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Abstract
Currently, the supply chain is re-designed for improvements every time there is a change in business requirements, for example to respond to new demand, new technology or the introduction of a new product. The re-organisation processes are implemented without referring to a standard procedure or methodology. These practices often result in supply chain improvements which do not provide optimum benefits to the organisation. Furthermore absence of a well defined methodology will make the processes prone to errors. Evaluating the new design can be simplified if a well defined methodology is adopted. A well guided methodology will ensure that resources used are optimised and the success of the outcomes more predictable.
A methodology that guides the managers to develop improved supply chain systems that comply with "best" practice SCM is needed. This work developed a supply chain improvement framework (SCIF) to evaluate and re-design supply chain using IDEF0 models.
This framework assists managers to formulate effective supply chain policies and long term strategies towards providing better service to manufacturers. The author has applied this framework to an automotive parts manufacturer. The project was to design an improved supply chain that would be appropriate in a short cycle time system (SCTS) which was to be implemented in the company. A logistics operation and production planning system (LOPPS) team was engaged to assist in the project.
The outcome of the project recommended was a final model of the supply chain which was formulated using SCIF. In addition, the author carried out activity based costing and financial analysis to evaluate the savings and improvements in the final supply chain. The results indicated that the final supply chain resulted in significant cost savings and also reduced the number of activities. The usefulness of the SCIF was further supported by the immediate implementation of some of the proposal improvements.
