Inventory and Supply Chain ManagementOne of the most important areas of focus in pursuing operational excellence is improving inventory and supply chain performance. As we have seen, supply chain shortcomings have regularly made headlines during the COVID-19 pandemic. In addressing the following questions, support your response with specific references to this week’s course materials.
- Locate and post a link to a news story from the last six months published in The Wall Street Journal
or other reputable source about an inventory or supply chain issue. This need not be directly related to COVID-19. - Briefly summarize the issue including what went wrong and the impact this had on customers.
- What steps did the organization and/or its supply chain/logistics partners take to address the issue? What was the outcome?
- Given the information available at the time, what could have been done differently to mitigate the impact on the supply chain?
Post your initial response by Wednesday, midnight of your time zone, and reply to at least 2 of your classmates’ initial posts by Sunday, midnight of your time zone.
1st person to respond to
Faith,
Hello Professor and class. I chose the link above to talk about, the world goes insane about the iPhone, and I think this will cause a big eruptions of the customers. The facility in Zhengzhou is producing the new iPhone 14 Pro and iPhone 14 Pro Max but at reduced capacity. There will now be a lower amount of shipments which means the customers will experience a longer wait time. Last week there was a weeklong lockdown at Zhengzhou complex for a COVID-19 outbreak. This facility is known as Iphone City. The facility is the biggest assembly site for the Apple’s smartphone. To deal with the outbreak on Nov. 2, banning all but essential movements in the 150-square mile park for 7 days to counteract the “severe and complicated” spread of Covid-19. They have made sure that all Covid-19 protocol controls are strictly followed, and that conditions for workers improve. The lockdown comes even though Foxconn imposed a bubblelike closed-loop arrangement at the Zhengzhou facility. Hundreds of thousands of workers were on lockdown at the facility the workers were not able to return to their homes. Many were confined to their dorms or bussed to quarantine facilities away from the plant. I like the way the company put everything on lock down to help prevent the spread of the virus. In the ad it stated that there were complaints of the facility not having enough food and essentials. That would be something that I think should have been done differently. If you are going to put the facility on lockdown you need to make sure there are enough food and supplies that everyone needs. For the workers not to be able to go home they should have been made a comfortable as possible.
JWI 550: Operational Excellence Week Six Lecture Notes
JWI 550: Operational Excellence Week Six Lecture Notes
2nd person to respond to
Paige,
Dear Professor Chin & Classmates,
The article I selected this week was published online by the CBC (Canadian Broadcast Center), highlighting a significant drug shortage across Canada. Amoxicillin, a first-line treatment for bacterial infections in children (some of you may remember the yellow-banana-flavoured liquid from your childhood), is facing shortages across many suppliers.
The article link from CBC is: https://www.cbc.ca/lite/story/1.6641392
However, a specific list of all the manufacturers that produce this medicine can be found on Health Canada’s drug shortages page here.
A brief summary of what went wrong and the impact this had on customers:
- There has been a surge in demand for amoxicillin in Canada this fall
- The rise in demand is thought to result from an uptick in respiratory syncytial virus (RSV) and the seasonal flu.
- In turn, customers have to shop around at pharmacies to try to find the medication in stock
- If customers cannot find amoxicillin, they are forced to communicate with their physicians to receive a prescription for an alternative antibiotic that is available.
What steps did the organization, its supply chain, and logistics partners take to address the issue? What was the outcome?
Only one of the four manufacturers facing the shortage, GSK, responded to questions with the reporter. Their comments confirmed that the shortage was linked to an unexpected increase in demand. GSK also stated that they expect things to be resolved by the end of the month. The outcome is yet to be determined.
Given the information available at the time, what could have been done differently to mitigate the impact on the supply chain?
In the materials this week, Jack mentions the concept of “buffer stock” when outsourcing. Jack explains that buffer stock costs more but provides a cushion when just-in-time delivery isn’t possible (1). I think this concept could be applied to the supply chain issues facing pharmaceutical companies right now.
Moreover, it appears that the initial breakdown was in the communication between pharmacists and suppliers. As Mr. Knisley points out, in a good supply chain, the best relationships/partnerships are collaborative and encourage two-way dialogue. Better communication between the pharmacies and manufacturers could also mitigate the impact on the supply chain.
Lastly, in the pull inventory model, product production is based on customer demand. If this process is not monitored closely, you risk not having enough stock. This is what happened to the pharmacists in Canada this fall. The surge in sick children was not met with a rise in production for the medication needed to treat their illnesses. Now, parents are forced to 1) go without or 2) go back to their physician to find an alternative type of antibiotic. Similar to the above, to prevent this from happening in the future, suppliers should communicate with vendors to negotiate different reorder points to provide them with enough lead time to meet demand.
Thanks for reading my post & good luck to all on the assignment due this weekend!
Paige
References:
- JWI550. 2022. Video. Expert of Practice – Jack Welch: Outsourcing
- JWI550. 2022. Video. Expert of Practice – Philip Knisley: Supply Chain Partnerships.
- Steven Brown. 2022. Inventory Management Foundations – Three inventory models. LinkedIn Learning. Retrieved from: https://www.linkedin.com/learning/inventory-management-foundations/three-inventory-models-15279471?autoplay=true&u=57878161
