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Supply chain of a Lenovo laptop

Executive summary

Planned and purposive supply chain management is highly effective. A supply chain which is value driven coupled up with priorities of a firm results  in a deliberate management actions and strategic investments aimed at procuring, developing, and configuring of appropriate resources, metrics and processes as per the firm’s supply chain. In any business environment, business people most of the times gang up together to set prices for commodities they deal with. Also, in any business environment, an individual or a firm seeking to purchase some items only accesses the product they are interested in at the market price. Even if they go to the manufacturer, a broker will have to be involved. As for the department of Culture and tourism, much care should be exercised as any deviation from the outlined procedures will trigger an uproar from the society.

A three tier framework is proposed which factors in the three key levels that are vital to understanding supply chain designs: influencers, design decisions and building blocks.  Influencers are high-level considerations such as the political and business environment and the firm’s desired outcomes. Design decisions are the structural, social and behavioral elements which define a supply chain. Building blocks are the processes (inventory, transportation, capacity and technology decisions) used in the implementation of a supply chain.

This paper is dealing with the supply of a Lenovo laptop to the department of culture and tourism (DCT) which is a government institution. These three levels of analysis are considered and their effects to the procurement department.

Introduction

Supply chain has emerged as a critical competitive force in an increasingly turbulent business places (Lee and Billington, 1992). Utilizing the capacity and skills of the supply chain and developing and fostering appropriate relationships with both the customers and the manufacturers, firms stand a chance of reaping from the benefits of specialization in the form of reduced costs, inventories, improved responsiveness and strategic focus. Top trading companies in the world in a move to ensure that there are sustainable supply chains, have backed an initiative aimed at improving global supply chains in the midst of rising consumer demand for slave-free services and goods (Guilbert, 2018).

Supply chains take the burden from the procurement department and transfers it to the supplier (Hull 2005). A recent transition from the strategically price-driven supply chain to value driven has been noted. The transition is a result of a deliberate management actions that are aimed at positioning an organization to compete successfully in the market place. Supply chain is basically intended at procuring, developing and configuring resources for the best available results.

The department of culture and tourism is a very sensitive department; care is needed to ensure that information is available for the tourists who have a desire to visit the country. A Lenovo Yoga 920 would be ideal for the department due to its processing speed, the storage capacity and a good battery that can last up to 10 hours on a single charge (Sharma R. 2019). The uptime of the laptop will be highly effective since it will be used as a point of processing tourist enquiry and as well as informing them of the state of their enquiries.

Department of Culture and Tourism Abu Dhabi

The department of culture and tourism regulates, develops, and promotes the heritage and culture of the Emirate of Abu Dhabi leveraging them to develop into a world-class, an inspired global destination, which enriches the lives of visitors and residents alike (Ibtm, 2019). The destination is rich in cultural authenticity, family leisure, diverse natural offerings and entertainment attractions.

The department is tasked with inspiring, stimulating foreign tourism to Abu Dhabi by providing sufficient information to the tourists who are in a consideration phase. The department is mandated with marketing using a paid search media so as to deliver a more engaged audience to the department’s website. The team has embraced smart bidding which involves a set of automated bid strategies which use machine learning to optimize for conversions of value for every auction.

The team responsible for smart bidding employed keyword categories covering the whole user journey. As a means of incorporating more signals to their campaign bidding, they first identified users with a strong intent as they were automating the process (UAE 2019). In order to achieve the highest value, they used one of AdWords’ automated bidding strategies, target CPA. The team focused on singling out multiple behavioral signals on their website so as to differentiate between the most engaged users and those who are most likely to visit Abu Dhabi. The additional signals were then used to further develop the automated bidding algorithm through smart bidding.

Through the additional signals, the campaign has delivered more relevant and users who are likely to visit the country. Through the smart bidding, the department’s engagements rose by 31% on the website and the resulting visits were 90% longer as compared to the traditional paid search campaigns (UAE 2019). Further, smart bidding will be highly effective when the department acquires laptops which permit more of these engagements. Both the quality and the price of the laptop should be able to converge towards increasing the number of engagements and further the number of visits to the country.

Chapter 1

Supply chain Map

Melnyk, Narasimhan & DeCampos (2013)

Supply chain map is critical and highly complex. Starting from the very raw material that is used in creating the Lenovo laptop to the final consumer can be very complex. The material ought to be outsourced by the manufacturers so as to get the best quality for their activities. The manufacturers then sell the finished products (spare parts) of the laptops to the various assembling points. Operations begin that end with a working laptop. Laptops are produced as per the purpose they are likely to be performing. Finally, the suppliers or retailers buy these laptops from the manufacturers selling them to the consumers (users). Every supplier ensures that they have the best products at various prices as the market dictates

Chapter 2

SWOT analysis for the Supply Chain Map

Some of the strengths of the supply chain are:

There are no lost sales in this supply chain since every category is administered by an individual who is specialized in that line. Since the organization will deal directly with the suppliers, the suppliers will be able to give a quotation of the each laptop they are selling.

Customers are mostly happy in such a supply chain as before purchasing any product, they are given an explanation of every detail of the products that a supplier has before making up their mind on the kind of product they will purchase (Ashe-Edmunds n.d). When a supplier finally supplies the products, customers have to ascertain if they meet the very description they settled earlier on. Consequently, for instance, if the Lenovo laptop malfunctions, then DCT can be able to request the supplier to ensure that it is repaired at minimal costs if the warrant has expired.

Gives customers a pool of suppliers to choose from when they want a product supplied. This is beneficial to the consumers as they have an opportunity of testing various brand products before deciding on the most ideal.

Every level is as efficient as the next level, thus there are no bottlenecks. This ensures that there is sufficient labor to produce the desired products for the anticipated number of customers. Any new entrant into the chain ought to be as smart as those who are already in the market.

Weaknesses of the supply chain

When one part of the supply chains breaks or stalls then the entire process is affected greatly. When manufacturers shift from a particular product to a new one then that means the market has to shift with the manufacturers. For this scenario if a website that is being used for updating and engaging with visitors’ crashes, then communication stalls as much as the time the website will be down.

 A supply chain tends to increase the value of a product as it proceeds from the material to the manufacturer, to the suppliers, retailers and finally to the consumer. A consumer ends in paying a price triple the factory price as every level has to make some profits.

A supply chain is a slow and tedious process as there are many players who are involved. Whenever there are different levels that make independent decisions, then it will be a challenge when a consumer makes an order of products which are not in the warehouse or products whose materials are finished. Also, the process of transferring ownership from one level to another has to factor in so many other things which ends up in delaying the whole process.

When outsourcing a part of your supply chain such as shipping, a vendor can disrupt your business, either accidentally, when your business is struggling.

Chapter 3

SWOT analysis of the supply chain to DCT

Strengths for DCT

The quality of product that an organization ends up purchasing is top quality. When an organization indicates that it is in need of certain products; in this case DCT needs Lenovo laptops that will be efficient for the ensuring that the website is functional all the time at the same time ensuring that the laptop gives employees an easy time to execute their activities then every supplier will have to demonstrate the power of their laptops. Through testing, an organization through the procurement department is able to make an informed decision as per its needs.

A supply chain affords time and space for procurement officials in the DCT to engage with the IT personnel or the employees who will be using those laptops on their advice of the best brand they could like to be purchased and features they anticipate in those brands. This characteristic of the supply chain ensures that employee attitudes are boosted

A supply chain will always motivate employees to be more innovative when they get the product they were vouching for. A good laptop always creates an environment where employees desire to improve quality their innovations, the reverse is also true most of the times. New laptops ensure that the old desktop computers which consume much power and produce much heat are replaced. This will ensure that employees have an ample working environment. In return, this will ensure that they are able to work at their optimum conditions.

A supply chain creates an environment that is conducive for working even if there is a change in government. A supplier takes full responsibility of the products supplied in case there is an anomaly.

Weaknesses for DCT

DCT will pay an exaggerated price for the laptop due to the different individuals involved in the process. If there will be a change in government, there will be concern of why the department had to pay such an exaggerated price. Accusations are also likely to emerge from the opposition arm of the government as to why they opted for the expensive Lenovo Yoga 920.

The procurement department may be accused of failure in their work when they go for an expensive laptop instead of considering the affordable ones which will still be efficient. This accusation may cause a go slow from other departments of the organization.

DCT employees will have to wait for long before they can receive the laptops. When employees wait for long for a particular product in this case a laptop that is essential in ensuring that the DCT department gets to engage more visitors to Abu Dhabi, then they are likely to go on a go slow. At the end, their overall performance will likely to dip.

Chapter 4

What are the affects to the organization by changing one tier in the SCM

1. Supply chain costs

The presence of supply chain in an organization can make up for a large proportion of product costs whereas an overly excessive inventory in the system can affect the cash flow and capital. When one tier is changed, there is a possibility of the following scenarios occurring:

  • Poor forecasting accuracy
  • Waste in the new supply chain
  • Procurement costs will be inflated
  • Excessive transportation costs may be incurred in case of direct purchases
  • Inefficient inventory management and storage costs

2. Supply chain performance

One of the main determinants on the profitability of a business is its customer service and customer satisfaction. Customer satisfaction depends heavily on the supply chain, therefore, a customer ought to be a primary focus. A change in one of the tiers can result in the following supply chain issues which will have an overall negative impacts on the customer satisfaction

  • Poor service or product quality
  • Delays in responding to customer service requests
  • Marketing new products will be slow
  • Challenges in filling orders and delivery
  • Inventory shortages
  • There will be long delivery times
  • Supplier performance

The supply chain is as strong as its weakest link. When a supply chain has some weak links, then a change in one of the weak links leads to the supply chain becoming stronger, therefore, performance is likely to improve (O’Byrne 2019). On the other hand, a supply chain that has been efficient when disrupted by changing one tier, then it may lead to a business crumpling.

3. Supply chain Network Design

The design of a supply chain plays an important role in the success or failure of a business. A change in one tier means a change of design to the supply chain, therefore, there will be other products will have incomplete structures on how they are supposed to move. A supply chain networks evolve through a series of changes and developments each addressing arising needs and in some few instances, deliberate moves that are strategically integrated into the supply chain (Janvier 2012).

4. Supply chain strategy

A supply chain strategy is important in the long term success or failure of a business. A supply chain design should overly support the overall strategy of the business under consideration. A change in a tier from the supply chain changes the design which ends up shifting from the strategy of the business (Melnyk, et.al 2010).

Chapter 5

Conclusions

Findings

Success of a business is highly dependent on the strength of its supply chain and how well it is aligned to vision of the business. A supply chain design is a road map on how the products will be moving from one point to the other.  Every tier is as vital as the other since they influence each other. Costs incurred in a supply chain are minimized due to specialization in different levels. Altering or tampering with one tier will have an overall effect on the performance of a business. When the tier being removed is the weakest link then that supply chain ends up being stronger while when a supply chain is profitable to a business and a tier is removed, then the overall design and network of the business changes.

Results

A supply chain results in customer satisfaction. A business whose supply chain is aligned to its strategies ensures that even a consumer gets the satisfaction as the supplier does.

A supply chain is as effective as its weakest link. In situations where customer satisfaction is key, then the end consumers are less likely to benefit if within the supply chain there is a tier that is not interested with customer satisfaction.

Supply chains tend to influence the overall price of a product. For instance, DCT is likely to pay some more money due to the different levels involved.

Chapter 6

Recommendations

Findings

Supply chain is still evolving with every other new player that joins the business industry. With new innovations and technologies, supply chain has to be looked at as a baby who is growing. When a system becomes obsolete, getting to respond to the changes is a highly effective model towards developing another supply chain model. Before completely excluding any tier, it is prudent that the replacement be done in phases so that every other tier that depended on the tier in question will not be adversely affected.

DCT

The procurement officials seem to want to please both the employees and the suppliers. This is so in that they are involving suppliers to get the laptops delivered at the same time they are involving employees to ensure the product which will be delivered meets their desires. I would recommend that there be a direct supply chain from the manufacturers to organizations where organizations can order for products from the manufacturer. This will tend to reduce the waiting time and also ensure that in case of a problem, the manufacturer will send representatives to solve the issue.

In developing supply chain models, there are parts where some issues are included in a strategic way to some future anticipations. I would recommend that manufacturers offer to replace the old existing products as incentive to lure consumers to becoming lucid in their decision.

References

Ashe-Edmunds (n.d) Strengths & Weaknesses of the Supply Chain. Chron Available at: https://smallbusiness.chron.com/strengths-weaknesses-supply-chain-75987.html

Guilbert Kieran (2018) Big brands from Nestle to Walmart back sustainable supply chain drive. Reuters. Available at: https://uk.reuters.com/article/global-business-supplychains/big-brands-from-nestle-to-walmart-back-sustainable-supply-chain-drive-idUKL8N1S27D0

Hull, B. Z. 2005. “Are Supply (Driven) Chains Forgotten?” The International Journal of Logistics Management 16 (2): 218–236

Ibtm Arabia (2019) Abu Dhabi Culture and Tourism. Available at: https://www.ibtmarabia.com/media/partners-and-associates/The-Department-of-Culture-and-Tourism--Abu-Dhabi/

Janvier-James, A. M. 2012. “A New Introduction to Supply Chains and Supply Chain Management: Definitions and Theories Perspective.” International Business Research 5 (1): 194–206. [Google Scholar]

Lee, H. L., and C. Billington. 1992. “Managing Supply Chain Inventory: Pitfalls and Opportunities.” Sloan Management Review 33 (3): 65–73. [Google Scholar]

Melnyk, Narasimhan & DeCampos (2014) Supply chain design: issues, challenges, frameworks and solutions. International Journal of Production Research  Volume 52, 2014 - Issue 7

Melnyk, S., E. Davis, R. Spekman, and J. Sandor. 2010. “Outcome-Driven Supply Chains.” MIT Sloan Management Review 51 (2): 33–38.[Web of Science

O’Byrne Rob (2019) 7 Reasons Why the Supply Chain Matters to Business Success. Business Improvement, Supply chain. Available at: https://www.logisticsbureau.com/7-reasons-why-the-supply-chain-matters-to-business-success/

Sharma Rajat (2019) The 7 Lenovo laptops of 2019. Operations and Technology. Available at: https://www.thebalancesmb.com/best-lenovo-laptops-4169353

UAE (2019) Abu Dhabi’s Department of Culture and Tourism drives more qualified audience through Smart Bidding. Available at: https://www.thinkwithgoogle.com/intl/en-145/success-stories/local-case-studies/abu-dhabis-department-culture-and-tourism-drives-more-qualified-audience-through-adwords-smart-bidding/

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