Supply Chain Management Essay
Supply Chain Management
The purpose of this paper is to analyze how supply chain management software, buffering and pull systemscan be utilized to reduce cost, speed delivery and increase productivity, using Wendy’s as an example. Since Wendy’s is a fast food restaurant chain, it is extra vulnerable to delays in the supply chain, which could lead to the cold chain being broken. Efficient supply chain management can utilize systems to prevent costly losses from spoiled food, delivery delays and enable employees to be more efficient.
Utilizing software to identify bottlenecks The main determinant of throughput, work in process and cycle time is capacity, which is the highest rate at which the products flow through the system. A major factor of capacity is a constraint known as a bottleneck. It is the slowest process within the supply system (Imaoka). Determining and resolving bottlenecks is essential in order to reach the goal of high throughput, low work in process and cycle time. In smaller businesses bottlenecks can be identified pretty easily.
However, in large multinational corporations such as Wendy’s,which has one of the most extensive food supply chains in the world, it is much more complex (Childress et al. ). ArrowStreamOnDemand is a supply chain managementsoftware platform developed specifically for the foodservice industry. It is a highly integrated software system allowing Wendy’s to track inventory from the beginning of the supply chain to the end. Each batch of inventory is scanned by a handheld device at every step of the supply chain.
This system enables Wendy’s managers to tellexactly where inventory is at any of the links of their global supply chain, at any given time (Larson Bricher). For example, Wendy’s may notice that one shipment of beef patties is being shipped out every day by theirproducer in Florida to their warehouse in Puerto Rico. However, despite the fact that the contracted shipping company runs daily shipments between the port of Miami and the port of San Juan, the warehouse in Puerto Rico is not receiving daily shipments, but larger batches every three days.
To identify exactly where the bottleneck is, Wendy’s can consult ArrowStreamOnDemand to instantly see where inventory is being held up due to a bottleneck (Wendy’s). This system can also identify any other issues in the supply chain and provide Wendy’s with valuable data about the cold chain to reduce spoiled food, focus on problem links in the chain, and reduce time spent on trying to track inventory. This directly impacts and reduces cost and delivery time, leading to increased productivity.
Stabilizing inventory by employinga buffering system While Wendy’s has topreventkeeping excessive inventory, it is important that the company is able to effectively respond to supply chain constraints such as bottlenecks. A bottleneck can easily lead to spoiled batches of food due to the cold chain being broken. If failures caused by variability were predictable, Wendy’s would be able to carry replacement frozen beef patties exactly when and where needed, thus keeping the supply chain system working all of the time.
However, since failures are unpredictable, a buffering system allows Wendy’s to reduce and absorb the shock of impacts of supply chain failures. Having astrategically located buffering inventory enables Wendy’s to keep working and avoid sudden stops in the overall supply chain system, caused by minor issuesduring a previous link in the chain (McNamara et. al). For example, Wendy’s may keep a buffer of extra beef patties at a local warehouse in Puerto Rico, to prevent running out of product in the event of a bottleneck in the shipping of beef patties from Miami.
This is an example of buffering against variability by means of inventory. Buffering contributes to reduce costs, speed delivery, and boost productivity mainly by reduction of the idle time during subsequent steps in the supply chain system and by preventing costly supply shortages at the end of the supply chain (Dooley). Utilizing a pull system to ensure thatfood is served fresh at Wendy’s It is imperative that quality is maintained throughout the end of the supply chain.
Once the beef patties have safely been transported through the supply chain to a Wendy’s restaurant, it is essential that the customer has a good experience. Wendy’s is famous for serving fresh fast food and many customers choose Wendy’s over other fast food restaurants for this reason alone. In order to efficiently serve fresh food, a pull system is utilized. In a pull system, work is released based on the status of the system and has inherent working-in-process limitations (Hopp et al. ). A pull workstation would not process or provide service arbitrarily.
Inventory could not enter into the pull system unless authorized. Wendy’s may use a pull system to dictate the release of beef patties to the cooking station based on customer orders. This prevents waste and reduces cost, as each beef patty is released to the cooking stage only as orders are entered. Productivity and speed of delivery is increased, as the system is highly flexible and resources are available to meet a wide range of demand levels. Quality is greatly improved as every food item is served fresh and the customer is provided a better experience.
The pull system also allows you to detect any quality problemswith any individual food item which can be corrected immediately. Conclusion By employing a suitable combination of supply chain management systems, multinational corporations such as Wendy’s can save money by reducing wasted inventory and time, speeding delivery and increasing productivity. There are very sophisticated supply chain management platformsavailable that are customized for specific industries. By utilizing buffering and pull systems, inventory and output are managed to save money and operate more efficiently.