Supply chain management is the management of storage of materials, inventory control, management and transferring of goods, delivery of raw materials, provision of final product and work – in – progress to the end consumer etc. (Christopher, 2005). In contemporary times, having large inventories can greatly increase storage and maintenance costs as well as fixed costs due to which inefficiencies in systems may arise. With the help of a good supply chain process a lot many advantages can be obtained in the form of both financial and operational capacities for a company.The Case – Sunny Hotel The Sunny Hotel case talks about the consolidation of services (inclusion of outsourcing for instance) and products both in the supply chain process because of which efficiencies will arise due to supply chain being made a focal point for the company in its management.
It basically intends to do this with the outsourcing of services The hotel under this plan included the following elements as part of its new SCM.These include security, cleaning, insurance, animation, software support, staff training, food storage, and food delivery services. However, there are known issues with the new SCM process like the fact that many supplier selection and evaluation systems are actually being exploited for materials and services resulting into faulty selections. Another problem is that the new purchasing department personnel in this new and improved department do not take into account the opinions of the department heads where source selection is concerned.It can be argued that the proposal here that of management services flow is the talk of the new era. However, in relevance to many contemporary supply chain management practices and practices this can be analyzed while paying attention to how A `sense and respond` supply chain approach versus traditional approaches to supply chain management ‘Predictive’ and ‘optimized’ are two key terms that are important when supply chain is talked about.
Many international business transformations today have well coordinated systems that add a lot of value to the decision making processes for these businesses. Similarly, the inclusion of a services flow through out sourcing being treated as a central point can prove to be lucrative is a sense and respond system is capitalized upon. (Huang, Kapoor; and Buckley, 2004). With the help of a supply chain management system that does not include the departments the service related to when it is being outsourced means that there is a lot of centralization being taken place.A sense and respond system through its characteristic of integrating multiple applications resulting into a system that optimizes operational performance and encourages specialization even though departments are not directly involved basically points toward the fact that decisions can now be made more effectively.
The consolidation of all responsibilities - services acquiring or purchansing related by one complete Purchasing department at the Sunny Hotel means the hotel can make this even more profitable if the sense and respond theory of supply chain is used.This involves the three stage process which starts off with sensing a need, analyzing the need and then coming to a decision regarding it after which execution of “order” or “purchasing” takes place. (Huang, Kapoor; and Buckley, 2004). “Leagility’’ and Sunny Hotel “Leagility” is a combination of two different systems in the supply chain management at a company. These include Lean and Agile. The Leagile supply chain approach refers to capitalizing on the strengths of a Lean and an Agile approach in supply chain management.
Lean supply chain is the pulling of goods by having a dependency on demand side of the process. Demand constraints and determinants are the focus of this type of a supply chain approach and capacity constraints are not exactly taken into account. Agile on the other hand is the making flexible the entire supply chain through the adoption of the MTO or made – to – order process. These systems are in correlation with the sense and respond supply chain as this kind of an approach calls for conforming to more consumer specifications. (Bruce, Daly, and Towers, 2004).
Sunny Hotel through having a centralized supply chain is also making of a ‘leagile’ supply chain system since it wants to increase profits by having an “effective purchasing and supply management” that increases the chances of profitability through “the acquisition of services than in goods”, according to the new purchase manager at the hotel. Customer specifications need to be taken into account for the success of any system – which can be an interesting dimension when we talk about the inclusion of a leagile system at the Sunny Hotel. Relationship management and The Sunny HotelBuilding of strong relationships is the key to customer satisfaction and success for a company. When there are loyal, committed customers to a company’s disposal it means maximization of revenues, low customer turnover, new business generation because of word of mouth and increased recall. Supply chain at service companies like Sunny Hotel can benefit from adopting either a traditional bow tie (by involving only the buyer and seller) or a modern diamond process (by having all functions to communicate with one another) while relationships are being built with customers.
(All Business, n. d. ) TechnologyIn times of changing technology supply chain management too can face positive and negative effects. In this case, due to adopting electronic commerce or e-commerce a lot of value can be added to the supply chain process.
Internal functions can be integrated with one’s suppliers or companies the service being centralized into the supply chain process and purchased through outsourcing activities as per the case is of relevance here. The new technology can help in decreasing inventory risks, maximizing services efficiency and having short life cycles for the services arranging for customization too simultaneously. (All Business, n. d.
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