Charles Sobey

Ms. Mack
RHET 1302
12/3/2013
Problems facing supply chains
If you walked into a store and they had nothing on the shelves, we would be quite
shocked but considering how much stores are stocked with it is amazing that such events are
not common place. supply effects a great many things in our life such as; how much products
cost, how long it takes to get things from one place to another, and wages. This not only affects
civilian life but military as well with troop transport and the like. supplies is the basis of our
economy and it is in need of reformation and supply managers with skills to be retained. With
larger populations that companies can draw from there is a need for more supply of products
but with the ever growing quickness in the trends people like is making it very difficult. When it is
unknown how long you will need to produce something or where to send it there is a nightmare
the every large business must deal with. However companies are starting to get a better handle
on the details of their supplies and supply chains. Another larger internal problem is the loss of
talented logistic supply officer.
What is a supply chain? The simplest way to describe it is how Benita Beamon
describes it in a diagram in that supplies go to a manufacturing site, there they go into storage
until they transported to a retailer (Beamon). Although things are not that simple,there are
many different factors that now define our world of supply that companies must deal with in
order to have an edge over their competitors. The most basic are constraints on the supply
chain such as capacity for goods, how long it takes for goods to reach a location, and how much
of the product was ordered. That is know as TCT (total cycle time), which shows the efficiency
of a supply chain. As stated in a paper by Min and Zhou, shortening this time is key to the
development and capability of all aspects in the supply chain(Min, and Zhou 232-234). Thus the

TCT can be used as a measuring tool for goals relating in time costs. Other factors include
the rapidly changing technology industry that is constantly updating. meaning many products
become outdated and the value of it falls as well. That makes knowing how long to keep making
a product and how well it will sell makes managing the supplies very profitable and also very
disaturious. This is because consumers expect different things and companies must tailor that to
different groups such as those who order online and those who go to the store.
All products in all industries can be grouped into two different categories. As defined by
Hau Lee those are functional goods which are basic goods such as food or long term items like
furniture. Then there are innovative goods, these are items such as fashion that changes from
season to season making the products have a short life time before they must be changed out
to meet consumer demands (Lee 105-108). Also their characteristics on how they sell makes
them have to plan for them in very different ways to maximise profits. Functional goods have a
much longer shelf life making a smaller amount more viable but they also have stable demand.
Then there are the Innovative goods which have large turnout and must be kept in stock. This
comes at a risk that it will lose popularity and any product left over losses money.
Companies dont just deal with issues about trends and their supplies but also much
larger shifts, such as world events. From 1940 to 1970 the US steel industry was at its height
and employing many people and selling large quantities of steel. But from 1970 and onward the
industry was weakening due to cheap labor in foreign countries. The companies could not
compete and had no choice but to shut down many of their mills. This meant that companies
who dealt with steel had to find new sources or the would not have this product when needed,
also for the normal consumer market goods in those areas that many people would cut down on
innovative goods making those stores need to order less or lose profits due to this sudden
change. Also time can cause what used to be functional goods to disappear. Newspapers are
dying and are being replaced with digital copies. This means newspaper companies lose the
money they make off of them and must find something else to supply or risk going out of

business. With changes happening so much faster today this has become something that
companies need to take into account when committing to a new good.
The example mentioned above leads us to a more specific point, that all things
even within in the same industry are different. But first what must be addressed are the supply
and demand variables. There are stable supply bases for products such as food and clothes but
also functional and innovative as well. Clothing has a stable supply base but the demand for the
kinds of clothing vary a lot making the profits of the supplies depend on the kinds of clothes.
There are also the unstable supply base such as new energy industries which are trying to get
the functional of electricity out to people but through an undeveloped supply base unlike the oil
and gas industry. If the retailer and manufacturer do not work for the same group it become
even more troublesome to make sure the amount demanded is meet and when it will arrive at
the targeted locations.
As noted the relationship between the manufacturer and the distributor is the one of the
most important things in the equation that is supply. The overall performance depends on how
the the two work together and what their objective is. This is displayed in the following example
provided by Hau L. Lee and Corey Billington, Indiana component manufacturing plant

of an automobile manufacturer started aggressively cutting inventory, as its

performance was explicitly determined by its inventory. As a result, the plants response
times to the final assembly plants and the spare parts distribution centers became
longer and highly erratic. The final assembly plants and the parts distribution centers
had to keep inventory high to give their customers reasonable service(Lee, and
Billington ). This is a real world example demonstrating that a conflict of objectives can
lead to terrible losses in profits when the goal was to make money. According to Sunil
Chapora and Sodhi a company must also take into account the impact of uncertainties
such as the performance of deliver and how such things are connected to other parts of

the supply chain. They should have the supply managers be in agreement over what the
risks are and steps to rectify it when they do arise. This includes doing stress by
identifying key providers, capacity limits and the like and seeing, theoretically what
would happen if something went wrong at what steps should be taken so the reactions in
the future are quick and appropriate (Chopra, and Sodhi).
Talent is also something that must be addressed in the human aspect of
managing. According to SSC (supply chain council) Competent supply managers are
very difficult to find due to the large area of knowledge needed to cover such a complex
area (supply chain council"). This is more important than many people think. Just how
nations have risen and fallen do to talented individual so do companies and that is
especially true for an area such as supplies.
These are some of the major issues faced by companies and firms today and while
there are not definite solutions, there are actions that can be taken to minimize the
losses and help the them grow. Stress testing your supply chain is a good way to find
weak areas and to try and implement new things such as, more 3d party producers or
extra storage. Having coordination between the supervisors of different plants to insure
communication is stable and all efforts are put in the maximizing efficiency across the
board deals with TCT. As such TCT should always be getting shorter and shorter, if not,
parts of the chain need to be reviewed. Scouting for talented individuals and have an
apprentice under them to learn the correct ways to manage, along with other tips and
insight. Doing constant research to ensure the most cutting edge equipment and
products. The one thing that can never be predicted is political instability causing large
scale disruptions such as embargoes. In regards to that as noted in a survey done by the
McKinsey&Company, of all the problems facing companies in the future the most

daunting one is the unpredictability of the world ("nsights & Publications").

Supply chains are a community that makes up the global supply chains that we
depend upon to keep our current way of life. As with all communitys it faces many
problems like a rowdy populace (Ex. factories that have different objects that make
predictions more difficult) and shortages that can lead to breakdowns. Many of theses
can and are being prepared and while nothing is perfect, it can evolve and become a
more stable entity.

Works Cited

Lee, Hau, and Corey Billington. "Managing Supply Chain Inventory: Pitfalls and
Opportunities." 3336 (1992): n. page. Web. 8 Dec. 2013.
"Top supply chain challenges ." supply chain council . n.d. n. page. Print.

Chopra, Sunil, and Manmohan Sodhi. "Managing Risk to Avoid Supply-Chain

Breakdown." (2004): n. page. Web. 9 Dec. 2013.
Min, Hokey, and Gengui Zhou. "Supply chain modeling: past, present, and future ."
(2002):

232-234. Web. 9 Dec. 2013

Lee, Hau. "Aligning Supply Chain Strategies with product uncertainties ." 44.3
(2002): 105-108. Web. 9 Dec. 2013.
"The challenges ahead for supply chains: McKinsey Global Survey results." nsights
& Publications. Nov 2010: n. page. Web. 9 Dec. 2013.
Beamon, Benita. "Supply Chain Design and Analysis: Models and Methods." 55.3
(1998): n. page. Web. 9 Dec. 2013.