Providing a Framework Week 4
Create Section 6 of your Supply Chain Process Improvement Proposal: Measurement and Management.
Describe how supply chain performance is measured, presenting the various measures used in each organization or function.
Create Section 7 of your Supply Chain Process Improvement Proposal: Global Supply Chain.
Describe international trade and the supply chain role in globalization as it applies to the organization you have selected.
Share the company’s current process.
Provide recommendations for the company that you have chosen.
Providing a Framework
There are various measures that organizations or functions adopt to measure supply chain performance. Performance measurements are done to give an insight into how the organization is fairing in the market. A global supply chain entails the distribution of goods and services in the global market for profit maximization. This paper explores the methods of measuring supply chain performance and the significance of international trade and supply chain in Cisco.
Supply chain measurement tracks or compares business operations at different phases. These measurements may be either non-financial or financial. Various measures are done on non-financial components depending on the organization (Ivanov, 2018). The measurement assesses cycle time, resource utilization, inventory levels, customer service level, flexibility, and quality. Cycle time in the supply chain identifies the business process of interest. It measures the lead time on the customer orders and delivery. Order-to-delivery lead time measures delay time between the time of order placement and the delivery of goods to the customers. On the other hand, supply chain lead time measures the time taken to change raw materials into final products, including the required time for the goods to be delivered to customers.
Customer service level comprises multiple unique performance indices of operation. It covers fill rate, backorder level, stock out rate, and the possibility of on-time delivery. Order fill rate determines the rate of customer needs that can be addressed with the available stock (Ivanov, 2018). The stockout rate measures the inventory losses due to stock out, while the backorder level gauges orders that have not yet been filled. Finally, the probability of on-time delivery identifies the portion of orders delivered on time to the customers.
Inventory level measures the ability of the different entities in the inventory to meet the customer’s needs. These entities include raw materials, unfinished and semi-finished goods, and spare parts (Ivanov, 2018). In addition, the measurement identifies the system efficiency in maintaining optimal levels of each inventory type.
Resource utilization measurement is done on different entities, including the manufacturing resources, human resources, logistics resources, storage resources, and financial resources. Manufacturing resource measurement is done to assess the state of machines, tools, and material handlers. Storage resources entail measuring the state of warehouses, retrieval systems, and automated storage, while logistic resources measure the efficiency of rail transport, trucks, and air cargo carriers (Ivanov, 2018). Human resources cover technical, scientific, and labor personnel, while financial resources encompass working capital, investments, and stock. Finally, resource utilization performance measurement evaluates the organization’s effectiveness using all assets and resources to optimize customer service, maximize inventory levels, and reduce lead times.
Financial measures gauge the operation of fixed costs related to the supply chain. It identifies the organization’s ability to optimize its revenue while maintaining by minimizing the supply chain costs. Financial measurement is done by assessing the cost of raw materials, activity-based costs such as material handling, assembling rates and manufacturing, revenue from goods sold, inventory holding costs, cost of expired perished goods, inventory holding costs, and penalties for incorrectly filled or late orders delivered to customers.
International Trade and Supply Chain
International trade and supply chain plays a critical role in Cisco’s pursuit to globalize its operations. Cisco relies on international trade to guide the production of goods and selling to multinational companies. Cisco has initiated international trade strategies such as producing goods in other countries, which reduces supply chain costs. On the other hand, Cisco depends on the supply chain to outsource its products overseas. It uses a supply chain to ship goods to different parts of the world. Cisco has diversified its supply chain based on the customers’ expectations and fulfillment requirements. The supply chain has enabled Cisco to move its networking materials and components effectively worldwide (Delaney, 2021). Cisco has also consolidated its supply chain business processes by creating a standardized end-to-end workflow system that meets the global market needs.
Company’s Current Processes
Cisco is currently designing network innovations in optics, software, silicon, and systems to drive its economic, architectural shifts. The company is evolving the operational functionality of its network by maximizing its operational agility to create a competitive advantage in the global market (Cisco, 2021). In addition, the company is enhancing its security posture for its clients by auditing, measuring, enforcing, and verifying the trustworthiness of the critical infrastructure being provided. The company is also providing clients with the support they need by allowing them to experience innovation, quality services, and expertise, thus bridging the talent gap, managing risks, and delivering excellent solutions to realize the significance of technological investments.
As a global organization, Cisco should ensure that its supply chain processes operate smoothly. It should do regular supply chain performance measurements to gauge the reliability and relevance of its activities in the global market. As time goes on, new companies are coming up, posing significant competition to Cisco products. Cisco should strive to provide high-quality services to its customers by adopting up-to-date technology and eliminating all forms of inefficiencies in its supply chain. These include delays in the delivery, damage of goods, and high cost of storage. As the company is expanding globally, it must also consider the risks and threats that these extensions may expose the company to and how to respond to them. These include increased cost of distribution, increased demand which may not match the company’s production abilities, and legal constraints that the company should meet.
Cisco. (2021). Who is Cisco https://www.cisco.com/c/en_au/about/who-is-head.html
Delaney, K. (2021). Reimagining the global supply chain. Cisco Newsroom | The Network. https://newsroom.cisco.com/feature-content?type=webcontent&articleId=2155474
Ivanov, D. (2018). Revealing interfaces of supply chain resilience and sustainability: a simulation study. International Journal of Production Research, 56(10), 3507-3523. https://doi.org/10.1080/00207543.2017.1343507