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A supply chain design may be used to refer to a specific cohesive process that facilitates the proper function of a business entity in accomplishing certain tasks. A comprehensive supply design enables suppliers, distributors, retailers and manufactures to work hand in hand in various processes (Beamon, 1998). These processes include; acquiring raw materials, converting the acquired raw materials into final products and proper deliver of the raw materials to the retailers who sell to the consumers. A design chain is well characterized by it dual way flow. This flow allows forward movement of materials and finished products and a backward movement of information. An adequate supply chain design meets the customers demand conveniently without sacrificing the quality of products or customer service as it also work towards cost minimization all trough.
One of the most significant strategies in a supply chain design is postponement. Postponement generally leverages demand forecasting characteristics. These require that firms postpone production and supply of its final products for an adequate period of time. The main purpose of postponement is to allow the manufacturer to organize the finished goods according to the customer’s orders, personalize, and modify the mix of the final product in attempt to meet the demand changes. Generally, a universal power supply is considered to be a postponement strategy because the product is left in the same state but is shipped to its specific market on the establishment of the demand for that specific market but not through single market forecasting (Beamon, 1998).
Postponement is very beneficial to firms and Swift Company in particular should adopt postponement in order to reduce cost and in the same case maintain the same level of its services to the customers. Inventory obsolesce will be reduced significantly while risks and uncertainty cost will be eliminated as it allows the creation of the latest and most effective demand forecasts. In this case therefore, Swift will be able to produce and allocate the required and most competitive products to their customers at the right time.
Swift should improve their supply chain design and work at increasing its average sale per customer. One of the assumptions that can be drawn from this case is that the customers know the product of Swift. Thus, Swift has not fully utilized its capacity to maximize the average sales for every customer. Once the tables are processed, labeled and packed, they are taken straight to the warehouse. Swift should consider a method of effectively using display space. This will be very convenient as it would result to an increase in sales volume per square foot. Therefore Swift will reduce the cost of taking most of its products to the warehouse, increase income and additionally maintain the same level of service.
It is essential that Swift improves its internal methods and procedures particularly in delivering of the products to the customers. It is clear that the management in the company understand the costs accrued from delivering Duros in small vans. This is a rather expensive service that affects the general returns to the company. While it is vital to maintain an adequate customer service, the company needs to redesign in order to cut these expenses. If Swift organizes with its customers to make order requiring delivery within a week, much of the costs accrued will be cut. This is because most of the deliveries will sum up requiring the company to deliver the products in large trucks which are cost effective.
The issue of the various inputs supplied to Swift Company has not been clearly stated. The description is unclear of where the raw materials are stored immediately after delivery from the supplier. It is not cost effective to the company if the raw materials are stored in the warehouse or the finishing plant at the other side of the town. This is because Swift will have to spend on the transportation of the raw materials to the initial plant. Similarly the company should consider redesigning and find a suitable location for its final plant in order to save time used in packing and transporting of the semi-finished tables to the finishing plant located at the other side of the city. This attempt will also facilitate the reduction of labor force used in the loading of the vans and labeling of the packed tables. Therefore, the cost will be reduced significantly while the level of services will be maintained.