SCM Framework: Production, Inventory, Location, Transformation, and Information.

1. PRODUCTION

The responsiveness of this driver can be enhanced by constructing factories with excess capacity and implementing flexible manufacturing techniques to produce a variety of products. To further improve responsiveness, a company can engage in production across multiple small plants located near major customer groups, thereby shortening delivery times. Conversely, if efficiency is the priority, the company can build factories with highly measured capacity and optimize production focus on a limited range of products. Additional efficiency can also be achieved by consolidating production in large central plants to attain better economies of scale, even though delivery times may be longer.

2. INVENTORY

Responsiveness can be achieved by maintaining high inventory levels for a variety of products. Additional responsiveness can be obtained by stocking products at various locations so that inventory is close to customers and readily available. Efficiency in inventory management will require reducing inventory levels for all items, especially those that do not sell frequently. Moreover, economies of scale and cost savings can be realized by storing inventory only at a few central locations, such as regional distribution centers (DC).

3. LOCATION

Location decisions that emphasize responsiveness would involve establishing numerous locations close to the company’s customer base. For instance, fast-food chains utilize location strategies to respond to customers by opening numerous outlets in high-volume markets. Efficiency can be achieved by operating from only a few locations and consolidating activities in common locations. As an example, e-commerce retailers serve wide geographical markets from just a few central locations that engage in various activities.

4. TRANSPORTATION

Responsiveness can be achieved by using fast and flexible transportation modes such as trucks and airplanes. Many companies selling products through catalogs or the internet can provide high levels of responsiveness by utilizing transportation to deliver their products often within 48 hours or less. FedEx and UPS are two companies that can provide very responsive transportation services. Currently, Amazon is expanding and operating its own transportation services in high-volume markets to be more responsive to customer desires. Efficiency can be emphasized by transporting products in larger batches and doing so less frequently. The use of transportation modes such as ships, railways, and pipelines can be very efficient. Transportation can also be made more efficient if it originates from a central hub facility or distribution center (DC) rather than from many separate branch locations.

5. INFORMATION

The power of this driver grows stronger every year as the technology for collecting and sharing information becomes more widespread, easier to use, and more affordable. Information, much like money, is a very useful commodity because it can be applied directly to enhance the performance of the other four supply chain drivers. High levels of responsiveness can be achieved when companies collect and share accurate and timely data generated by the operations of the other four drivers. An example of this is the supply chains that serve the electronics market; they are some of the most responsive in the world. Companies in these supply chains, including manufacturers, distributors, and large retailers, all collect and share data about customer demand, production schedules, and inventory levels. This enables companies in these supply chains to respond quickly to situations and new market demands in the ever-changing and unpredictable world of electronic devices (such as smartphones, sensors, home entertainment equipment, and video game devices, etc.).

Develop the Elements of Supply Chain Management Framework for Digital Business.

PT Indo Sentosa Rayon is a company engaged in the production of rayon threads. To develop its digital business in this era, PT Indo Sentosa Rayon can adapt the elements of the supply chain management framework as follows:

1. PRODUCTION :

Agile and Data-Driven:

• Implement a flexible production system capable of adapting to rapid changes in market demand.
• Utilize online sales data and industry trends to predict demand and adjust production schedules.
• Consider implementing robotics and automation technology to enhance production efficiency and capacity.

Customization and Personalization:

• Develop an online platform for ordering rayon threads with customization options, such as color, thickness, and texture, based on customer needs.
• Leverage data analysis to understand customer preferences and specific needs, offering personalized products.

Production Partnerships:

• Collaborate with other rayon thread manufacturers to expand production capacity and meet increasing demand.
• Partner with textile or fashion companies to develop innovative rayon thread products and address specific industry needs.

2. INVENTORY :

Demand Forecasting:

• Implement more accurate demand forecasting algorithms based on online sales data, industry trends, and seasonal shifts.
• Utilize big data analysis to identify patterns and factors influencing rayon thread demand.
• Optimize raw material and finished thread inventory levels to minimize storage costs and stockouts.

Cloud-Based Management:

• Use cloud-based inventory management systems to gain real-time visibility of raw material and finished thread stocks across production locations and warehouses.
• Implement automatic alert systems to prevent stockouts and optimize reorder processes.

Dynamic and Flexible:

• Implement just-in-time strategies for certain raw materials with a short shelf life or high price fluctuations.
• Use a multi-tier inventory model to store popular specifications of rayon thread strategically close to major customers.

3. LOCATION :

Distributed Warehouse Network:

• Open finished thread storage warehouses near regions with high concentrations of major customers, such as textile centers or garment manufacturing hubs.
• Consider implementing micro-fulfillment centers for faster deliveries in urban areas.

Omnichannel Integration:

• Integrate online and offline distribution and sales systems, allowing customers to order rayon thread through online platforms and pick up directly from the nearest warehouse.
• Develop click-and-collect options to enhance customer satisfaction and streamline the ordering process.

Logistics Partnerships:

• Partner with reliable logistics providers offering fast and flexible delivery options, including express delivery and same-day delivery.
• Utilize tracking and tracing technology to provide real-time visibility to customers regarding their rayon thread deliveries.

4. TRANSPORTATION :

Mode Selection:

• Choose the most efficient and cost-effective transportation modes (e.g., truck, rail, air, sea) based on product characteristics, distance, and delivery requirements.

Route Optimization:

• Use logistics software and expertise to plan the most efficient routes, considering factors such as traffic, weather, and delivery schedules.

Carrier Selection:

• Partner with reliable transportation providers offering competitive rates, timely deliveries, and tracking and tracing capabilities.

5. INFORMATION :

Integrated Platform:

• Develop an integrated digital platform connecting all supply chain elements, including production, inventory, delivery, and sales.
• Ensure the platform enables data sharing, collaboration, and real-time visibility across the entire supply chain.

Cybersecurity:

• Implement robust cybersecurity measures to protect critical company and customer data from cyberattacks.
• Ensure the security of online transactions and the integrity of product and production data.

Blockchain Integration:

• Consider implementing blockchain technology to enhance transparency, security, and traceability.

Authors:

Amrid Ramdhani (2502445542)

Defa Hanifta Putra (2502444924)

Rizki Ashari (2502444760)