Individual Portfolio

Operations and Supply Chain Management – 2122SEPJAN

5031SSL

Dr Witold Bahr

2nd Nov 2021

Individual Portfolio

1 – SCM

Sustainability versus Demand

The role of the current supply chain for palm oil has been a subject of recent debate, relating to green practices and sustainability in line with the current market changes. The oil palm is perhaps the most feasible of the oil crops that are produced for commercial purposes. The worldwide demand for palm oil has rapidly increased to such an extent where it is now dominating global oil marketplaces, with production reaching 65 million tonnes in May 2016, according to the International Palm Oil Association (USDA, 2016). The growing of oil palm as a commodity and sector is multidimensional, it is however primarily driven by the steadily rising demand for affordable, commonly available food products by population increase in the world, particularly in areas such as Asia, which is magnified by the escalating utilisation of palm oil as a pocket friendly alternative for trans-fats and animal by-products in other geographic areas, including the United States (for example, Buckland, 2005; Rival & Levang, 2014). Sustainability is among the most pressing concerns facing supply chains across a wide range of businesses, and the palm oil industry is no exception.

Environmental and Ethical Issues

On the environmental and ethical aspects, there has been a great deal published. Closs et al. (2011) argue that additional concept is needed to explain how supply chain management may assist more generally to increasing the effectiveness of supply networks. As long-term sustainability challenges arise, businesses must develop effective ways to foresee and minimize the implications of any adverse repercussions (Carter et al., 2008). While there is some vulnerability within the palm oil supply chain itself, there are also concerns created by the different conflicting interests that exist between environmental, economic, and social elements (Hadiguna, 2012b; Widodo, 2010). A decreasing trend in the palm oil cost around the world, for example, will have an adverse impact on the stability of supply chain because palm oil growers are less likely to sell their palm fresh fruit bunches.

Social Challenges and Inconsistency Issues in the Supply Chain

Besides that, social challenges, including non-tariff barriers on palm oil waste pollution, are potential dangers that might destabilize the whole supply chain, if they materialize. In these settings, environmental, economic, and social risks must be successfully handled in order to preserve corporate sustainability (Bloemhof, 2005). If these risks are not dealt with quickly enough, they can develop into business issues (Carter and Easton, 2011). Palm oil supply chains, like other agricultural-based goods supply chains, are plagued by issues such as inconsistency in availability of raw materials, possibly due to seasonal fluctuations in crop production, high loss possibility during transit from plantation to production plant, a scarcity of qualified professionals, poor and inconsistent processed products quality, unsuitable material packaging, and prohibitively expensive packaging materials.

Recommendations on Supply Chain Elements

There are a number of recommendations that the sector should take into consideration. At the cultivation level, enhanced surveillance at the time the harvesting of the palm fruit, lessening the time required to ship collected fresh fruit bunches to the production plant, eliminating superfluous dealing to cut down the probability of the fruit going to waste or leftover, increasing the reliability of transportation for the collected fruit, and monitoring the loading and unloading of the lorries.

SCM Definitions Sources

The centralised management of how goods and services flow between locations and businesses. (Saberi, Kouhizadeh, Sarkis, & Shen, 2019)

The Practice of coordinating various activities needed in the production and delivery of products to the end users. (Langlois & Chauvel, 2017)

Handling of an entire production flow of products from the raw components to the delivery of final product to the customer (Azmi, Hamid, Hussin, & Ibrahim, 2017)

Table 1: Various SCM definitions

2 – Logistics

Potential Benefits

The benefits that the manufacturing company will get 3PLs include the ability to take advantage of economies of scale (benefits from large truck fleets, warehousing, and so forth) and economies of scope, that help businesses to enhance net value by cutting down the expenses. If the 3PL provider is acquainted with information technology, marketing, is not asset-based (and therefore flexible), or all of these factors are present, the impacts of these efficiencies are attained. Workflow management system abilities enable competent 3PLs to find dependable partners or contractors and to handle the cross – functional and cross flow of products in an effective and efficient manner. By delegating logistical tasks, the corporation can save money on capital expenditures and, as a result, lower their financial risks.

With years of experience knowing what makes the most sense for clients, 3PLs will have the capacity to streamline inventory and route management with innovative technology designed by the organization. 3PLs identify previously undiscovered effectiveness that can improve the efficiency of these key processes for the corporation and its consumers. Combining shipping items with those of other customers of the 3PL provider is advantageous to all parties involved. 3PL companies may arrange where each item needs to go and when it should get there, grouping materials and products that have similar schedules and destinations together for easier tracking.

Clients split the cost of the service since they no longer have to arrange an entire journey for just their own things, and the expense is spread amongst them. When it pertains to warehouses, the idea is the same as before. They can cut storing expenses for everyone by aggregating a diverse range of merchandise from many clients who all demand the same storability and area.

Potential Disadvantages

Undoubtedly, a solid and cost-efficient cooperation between the company and its third-party logistics supplier is difficult to create. In order to develop a dependable collaboration, steps need to be taken in two stages: the selection of a 3PL provider and the signing of a contract. It is critical to pick a new 3PL company who has the ability to give superior services at the beginning of the process of choosing a new 3PL company.

If the companies are unable to identify dependable third-party logistics suppliers, they may face financial losses. Because of the issue of asymmetric information between the organization (primary) and the 3PL company, it is difficult for companies to evaluate the capacity of the company during the selection phase (agent). Sophisticated selection techniques are required to determine their capacity in attempt to remedy this challenge. Furthermore, because of the complexity of the selection procedures, there may be an increase in transaction fees. Second, once a 3PL company has been found, it is critical to put in place a framework that will allow them to sustain a dependable collaboration. It is always necessary for the parties to share information and perceived risks with one another.

With regard to the exchange of information, it goes without saying that a more comprehensive exchange of information leads to an increase in the efficiency of the logistics activity. Nonetheless, if certain information that is critical to the company’s operations is compromised, the associated expenses may rise. As a result, each party’s pledge to information sharing is essential, and a plan for ensuring that these obligations are met must be developed in advance. Nevertheless, there would be an increase in transactional costs as a result of this. Building a risk-sharing arrangement between the company and the third-party logistics company is crucial for building dependable partnerships. Demand risk, inventory risk, and financial risk, among other things, are among the hazards associated with using 3PLs. In one common example of a rewarding program, the 3PL assumes a portion of the liabilities and then receives rewards depending on the growth in the organization’s profit.

Logistics Definitions Sources

Ensuring correct procurement of products and timely arrival of these products in the supply chain (He, Shen, Wu, & Luo, 2018)

The practice of coordinating transportation, storage, as well as distribution of products for use by an organization. (Dolati Neghabadi et al., 2019)

The general management of the flow of products or information from the points of origin to consumption. (Szymańska, Adamczak, & Cyplik, 2017)

Table 2: Various Logistics definitions

3 – Lean Management

Current Practices

In Shanghai, there is a diverse selection of restaurants that serve not just to local palates, but also serve cuisines from throughout China as well as the rest of the universe. Xian Qiang Fang is one of the top restaurants that can be found in Shanghai, and it is a must-try. The restaurant specializes in Shanghai-style dishes that are exquisite, innovative, fresh, aromatic, and delectable (Gładysz, Buczacki, & Haskins, 2020). The menu changes seasonally. As well as for its cuisine, the restaurant is well-known for its distinctive design and décor, which depicts the pretty standard and lavish Shanghai style of life during the 1930s period.

For each shift, the restaurant employs a pull-style production system, with the primary emphasis placed on safety and Just-In-Time delivery of the food produced. The food for a client is not ready till the order has been received by the cooking area. Upon receipt of the order, the kitchen staff works collaboratively to prepare and plate the order within a reasonable time frame. This procedure directly correlates with the restaurant’s stringent quality control procedures. Each item of food has to be correctly prepared and served before it is delivered to the client’s table. Using standardized cooking procedures, the restaurant staff is able to make sure that the amount of variation among meals is maintained to a bare minimum and that the overall quality is constant. A set of rules for how fast each particular dish ought to be prepared is provided by this standardization. It alerts the employees that something is totally incorrect if they are continuously sluggish than the established standard for the job.

A successful restaurant functionality is presently run by Xian Qiong Fang. Upon completion of their shift work, all leftover foodstuffs are made available to the staff in this all-you-can-eat Chinese eating experience. Because of this, theoretically, the amount of food that is wasted during the day is kept to an absolute minimum.

Logistics Definitions Sources

An approach in support of organizational continuous improvement (Danese, Manfè, & Romano, 2018)

An approach that targets the long-term systematic changes in small and incremental bits in processes so as to have improved quality and efficiency (Alkhoraif, Rashid, & McLaughlin, 2019)

A practice that seeks to create value to customers through the optimization of resources (Danese, Manfè, & Romano, 2018)

Table 3: Various Lean Management definitions

Recommendations

Firstly, it is recommended that all food and restaurant preparations be done at the same time every day, and that these standard timetables be used to schedule the appropriate number of staff to have available at all occasions on any nightly basis.

Secondly, Data on the average amount of walk-in clients per moment of year could be gathered over period, and the findings might be added to the number of existing (or scheduled) reservations in order to identify the standard servers and kitchen staff required on any nightly basis. For foods that take time to prepare, that cannot be prepared on order as per the restaurant’s current norm, this information will also allow kitchen staff to plan ahead of time how much food to begin preparing, ensuring that there is only sufficiently fresh, prepared food available for customers who are currently in or about to enter the establishment.

A lean supply chain system may be implemented at Xian Qiang Fang. Food service and ghost distributors are currently placing weekly orders for foods, alcoholic drinks, and other essentials, which are then delivered to the customers. Ordering takes a significant amount of time and is subject to mistakes (because of guesstimates) in the context that ordering much more of one product at the expense of not placing an order sufficient of some other product creates a negative opportunity cost.

If Xian Qiang Fang were to adopt a computerized food ordering tracking system for tracking the frequency of orders for various varieties of foods and beverages, this data could be used to allow the restaurant to apply a Just-in-Time ordering system with their clients; that is, to order precisely what they require, in the amounts they desire, and at the moment they require it. Moreover, shipments of food service might be made even before restaurant opens for daily business on a predefined day instead of during regular business hours, which might cause an interruption for both staff and clients, from the car park to the real provision of food service to legitimate clients.

References

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medium enterprises: Literature review. Operations Research Perspectives, 6, 100089.

Azmi, I., Hamid, N. A., Hussin, M. N. M., & Ibrahim, N. I. (2017). Logistics and supply

chain management: The importance of integration for business processes. Journal of emerging economies and Islamic Research, 5(4), 73-80.

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Buckland, H. (2005), ‘The Oil for Ape Scandal: How Palm Oil is Threatening Orang UtanSurvival’, London, UK: Friends of the Earth Trust.

Carter, C. R. and P. L. Easton. 2011. “Sustainable Supply Chain Management: Evolution and

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Carter, C.R. & Rogers, D.S. (2008), ‘A Framework for Sustainable supply chain

management; moving toward new theory’, International Journal of Physical Distribution and Logistics Management, Vol. 38, pp. 360-387

Danese, P., Manfè, V., & Romano, P. (2018). A systematic literature review on recent lean

research: state‐of‐the‐art and future directions. International Journal of Management Reviews, 20(2), 579-605.

Dolati Neghabadi, P., Evrard Samuel, K., & Espinouse, M. L. (2019). Systematic literature

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Gładysz, B., Buczacki, A., & Haskins, C. (2020). Lean Management Approach to Reduce

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Szymańska, O., Adamczak, M., & Cyplik, P. (2017). Logistics 4.0-a new paradigm or set of

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