Kuiper Leda Supply Chain Defense
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Running head: KUIPER LEDA SUPPLY CHAIN DEFENSE
Kuiper Leda Supply Chain Defense
University of Phoenix
Kuiper Leda Supply Chain Defense
Kuiper Leda Inc. is an electronic components manufacturer that is established in the Republic of Novamia. Their specialty is Electrical Control Units (ECUs) and also sensors for automotive industries. They have been in operation for 10 years and began with revenues of $100 million and now the revenues are $400 million. Supply Chain Management is very important for the growth of Kuiper Leda Inc. Kuiper works with smaller customers and has a limited daily capacity of ECUs and RFIDs. Kuiper has built a sturdy reputation with its consumers, and is known for quality and delivery responsiveness. Kuiper flourishes on repeat orders and supplier relations, but the company is also working in a highly competitive industry and needs to be constantly aware of its competitors. Because of the large operating scale, Kuiper must maintain focus on capacity management and delivery.
Unpredictable demand over the last few months has become a problem for Kuiper’s overloaded supply chain. There has been no reliability in production in the plant, and suppliers have been under pressure to meet Kuiper’s requirements (Kuiper Leda Simulation). While Kuiper needs to be responsive, it also needs to ensure that demand does not affect the plant or its suppliers.
Supply Chain Management is the process of planning, implementing and controlling the operations of the supply chain as efficiently as possible. Supply Chain Management spans all movement and storage of raw materialss, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption. Inventory management involves planning and controlling inventory from the raw material stage to the final delivery at the customers end. Businesses reply heavily on the suppliers for their materials. It is important for businesses to manage their production schedules well in order for them to keep their commitments to their consumers.
Kuiper Leda’s supply chain defense and measures will be discussed in further details. In this paper, the supply chain practice of Kuiper Leda will be examined to determine if the company’s practice are sufficient for today’s RFID manufacturing demands. Kuiper Leda Supply Chain Defense Kuiper Leda is an electronic components manufacturer is faced with a growth opportunity. Kuiper Leda needs to ensure that the existing SC is streamlined. An inventory quantity planned to be on-hand at all times to provide a hedge against future uncertainty. Planning systems generate planned orders based on the quantity and timing needed to maintain the specified safety stock. This paper will give insight on how a supply management company should be run in order to be a successful company.
Kuiper Leda Supply Chain Defense
In today’s business environment, a company must understand the need for an efficient supply chain management system to gain an advantage within the industry. A company must have an understanding of various interactions between suppliers, manufacturers, distributors and consumers in order to have an effective supply chain management system.
A world-class company recognizes that its ability to compete in the marketplace depends on developing an operations strategy that is properly aligned with its mission of serving the customer (Chaseв?Jacobsв?Aquilano, 2006). Kuiper is in the position of looking for its most profitable and efficient sourcing options. These include manufacture (manufacturing product in-house), outsource (buying the entire product or key components from another manufacturer), e-business portal (buying the product or components from a portal that sells electronic items and components), and contract manufacturing (outsourcing production of the entire product or components to another manufacturer).
In this simulation, Kuiper recognizes that it can improve supply chain management by outsourcing ECU manufacturing and retaining RFID tag manufacturing in-house. A four week lead time for outsourcing ECU production satisfies the customer’s specification for delivery, which makes outsourcing the entire product to an e-business portal feasible. Also, because massive rescheduling and subsequent increased costs would occur if ECU’s were manufactured in-house, capacity burdens are eased by outsourcing. As a tradeoff between the time taken to procure the product and the cost, outsourcing is a more feasible option than manufacturing microchip production.
The Inventory Management Plan for handling the new order requirement for Microchips at Kuiper is Maintain N-weeks supply, Order Fill Rate, Lot for Lot, and Inventory Ordering System.
Independent Ordering System—The independent ordering system is a forward looking inventory arrangement. In this system, a specified order point is decided in advance. When the inventory drops below the safety stock level, the order point is released and a fresh order is created. Independent ordering systems try to sustain a minimum level of inventory at all points in time. This is dependent on the production lead time, demand rate per day, and safety stock level.
Order Fill Rate—The Order Fill Rate of 75% is a good decision because inputs indicate that the Order Fill Rate should not exceed 80%. This is because an excess of safety stock would increase carrying costs considerably. Large order quantities would increase Work in Progress inventory at the plant and also increase requirements for other components.
Lot for Lot—Choosing the Lot for Lot system ensures that the order is exactly what is needed. This means that the order quantity changes whenever the requirements change. As items are ordered as and when they are required, this system creates no unused lot size inventory and reduces carrying costs, making it appropriate for a Just in Time (JIT) environment or an environment where orders are known in advance. The Lot for Lot system also works well when used in conjunction with MRP because the MRP indicates requirements in successive periods well in advance.
N-weeks Supply—By choosing the N-weeks Supply system, enough inventory can be ordered to satisfy future demand for a given period of time. This increases the level of inventory in the system, which can increase carrying costs. However, it reduces ordering cost because orders for many time periods are ordered together.