How is supply chain structured and how it be applied to a footwear product:
The supply chain structure for leather boots is as shown below:
The footwear example is leather boots. The structure for the leather boots supply chain has five main tiers that enable sourcing of raw materials, processing the raw materials, manufacturing of the product, distribution, and consumption of the product. The main raw material components of shoes are the leather for the body of the shoe, and the rubber for the sole. The supply chain structure shows how the different component come together to produce the shoes and goes further to show its distribution (OECD, 2013).
The livestock farmers and farmers of the rubber tree are first tier in the supply chain. They are a vital part of the chain as the product the raw materials that are needed for the production of the shoes (In Ramanathan, 2013). The livestock farmer rears his livestock such as cows, goals and other animals, which in turn he sells for their meat and hide. Therefore, an intermediary processor such as a tannery will buy the farmer’s hides to turn into leather. The rubber tree farmer sells his rubber to a rubber refinery processing plants.
Intermediary processors are the second tier. They include the tannery and the rubber refinery processing plants. These processing plants get the raw materials from farmers, and process them into the various finished product. The tannery obtains the hides, which undergo certain processes to produce leather. Other intermediary processor may include the cotton-processing factories, which provide different kinds of fabric that is required to offer more comfort to the foot.
The manufacturer is the focal point of the supply chain and the third tier. The manufacturer obtains finished processed goods form independent or sub-contracted processed goods providers. The manufacture of footwear comes up with many different designs that targeting different markets. Different markets include providing school shoes, army boots, office-wear leather shoes, and many others. The designs are mass-produced, boxed, and distributed. The manufacturer may use feedback to design better shoes for their consumers, which will in turn boost business (Blanchard, 2010).
The fourth tier is distributor. Distributor designs a marketing and distribution strategy that will ensure sales of the footwear (Burns, Bryant & Mullet, 2011). The distributor’s main activity is to deliver the product to several different selling points or locations, both locally and globally. The distributor obtains feedback from the consumer, which is integrated into its marketing and distribution to boost sales. The distributor devices a marketing strategy with the target market in mind to ensure sales. Using feedback responses, the distributor strategizes to appeal to their target market.
The last tier is consumer. Customer/consumer is the last but not the least in supply chain. The consumer is the most important part of supply chain. Without the consumer, there is no business. Therefore, the consumer is highly respected and considered in all parts of supply chain process. The consumer offers vital information using feedback responses and reviews, which can be used to provide better product and services. The consumer may also be directly responsible for the adoption of socially responsible practices by the intermediary processors and manufactures (Awaysheh & Klassen, 2010)
How supply chains compete in terms of time, cost, quality and sustainability aspects:
The discussion below examines how supply chains compete in terms of time, cost, quality, and sustainability aspects. These are critical aspects in any supply chain. This is mainly because they directly influence and determine the efficiency of a supply chain. In order to understand how supply chains compete based on these factors it is important to examine each individually.
In terms of time, supply chains compete by reducing cycle and lead times. Time is critical in any supply chain since it determines the efficiency with which cycles are completed. As mentioned earlier, supply chains complete by reducing cycle time. This is the amount of time needed to complete a cycle within the supply chain (Stadtler, Kilger, & Meyr, 2015). In order to have a competitive supply chain, organizations aim at reducing cycle times through a number of measures and mitigation plans. For any business or project’s supply chain, the main interest is in the time taken to order and delivery of specific goods or services. This is attributable to the fact that business and projects are highly time sensitive. It is critical to ensure the reception of materials, goods, or services from a manufacturer in good time to meet a specific need.
Supply chains compete in terms of reducing cycle times by ensuring that raw materials are quickly processed and manufacturers produce the finished product. Supply chains also compete in terms of time based on order lead times. Lead-time is the time elapsed between a manufacturer receiving an order, producing it, and shipping it back to the customer (Christopher, 2016). It is critical for manufacturers to have low lead times aimed at ensuring that orders are quickly processed and goods and services shipped out to customers. Furthermore, lead-time efficiency in supply chains determines overall production costs, costs of goods, and inventory levels (Christopher, 2016).
Supply chains compete in terms of costs by trying to reduce the price of the final product. Supply chains achieve this ensuring that the supply chain is efficient, as well as, eliminating losses occasioned by interface differences between suppliers. Highly competitive supply chains also reduce costs through mass production. This is an important aspect of any supply chain since it helps suppliers and manufacturers enjoy economies of scale during the manufacturing process (Liu, 2012). This in term reflects on the final cost of production. In any supply chain, there are different costs that businesses and projects compete to reduce. The first is transport cost. The reduction of transportation costs is key to the success and effective competition within a competitive supply chain (McKeller, 2014).
This is achievable through a transportation model that when optimized can provide the most effective transport route through which goods and materials can be transported at the lowest cost (Watson, 2013). Supply chains also compete in terms of inventory and handling costs. These are costs resulting from the storage and handling of goods and raw materials. Effective supply- chain management techniques such as just in time aim at reducing inventory, as well as, the space need to manage such inventory (Watson, 2013). The reduction in all these costs reflects on the final cost of a product. This in turn reflects on customer satisfaction and utility of the product.
Supply chains compete in terms of quality by improving the quality of finished product. The quality of finished product from any competitive supply chain is an important metric that influences consumer perception, brand loyalty, as well as, customer satisfaction. According to (Flynn & Zhao, 2015) product recalls due to quality issues have negative impacts on manufacturers. Therefore, it is critical for any supply chain to ensure that it produces high quality goods. Supply chains can improve the quality of the finished product in a number of ways. First, supply chains compete by improving the quality of raw materials. In order to have a good finished product it is critical to ensure that the raw materials used are of high quality.
Therefore, manufacturers in supply chains will source their raw materials from reputable suppliers known to be consistent in the production of the raw material needed for the production process. Quality control is an important feature at this stage. This implies that, all raw materials used need subjection to a quality control test. Any material below a certain level of quality is not utilized in the production process (Jraisat & Sawalha, 2013). Furthermore, supply chains compete in improving the quality of the production process. In order for a quality product, the production process must be well designed and perfect. This will help eliminate waste, as well as, ensure that all finished product meet a certain quality threshold. Similarly, quality control is essential at this stage. During the quality control tests, the team responsible discards the products that do not meet a certain quality criteria or threshold.
Supply chains compete in terms of sustainability by building efficient supply chains and production processes that meet the triple bottom line. This implies that they need to be socially, environmentally, and economically sound. Furthermore, supply chains compete in terms of eliminating waste. Competitive supply chains achieve waste elimination through reducing packaging, and reducing damage (Seuring, 2013). In turn, this helps reduce storage space and other costs such as transport costs, hence increasing economic sustainability. For example, it is critical for manufacturers within the supply chain to build manufacturing processes that aim towards reducing energy consumption. Energy costs are increasing greatly. Therefore, by reducing energy use and consumption economic and environmental sustainability is increased.
Manufacturers within a supply chain also improve sustainability by vetting all suppliers. It is critical for manufacturers to ensure that suppliers utilize sustainable and environmentally sound processes in order to do business with them. On the other hand, customers must also ensure that they buy from manufacturers with environmentally sound processes. By doing this, the entire supply chain provides internal checks and balances and improves its sustainability (Beske, Land & Seuring, 2014). This is critical since industry collaborations across the entire supply chain will help ensure high sustainability. Supply chain members are also utilizing training programs. The main aim of these programs is to enlighten other supply chain members on the dangers of a wasteful supply chain on the environment. Education is important towards ensuring green supply chains in which supplier and manufacturers produce raw materials and finished goods with little to no impact on the natural environment (Wang & Gupta, 2011).
[A] Awaysheh, A. and Klassen, R.D. 2010 ‘The impact of supply chain structure on the use of supplier socially responsible practices’, International Journal of Operations & Production Management, 3012, pp. 1246–1268
[B] Beske, P., Land, A., & Seuring, S. 2014. Sustainable supply chain management practices and dynamic capabilities in the food industry: A critical analysis of the literature. International Journal of Production Economics, 152, 131-143.
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[H] Liu, J. J. 2012. Supply chain management and transport logistics. Milton Park, Abingdon, Oxon: Routledge.
[I] McKeller, J. M. 2014. Supply chain management demystified. New York : McGraw-Hill Education
[J] OECD, O. F. E. C. A. D. 2013. Global Value Chains. Paris: Organization for Economic Cooperation & Development.
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[M] Stadtler, H., Kilger, C., & Meyr, H. 2015. Supply chain management and advanced planning: Concepts, models, software and case studies. Berlin: Springer
[N] Wang, H.-F., & Gupta, S. M. 2011. Green supply chain management: Product life cycle approach. New York: McGraw-Hill.
[O] Watson, M. 2013. Supply chain network design: Applying optimization and analytics to the global supply chain. Upper Saddle River, N.J: FT Press.
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