Resolving Complex Supply Chain Problems

Case 1: Reading the Tea Leaves at Tea and More: Resolving Complex Supply Chain Problems

Q1. Tam requires the use of more sales staff to replace its current use of contract “sales persons”. It also needs to ensure that technology that are up to date are available for its employees such that information can flow easily.

Q2. TAM has failed by dwelling on expensive campaigns with high quality, and it has therefore lowered its profits. The company needs to reduce its cost of production to remain powerful and attractive.

Q3. The solution to issues that occur from unpredictable ordering patterns can be found by reduccing the unpredictability of TAM’s operations. TAM, therefore, needs to reduce its inefficiencies so as to minimize stock outages and other inventory problems resulting from unpredictable customer ordering.

Q4. Reducing the collection time from 54 days to 40 days without alienating the customer base would require Tea and More (TAM) to guide its clients to follow its credit policy effectively. TAM, therefore, needs to ensure that customers are well-informed about its credit policy.

Q5. The decision is that TAM's failure in previous instances was due to its lack of investment in marketing. TAM cannot afford to continue with such experiments since they only benefit its competitors. Also, TAM cannot afford to stick only to its basic teas since it has to seek new loyal customers. Therefore, TAM has to embrace seasonal varieties, which would allow it to invest in marketing strategies.

Q6. What TAM has not thought of is that the operating profit margins have reduced between the year 2006 and 2008 to below the company's market average. Additional financial advantages and company's process efficiencies can be achieved by adopting new suppliers and developing better business relationships that are not so worldwide.

Case 2: The Peanutty Food & Co. Supply Chain

Q1. Peanutty's managers can take the action of using a just in time technique so as to get a better understanding of the demand for its products. That way, Peanutty's managers can reduce its production costs through the production of only what is required by its customers. Additionally, Peanutty's managers can make projections of when they would require more products so as to ensure that they have adequate stock for the clients.

Q2. One of the activities that Peanutty needs to develop is to explore and expand its market base. Additionally, Peanutty needs to initiate more creative and innovative uses of peanuts and associated products so as to gain more customers. Peanutty should also increase its suppliers, as well as form partnerships with other firms so as to broaden its market base. Working with customers and small businesses would be better for Peanutty, as they would help Peanutty to reduce costs and maximize its products' profitability.

Q3. The best organizational structure that would make Peanutty more agile and competitive is a matrix organizational structure. That is because it would bring all its managers and employees from different departments together and compel them to accomplish the company's goals.

Q4. From the four areas, I would choose logistics since production relies on the demand from external customers. Besides, I would not recommend R&D and Management because it would take a longer time to introduce new products. Logistics forms an internal function of Peanutty, and it involves the transportation or movement of peanuts from Peanutty's suppliers to its warehouses, and eventually to export and import destinations. The most appropriate performance metrics for the company's logistics would include a reduction in wastage, cost, time, as well as human intervention.

Case 3: Insights into Corporate Social Responsibility Practices in Supply Chains: A Multiple Case Study of SMEs in the U.K.

Q1. Yes, it is possible to align the issues addressed by CSR requirements with those relevant to their smaller suppliers. The CSR concept got developed basically for multinational businesses. Besides, the CSR practices in multinational companies are greatly different from those designed for SMEs due to the uniqueness of such firms. Therefore, to align the issues addressed by CSR requirements defined by customers, to those that are relevant to smaller suppliers, the multinational companies must understand the size of the smaller firms, as well as expect the efforts of CSR accordingly. Besides, the expected scale of CSR should be as per the suppliers' affordability.

Q2. Yes, the use of systems such as ISO14001, OHSAS18001, ISO26000, and FSC can help SMEs to comply with various requirements defined by the customers if such tools get applied honestly as opposed to being used just as a formality to pass the consumers' compliance needs.

Q3. The final customer is usually price-sensitive, and that is why most companies prefer outsourcing their work from various developing countries so as to benefit from lower costs of labor. It, therefore, becomes difficult to convince final customers to pay a price premium for CSR. However, in cases of products and services that target markets that are sensitive to both the environmental and social causes, it is possible to stimulate them to pay a price premium for CSR.

Q4. The presence of different standards for the CSR requirements usually does not impress the smaller suppliers, who often strive to attain the CSR standards that are set by the large customers. Therefore, to address such an issue, the defined CSR requirements need to be based on the percentage of the company's financial size.