MGMT 3314 Purchasing And Supply Management
This course examines the critical operational areas of purchasing, materials management, inventory management, just-in-time (lean) purchasing, supplier selection and evaluation, total quality management, bargaining and negotiation, equipment acquisition, and global sourcing in supporting a professional supply management function.
Sample Answer
Essay on supply chain and how to improve it
Description of case company (Coca-Cola South Africa)
Coca-Cola Fortune (CCF) has been operating in South Africa since 2002, as a franchise and is one of certified soft drink bottle. The Company operates from Port Elisabeth. The company has five production plants located at Port Elisabeth, Polokwane, Nelspruit, Bloemfontein, and Port Shepstone. It has a large number of workers from the diverse ethnicity of South Africa that creates an energetic, vigorous and challenging workplace.
I visited Port Elizabeth during an industrial class visit where I observed the following. The company produces a broad range of drinks including sprite, coke zero, Coca-Cola, Fanta, iron brew, Stoney and much more. The company controls the largest market share in South Africa. The factory has the following departments; Finance, internal control and IT, human resources, supply chain management, operations, commercial sales, public affairs and communication and marketing.
The Coca-Cola Supply Chain
The following are principles, which are used in governing the Coca-Cola Supply Chain department;
- At all times, the supply chain department must serve clients with custom-made services in any
part of the earth. - The Coca-Cola supply chain department applies the theory of client determined supply chain
organization. - Clients highly care through splitting up since the firm has numerous product types within its
limited manufacturing structure internationally. - There is a high collaboration between firm and dealers to ensure best clients services.
- The Company has a plan for having less Stock Keeping Units in its operations.
- The company has localized their customer service with extensive lean six sigma operations, which allow it, leverage best practices and plans the increase in excellence and performance.
- The firm management system is centralized which allows visibility in all facilities and a fast repeat of predicting and manufacturer programs.
The company uses just in time delivery making sure that the inputs for the process arrive time for processing into products which are transported to market in time to meet needs of customers. The company has links to supermarkets and other outlets for smooth operation. The company also work in close collaboration with canners and bottlers and other suppliers, which ensure the efficient and proper functioning of the business.
The following theories are applied in supply chain department of Coca-Cola Company;
Transaction cost economics theory: This approach tries to fulfill the goal of existence of the factory. It aims to decrease the expenses associated with transactions involving decision making whether to make or buy. The firm’s decision to make or buy is influenced by rate of sale, specificity of assets and mechanism of governance which are applied to mitigate the dangers of opportunity reliance in supply Coca-Cola Company relies on the relationship of all partners and extends networks to supply chain businesses. This is bases on Network Perspective theory. This makes Coca-Cola company to compete beneficially and efficiently through supply chains firms. This makes this company develop long-term relations with supply chain business. Coca-Cola Company looks at behavioral and ethical aspects of firm-firm, public-firm, and public-public relation to ensuring proper relationship exists. Analyzes are done of all these relations from wide perspectives such as financial, moral elements as well as technical. Coca-Cola Company applies resource-based view theory where the firm’s resources and capacities are its vital assets. This makes this company gain competitive advantage over another firm.
Principle-agent theory is applied in coca cola company governance and control mechanism structure to alleviate the opportunities, interests that are conflicting and asymmetry information between the agent and the delegating authority. It gives incentives for firms meeting minimum standards of the principle and governance and mechanisms of control are given contracts.
The company also employs game theory principle where strategic decision-making are made looking at different conflicting and cooperating characters between it and another rational firm. It aims at win-win, lose-lose or lose-win scenarios. This company also brings together various elements of complicated supply chain including human, information, capital, material, and finance forming a system, which is part of the big system network of supply. It accurately understands internal and external factors shaping the firms supply performance. This is the system theory of supply chain management.
The company also employs strategic choice theory to minimize the goals, which are difficult to implement. It addresses strategic problems and political forces, which are related to supply chain management for it to achieve success and prosper as it markets its products. The whole contract is to function approach related to personal supply chains businesses. Each theory discussed above has different objectives and goals in management and organizational structure of supply chain giving each a unique perspective of supply chain management. This method should be split narrower to strategic, project specific, operational and corporate supply chain management.
