1. 0 Introduction: How can we explain how important supply chain management is in the business industry? Many business go through the process of supply chain such as Public v Private Primary, Secondary, Tertiary sectors, Financial, Retailing, Manufacturing, Wholesale trades, Construction, Mining Quarrying/Farming, Services and Transport. Our lives moves and grows through supply chain management its part of a system in receiving our products, everyday goods, Raw materials, Packaging materials, Semi – finished goods, Finished goods , Machines & spares, Services and Office Equipment.
It can be defined as a process of arranging, preparing, applying and taking efficient control, by storing goods or services and taking information from the original point to the point of its development or consumption for the intention of conforming to customer’s orders and requirements. It involves coordination of all sectors involved in delivering the arrangement of inputs, outputs or outcomes that will meet a specification of customer or buyers requirement. Figure 1 TRADITIONAL SUPPLY CHAIN MODEL Physical good flow information flow ttp://www. axtin. com/solutions/supply_chain. html In a way it’s like the circle of life, business life. To go through the process of purchasing you must first characterize and define what is required and when it is wanted. Second identify the item, suppliers and evaluate. After that you negotiate the terms in which you want and negotiate the price or the order. The result is receiving the requirements, goods or services. The final stage is the payment procedure in which will either be in check or cash. To acquire the right quality material, at the right quantity, from the right source, at the right price. ” – Baily 2005 Our aim is to the theory or definition of purchasing which are six rights can impact on coca cola as the key official supplier to the 2012 Olympics. We’re going to cover each of the six rights which are: RIGHT ITEM RIGHT PLACE RIGHT TIME RIGHT QUALITY RIGHT QUANTITY RIGHT PRICE 2. 0 Findings: 1. Right Item: A product is what the company produces and provides for their customers.
The right items for Coca cola would be the raw materials which are the main ingredients that are used to produce Coca cola which are sugar, water and aluminum to produce cans or plastic for producing bottles. This would also involve specification of the product as well as material requirements planning and manufacturing resource planning. It is important that Coca cola to be specific in ordering their supplies and raw materials. To make a note every order or purchase or specification or the order must be documented. 2. Right Place:
For selecting the right place we should acknowledge where are our sources? Where are we getting our raw materials from? And where are we selling it to? Our raw materials would be water, sugar and aluminum; we’re getting our sugar from Egypt as for water and other ingredients’ will be manufactured in turkey from there the products will be transported by ship and rail to Germany where the all the materials are put together and produced to Coca cola cans and bottles. then the end products will shipped to the UK distribution center where the products will be transported to retail stores around the UK . . Right Time: “Time is money” In order for us to meet customer orders it is important to be right on time in delivering the product. We can’t afford to be too early or too late. If the delivery is too early there would be a problem in storing the goods and if the delivery is too late we would also have the same problem in storing the goods this brings us to where MRO (Maintenance, repair, operations) could be used. In this case the coca cola products must be delivered in time of the Olympic 2012 as it is the key official supplier.
This would have an effect on coca colas brand image, so in order for coca cola to meet their deadlines and the Olympic 2012’s deadline I suggest they us JIT (Just in time) to meet the type of this events requirements which is high value. JIT is used in repetitive manufacturing which means that products are manufactured repeatedly. JIT’s advantage in this case that it can reduce lead time as it can link manufacturing centers and create a balance between them so that the process can be in order. http://personal. ashland. edu/~rjacobs/m503jit. html 4. Right Quantity:
After ordering the supplies the next step will be defining the right quantity and quality. Miscalculation in approximating these statistics may affect the company in over- or under-supply. This would define the increase in holding costs. It is vital to define the right number, size weight of the product in order to identify the right quantity for us to meet the demand. This information is required in every stockroom and storage room, it can also help us define the type of transportation required. For coca cola who are sponsoring the Olympic 2012 it is crucial for them to provide the right amount of quantity of their products during this time.
It cannot be too much or too little. Quantities can increase price requirements. 5. Right Quality: What is Quality? “Quality is whatever the customer says it is” – (Baily) It is what the customer will define the quality of the product or service. it is what any business is supposed to be aware of cause in the end it is all about what the customer requires and what they will purchase. Quality isn’t just about quality of the product it counts as quality of the appearance of the product, taste of the product, the service and time in delivering the product, this all will all determine the brand image of Coca cola.
Coca cola is a huge brand name; the name has developed its own marketing strategy, so getting the right quality is very important in a huge company like coca cola. Quality requires two things: specification and conformance. Specification: when it comes to purchasing and supply getting the right specification is important, in order to get the right specification the buyer must be clear and detailed as it is used especially for ordering raw materials and quality of work for something to be built, established, or manufactured.
This is done in two stages: – Decide the requirement. – Describe it. In this case Coca cola need to order the right amount and the right requirements of the customer’s orders during the Olympic 2012. Team approach is crucial Conformance: Conformance is making sure that coca cola and the retailers have received their supplies on time and whatever they have ordered has been received. This also determines Coca cola’s quality capability to meet customer needs and acceptable values and standards.
Supplier capability is ensured by maintaining specification of the product, plan and time, making sure that the all the staff are contributing by doing that coca cola must develop training programs, ensuring that the statistical processes is under control for example the quantity must mean the customers orders as well as quality. After conducting all of the above the next step would be confirming quality assurance, the effective method and actions that are used to accomplish requests for getting the right quality, this method would help coca cola reduce their errors.
Quality control is conceded out by examination of the coca cola products and ensuing that everything is under control and supervising any activities. 6. Right Price: After conducting all the procedures in the above it now comes down to the price, the total acquisition cost (TAC) and selling price. Total acquisition cost will calculate all of Coca Cola’s delivery cost, services, cost of returns, inspection of the products and staff, inventory costs and handling costs. rice has a lot to do with the supply and demand, if the demand is low the price is low, if the demand is high the price is high, when the supply is low the price is low and when the supply is high the price is high. if it comes to be an equilibrium then the levels of supply and demand are the equal. Extra demand or Extra stock can be dealt with price increase. Coca Cola must plan the right price by negotiating prices on the materials (sugar, water and other ingredients), labor (staff in manufacturing companies in Turkey) and bought items and services such as transportation.