You will prepare a distribution improvement strategy for the Hunt Company. Recently, the company began outsourcing its manufacturing to overseas companies. Due to this recent change, they have suffered various issues and problems with their distribution processes.
Instructions: Read the Hunt Company case study on pages 85-88 of the Hugos textbook for additional information pertaining to the challenges, issues, and problems facing the company. In a 3-4 page written paper, address the following items in your distribution improvement strategy:
1. The major facts of the case study.
2. The main problems or issues facing the Hunt Company.
3. The possible solutions to these problems or issues (1-3 solutions).
4. Rationale for these solutions using concepts, terms, processes, procedures, and/or real-world examples discussed in the course materials.
5. The main steps to implement the new strategy or plan.
Please remember to include a title page, in-text citations, and reference page in APA style. The title page and reference page are not included in the page count.
Distribution Improvement Strategy for the Hunt Company
Course Name: Course Number
The major facts of the case study.
The case study has illustrated the supply chain issues at Hunt company after they agreed to outsource its high volume products to contractors in china as well as using low-cost offshore suppliers. Hunt’s main focus in outsourcing was to reduce the manufacturing costs which was eventually lowered after outsourcing. However, after switching to offshore outsourcing, the process led to strains on the company’s supply chain (John and Sons, 2006). The main problem discussed in this case study is the cost of switching to the outsourcing process and the management of lead times. The case study has paid attention to the shipping charges and lead times. The material manager at Hunt argued they have to improve the distribution approach to improve the office supplies, increase inventory, and reduce lead times. The objective of the case study is to cultivate a better supply chain that will enable the Company and the suppliers to have better communications thus reducing the inventory levels and lead times.
The Main Problems Facing the Hunt Company.
Hunt Company decided to outsource the manufacturing of its high volume products to contractors in China as well as low-cost offshore suppliers. The outsourcing strategy has led to several problems within its supply chain. The shift to offshore outsourcing has led to new strains on the supply chain of the company. Ideally, the problem of outsourcing comes from over-dependence on suppliers and integration issues within the supply chain (Selviaridis, 2016). For instance, the lead times, which is the time taken by the company to deliver its orders has increased while the overnight shipping charges, increase airfreight charges, and inventory costs have risen. The changes have resulted in Hunt switching from a company that quickly responded to their customers to a company that takes time to respond to their customers since they no longer depend on their manufacturing prowess but rely on their partners.
The Possible Solutions to These Problems
Hunt Company has been forced to offer solutions that will strengthen its supply chain and distribution prowess. Considerably, to acquire the best out of the new business model, Hunt requires developing a new supply chain process that will reduce the lead times and inventory leads. The changes in the supply chain process should be focused on collaboration and improved communication with suppliers. Working more efficiently with the suppliers will reduce the lead times. Effective collaboration and communication with the supplier will lower the order delivery cycle and thus improve competitive advantage and customer satisfaction.
Hunt needs to modify its forecasting process to enable the supplier’s planning capacity. Considerably, rather than offering just one level of commitment. Through this solution, the company can service the customers without having high lead times and excess inventory. The slushy and free time zones will be effective in creating more levels of commitment. For instance, the slushy zones will allow the company to purchase raw materials as well as a standard component to enable the suppliers to plan purchases and production. Hunt also needs to work out a distribution strategy that will offer suppliers better visibility into its inventory and forecast levels.
The Rationale for These Solutions
Hunt company has decided to work closely with the suppliers to structure and manage the capacity to be supplied. Building better relationships with the suppliers and customers through collaboration and communication will play a big role in improving the supply chain process. Collaboration and communication positively influence the business’ supply chain since they facilitate streamlining of the supply chain processes. Through constant checkups with the suppliers, a company can manage the lead time and inventory costs.
Forecasting forms a significant component of the supply chain process since it offers an estimate of the products that consumers will purchase as well as measuring the supply required (Darvazeh, Vanani, and Musolu, 2020). Modifying the forecasting process will create a discrete order in the supply chain which will enable the company to make choices while buying the raw materials and finished goods. Considerably, the forecasting process is an effective solution that ensures that the supplier can sufficiently plan for Hunt’s production and purchases. From lowering the lead times, inventory costs, cutting supply chain costs, and ensuring that the customers are happy, the forecasting process is an essential component in the supply chain management since it enables the company to eliminate unnecessary inventory expenses, fulfill orders on time and plan for the price fluctuations depending on the cost of supply. Effective forecasting satisfies the demand of many valued customers. MFG/PRO enterprise resource planning applications are utilized in running the internal business and supply chain visualization to offers the suppliers visibility into the company’s inventory and forecast levels (Bushuev, Guiffrida, and Rudchenko, 2018). Supply chain visualization plays an essential role in effective communication with suppliers and making contingency plans depending on the forecast and inventory information.
The Main Steps to Implement the New Plan
Hunt Company will rely on three major steps in the implementation of the distribution strategy. At first, Hunt Company needs to develop an effective distribution channel that will suit the company operations. This entails examining different distribution channels to set a distribution channel with a set of competitive priorities focusing on the needs of the end-user. The second step includes the development of a strategy that will incorporate the customers and suppliers to will come into play and recommend means of accessing the product. Considerably, understanding the consumer and suppliers plays a great role in pushing the product through. Focusing on building long term relationships with consider lead times and costs to ensure customer satisfaction. The last step will entail evaluating and adapting changes in the chosen channels. The forecasting and supply chain processes rely on the effectiveness of the distribution channel.
Bushuev, M. A., Guiffrida, A. L., & Rudchenko, T. (2018). Supply chain delivery performance improvement for several delivery time distributions. International Journal of Operational Research, 33(4), 538-558.
Darvazeh, S. S., Vanani, I. R., & Musolu, F. M. (2020). Big Data Analytics and Its Applications in Supply Chain Management. In New Trends in the Use of Artificial Intelligence for the Industry 4.0. IntechOpen.
John, W., & Sons (2006). Supply Chain Operations: Sourcing Materials and Making Products.
Selviaridis, K. (2016). Who’s to blame or praise? Performance attribution challenges in outsourced service provision in supply chains. Supply Chain Management: An International Journal.
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