10/28/2014

Supply chain
Audit
Student number: 212115103
Lecture: MR T. Mallane
Assignment: 1
HMT Chitamba

HMT Chitamba
ORGANIZATIONAL EFFECTIVENESS

Introduction
My name is HMT Chitamba and I am an expert in supply chain management and logistics.
Two weeks ago PBF approached my company for some counselling on their supply chain
strategies. In this document we will go through some of the methods and techniques used to
bring about an efficient flow and transformation of goods from the suppliers through the
manufacturing stage up until distribution.

Basic scale of supply chain

Some simple concepts are necessary to have in mind when looking to fix major supply chain
complexities, so to begin we look at the following figure:

Supplier

Buy/Acquire

Manufacturing
Plant

Convert

End users

Retailers

Distribute

Export Profit (ways to increase)

If we look at this case from a logistics point of view, two of the most expensive activities are
storage and transportation, so one should usually base a strategy by evaluating the courses of
action we take when dealing with this two activities.

Transportation: in the case of PBF they should consider the use of intermodal services for
their customers that are in land and closer to them, alternate ways of distribution through
trucks, railway etc. For the global market they should consider alternating, e.g. if the order
has a short delivery date and needs to be delivered immediately they should use an airplane
and if delivery dates are longer than they can use the sea.
Storage
Because PBF deals with Glass it would be to their best interest to take precautions when it
comes to materials handling and proper packaging, if the products are not stored properly

they may break, fracture, scratch, many costs of rework can be saved if cautious measures are
taken to insure that products are stored.

Project Export division

PBF made sure to be specific that they needed good results in this department, it came to our
attention that they were hiring a third party warehouse provider. We also observed that the
export division was last on the list when it came to priorities. We had an idea to establish
project teams, three to be exact, one team would focus their expertise in laminating and
toughened Glass, the other on ARG, and finally a cross-functional team on the export
division. All three teams would share information but the projects would be completed
separately this would insure that all three divisions would now have the same attention.

How to beat the competition (Lead times)

We looked at how PBF was dealing with their supply chain partners, we saw that if PBF
would have more than one supplier they would not be delayed if an order came and the one
supplier could not deliver the materials in time, they would simply use the other supplier.
Also they could vary between a few trusts worthy suppliers which would be productive.
Another way would be to create close relationships with some local transport carriers,
motivating them to move goods quicker through supply-conversion-distribution. Another
important issue is to eliminate wastes also known as non-value adding activities throughout
the supply channel.
As for their Chinese competitors PBF could go with a more expensive approach by
distribution by airplane for lengthier destinations. Another way would be to send customer
goods to destination two days before delivery date that would make up for time taken by sea
voyages. Using a clock system where managers can stipulate and manage local time
schedules with international time schedules.

Warehousing strategy
PBF has a third party warehousing, but they are not performance driven, PBF should make
this staff members feel like they are part of the PBF family, by creating a stronger
relationship with them through motivation and incentives. The export warehouse staff should
be allowed to have a certain degree of ownership over their jobs at the warehouse.

Crate utilization
The key word to increasing crate utilization is palletisation. Palletization helps movement by
permitting the use of mechanical handling equipment to handle goods such as glass. It is of
outmost importance to take into consideration the distribution and stability of the load.
Palletisation is an added cost, but its a cost worth having to increase utilization

Container utilization
To save space and fully load a container we can use palletisation to pile glass fitted on top of
one another strapped in a secure manner that will prevent them to shatter, and also
consolidation which means to place different sizes of glass in the same container, by doing
this containers will be fully used and this is also a great way to reduce costs when distributing
commodities overseas.

Order processing
Another issue with PBF is the fact that some of their clients orders get lost within the
manufacturing units, here are some ways to help aid this problem:

Order preparation: this refers to the gathering of information needed about the products
desired and sequentially requesting products to be purchased. Some examples below

Bar code scanning

Internet web sites providing information.
EDI ( Electric data interchange
Elements of order processing are the following:

Order
preparation

order
transmittal

order entry

order status
reporting

order filling

Communications within organization

The sharing of information should be absolutely accurate to avoid unnecessary interruptions,
today people can communicate through e-mails, database applications, if PBF needs better
communication channels they should consider creating a network between the partners
involved in their supply chain, they should try getting a virtual private network where
partners collaborating with them have access to a limited degree of information, mainly order
transmittals, delivery dates, inventory records ect..
Having great communication will also prevent work from being duplicated between
departments

Conclusion
Finally is PBF should follow the solutions and recommendations made by our company they
should be on the right path to improve their profitability , increase their productivity , reduce
costs and eliminate all those deficiencies they were initially worried about. If all
recommendations are established within a month they should be seeing early results, still it is
the responsibility of PBF to change the culture in which their supply chain is organized
without that none of this is possible.

References
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