MKT757 SUPPLY CHAIN MANAGEMENT MASTER IN BUSINESS ADMINISTRATION

CASE STUDY: SCM-Latest Fad or Strategic Imperative?

Prepared by: Rafiah Bt Ahmad 2011183941 Abdul Latif Bin Zaharudin 2011752605 Noorizathulazwin Bt Ahmad Timbul 2011742601 Mohd Afif Nasriq Bin Mohamad Safri 2011781609 Ahmad Mualzaffardan Putra Bin Kamarudin 2011828578 Prepared for: Dr. Md Nasarudin Bin Hussin Date of Submission: 8th May 2013

QUESTION 1 Is supply chain management for real or is it just another fad? Does the answer to this question depend on how a company pursues SCM? ANSWER 1 Supply chain management is for real. This is because it is used frequently in todays materials management environment. SCM is generally associated with advanced information technologies, rapid and responsive logistics service, effective supplier management, and increasingly with customer relationship management. Most materials managers are familiar with the SCM concept and view it as the same with collaboration. Indeed, few companies have adopted SCM. Even fewer have thoroughly mapped out their supply chains so that they know who their suppliers suppliers or customers customers really are. In theory, SCM allows a company to focus on doing well a few things for which it has unique skills and advantages. Noncore activities are outsourced to channel members that possess superior capabilities in those areas. Appropriate relationships are formed to assure outstanding performance levels. SCM is an absolutely right tool in meet heightened customer demands, while also cutting costs. The markets are changing and customer really do expect more and more every day without an increase if not reduction in their current prices. SCM is a key in making this happen, as in this case study all levels of the organization must be involved. When faced with change, managers and employees are easily resisted by the idea of shaping new practices because they already have much familiarity with current positions. Consequently, if company pursues SCM half hearted, they likely to not fully hold the tool and not fully obtain the rewards. So the companies as a whole must do everything in their power to encourage SCM for the process to successful. Thus, it does depend on how a company pursues SCM. Not all of them succeed with SCM without know deeply about it at all.

QUESTION 2 What efforts would you make to assure that managers at Med-Tec did not treat SCM as just another flavor-of-the-month management program? ANSWER 2 To ensure managers at Med-Tec did not treat SCM as another flavor-of-themonth, we would first send all managers to SCM practicality course in order to educate them on how SCM will ultimately ease their jobs. When people revolt

against change it is often because they do not understand it, so SCM is become crucial to reduce or improve it. This course should be conducted by expert consultants that have the experience in medical equipment field. Even though the course might be costly, the outcome is huge as it will directly affect the whole operations. This course plays the main role in feeding the real knowledge of applying SCM towards companys talents. Thus, a quick test will be conducted at the end of the class to evaluate their understanding. It will be followed by measuring their performance a month after the class to see whether they practise well of what they learn. If the performance shows an unsatisfied improvement, they should retake the course till they succeed. Also during the process of integrating SCM in daily practices, we would create an internal portal for reporting and monitoring the progress for managers and upper management. This portal should provide the real time monthly performance of everyone, the specific benchmark level of tasks that they should achieve and comparison of companys overall performance with industry average. This will guide them thoroughly and keep the managers on track with companys expectation. Every plan has some fails, so if managers feel like they can collaborate on how to better execute SCM they will quickly get into team building mode. Team building mode provides problem solving brainstorming, new ideas sharing and contingency planning on every specific SCM activities. It will also keep the managers well inform with everyone responsibilities and smoothen the information flow within the company. Overall Med-Tec does not need to just create SCM, but they also need to breed the culture of SCM which will push out the fad mindset. This culture will only can be absorb by implementing all of the strategies above regularly.

QUESTION 3 Suggest a possible analysis framework Don could use to weigh the facts and determine whether or not SCM is the right thing to do? ANSWER 3 To analyze whether SCM is right thing to do for Med-Tec, Don could create the beginning of a Supply Chain Road Map the method that would build a better supply chain strategy. First he needs to identify who Med-Tec is and what their purpose is. Then he needs to identify exactly how they fit in as a company currently and where they are falling short. Knowing the facts on what is working correctly and what areas need the most work is extremely important, this can be done in order to improve their supply chain process. Right after he knows the purpose to implement and improve SCM which is to increase the customer service in order to increase the demand, Don must identified which area that should be improve in order to achieve

the purpose by reduce the cost of production and without increase the price towards the customers due to the better service delivered. Don also should know whether it is fit to apply this SCM method in Med-Tec business. Firstly, they have to look at back on their company location where they produce their product where they must identified whether the location are near to the customers and also resources. If the location were near to both customers and resources means they are good, if not they might change their location. However this is one of the suggestions because change from the current location to the new location might incur high cost even though later it will be benefit for a long term. The second thing that Don should focus maybe in term of their production where Don may look on the capacity whether the capacity will be able to produce a lot with the present layout of production site since as we know by having produce more is be able to reduce the cost. The other thing that Don might take a look is on the production scheduling where scheduling might have an impact to the production in term of time and cost. He may look at on the production scheduling for machine and also equipment maintenance. The next thing that Don can improve is in term of their inventory where inventory exist at every stage of production either raw materials, semi-finished of finished goods. Holding on inventories to long is not good because it might have an effect for a certain products especially medicine which have an expired date. Dons decision on just-in-time method can be used in order to increase customer service and provide a better quality. Last but not least, he has to take care of the transportation decision because the transportation may incur around 30 percent of the logistic cost. Since Med-Tec use the resource and produce globally, they might have two option of the transportation method which is air shipment that fast, reliable and warrant lesser safety stock but they are expensive. The second method is by shipping where is much cheaper with holding and bringing a large amount of inventory. Overall, in order to reduce inventory cost, better asset utilization, higher product quality and other benefit that Don might have, he actually have to look at back on the supply chain process itself where is the area that need to be change or improve in order to increase customer service and at the same time reduce the cost of production. The road map can be illustrate through the new SCM decision by Don for the Med-Tech company and SCM is the right thing to do even though it is fade however with the proper strategy it might be succeed.