment, and learning from other students and the instructor has helped me gain an in-depth understanding of supply chain management. I will apply these concepts when employed as a supply chain manager, expert advisor, or as a part of a forecasting team or supply chain management team to advise the company and offer insights to help the company make informed decisions. I can also use these concepts to run my own business successfully. (Supply Chain Product Plan Comprehensive Essay Paper Example)
de Sousa Jabbour, A. B. L., de Oliveira Frascareli, F. C., & Jabbour, C. J. C. (2015). Green supply chain management and firms’ performance: Understanding potential relationships and the role of green sourcing and some other green practices. Resources, Conservation and Recycling, 104, 366-374.
Essex, D. (2017). Material requirements planning (MRP). https://www.techtarget.com/searcherp/definition/material-requirements-planning-MRP/(Supply Chain Product Plan Comprehensive Essay Paper Example)
Flostrand, A., Pitt, L., & Bridson, S. (2020). The Delphi technique in forecasting–A 42-year bibliographic analysis (1975–2017). Technological Forecasting and Social Change, 150, 119773.
Hakimi, S., Zahraee, S. M., & Rohani, J. M. (2018). Application of Six Sigma DMAIC methodology in plain yogurt production process. International Journal of Lean Six Sigma.
Mohammaditabar, D., Ghodsypour, S. H., & Hafezalkotob, A. (2016). A game-theoretic analysis of capacity-constrained supplier selection and cooperation considers the total supply chain inventory costs. International Journal of Production Economics, 181, 87-97.
Rohac, T., & Januska, M. (2015). Value stream mapping demonstration on real case study. Procedia Engineering, 100, 520-529.
Wang, X., & Disney, S. M. (2016). The bullwhip effect: Progress, trends, and directions. European Journal of Operational Research, 250(3), 691-701.