Operation Management

Executive Summary of Supply Chain and Value Design

In this report, the dynamics of supply chain management is demonstrated in relevance to Coela’s Pvt Ltd company revolutionary building material. The product will utilise solar energy and reduce the carbon emission of Australia significantly. It will also be light-weighted as the new technology of processing coal into carbon fibres. Therefore, the adoption of lean supply chain management would be done, to reduce costs and benefit customers as well.

Table of Contents

Introduction.

Methodology.

Conclusion.

References.

Introduction to Supply Chain and Value Design

A supply chain management is a layered process which allows the relevant professionals to execute the essential part of the production process. These steps majorly indulge in turning raw materials into finished products. In the production process when finished products are about to be distributed to end-users, is also identified as a crucial part of supply chain management. However, a Value chain analysis provides the company with a detailed list of business activities required to build the product from the beginning to end. In this assignment, discussion of fundamental principles of supply and value chain would be done along with the demonstration of how to utilise all the available resources. Application of critical thinking would be showcased to resolve business issues.

Methodology of Supply Chain and Value Design

  1. Draw a map of and describe the SC for your organisations' product(s)
  1. Identify all organisations and supplies in the SC (real-world organisations that will be supplying to your organisation).

A supply chain is a bridge in between a company and suppliers who will provide raw materials for the development of the product (Boubaker et al., 2019 p3). Coela Pvt Ltd would require various resources procured from all over the globe for the development of revolutionary building material. The domestic market would be Australia, as the manufacturing will take place in Townsville, New Queensland. The raw materials required to construct the revolutionary building material are as follows.

Coal - It will be procured from the North Queensland, Bowen Basin Coal Mines, which is identified as one of the largest coal reserves in the nation of Australia (Bbugs.org.au, 2020). The coal is required so that the core dynamic of the product which is the usage of carbon fibres for lightness and strength can be created. Some of the major mines that can supply to this startup project are listed below.

  • Curragh Mine
  • Dawson Central Mine
  • Goonyella Riverside Mine
  • Hail Creek mine
  • Peak Downs Mine
  • Saraji Mine

Assembled Heavy density insulation fillers- Coela Pvt Ltd’s revolutionary building material will have insulation layers in it, for it to provide more power to it (Dakhil, & Mashkoor, 2019 p30). Japan is the country which is excelling in the making of such powerful materials like insulation fibres which are empowered by thermal solutions. Some of the famous companies that can supply to this start-up are as follows.

  • Toray - Innovation by Chemistry
  • Japan Insulation Co Ltd

Fireproof/resistant outer layers - Coatings - To build this revolutionary material that promises to hold the residential construction and commercial buildings, fireproof coatings are required to provide it more solidity in its sustenance. Coela Pvt Ltd can source this from South Korean companies which are as follows.

  • kr
  • Linder
  • Rotork PLC
  • Tyco
  • Bernard Controls Group

Zircon - Pilbara region Western Australia - It is a whitening agent which is widely used in ceramics and fibre optic components. Australian is identified as the largest resources of economically powdered metals and minerals. Zircon is one of them, and it is widely found in the Pilbara Region of Western Australia. Some of the companies are as follows.

  1. KingFact
  2. Audeck
  3. Dome - Discover Opportunities

Specialised toughened glass insul wool fibres - This material is excellent heat observers and is also composed of amino acids (Bechthold & Weaver, 2017 p6). Retention of moisture is high and hence it is required to build the revolutionary building material. It can be procured from Wollongong NSW and some of the companies are listed below.

  • Kenwalls Fencing
  • Bunnings Wollongong
  • Insulation Roof and Safety

Silver - Silver is an important metal that is used in the revolutionary building material. Therefore, from a geological survey, it was found out that PNG Highlands (Papua New Guinea’s Highlands) have a relatively high potential for mineral production. Some of the mines that can supply to this start-up are as follows.

  • Edie Creek
  • Hidden Valley
  • Identify all downstream organisations and customers in the SC (real-world organisations that will be buying from your organisation).

Supply chain management is an extensive process which begins from procurement of raw materials and ends into finished products. It begins from vendors and suppliers, then the manufacturing process takes place (Lestari et al., 2020, p430). After that, the distribution process to the end-user is elaborate as it goes through various, retailers, wholesalers from brick and mortar outlets or online. Downstream is that stage of the supply chain when the finished products are about to flow away from the organisation (Lima, Relvas & Barbosa-Póvoa, 2016 p85). The actual sale of the product takes place in this stage, as the sale is made to various organisations, government institution and private individuals as well. Therefore, when direct contact is made with customers, it is called down streaming of supply chain. The product promises to provide sustainability for commercial and residential buildings. This states that construction companies in Australia will be wanting to associate with the revolutionary building material of this startup. Some of these companies are identified below which we as an innovative start-up can approach for marketing the product.

Commercial Contractors

  • Richard Crookes Constructions
  • CPB Contractors
  • Laing O'Rourke Australia
  • Hutchinson Builders
  • Probuild
  • Nexus Infrastructure
  • John Holland
  • ADCO Constructions
  • BGC (Australia)
  • Fulton Hogan
  • Lendlease
  • Nexus Infrastructure

Residential Contractors

  • MAS - Build with a difference
  • J & P Richardson Industries
  • Tamawood Limited
  • Dowells

These are some of the companies who would be the target organisations of this start-up of developing a revolutionary building material. Coela Pvt Ltd has chosen to adopt the lean supply chain management approach. The company will link to its downstream customers and suppliers directly, to reduce waste which is its first objective. This product will significantly reduce Australia’s carbon emission by 1.1 % overall which will be achieved with the collaborative working system of the lean method. Therefore, its work structure breakdown is as follows.

  1. Identify and discuss the challenges that need to be considered in developing the supply chain? Suggest possible alternatives to the challenges identified.

Supply chain management is a complex process, hence it should be mapped out correctly beforehand, to avoid overlapping of activities. Correct structuring of Supply Chain will lead to the achievement of advantage over competitors in the economy. As the production of this product is from a start-up entrepreneurial base, it requires focussed attention in the manufacturing and distribution process. However, there are many challenges that a start-up can face during managing their supply chain management. Some of the possible challenges are identified below.

Fuel costs

One of the highest cost that a start-up has to bear is the fuel cost. The procurement process for the revolutionary building product is extensive, as it requires various metals for its construction which needs to be resourced from reliable places (Rajeev et al., 2017 p306). In the above question, it was mentioned that the procurement will take place from around the globe. High fuel prices and the rate of transportation altogether hike the budget itself. However, this can be managed if sensible drivers are recruited who use aerodynamics and maintain limited weight.

Business Process improvement

The economy is changing rapidly, therefore, the businesses need to stay updated with all the latest technologies that corporates largely use. Usage of Supply Chain Management software’s is recommended by experts. It helps to manage the flow of business activities smoothly (Luthra & Mangla, 2018 p173).

Improved Customer Service

Any start-up’s centrifugal force is the cause behind the idea and how it would add value to the lives of people in a community. There are many organisations and private individuals, who would want to buy the product of revolutionary building material. Distribution shall be done in a way that it markets the scope of using this product. It should be provided in a way that it justifies the right quantity and quality at the right price. However, this can be managed, if the customer’s preferences are kept in mind.

Risk Management

Start-ups like this shall keep the dynamics of the economy in mind, while the draw out a structure of their business activities. The suppliers of this project are speeded across multiple countries and different time zones. Coordinating activities can act as a tough challenge for the company as it has to be kept simple to maintain the upstreaming and down streaming of exponential partners smoothly.

Supplier Relationship

The impact of volatility and complexity can rupture the entire process of supply chain management. Therefore, to survive this, the supplier relationship shall be focussed upon extensively. Communication and building a good reputation is the key to achieving that. As Coela is a start-up, it will be pitching their cause of benefiting Australia’s environment and adding value to the community by their revolutionary building material.

The major suppliers are from across various foreign countries which might impose the pressure of bearing with political tariffs across trade routes.

  1. Identify and discuss the value proposition of the proposed SC for the organisation and product/service.

Creation of alignment in between business and value chain strategy is essential for effective management of Coela’s project of constructing revolutionary building material. The company has chosen to adopt lean supply chain management and its work process breakdown is as follows.

Procurement - This requires extensive market research and as Coela will need to have a list of suppliers that can provide it with the particular amount of various metals and insulators, to construct the revolutionary building product. Countries like Chile, Japan, South Korea and places like PNG Highlands, and Bowel basin will be the major areas from where the required raw materials will be transported to New Queensland. Raw material from PNG, Chile, Japan and South Korea will be shipped from Port Moresby, Brisbane and Sydney respectively to Townsville port.

Manufacturing

The lean method makes an organisation excel in their manufacturing area. It is that level where most of the costs and waste will be reduced. Coela will examine each of their routines, avoiding any possibility of defects to increase efficiency. The manufacturing facility of Coela Pvt LTD. will be established in Townsville of New Queensland. The procured raw materials from various countries will be processed in that facility itself. Now, this requires the avoidance of duplicate procedures in the same department and management in the co-coordinating time of various processing activities.

Warehousing

Warehousing shall be done effectively too, this is because if a company can manage its storage and handling of products during the shipping and transporting process is essential (Panayides, Borch & Henk, 2018). Coela will adopt the process of managing inventory efficiently. Customised pre-fabricated panels will be available within 10 days of CAD order. Transportation and shipping would be done through trucks and standard shipping containers. Port of Townsville, will export 15% of the expected production in the first 24 months.

Transportation

Coela wants to implement the lean methodology in its supply chain management. This can be achieved if the company focuses on associating with a few logistics companies which are listed below.

  • DB Schenker 
  • Linfox 
  • Kings Transport 
  • SCT Logistics 

The cost can be reduced here as well, when users are not confused with multiple shippers and offers are provided to them, which will enable them to order more than one item at a time. This fulfils the objective lean methodology that is of benefiting the customer and the corporation as well.

  1. Identify and discuss relevant Order Winners and Order Qualifiers.

Order Winners and Order qualifiers differ from each other at one point which is if some characteristics of a product make it unique are relevant to the former term. However, those characteristics which make it fit to enter the market are relevant to the latter term (Dagaev & Sonin, 2018).

Order Qualifiers

  • Extremely light, strong, nom rusting, termite-proof and can be reshaped into artistic architectural shapes if required.
  • Processes coal into coal fibres and approaches the production process with lean management.

Order Winners

  1. Very small environmental footprint
  2. Fully recyclable components with a buy-back, recycle incentive offer to all customers
  3. Contributes to the reduction of global emissions.
  4. Research going on to suit is applicability in a tropical cyclone and northern hemispheres.

Conclusion on Supply Chain and Value Design

It can be concluded that supply chain management is about maintaining the flow of products and monitor over its correct transformation to the designed end product. The product of revolutionary building material by Coela will produce domestically in Australia by 15 per cent in a year and then expand its reach to the international buyers. Lean supply chain management is the most suitable to their business model as it contributes towards benefiting society.

References for Supply Chain and Value Design

Bbugs.org.au (2020) Bowen Basin Coal Mines – BBUGS. Retrieved 10 August 2020, from http://bbugs.org.au/bowen-basin-coal-mines/

Thebalancesmb.com, (2020) An Expert's Guide to Lean Supply Chain Management. Retrieved 12 August 2020, from https://www.thebalancesmb.com/lean-supply-chain-management-2221274

Boubaker, S., Jemai, Z., Sahin, E., & Dallery, Y. (2019, September). Supply chain agility drivers and enablers. In 2019 International Conference on Industrial Engineering and Systems Management (IESM) (pp. 1-5). IEEE.

Bechthold, M., & Weaver, J. C. (2017). Materials science and architecture. Nature Reviews Materials2(12), 1-19.

Dakhil, S. F., Mohammad, H. M., & Mashkoor, E. A. (2019). Evaluation and Optimization of Composite Thermal Insulators from Waste Materials. Basrah Journal for Engineering Science19(2), 27-32.

Lima, C., Relvas, S., & Barbosa-Póvoa, A. P. F. (2016). Downstream oil supply chain management: A critical review and future directions. Computers & Chemical Engineering92, 78-92.

Lestari, F., Kurniawan, R., Ismail, K., & Hamid, A. (2020). Supply chain relationship in a downstream sector. Uncertain Supply Chain Management8(2), 423-438.

Luthra, S., & Mangla, S. K. (2018). Evaluating challenges to Industry 4.0 initiatives for supply chain sustainability in emerging economies. Process Safety and Environmental Protection117, 168-179.

Rajeev, A., Pati, R. K., Padhi, S. S., & Govindan, K. (2017). Evolution of sustainability in supply chain management: A literature review. Journal of Cleaner Production162, 299-314.

Panayides, P., Borch, O. J., & Henk, A. (2018). Measurement challenges of supply chain performance in complex shipping environments. Maritime Business Review.

Dagaev, D., & Sonin, K. (2018). Winning by losing: Incentive incompatibility in multiple qualifiers. Journal of Sports Economics19(8), 1122-1146.

Handshake.com (2020) Lean Supply Chain: How to Develop an Effective Strategy | supply-chain

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