Chapter 5 South America Market
Students:
Alex Liemburg
Danny Mulder
Frank Gunnink
Group 5
Minor Operational Management in Industry
Class EDMOMb
Windesheim University
1.
Not everybody is capable to go to the supermarket regularly, because of the travelling costs and not everybody has a car. But nowadays the Internet is expanding everywhere. So supermarkets can use these evolutions to bring their products to their customers so it’s easier for them to buy their goods by you. We are a company that provides a portal web shop in South America, so the supermarkets can use our services to offer their products to their customers online. When the customers ordered their goods, the supermarket will bring it to them. To arrange this the supermarket can choose out of 5 different options:
1. First-party logistics (1PL).
When the owner of whatever is being transported organises and performs product movement themselves. So this would mean that the supermarket would transport their goods by themselves.
2. Second-party logistics (2PL).
When a firm decides to outsource or subcontract logistics services over a specific segment of supply chain. This would mean that the supermarket arranges a logistics service provider.
3. Third-party logistics (3PL).
When a firm contracts a logistics company to work with other transport companies to mange the logistics operations. In this situation the supermarket wants us to arrange the logistics for them.
4. Fourth-party logistics (4PL).
When the supermarket arranges the other company to take over the complete supply chain. In this case we should arrange the whole supply chain for the supermarket.
5. Pick-up points
When the supermarket wants to use selling points the same will happen as above, but the end station wont be the house of the costumers but a pick-up point nearby so it’s easier for them to pick up the goods.
2.
We would consider a relationship based on:
• Calculative trust. In order to build a good relationship, it is important to trust each other. When you trust each other and believe that trust can improve the collaboration, it will be more likely to get better results.
• Sharing Success
We believe that, in order to get better results, we need to work together with other companies. You can’t do everything individually, but you can take advantage of the strengths of your partners.
• Long-term expectations
To maintain a high level of quality with your suppliers, we feel like it is important to keep a long-term relationship with them. When the feeling is right and the quality is high, it is best to begin a long-term relationship with the supplier.
• Joint coordination
When we coordinate our daily planning together with the customer, a better inventory level will be achieved. When you coordinate it at its best, your inventory level will be just the right amount instead of overstocking, which will lead to lower costs for storage.
• Information transparency
When the communication between you and the supplier is good, this will lead to better results. When your supplier is honest to you and communicates in time when something will be delayed, you will be able to react faster instead of needing to respond last minute, which can result in delayed deliveries to your customers.
• Joint problem solving
When you solve the problems together with your supplier, this will result in a better relationship. We believe that when you work together on this level, trust will be gained and a good relationship will be the result.
3.
In case of the concept in which we are the portal web shop from chapter 4, several different potential supply chain mismatches can occur. In our believe the following three mismatches are applicable to our company:
1. The supplier improvement gap, which is the gap between the view of our own requirements and our view of our suppliers’ performance. Questions to ask are: What do we need from our suppliers? What are we getting from our suppliers? What are the main gaps?
For example, if their occurs a gap of information about the inventory level of particular products at our partners, it could be possible that we keep on selling products that are out of stock at our supplier. In this case customers can place orders which we can’t fulfil. When this information is available and used in the right way, we can change our online offer to the real time stock levels at our sellers’ warehouse.
2. The market perception gap, which represents the gap between what we believe we need from our suppliers and what we think we need. This gap is all about the perceived differences in requirements between customers and suppliers.
In our business it can happen that our suppliers don’t know the exact demand of the market. Because we can see the behaviour of our customers we have to adjust the market requirements with the operations resources of our suppliers and so, make a correct reconciliation.
3. The operations performance gap, which is the gap between how we see our suppliers’ performance and how they see their own performance. Can we be sure that our suppliers judge their own performance in the same way that we do?
If there is a gap in operations performance the result will be that the performance of the whole supply chain will suffer due to this.
The company can prevent this by setting up Critical Success Factors together with the suppliers. All members of the supply chain need to have common Critical Success Factors. In this way it is made perfectly clear what can be expected, what needs to be done and what will not have to be done.’
4.
We would prefer to have relationships with many logistical service providers in order to respond fast to the wishes of the customer. In order to do that, the web shop has to make unit rate contracts and relational contracts with these service providers.
This way, the company doesn’t have to pay much to the service providers when the sales are low and they will be very flexible as well. Next to that, by the relational contracts it will be easier to exchange information between the portal and the service providers (which is needed for flexibility) and it will be easier to solve problems together and faster.
5.
• Robustness- taking decisions designed to dramatically reduce the likelihood of certain risks having any impact (child labour, environment, nature disasters Etc.)
• The extent to which the buying firm can effect a reduction in the negative performance impact (for example purchasing more options on supply capacity than are forecast to be needed)
• Sometimes urgent remedial action is needed. In general terms, the key attribute of such recovery strategies is rapidity. (for example big fines for breaking the law or recalling our products)
Our opinion:
• Robustness: By improving our processes and reducing the gaps between our suppliers and clients we reducing the likelihood of risks having an impact on our performance.
• Reduction: By reducing mistakes and misunderstandings we will be able to reduce recovery time.
• Rapidity: The globalization has brought rapidity with it, so we have to act faster. When we lose a lot of money in a small time period, we must have the ability to react quickly and we must take urgent action in order to rapidly get the performance on a high level.