Contemporary Supply Chain Management

Contemporary Supply Chain Management

Introduction

For finance and other business activities, the supply chain involves the movement of goods and services from the suppliers to consumers. It also consists in transforming raw materials and other natural resources into finished products that can be consumed by people (Baryannis et al., 2019). On the other hand, lean implementation involves the process of transforming an organization to develop a different and improved process (Charron et al., 2014). This essay aims to analyze the current supply chain management for Palm Oil and the areas that can undergo improvement within the supply chain. This essay also analyses how outsourced logistics may be used to improve the environmental theoretical concepts and how lean principles can be used to improve the issues facing Rojimon restaurant in Kyoto.

Supply Chain Management Systems for Palm Oil

Over the years, sustaining and cultivating oil palm has become highly argumentative. The product’s demand is relatively high even though it is divided between selling the premium and highly certified products of Palm Oil to Europe and the bulk selling of Palm Oil to the markets in Asia. Furthermore, the supply chain for the palm oil has readily been undergoing major significant changes due to the following number of factors such as the enhancement of technology and fourth industrial revolution, this through investing heavily in technology to help in boosting the sustainability credentials required in smoothly running the supply chain of the oil palm industries. The influence of technology on the supply chain of the oil palm industries has been enhanced through the introduction of farm machinery that has been used in the enlargement of large oil palm farms that will help in the supply of large volumes of the oil palms raw materials whenever needed at global scale sector.

Moreover, we have the improvement of means of communication and transportation that has mainly been brought forward through the development of technology. Through proper communication and transportation means that have been implemented in the oil palm sector, this has enabled in the appropriate timing of the way products and raw materials will be manufactured and when they will be received. This helps in detecting how the way the market trend of the oil palm sector will go in the coming future. Lastly, we also have the changing of customer demands, by embracing on this factors they will help the oil palm industrial sector on how to run and whether to increase or reduce the demand oil palm both raw materials and the products in the coming future ( Grant et al., 2017).

Despite the many benefits that are brought about by the cultivation and production of Palm Oil, other challenges are experienced as well. For instance, cultivating palm oil has led to the destruction of many rainforests all over the world. On top of that, some of the buyers of palm oil fear that the right processes are not followed in its production. Just like is the case for many products of agriculture, it is feared that the way through which palm oil producers harvest it may be having a negative impact on the environment, and many businesses look forward to mitigating it.

Another area of potential improvement in the supply chain of palm oil is its cost and the methods of production.  Despite the fact that some people have benefitted, many other ingenious people have lost their ancestral lands through the cultivation and production of palm oil products. As a result, many people have started suggesting that the idea that palm oil cultivation and production is a way for bringing the fundamental development to the poor people in rural areas. On top of that, the cost of palm oil and its products being low means that most markets prefer buying it. An increase in the quality of the product through modernization of the supply chain of palm oil would imply a general improvement in the standards of living of the farmers and better prices in the outside world.

The just in time theory is one of the most effective theories in helping improve the challenge in production. This technique will play an important part in the provision of high-quality palm oil products with the lowest lead time that is possible and at the lowest cost producers can. The harvesting of palm oil will be done at the right time, and as such, no wastage in terms of damage on the products will be experienced (Charron et al., 2014).  However, in order to achieve this aspect of producing items just in time, owners of supply chain companies will need to modernize their systems of production.

Need for Outsourced Logistics in the Improvement of Environmental Theoretical Concepts

One of the top priorities that any business aims at achieving is the reduction of overhead costs and driving business growth. Despite that reality, many owners of businesses are not able to successfully link those priorities to the sustainability of logistics (Manuj & Mentzer, 2008). Ensuring that any operations do not have a negative impact on the environment is the reason that mostly leads to the need for the application of sustainability. One of the main reasons for the need for sustainable logistics activities in a company is the reduction of carbon footprint and the overall improvement of how customers view a certain company. Since logistics mainly deal with the transportation of goods from one place to another, the basic need for an environmentally friendly system of logistics which is the reduction of emissions, which in most cases originate from carbon (Baryannis et al., 2019). Most of the vehicles used by companies are run on fossil fuels, and the implementation of green logistics and sustainably will, as a result, mean a low carbon footprint in a given company.

The use of the control theory can be much effective in minimizing the problems that are mainly associated with logistics (Robinson, 2020). A company that hires experts is very likely to be in a better position to have all the issues that prevent them from having an environmentally friendly situation that one that does not (Waters, 2010). The experts of the modern transportation industry have a full understanding of the fact that the more the distance that a vehicle travels, the more emissions that happen. By ensuring an overall decrease in the number of miles that are driven on a daily basis, a consequential reduction in the number of emissions into the atmosphere is experienced (Ivanov, Dolgui & Sokolov, 2019). On top of that, the use of other non-polluting means of transport plays an important role in ensuring an overall reduction in the level of carbon emissions into the atmosphere.

Logistics sustainability is likely to play a more important role in the supply for any company in the future than is the case right now (Grant, Trautrims & Wong, 2017). The growing demands of consumers and the legislation on ensuring sustainable logistics have, over the years, been moving the demand for third party suppliers from a “nice to have” aspect to that of “need to have.” It is much acceptable now that one of the main sources of a company’s carbon footprint is its logistics, and being able to manage the activities related to logistics will lead to an overall decrease in carbon emissions.

One of the main ways through which a company benefits through the use of outsourced logistics is the accurate measurement of the carbon footprint as this helps in the general improvement in the state of logistics sustainability by measuring the impact that the current operations are having on the environment (Heragu, 2019). An outsourced logistics can also work hand in hand with customers in order to get effective feedback on the actual emission of carbon and how those consumers think that it can be reduced (M & W Logistics Group, Inc., 2020). During the process, an outsourced logistics company will help a company to comply with the rules and regulations set and through the use of the green supply chain management theory, reduce climate change and any unsustainable consumption since the theory makes it a requirement to all companies to more aware on conserving the environment and take the necessary precautions to ensure that carbon emissions are reduced as much as possible.

One of the major advantages of outsourcing logistics activity is the possibility to apply the theory and practices of reverse logistics in which a company can systematically accept used products from customers and other sources and recycle them (“Lean Management,” 2020). Scaling of transportation and labor in regards to the needs of a company’s inventory is another advantage (Waters, 2010). However, failure by many logistics activity providers to meet the needs of the employer, coupled with the fact that the information from the logistics company is not always compatible with that from the company, are the major challenges that can be associated with the activity of outsourcing logistics activities.

Application of Lean Management Practices in Rojimon Restaurant in Kyoto

When it comes to the application of lean activities, most people may argue that the best place to apply them is in the now common automotive industry because, after all, that is where these principles were first-ever applied. However, other industries, e.g., restaurants and cafes, have been in the frontline of the application of lean principles as well (Heizer, Render & Munson, 2016). Rojimon restaurant in Kyoto is one of the restaurants that need lean improvements so as to serve customers in a better way.

One of the main issues that need addressing is the menu of the restaurant.  The menu is of a very large size, and customers have problems going through all those pages and often find themselves having to order what they see on the first page (Madichie, 2009). On top of that, the time taken before customers can make a final decision on what they would like to order is relatively high, and the restaurant has to buy more ingredients on a daily basis in order to meet the high demands of preparing everything that is offered. In addition, people do not always have the time to through everything that is on offer, and as a result end up not ordering some foodstuffs, and that leads to a lot of wastage for the restaurant.

Customer service is another issue that the restaurant often faces. As is the case for many customers, the first impression that they have concerning the kind of services that they are offered plays a great role in determining whether or not they will ever come to that place again. A low level of customer service also implies that the probability of a customer inviting his or her friends to that restaurant is relatively low (DuHadway, Carnovale & Hazen, 2019). All these factors lead to a low level of customer satisfaction and, as a result, low profits for the restaurant.

The application of lean principles can be of great help in the process of finding a solution to the above issues. By the use of lean management theory, the restaurant can come up with a strategy that will help improve the services of the company in the long term. Through that strategy, the company can effectively achieve small changes in the initial stages, but with the right lean management, increase those changes to accommodate all the areas that require improvement. Since the lean management theory focuses on the facilitation of effective responsibility and leadership, the restaurant can achieve the elimination of all waste that is experienced through the production of fewer foods and coming up with a menu that will not include unnecessary items.

Lean teams are, in most cases, more likely to view the effectiveness of commodities in the same way that customers do. As such, lean principles will be of many effects in ensuring that the restaurant offers the right customer service to its customers in order to ensure that they remain loyal. This analysis will be done based on various factors that relate to the customers, e.g., how the sales made help the customers like the restaurant more, have happy moments afterward, and even improve the way in which they view the services of the business.

However, easy and advantageous the implementation of lean may seem; it faces various challenges too (Multaharju, 2016). For instance, the costs that the restaurant will have to incur while adopting the new lean management system will be relatively high, and it will take some time before starting to enjoy the benefits. On top of that, lean management gives almost no room for mistakes, and a small wrong can lead to a lot of inconveniences to the whole restaurant and may take a lot of time before the management comes up with a way to save the situation.

On top of that, implementing lean principles in the restaurant is most likely to lead to inconsistencies in delivery.  This disadvantage would see the company fail to meet its expectations as it would push customers to the restaurant’s competitors, reduce the revenues received, and also see the deterioration in customer relationships. As such, the company would be forced to try other means of maintaining the loyalty of customers, create a better relationship with the customers, and still maintain profits. All of those actions are likely to lead to more costs for the restaurant.

Conclusion

Supply chain management is of much importance for any business to achieve its goals. The supply chain of Palm Oil is highly promoted by the fact that its production is cheaper compared to other sources of oil, e.g., rapeseed and sunflower. That fact makes the selling price of its products lower as well. However, the methods that are used for production of Palm Oil are not modernized and this leads to some wastage and losses and to some extent a reduction in its quality. In order to reduce those shortages and losses, the use of the just in time (JIT) theory should be applied. As such, production and processing should only be done when they are really needed in the present and not for the future.

References List

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