Supply Chain Management – Round -1 to be completed by the VP of Supply Chain
Management)
Please outline what decisions/changes you made and why. What did you expect the impact
of these changes to do? How do these changes align with your overall strategy? What did
these changes do and how did they impact on the ROI? What did leadership/management
decisions you make?
In supply chain management, the manager is required to ensure the safety stocks and the delivery of the
goods on time. On time delivery is only possible when there is an efficient management in the supply
chain methods. As depicted, the company witnesses problems with Vitamin C as they lack a proper safety
stock of the product. With regards to the problem, the availability for the component Vitamin C is low. As
the solution to the problem, we have decided to increase the safety stock from 2.0 to 5.0. The lot size of
the component decreases from 4.0 to 2.0. This would lead to stabilising the business.
The company further faces a high level of stocks with regards to Pack 1 liter and PET. This could be
rectified by decreasing the stock. Therefore, we have decreased the safety stock from 2.0 to 1.0 and
decreased the lot size from 4.0 to 3.0. This would result in decreasing the stocking problem and
accommodate useful material. There is some overstocking problem in Fressie orange 1liter, Fressie
Orange/mango liter and Fressie Orange PET bottles. Profit and overall product revenue decrease because
of overstocking. So we decide to decrease the safety stock of Fressie orange 1liter, Fressie Orange/mango
liter and Fressie Orange PET bottles from 3.0 to 1.5.
2. From a management perspective, how did you balance higher prices (contract
indexes) with suppliers resulting in higher reliability and lower lead times this
round?
From management perspective main issue is with reliability which depends on delivery window, the
additional time given to supplier is result in high quality products and high reliability. Because of this
issue returning or penalties paid cost decreased and revenue cost increased. To achieve high prices and
less lead time we decided to give extra time to supplier.
