Running head: SUPPLY CHAIN PROCESS FRAMEWORK
Supply Chain Process Framework
Michael Parkhurst
Bellevue University
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SUPPLY CHAIN PROCESS FRAMEWORK
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Abstract
A well-organized supply chain follows all the processes from supplier to customer. For a
smartphone manufacture this would include components, manufacturing, distribution,
and customer service. For this fictitious smartphone company there would be four
suppliers Atmel for the internal components, Foxconn for the casing, Samsung SDI for
the batteries, and Android for the operating system. Assembly would take place in three
plants located around the world. One in the United States, Germany, and Australia. The
warehousing and distribution logistics would be handled by DHL Supply Chain & Global
Forwarding. The phone would be distributed to all major cellphone carriers in the United
States, Canada, Mexico, France, Germany, and Australia. Customer service on the
distribution would be handled by DHL and the company would handle customer service
on technical problems or product defects.
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Supply Chain Process Framework
A well-organized supply chain can help companies gain a competitive advantage.
All processes from the ordering of raw materials to getting the product into the
customer’s hands and the continued support of the product needs to be addressed
when managing a supply chain. If one area of the supply chain does not work all the
other areas it can cause a bottleneck slowing down the rate at which customers can get
their orders.
The supply-chain operations reference, or SCOR, model focuses on four supply
chain processes to help guide a company through the process. These processes are
plan, source, make, and deliver. Planning is the overall process that looks at the supply
and demand of the products, what type of inventory controls will be in place, and
product line management. Planning looks at this information for all products and
channels. Sourcing is where the company gets its supplies from, how the will get the
products from their suppliers, and the quality of the product. The make phase includes
the production, packaging, and testing of the product. The final process is the delivery
process which looks at how the product will get to the customers (Stewart, 1997). This
paper will go through the supply chain process for a fictitious smartphone manufacturing
company in the United States with suppliers and customers from all over the world.
Proper supply chain management would not be possible without a great supply
chain system. Supply chain systems are software programs that help companies
manage their waste, overhead costs, and shipping in a scientific manner. These
systems can help provide inventory buffers to make sure the company does not have
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too much or too little inventory. They also help with risk mitigation by identifying critical
risk factors with the company or their suppliers (DeBenedetti, 2015).
SAP is one of the largest supply chain management software suppliers. In 2013
SAP had a revenue of $2.13 billion dollars (Trebilcock, 2014). SAP would be great for
the smartphone manufacturing company due to its versatility and global usage. SAP
offers multiple supply management tools for manufacturing businesses including
Demand Sensing, warehouse management, financial management, logistics, and event
management. These tools would help the company manage their inventory, delivery,
and unexpected events throughout the supply chain process (SAP, 2015).
For most smart phone companies it is more cost efficient to buy components
from suppliers who specialize in particular parts of the phone and assemble the phone
at a manufacturing facility. There are a few different routes to get smartphone
components from that include the manufactures themselves, wholesalers, and
distributors. Since smartphones require customization for each part is best method to
choose would be the component manufactures themselves. This allows the company to
make sure the product being created will suit the individual needs of the particular
smartphone (Kamizuru-Bowman, Lewis, & Sassine, 2000).
The components of a smartphone include the internal electronics, touchscreen,
case, battery, and operating system. Atmel is an American based component
manufacture. They create internal parts for smartphones including the microprocessors,
Bluetooth transmitters, touchscreens, and memory chips (Atmel, 2016). With the
company creating a wide assortment of components needed to assemble the
smartphone they would be a good choice to use as a supplier of the touchscreen and
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internal electronics. This will allow for less product variation, training time, and quality
costs. Some potential risks include failures at the supplier will cause a bottleneck and
greater supplier power (Martin, 2004).
Foxconn is a technology component manufacture based out of Taiwan with
manufacturing facilities in China. Foxconn will be the producer of the cases for the
smartphone. Foxconn is a good choice due to their ability to produce multiple products
needed for smartphones. If the primary supplier for components has issues the
company can order the supplies the need from Foxconn. Batteries are the lifeblood of a
smartphone. Having a company that excels in the production of batteries is very
important. Samsung SDI has the largest share of the lithium-ion battery market. They
are the world’s leading provider of total battery solutions based on B3 reports. They also
manufacture batteries for tablets, laptops, and wearable devices if the company decided
to add new product lines as they grow (Samsung SDI, 2016).
The smartphone will use the Android operating system. The Android operating
system is one of the leaders in mobile operating systems. The operating systems allows
users to make an individual account that backs up their contacts making it easy to
switch to a newer phone without needed the data transferred over. Android also offers
hundreds of thousands of applications and games for its users to enjoy through the
google store. Google is constantly working on updating the operating system to better
suit its user’s needs (Todd, 2014).
The manufacturing company is based out of the United States, but has an
assembly facility in Germany to produce for the European market and an assembly
facility in Australia to produce for the Australian market. The United States assembly
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plant will assemble the products for the United States, Mexican, and Canadian markets.
Operating multiple assembly plants can have increased operating costs for the
company as a whole, but they do offer some benefits. With multiple assembling
facilities, if one becomes disabled due to some type of disaster one, or both, of the other
assembly facilities would be able to help produce the products of the non-functioning
facility. Localized assembly facilities allow for better prices on product distribution. It can
also help with reliability for product testing when conducting tests at multiple locations
(Gray, 2015).
For distribution and inventory storage the company will use DHL Supply Chain &
Global Forwarding. DHL Supply Chain & Global Forwarding was ranked number one in
the top 50 third-party logistic providers in 2013 by supply chain 247 (Burnson, 2014).
Third-party logistic companies offer a wide variety of advantages over doing the logistics
on-site. They can help save time and money for the company through the use of the
provider’s warehouses, transportation, and staff to cover logistic need. The companies
are also experts in the industry which allows them to be a head of companies who do
not solely focus on logistics. With the constant variation of supply and demand thirdparty logistics provides are continually working on optimization to increase profits,
reduce wait times and improve customer service. This allows the manufacturing
company to focus on their products and improvement (Robinson, 2013).
The company will ship their products to the major cell phone service providers in
the United States, Canada, Mexico, France, Germany, and Australia. For the United
States this includes AT&T, Sprint, Verizon, and T-Mobile for the major providers. It will
also include smaller providers such as MetroPCS, U.S. Cellular, and TracFone. Since
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other providers such as boost mobile and Cricket are owned by one of the major
companies they do not have to be included since the contract will include all
subsidiaries of the parent company.
Mexico has a limited variety in cell phone carriers. AT&T owns most of the
companies that offer cellphone service within the country. The other companies offer
prepaid services where the customers use their own unlocked GSM phones and place
the companies SIM chips into them (Mexican Cellular, 2015). The contract for AT&T will
cover all of their companies within Mexico.
The major providers in Canada include Rogers Communications, Telus, Bell,
Koodo Mobile, and Mobilcity. The company will provide phones to these providers much
like the United States carriers where all subsidiaries are covered under the contract
(Tucker, 2014). The Australian companies that will be included are Telstra, Optus,
Vodafone, and Virgin (Whistleout, 2016). French major carries include Bouygues
Telecom, orange, SFR, and Free (Angloinfor, 2016). Finally Germany’s carriers include
T-Mobile, Vodafone, O2, and BASE/E-Plus (InterNations, 2016).
The final stage in the supply chain process is customer service. Customer
service for this company will be handled differently depending on which stage on the
supply chain process is being effected. DHL Supply Chain & Global Forwarding will
handle the customer service regarding the shipment of the products to the individual
carriers. If there is a problems with delivery time or quality it will be handled by them.
There will also be a customer service department at each of the assembly facilities to
handle any of the technology issues or defects that might arise. The reason for this is to
make sure all problems with production are being handled by the facility in which the
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product was assembled. This should help the company determine when there is
something wrong with a particular batch or products or if a machine is causing faulty
results.
The Supply Chain Operations Reference (SCOR) model attached at the end
shows the process through a flowchart. Ensuring every aspects of the supply chain runs
smoothly will help the company eliminate bottle necks. This plan also covers
contingencies to ensure if one supplier or facility has a disruption to their processing
another supplier or facility will be able to take on the load until the issue can be
resolved. These small details within the supply chain have the ability to make or break a
company.
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References
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