Logistics Supply Chain Management (Scm): Term Paper

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From the year 1991, environmental considerations have come to be an important standard with regard to Nestle's renovation and innovation of packages and that of the packaging materials. Reduction with regard to the amount of packages and packaging materials which are required for a product and at the same time making conditions for protecting safety and quality is an ongoing important primary objective and priority. Nestle's 'No Waste at Work' program helps the 'shop floor' staff at their offices, warehouses and factory sites with the knowledge, skills and tools to develop and carry out waste minimization plans to ensure reduction of not just solid waste, but also energy and water usage. The program continued to be implemented and utilized by sites across the area during the period from 2003-2004 with huge success in not just reducing the amount of waste but in developing an empowered amount of shop-floor culture. (Nestle Australia Ltd.: National Packaging Covenant)

Role and trends of warehousing in SCM (Case Study of Volkswagen):

Based in Wolfsburg, Germany, Volkswagen -- VW is Europe's largest auto manufacturer with global revenues touching $110 billion and having manufacturing facilities in every continent of the world. The company is best regarded for its VW and Audi brands; Volkswagen is also the parent company behind such renowned and prestigious brands of cars like Bentley, Bugatti and Lamborghini. In the midst of ever-increasing competition in the global auto industry, VW has long distinguished itself through the design and engineering of its cars yielding the twin blend of speed and simplicity that epitomizes the 'Euro' styling. The various on demand business benefits of VW are (i) anticipated payback within one year (ii) 20% rise in productivity for VW's procurement staff (iii) shorter order-to-delivery cycles by means of more effective processes. (iv) Enhanced capability for VW's procurement employees to concentrate on high value activities. (v) More quick responses to imminent shortages and surpluses, thus reducing bottlenecks and inventory costs. (vi) Better ability to leverage purchasing economies by means of a greater unified notion of VW's supply chain. (Volkswagen's world class procurement strategy produces breakthrough productivity gains)

Speed and simplicity have also risen in significance for the company's core business processes. Propelled by continuous industry competition, the necessity for maximum employee productivity, shorter cycles and lower cycles had never been higher. Concurrently, attaining these efficiency levels had come to be of a greater challenge. A greater factor has been a change in the buying practices of consumers, with increasing number of buyers tailoring their car at the dealership point's right from the upholstery and color to engines. Due to change in fashion in the buying habits, the business processes of the car manufacturers which is already complex have been even more so. When an order is placed at a dealer, it travels through many systems to the production ordering system, to the production assembly system and lastly to the logistics system that completes the cycle when it gives delivery of the car to the customer. (Volkswagen's world class procurement strategy produces breakthrough productivity gains)

Whereas greater options implies more choices for VW's customers, it also implies an exponential rise in the differences of components traveling through the assembly processes, each of which is required to be ordered, delivered and tracked. In a number of ways, this order-to-delivery cycle forms the forefront of the competitive battle being undertaken in the auto industry. As a part of this battle, VW and its competitors are required to maximize the efficiency levels of each stage of this cycle so as to lower their costs and to fasten the delivery of new vehicles to customers. Nevertheless, with VW's processes over the years turning to be more and more complex, maximizing efficiency has in its turn become a greater challenge. The industry's continuous pressure to have control over costs forced the company to encounter this challenge. To embark on an enhanced level of efficiency going forward, the company required to basically alter its central processes.

Within VW, the efficiency of processes is outlined by the manner how good these processes function under normal predictable conditions and maybe which is more crucial, their capability to dynamically adapt to crucial changes in its environment and continue to deliver the best possible results. VW partnered with IBM and started installing a new system designed for simplification and process automation by which employees and suppliers capture, access, analyze and utilize information. The new system aimed at reversing the present application pattern, under which the responsibility of seeking information lies completely on the end users.

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The vision of the company was to leverage technology to make a sense and respond capability which would support more efficient decision-making. This implies the right intelligence and workflow automatically goes to the right user in response to an outside event, which is the very definition of an end-to-end adaptive process. (Volkswagen's world class procurement strategy produces breakthrough productivity gains)

SCM needs specialist skills and is all regarding efficiently assembling all the links and stages involved in building a high quality supply chain. VW's part of the supply chain is managed by Exel who long with providing the systems and solutions also handles freight by provision of airfreight and sea-freight supported by an extensive transportation network where the movement of the goods can be tracked by means of an extensive Internet-based transportation network. Apart from that Exel manages the warehousing and distribution of goods along with that of the supply chain. With substantial experience in this field it is in a position to design large-scale distribution outlets which are sometimes shared among different customers who gain advantages from economies of scale in relation to storage and distribution. Among the best instances of modern supply chain management lies in motor vehicle manufacturing. (Exel: Managing the supply chain for globally integrated products)

Modern cars are an instance of global products containing research and design characteristics that include the joint effort of several people across a lot of countries. The components that are included in the final assembly might possibly be produced in a lot of different avenues and include several assembly and sub-assembly activities. Exel has worked with car manufacturers in order to develop upon a parking system of managing end operations of the supply chain for that of the motor vehicle assembly. A lot of important end component suppliers are being located near to the final assembly point. Exel has created and handles the Just-in-Time -- JIT system that makes way for an efficient running supply chain of components to the new Beetle final assembly plant that avoids wastes from the processes. (Exel: Managing the supply chain for globally integrated products)

Role and trends of warehousing in SCM (Case Study of Volvo Construction Equipment):

Volvo Construction Equipment or Volvo CE constitutes one of the world's largest producers of heavy and compact construction equipment with the company selling its products in over 100 nations maintaining production facilities in the 4 continents. It manufactures over 130 various models of articulated haulers, wheel loaders, motor graders, excavators. Besides, the company also offers a broad range of compact equipment. In the year 1998 following the acquisition of the construction equipment business of Samsung Heavy Industries, Volvo CE Korea was formed. This takes over assisted Volvo CE to form a manufacturing presence and enhance its distribution facilities in S. Korea. Even though the Samsung acquisition improved Volvo's CE market status, the company understood that in order to make profitable growth in Korea and to maintain the profitability of the newly formed company, it would encounter a lot of challenges. (my SAP Automotive at Volvo CE)

Taking the marketing forces into account, Volvo, Korea determined that it must better its supply chain planning and execution potential, in case it wished to attain sustained levels of profitable growth. The company improved customer-facing business processes, inclusive of available-to-promise -- ATP capabilities, and concentrated on the efficiency levels of its internal operations by means of reengineering initiatives in order to eliminate unwanted complexity as well as costs. Volvo also realized that its legacy with regard to stand-alone applications would not be able to support it needs in future. Following a careful analysis of alternatives, Volvo selected mySAP Automotive SAP Business Information Warehouse and SAP Internet Transaction Server to assist in the reengineering its planning and execution processes. The SAP solutions have helped Volvo to reinvent itself in order to transform and reorient itself in order to become a process-oriented organization. (my SAP Automotive at Volvo CE)

Given the process innovation efforts, employees of Volvo are at present using an integrated system which supports its daily customer-oriented business processes. A short time after the acquisition of Samsung in 1988, Volvo started a detailed assessment of its operations in order to find out how best to satisfy the needs of the customer requirements and enable the newly formed company to take part effectively….....

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