Supply Chain Management Final Paper
Supply Chain Management Final PaperCreating Efficiency,
Integration, and Responsiveness at New Company: The Case of PT Indo
Marvel Perkasa
Silviany Chandra - 3303012020International Business Management
Faculty of Business Widya Mandala Catholic University Surabaya
2014
Table of ContentsTable of Contents ii1. Introduction 11.1.
Background 11.2. Problem Statement 32. Literature Review 52.1.
Customer Order Cycle 52.2. Supply Chain Drivers: Facilities,
Transportation, Information, and Sourcing 72.3. Distribution and
Application to Online Sales 112.4. Information Technology in a
Supply Chain 123. Discussion and Analysis 153.1. Company Profile
153.2. Discussion and Analysis 184. Conclusion and Suggestion
304.1. Conclusion 304.2. Suggestion 31References 322
1. Introduction1.1. BackgroundSupply chain management is become
trending nowadays. At 1980s, chain of activities that usually done
in manufacture like material handling, procurement, production,
distribution, logistic and soon is not mentioned as supply chain.
Then, at 2000s we can know the term of Supply Chain Management
(SCM) that consist of logistic activities, combine with the
advancement of technology, marketing, and strategic planning.Supply
Chain is activities consist of all parties involved, directly or
indirectly, in fulfilling customer request. The parties involved
are not only manufacturers and suppliers, but also transporters,
warehouses, retailers, and also customer themselves. SCM is
something that really important to be mastered by a company. The
objective of SCM is to reduce cost in order to increase the profit.
Profit is the result from revenues subtract by cost. When revenues
already maximum because the market price cannot be increased
anymore, we can maximize our profit by reduce the overall cost. In
SCM, we can identify numerous techniques to reduce cost. Every part
of supply chain starting from supplier until customer has different
management technique to reduce cost and gain efficiency.Efficiency
is not the only thing that we have to take into account in supply
chain, but also how through supply chain a company able to fulfill
customer willingness or become responsive. Thats what we called
value chain, where every stage in the supply chain a product could
have additional value when finally the product accepted by
customer. Responsiveness creates great customer experience and
maintains good relationship with them.Every manufacture company in
Indonesia should apply SCM. But, unfortunately, every company
doesnt have ability to apply it on their system. Many factors that
cause it, one of those is the lack of knowledge that usually
experienced by Small Medium Enterprise (SME). The factors also
\because you need particular measurement and not every company able
to do it. The lack of staff with special skill and supporting
technology also the major cause why it is hard to implement.
Moreover, to have those things a company needs high investment.
Then, the application of supply chain in a company become more
difficult, especially for new company.Yes, a new company that might
just established around 2-5 years. A new company usually still
unstable, that is because new company doesnt have certain system
like Standard Operating Procedure (SOP), the system of order
processing, employees management, and many more. The working
process usually done manually. From that side we can conclude the
supply chain in new company still not working properly. The
consequences, there will be a lot of problems that occur such as
inaccurate information in the company, the ambiguity of a
procedure, and incapability of fulfilling customer needs.In this
paper will be elaborate how the supply chain condition is in new
company. We will find out what problems faced by them and what is
the major problem that create the most loss to the company, why it
is happen, and how to attain that problem to create efficiency,
integration, and responsiveness.1.2. Problem Statement1. Efficient
shippingAs a company that focuses on business to business
transaction, usually shipping is done by the company itself
directly to the customer. Shipping is one of the service that liked
by customer. Because of this service, customer doesnt need to go
and bring the product which usually heavy. On time shipping is very
important.However, company faces an issue where sometimes the
products that need to be sending are in small amount. Using box car
(the only shipping mode in the company) to just send one or two
carton will create loss because it is not worth the cost incurred.
But using motorcycle will cause delay to the customer because
motorcycle is not the transportation mode that owned by the
company, but it is owned by the employees who is not always at the
office.2. Choosing supplierHaving suppliers that can provide high
quality raw materials is very important for company so they can
provide customer high quality products. Good relationship with
supplier also helps company reduce cost because several benefits
that common business customer do not get.However, company sometimes
facing inconsistency with suppliers product, sometimes the quality
is good, sometimes the quality is low that make customer complaint
and reduce trust towards company. Supplier also not very
cooperative when sending the materials to the factory because
distance problem that makes factorys production delay.3. Receive
customer orderHaving good documentation for customer order very
important to avoid misunderstanding when customer ordering.
Computerized data record is also important for company so they are
able to do analysis toward each customer and create integration and
ease information sharing toward every department in the company.
Right now, the only access to order to the company is only through
call or come directly to the office. Ordering only through call
create misunderstanding, especially for customized order. Order
recording system also too simply and done manually by using book to
record the order. This is cause difficulties in information sharing
and analysis and makes company do not have a proper customer
database.
2. Literature Review2.1. Customer Order CycleThe customer order
cycle occurs at the customer/retailer interface and includes all
processes directly involved in receiving and filling the customers
order. The companys interaction with the customer starts when the
customer arrives or contact is initiated and ends when the customer
receives the order. The processes involved in the customer order
cycle include:Customer ArrivalThe term customer arrival refers to
the customers arrival at the location where he or she has access to
his or her choices and makes a decision regarding a purchase. The
starting point for any supply chain is the arrival of a customer.
Customer arrival can occur when: The customer walks into a
supermarket to make a purchase The customer calls a mail order
telemarketing center The customer uses the Web or an electronic
link to a mail order firmFrom the supply chain perspective, the key
flow in this process is the customers arrival. The goal is to
facilitate the contact between the customer and the appropriate
product so that the customers arrival turns into a customer order.
At a supermarket, facilitating a customer order may involve
managing customer flows and product displays. At a telemarketing
center, it may mean ensuring that customers do not have to wait on
hold for too long. It may also mean having systems in place so that
sales representatives can answer customer queries in a way that
turns calls into orders. At a Web site, a key stem may be search
capabilities with tools such as personalization that allow
customers to quickly locate and view products that may interest
them. The objective of the customer arrival process is to maximize
the conversion of customer arrivalsto customer orders.Customer
Order EntryThe term customer order entry refers to customers
informing the retailer what products they want to purchase and the
retailer allocating products to customers. At a supermarket, order
entry may take the form of customers loading all items that they
intend to purchase onto their carts. At a mail order firms
telemarketing center or Web site, order entry may involve customers
informing the retailer of the items and quantities they selected.
The objective of the customer order entry process is to ensure that
the order entry is quick, accurate, and communicated to all other
supply chain processes that are affected by it.Customer Order
FulfillmentDuring the process, the customers order is filled and
sent to the customer. At a supermarket, the customer performs this
process. At a mail order firm this process generally includes
picking the order from inventory, packaging it, and shipping it to
the customer. All inventories will need to be updated, which may
result in the initiation of the replenishment cycle. In general,
customer order fulfillment takes place from retailer inventory. In
a build-to-order scenario, however, order fulfillment takes place
directly from the manufacturers production line. The objective of
the customer order fulfillment process is to get the correct orders
to customers by the promised due dates at the lowest possible
cost.Customer Order ReceivingDuring this process, the customer
receives the order and takes ownership. Records of this receipt may
be updated and payment completed. At a supermarket, receiving
occurs at the checkout counter. For a mail order firm, receiving
occurs when the product is delivered to the customer.
2.2. Supply Chain Drivers: Facilities, Transportation,
Information, and SourcingFacilities are the actual physical
locations in the supply chain network where product is stored,
assembled, or fabricated. Decisions regarding the role, location,
capacity, and flexibility of facilities have a significant impact
on the supply chains performance. Facilities are a key driver of
supply chain performance in terms of responsiveness and efficiency.
There is a fundamental trade-off between set the facilities to gain
efficiency or responsiveness. Increasing the number of facilities
increases facility and inventory costs but decreases transportation
costs and reduces response time. Having centralized facilities
reduce facilities and inventory cost while increase the
transportation costs and response time. Firms need to decide which
one they want to pursue, responsiveness or efficiency. The other
consideration that firms need to make decision about the facilities
is whether the facilities will be product focus or functional
focus. For the warehouse, firms need to decide whether they will do
cross-docking or storage facilities. Companies also need to
consider issues related to the various characteristics of the local
area where the facilities situated, including macroeconomics
factors, cost of workers, cost of facility, available of
infrastructure, proximity to customers, tax effects, and other
strategic factors. Company also needs to determine facilitys
capacity to perform its function. Many things to consider when
making facilities decision, because it can impact the financial
performance of the firm and supply chains responsiveness to the
customer.Transportation is about moving inventory from point to
point in the supply chain. Transportation can take the form of many
combinations of modes and routes, each with its own
characteristics. Transportation choices have a large impact on
supply chain responsiveness and efficiency. The type transportation
a company uses also affects the inventory and facility locations in
the supply chain. Transportation decision made base on the product
they sell. If company selling high-value items they might use rapid
transportation to be responsive. But, a firm that sells low-value,
high-demand product they can use low-cost transportation like sea,
rail, and trucks.Transportation network is the collection of
transportation modes, locations, and routes along which product can
be shipped. A company must decide whether transportation from a
supply source will be direct to the demand point or go through
intermediate consolidation points. Consideration of transportation
includes what mode that will be used. Information consists of data
and analysis concerning facilities, inventory, transportation,
costs, prices, and customers throughout the supply chain.
Information presents management with the opportunity to make supply
chains more responsive and more efficient. Good information can
help improve the utilization of supply chain assets and the
coordination of supply chain flows to increase responsiveness and
reduce costs. The appropriate investment in information technology
improves visibility of transactions and coordination of decisions
across the supply chain. Coordination is essential if all stages of
the supply chain are work together toward a common goal. There are
some components when doing information decisions. First, managers
should decide whether the processes are part of the push or pull
phase in the chain. Second, is about coordination and information
sharing. Supply chain coordination occurs when all stages of a
supply chain work toward the objective of maximizing total supply
chain profitability based on shared information. Coordination in
supply chain need appropriate information sharing. Third, is about
sales and operations planning. It is a process of creating overall
supply chain to meet the anticipated level of demand. The sales and
operations plan becomes a critical piece of information to be
shared because it affects both the demand on a firms suppliers and
the supply to the customer. There is a danger in the assumption
that more information is always better. As more information is
shared across the supply chain the complexity and cost of required
infrastructure and the follow-up analysis grow exponentially. The
marginal value provided by the information shared however
diminishes as more and more information is available. It is thus
important to evaluate minimum information required to accomplish
the desired objectives. Sourcing is the choice of who will perform
a particular supply chain activity such as production, storage,
transportation, or the management of information, whether it will
be performed by the firm itself or outsourcing. Sourcing decision
also affect the responsiveness and efficiency of a supply chain.
There are some components of sourcing decisions, those are in-house
or outsource, supplier selection, and procurement. On supplier
selection managers must decide on the number of suppliers they will
have for a particular activity. They must then identify the
criteria along which suppliers will be evaluated and how they will
be selected. When negotiate managers must decide whether they will
use direct negotiation or using auction. On procurement managers
must structured it to ensure the coordination between supplier and
buyer and also to keep the transaction costs low. Supplier scoring
and assessment is the process used to rate supplier performance.
Supplier must be compared based on their impact on the supply chain
surplus and total cost. There are some characteristic of suppliers
such as lead time, reliability, quality, design capability, and
price. A good supplier must be identified by tracking the
performance along all dimensions and evaluate the impact on the
total cost of using a supplier, then we can select appropriate
supplier from that performance identification.
2.3. Distribution and Application to Online Sales Distribution
is important parts in supply chain. Distribution is the movement of
goods and services from the source through a distribution channel,
right up to the final customer, consumer, or user, and the movement
of payment in the opposite direction, right up to the original
producer or supplier. Distribution occurs between every pair of
stages in supply chain. Factors that influencing distribution
network design are customer needs that are met, cost of meeting
customer needs, product characteristic. Designing distribution
network affects supply chain costs on inventory, transportation,
facilities and handling, and also information. There are two key
decisions regarding distribution network design. First, will the
product delivered to the customer location or picked up from
prearranged site? Or will product flow through an intermediary?
Then, the manufacturer can decide which design best suit to their
objectives. There are some options of distribution network
design:1. Manufacturer storage with direct shipping2. Manufacturer
storage with direct shipping and in-transit merge3. Distributor
storage with carrier delivery4. Distributor storage with last-mile
delivery5. Manufacturer/distributor storage with customer pickup6.
Retail storage with customer pickupInternet could affect the
structure and performance of various distribution networks. We need
to understand what makes online sales being so successful in some
networks. Online sales gives impact to customer service at the side
of response time, product variety, product availability, customer
experience, then as a company we have faster time to market, and
giving the customer order visibility. It also allows us to build
relationship and get feedback from customer indirectly.
2.4. Information Technology in a Supply ChainIn the supply chain
there are three macro processes. There are Customer Relationship
Management (CRM), Internal Supply Chain Management (ISCM), and
Supplier Relationship Management (SRM). CRM is all the processes
that focus on the interface between the firm and its customers. CRM
key processes include marketing, selling, ordering, and service
center. IT can enhance CRM process. IT can increase responsiveness
and create great customer experience. CRM is very important,
because through CRM we can note the customer order more detail and
can send it to the production with the right information too. With
the accurate information, company can prevent mistake in
production. Company can use software that can support the
activities of CRM like Oracle or software that use cloud computing
mechanism like salesforce.com.ISCM is all processes that are focus
on internal operations within the firm. It includes strategic
planning, demand planning, supply planning, fulfillment, and field
service. The aim of ISCM is to fulfill demand generated by CRM
macro processes.SRM is all the process that focuses on upstream
interactions between enterprise and its suppliers. The major
processes are design collaboration, source, negotiate, buy, and
supply collaboration. Significant improvement in supply chain can
be achieved if SCM are well integrated with appropriate CRM and
ISCM processes. In the future of supply chain management we are not
always need to install special software to our company. Besides the
investment is high, the risk is also high. There is another option
to keep having integrated supply chain management, which is by
using SaaS or Software as a Service. SaaS defined as software that
is owned, delivered, and managed remotely. Gartner has predicted
that SaaS will grow to about 16 percent of global software market
in 2014. This shift is likely to occur because SaaS provides lower
startup and maintenance costs compared to application that are
deployed on site. These factors are particularly important for
small and midsized companies. The Software as a Service (SaaS)
model implies the use of various applications in rent. Its
so-called Cloud Computing. The essence of the model is that the
customer does not buy the software, but pays for the service which
it provides. The customer does not install software on the servers,
but uses capacities of the developer, needing only to pay for the
service, cloud server maintenance and consultation services. As a
result the company with SaaS customer gets access to the necessary
application on a cloud server of the developer which allows saving
money and quickly introducing the software to the business. It is
needless to say that as a result everyone wins: customers dont need
to spend money on system administration, and suppliers, thanks to
software installation on their cloud hosting, quickly provide the
clients with the necessary service. SaaS offer the user key
benefits include the following: Low cost of entry and lower total
cost of ownership (TCO) - elimination of capital expenditures and
dramatic reduction in IT salaries. Vested vendor interests - if the
application utilization is not successful, the vendor loses the
customer revenue opportunity. Much lower risk - faster
implementations and outsourced expertise dramatically lower risk. A
more powerful and secure IT infrastructure - few organizations can
match the infrastructure and security investments made by SaaS
vendors.
3. Discussion and Analysis3.1. Company Profile Vision:Creating
high quality products and become customer number one
trustworthiness. Mission: Giving high quality products with
competitive price. Maintaining stable sales and creating continuous
profit. Giving the best service by keeping customer satisfaction
and trustworthiness. PT Indo Marvel Perkasa Establish since
February, 2014. Located at Surabaya with office at Ngagel Jaya
Selatan and manufacture at Rungkut Industry. Recently, they
consolidate the office and the manufacture become one and move it
to Legundi, Gresik. Industry field that established by PT Indo
Marvel Perkasa (PT IMP) basically has a concept and target that all
this time Indonesia has two types of notes, those are manual note
and computer note. The types of notes has various specification,
those are: 1. Manual Note: Cash Note:- Nota Custom ( Pre-printed
Nota ) 2. Computer Note : Continuous Form- Custom Continuous Form-
Pre-Printed Continuous Form- Security Form Register Roll ( NCR ) -
Custom Register Roll- Pre-printed Register Roll Register Roll
Thermal- Custom Register Roll Thermal- Pre-printed Register Roll
ThermalContinuous Form Paper or Computer Form is the type of paper
which every piece interconnected and used for dot matrix printer
and ink-jet printer and also several printers that designed with
precise paper input mechanism. Continuous form used by person or
company where the system already computerized to do their daily
business activities where they print forms that will keep
continue.Here are the types of Continuous Form produce by PT Indo
Marvel Perkasa:
Vista Brand (Australia Material)
1 Ply 9 1/ 2 " x 11 " ( 2000 Sets)
1 Ply 9 1/ 2 " x 11 " PRS ( 2000 Sets)
2 Ply 9 1/ 2 " x 11 " ( 1000 Sets)
2 Ply 9 1/ 2 " x 11 " PRS ( 1000 Sets)
3 Ply 9 1/ 2 " x 11 " ( 1000 Sets)
3 Ply 9 1/ 2 " x 11 " PRS ( 1000 Sets)
4 Ply 9 1/ 2 " x 11 " ( 500 Sets)
4 Ply 9 1/ 2 " x 11 " PRS ( 500 Sets)
5 Ply 9 1/ 2 " x 11 " ( 500 Sets)
5 Ply 9 1/ 2 " x 11 " PRS ( 500 Sets)
Register Roll is paper that has roll shape, where usually use
for cash register machine, parking receipt, ATM, and so on.
Generally, register roll has no horizontal perforation or vertical
perforation, because usually the printer that used for register
roll application has its own cutting unit.Here are the types of
Register Roll produce by PT Indo Marvel Perkasa:RAYA REGISTER
ROLL
1 PLY 75x60
1 PLY 75x65
2 PLY 75x60
2 PLY 75x65
VISTA REGISTER ROLL
1 PLY 75x60
1 PLY 75x65
3.3. Discussion and AnalysisPT Indo Marvel Perkasa (PT IMP) has
supply chain management that done manually. I mean, there is small
contribution of IT at the firm. They have two major type continuous
form, first the regular continuous form (no customization), and
special order continuous form (with customization). The regular one
produce plain continuous form and always ready stock, while special
order continuous form usually added by company logo of the customer
with minimum order 10 boxes. Customer order received through
telephone call. If they are ordering custom product they have to
send their files (example: company logos) through email. Then,
office will give planning to the manufacture through a paper with
format: Customer name Quantity Product Type. For special order, the
office will collect the order for the entire week then the
production of all special order will be produce the next week. The
special order will finish about 3-7 days. For regular continuous
form, the production is done as long as there is no special order
and it always ready stock. When the customers order it, the office
will ship to them base on the daily shipping schedule that is start
from 10 am. They ship the product with their own transportation
mode, box car, and it is free for Surabaya, Gresik, and Sidoarjo
area. At the production site there are 3 machines, two machines for
producing regular continuous form and one machine for special or
customized continuous form. For the register roll they import it
from China. For production, PT IMP has several suppliers. They
supply the material such as paper, ink, carton, and tape. The
production process is quite simple. The operator will input the
plain paper to the machine, and then they will set the machine to
come up with desired size. The machine will automatically pack the
finish product. One machine handled by two operators. There are two
production shifts. First shift working from 8 am until 4 pm, and
the second shift work from 4 pm to 12 pm.As mentioned earlier that
PT IMP, consolidate and move their office and manufacture into one
single facility. The facility is located at Legundi, Gresik. The
decision to consolidate and move their facility is done for the
purpose of efficiency. When they have separate office and
manufacture, they have to pay for two facilities include the
electricity and water. They also need to pay more on communication,
because all order accepted by office, then office have to tell the
manufacture through communication channel like telephone, fax, and
email. Sometimes, miscommunication happens and create mistake in
producing customer order.By having single facility they can save a
lot of cost and doing long-term investment. The facility at
Legundi, Gresik has advantage of cheap price and it is a new
industrial area that has big potential for the next several years.
Moreover, for the next five or six years there will be highway, so
people from Surabaya and Gresik can easily go there. Moving to the
new facility giving new opportunity and more advantages for
short-term and long-term, but it also creates new problems, at
least for this five until six years regarding to the difficult
access to the new facility and the highway still on the
processThere are 3 problems that we could state here:1. Efficient
shipping2. Choosing supplier3. Receive customer orderShipment is
one of the service that a company done to satisfy customer and
adding the value to the product. The key success of a company is
satisfied customer, not only with our product, but also with the
service that we give. Company should try as maximum as they could
to serve customer, but in the other side company need to maintain
efficiency. Making products available, wherever they are required,
benefits customers. Although customers do not actually view the
operation of supply chains, they value product availability made
possible by distribution processes. In fact consumers have become
so dependent upon the operation of supply chains that they would
quickly complain if the processes of distribution suddenly broke
down.For shipment, the company has its own transportation mode that
is one box car (mobil boks). The box car has 1 driver and 1 drivers
helper. They provide free shipping to every area in Surabaya,
Gresik, and Sidoarjo. At this point they use manufacturer storage
with direct shipping distribution network. Where they ship the
product directly to the customer and do not through any other
intermediaries or distribution center. This company sells
low-value, high-demand product so they can use low-cost
transportation like box car or ship it through shipment service for
customer out of town.Shipping the product in large quantity there
will be no problem wherever they ship, because the shipping cost
wide spread all over the revenues of the product. When we as a
company decide to give free shipping to the customer, it will
affect the profit margin that we get. The cost of shipping will
reduce the profit margin.The problem occurs when the customer only
orders one or two boxes. The driver do not want to send it to the
customer because the quantity is too small and it will be a waste
of energy and cost to only ship such a little amount to an address.
When the customer order in small amount, the shipping cost is not
wide spread to the revenues that they get from the product sales.
It could create loss to the company operational. Then, for
temporary, they drop the small quantity order to the old office at
Ngagel, and then from Ngagel there will be other employee that
still operate Ngagel office, send the product using motorcycle. The
consequence, the shipment to the customer will be delayed. When the
shipment is delayed, the level of customer satisfaction will
decrease.Right now, the Ngagel office is in the process to be sold,
the problem occur when the Ngagel office totally off, what strategy
they would do to overcome this problem?First thing to do, the
company should have clear objective towards what kind of customer
they want to serve. After they decide, they can really focus on
that customer and not pay so much effort to the customer that is
not their main target. For this company, they mention that they
mainly serve business-to-business customer. Then, they should focus
on sell the product and serve to that targeted businesses,
especially business like Retail Store, Universities, or Expedition.
They need to push their sales force to really focus on dealing with
that target market. Having customer from that market can guarantee
the company to get large order quantity.Secondly, the company
should make some policies regarding to the customer order and
shipping. Such as, the minimum order, the shipping schedule,
shipping fee for product that is not fulfill the minimum order,
payment schedule, discounts, and so on. Once the policy set, every
part in the company, especially the order receiver, needs to obey
it, because sometimes when the customer keep force their request,
employee will approve it. But, from the company itself they have to
strict to the policies.Third, the company should consider several
alternatives to solve this problem. There are several choices that
they can use to solve the problem. If the number of small order is
high and it is a loss for company to not receive that order they
can add additional transportation modes in the form of motorcycle
for small amount order. They also can choose to use shipping
service. In Surabaya we can find many shipping service that offer
cheap price. Company also can set minimum order, when the order is
under minimum quantity the customer do not get the free shipping or
if they dont want to get charged of shipping cost, they can go to
the office and pick the product. They also can do daily shipping
plan to come up with efficient shipping route. When the rates of
order increase and company have excess money, dont bother to invest
in shipping software. Shipping software can help structure companys
shipping processes. Many companies are wisely embracing web-based
shipping. Making the move to online shipping methods helps
centralize all relevant information. Shipping software programs
have many beneficial features, some of which allow company to
integrate shipping department from warehouse, billing, sales,
finance, etc., keep track of all orders, easily access customer
information, manage inventory, plan efficient routes, and keep
everyone informed. Miscommunication, or lack of communication, can
wreak havoc on any shipping process. Train all of the employees on
the proper shipping procedures so that everyone knows the right way
to do it.Shipping processes and costs are typically not the first
place most companies look when they are tasked with streamlining
operations and lowering costs. Yet, this is one of the area most
companies consistently waste time and money. Intelligent shipping
solution deployed can transform a disconnected and high-cost
shipping operation into one of the most efficient and
cost-effective operations in a company while able to satisfying
customer.The next topic to be elaborated is supplier selection and
how to maintain good relationship with suppliers. Supplier is a
party that supplies goods or service to the company. Selecting the
right suppliers for a business needs is vital to ensure that you
are able to deliver your products and services on time, at the
right price, and in compliance with your quality standards. By
implementing specific suppliers selection criteria, its possible to
identify companies that will work with you to meet the demands of
your customers. Choosing the right supplier involves much more than
scanning a series of price lists. How you weigh up the importance
of these different factors will be based on your business'
priorities and strategy.PT IMP has some suppliers to support their
business process. They have total 9 suppliers. The suppliers supply
the basic goods for production like paper, ncr, ink, tape, and
carton. All the goods ship directly to the production site. When
the production site still in the Rungkut, there is no problem, but
when the production site move to the Legundi, Gresik there is one
supplier that dont want to ship to there because of distance
problem. It is the ink supplier. Temporarily, they send the ink to
the Ngagel office and people from Legundi will pick it up. But,
once again, when the Ngagel office totally off, how the supply can
be received by the production? If this thing keeps happening, it
will be an obstacle for the production side. And it also makes the
company should spend more effort to get the material, while the
purpose of supplier is to support companys business process.PT IMP
also meets a problem with paper supplier, where their quality is
not consistent. Sometimes the quality is good, but sometimes the
quality is lower than usual. When the quality is low, it creates
low quality finish products too. The low quality product results in
customer complaint. The moment the customer complaint, company
becomes less trusted or losing credibility in customer eyes. It
will make company lose their customer and drives to decrease of
sales.To overcome these problems, company should do evaluation
towards the suppliers. Is the supplier really worth to defend? Is
there any different from the side of quality and price that this
supplier offers? Is this supplier is has better quality than the
other? If the answer is yes, then company should negotiate
personally to the supplier to get special shipment service. Both
party can discuss and come up with win-win solution and sign an
agreement if needed. But, if the answer is no or the quality is
average (for the ink supplier, for example), then it is the time
for the company to find another supplier that can support the
business better.The most effective suppliers are those who offer
products or services that match - or exceed - the needs of your
business. So when you are looking for suppliers, it's best to be
sure of your business needs and what you want to achieve by buying,
rather than simply paying for what suppliers want to sell you.
Create a list of the suppliers selection criteria that suppliers
need to fulfill to be able to provide company with the items they
need. This could include issues like: Lead times from receipt of
your order to delivery Minimum and maximum order quantities Storage
and handling facilities Specific methods of delivery Quality
assurance processes Payment terms and conditions Return policy
Contactable referencesSetting the criteria in advance will enable
company to evaluate potential suppliers on each of the listed items
and help you identify what you want from suppliers.It's well worth
examining how many suppliers you really need. It's important to
have a more than one choice of sources. Buying from only one
supplier can be dangerous -where do you go if they let you down, or
even go out of business? So having back-up supplier is important to
face uncertain situation in the future. Where we can find the new
supplier? We can find suppliers through a variety of channels. It's
best to build up a shortlist of possible suppliers through a
combination of sources to give the company a broader base to choose
from. Here are some channels that can help us find
suppliers.RecommendationsAsk friends and business acquaintances.
Were more likely to get an honest assessment of a business'
strengths and weaknesses from someone who has used its
services.DirectoriesIf you're looking for a supplier in your local
area, it's worth trying directories such as Yellow Pages and
Thomson.Trade associationsIf the company needs are specific to a
particular trade or industry, there will probably be a trade
association that can match you with suitable suppliers.Business
advisorsLocal business-support organizations, such as chambers of
commerce, can often point the company in the direction of potential
suppliers.
ExhibitionsExhibitions offer a great opportunity to talk with a
number of potential suppliers in the same place at the same time.
Before going to an exhibition, it's a good idea to check that the
exhibitors are relevant and suitable for the business.After having
the list of suppliers that meet our criteria, company can start to
contact them one by one to have more detail information and maybe
do some negotiation so the suppliers really fit with companys
needs. After everything is match the two parties can make agreement
and start the transaction. Dont forget to monitor and evaluate the
suppliers performance. Even the most reliable supplier can
occasionally slip up. Make sure they have a direct contact point at
your company and conduct regular performance reviews. This will
help you keep tabs on their work and make sure theyre fulfilling
their end of the agreement.The last problem to be elaborated here
is about having responsive customer order receive. Order management
is the process of taking, organizing, tracking and satisfying
purchase requests for a company's products or services. In addition
to providing helpful organization for a manufacturing company's
order fulfillment process, order management can also describe the
electronic systems that help securities and commodity brokers
accept and fill orders placed in those markets by customers. In
receiving customer order, PT IMP use manual system, where order
received only through telephone call. The order record is very
simple and use manual way. They record it by write it on a book of
customer order. In this globalization era where customer management
is important, write their data on paper is not effective anymore.
By write it on paper the information is hard to be spread all over
the department especially production, marketing, and accounting. It
is also make the company dont have proper customer database and
difficult to be processed into proper data and information that can
be use for analyzing customer preference. Whereas, having
computerized data record can help marketing department to decide
appropriate offer, promotion, or discount to a customer. It also
helps accounting department to record their purchasing and help
production site process the order as fast as possible without wrong
execution. It also make customer able to track their order easily.
The consequence from this manual record sometimes creates
misunderstanding towards production site. The misunderstanding make
the production department makes wrong order. Of course the wrong
order cannot be sent to the customer. At the end, company has to
carry the loss cause by the unsold product. Here, the need of
computerized order management getting more crucial. Directly decide
to install special software for integration to the company is not
wise. The investment is high really high, and the company still
midsized and need money to do investment in the other area. The
risk of failure is also high. There are a lot of preparation needs
to be done before implement that kind of technology, especially the
readiness of employees. But there is another way make the customer
data more computerized and integrated. At the literature review has
been mentioned that there is SaaS (Software as a Service). This
company can use SaaS (salesforce.com, for example). The Software as
a Service (SaaS) model implies the use of various applications in
rent. Its so-called Cloud Computing. The essence of the model is
that the customer does not buy the software, but pays for the
service which it provides. The customer does not install software
on the servers, but uses capacities of the developer, needing only
to pay for the service, cloud server maintenance and consultation
services. As a result when the company uses SaaS, customer gets
access to the necessary application on a cloud server of the
developer which allows saving money and quickly introducing the
software to the business. Through SaaS, company can have proper
customer database to be analyzed. The information sharing also
easier and production site can prevent error in production
process.
4. Conclusion and Suggestion4.1. ConclusionNew company like PT
Indo Marvel Perkasa (PT IMP) still struggling to reach their
stability as a business. A lot of things that they should fix in
their daily operational and supply chain management. They also
working hard to manage their money and put it into worth
investment. Moving to the more promising facility is a big step for
this company. Some problem especially at the supply chain may occur
during this big step like how to create efficient shipping, how to
choose better supplier, and how to receive the customer order
better. PT IMP can make efficient shipping that will not create
loss to the company by having clear target market and focus to sell
to the targeted market, and develop policies regarding to the order
and shipping. PT IMP also can consider some alternatives like add
another transportation modes, use shipping service, give additional
shipping cost to the customer that order below the minimum order,
and make shipping planning every day.Choosing supplier is important
for the continuity of business process. PT IMP can overcome the
problem with the supplier by doing negotiation. PT IMP can also
find new supplier with the ways that elaborated earlier. For better
customer order receive, company can use SaaS to make the
information well recorded, well shared, and integrated.If PT IMP
success in creating better supply chain management through reducing
their cost (efficiency), increasing their responsiveness toward
customer need (through integration of information) and integration
inside the company, PT IMP can grow better, serve better, maximize
their profit, and able to compete in market.4.2. SuggestionPT IMP
better start to evaluate their overall supply chain management.
Through evaluation they can find what problem that happen all this
time and find the root of the problem. Once they find the root of
the problem, do meeting with all the staff, especially to staff who
face the problem. Discuss all the possible solutions, find more
information on how to solve the problem, decide which action to
take and implement it into the company. Dont ever get satisfied
easily, keep evaluating the overall business process at a
particular period of time and find better ways to do the business
to meet company objectives.
ReferencesChopra, Sunil and Peter Meindl. Supply Chain
Management. 2 ed. Upper Saddle River: Pearson Prentice Hall,
2004.Chopra, Sunil and Peter Meindl. Supply Chain Management:
Strategy, Planning, and Operation. 5 ed. Pearson Education, Inc.,
2013.Business Dictionary. Order Management.
http://www.businessdictionary.com/definition/order-management.html#ixzz3KHD0FCLgPoulsen,
Lisa. How to Choose the Right Supplier for Your Business.
Info Entrepreneurs. Supplier selection process. Coulsen,
Savanah. Speedy Delivery Make Companys Shipping Process Efficient.
2014.
http://www.smallbizdaily.com/17285/speedy-delivery-make-companys-shipping-process-efficient/Business
Dictionary. Distribution.
