Notes

in
HPC 204
SUPPLY CHAIN MANAGEMENT IN HOSPITALITY INDUSTRY

SUPPLY CHAIN OPERATIONS: MAKING AND DELIVERY

Many businesses and supply chains in which they operate represent consumers who are
becoming more educated and seeking a higher quality of service with each passing year Continuous
changes to the operations outlined in this chapter are needed to include the efficiency and
responsiveness that changing supply chains need This chapter discusses the final two areas of supply
chain operations food production and distribution.

MAKE: Categories of Supply Chain Operations

The third stage in the supply chain management process is the production or production of
goods requested by the consumer. The goods are developed, crafted, checked, packed, and synced for
distribution at this level. Here, it is the responsibility of the supply chain manager to prepare all the
necessary activities for fabrication, testing, packaging, and distribution planning. In this phase,
companies will measure the level, manufacturing output, and productivity of the workers as the most
metric-intensive part of the supply chain.

The three activities in this division are product design, product scheduling, and facility management.
A. Product Design
Product designs and component specifications are dependent on the current
technologies and product specification requirements. Until recently, little attention was given to
how the nature of a product and the selection of its parts influence the supply chain needed to
make the product.

When approaching product design from a supply chain standpoint, the goal is to design
products with fewer components, simple structures, and modular fabrication from common
sub-assemblies. As a consequence, the components can be purchased from a select number of
chosen manufacturers. Inventory should be stored in the form of standardized sub-assemblies
at strategic points along the supply chain. There would be no need to have vast inventories of
finished goods because consumer demand can be fulfilled easily by manufacturing final items
from standardized sub-assemblies as customer orders arrive. The nature of a commodity forms
the supply chain needed to sustain it. The more adaptable, responsive, and cost effective the
supply chain, the more likely the product's commercial success. Find the following example to
highlight this point.

Brand architecture influences the form of the supply chain, which has a direct effect on
the product's cost and availability. There is a huge potential to produce products that would be
 competitive and sustainable if product planning, sourcing and production people will cooperate
in the design of a product.

People in architecture, procurement, and manufacturing have a natural propensity to

have opposing interests unless their activities are planned. Designers are obsessed with
satisfying the needs of their clients. Procurement personnel are involved in obtaining the
highest offers from a prescreened group of chosen vendors. Manufacturing workers want quick
welding and assembly processes, as well as longer production runs.

A product design that does a decent job of integrating the three viewpoints, design,
procurement, and manufacturing can result in a product that can be backed by an efficient
supply chain. This will give the commodity a short time to market at a good price.

B. Product Scheduling

When market dynamics adjust, product scheduling becomes a constant balancing act.
Development managers must meet the often-contrasting demands of offering high levels of
customer care while keeping inventory down and plant productivity high.

The output scheduling operation is a method of finding the best possible compromise
between many opposing goals.

To plan a product at a dedicated plant means to organize operations in the most

efficient way possible and to operate the plant at the appropriate pace to satisfy the product
demand. If a single installation or a single assembly line creates many separate items, this is
more complicated. Each product has to be manufactured for some time and then it takes time
to turn to the next product. Product scheduling is an ongoing balance between use patterns,
stock levels, and the quality of customer support

C. Facility Management

Both decisions on facilities management are taken under the limits imposed by
decisions on the sites of the facility. It is generally very costly to close down an installation or to
construct an additional facility, but businesses experience the implications of decisions to find
their installations.

Facility management of the installation takes place as a given location and works on how
best to leverage existing power. Decisions need to be taken in three areas:
1. The Role Each Facility Will Play
This includes actions that decide the operations in which services can be carried
out. The flexibility of the supply chain is greatly affected by these decisions. They define
 mainly how the supply chain should transform its activities to satisfy changing demand
on the market. If there is only one facility or only services one particular market, it
cannot typically easily be diverted to another purpose, or service another market, as the
supply chain needs adjustment.

2. How Capacity is Allocated in Each Facility

Decisions on capacity utilization result in the equipment and labor that are
employed at the facility. Changing decisions on capacity allocation is better than
changing decisions on a venue, but repeated allocation changes are also not cost-
efficient. So, the distribution of capacity until determined greatly influences the
efficiency and viability of the supply chain. To allocate very little facilities power means
that demand and distribution losses cannot be achieved. Too much power within an
installation leads to low use rates and increased supply chain costs.

3. The Allocation of Suppliers and Markets to Each Facility

The first two decisions influence this. The facility needs different types of
suppliers and the goods and quantities it can allow and accommodate can serve certain
types of industries, depending on the position that the facility performs and the
capability it has. Decisions on distributors and markets for the plant will impact the costs
of freight and transportation from facility to consumers of services to the facility and
finished goods. These decisions often influence the ability to satisfy consumer
requirements for the overall supply chain.

DELIVER: Categories of Supply Chain Operations

The fourth stage is the stage of delivery. In here, the goods are shipped by the retailer to the
consumer at their destination. This is essentially the logistics point, where consumer orders are
approved and supplies are prepared for delivery. The distribution phase is frequently known as
logistics, in which companies work together to accept orders from clients, build a network of
warehouses, pick up carriers to supply goods to consumers, and create a payment invoicing system

Rules of Order Management

✔ Enter the Order Once and Only Once
Capture the order as similar as possible to the original source remotely. Do not return
the order manually.

✔ Automate Order Routing

Send orders immediately to convenient delivery points. People only handle exceptions.

✔ Make Order Status Visible

 Allow consumers and service agents to immediately view the details on the order status
if they choose to.
✔ Use Integrated Order Management Systems
To protect data integrity, associate order management systems electronically with other
similar systems.

Delivery Scheduling
Naturally, decisions taken surrounding the mode of transportation to be used have a significant
impact on the distribution scheduling process. The distribution schedule functions under the limits of
transport decisions. There are two categories of distribution strategies for most modes of transport:
direct deliveries and milk run deliveries.
❖ Direct Deliveries
There are deliveries from one place to the reception place. The routing is essentially the
fastest route between the two places using these types of distribution. This delivery schedule
includes recommendations on the amount of delivery to the Individual locations and the pace
of delivery. The benefits of this distribution system are the ease of procedures and the
scheduling of delivery. Because this approach specifically transfers goods from where they are
processed or deposited in warehouses to a place where the products are used, indirect
operations that add multiple smaller shipments to one single, larger consolidated shipment are
removed.

❖ Milk Run Deliveries

These are some deliveries that carry goods from a single place of origin to various
receiving sites, and there are also deliveries that bring products from multiple places of origin
to one receiving site. Planning milk supply is a much more difficult job than preparing direct
supplies. Decisions must be taken about the supply volumes of various materials, the frequency
of supply, and above all, the routing and sequencing of pickups and supplies. The benefits of
this distribution system are that the mode of transport used can be used more efficiently and
that delivery costs are smaller since the place receives fewer and bigger deliveries.

Sources of Delivery
▪ Single-Product Locations
These include plants or warehouses that are available for shipping in a particular
commodity or a narrow selection of similar products. These installations are ideal if the demand
for the items they sell is predictable and strong and where shipments only go to consumer sites
where the goods can be shipped in huge quantities. When used successfully, they give great
economies of scale.
 ▪ Distribution Centers
There are warehouses in which bulk commodities are transported from single- product
locations. Where vendors are situated far from consumers, the use of a logistics center ensures
economies of scale in long-distance shipping, bringing vast quantities of goods close to the final
consumer.

Return Processing
This is often called the "reverse logistics" phase. The returns must be treated in all supply
chains. This is essential since recycled items are returned, and after online e-commerce transactions,
products are returned as well. Returning is critical and can be effectively managed, but also it is easier
to work on ways of alleviating the root causes of commodity returns.

Companies and supply chains, in general, must monitor the type of returns, their duration, and
whether the rates of returns increase or decrease. Return processing can be efficient, but at the same
time, note that there is no need for much return processing if all supply chain operations are
successfully handled. Optimization of the return mechanism would be an effort to improve the
efficiency of a process that is first of all not to take place. With the rates of return rising, identifying and
disclosing the causes of the problems required are considerably more efficient.