OPS FPX 5620 Assessment 3 Implementing Global Operations and Supply Chain Infrastructure Changes

Student Name

Capella University

OPS-FPX5620 Supply Chain Foundations and Management

Prof. Name

Date

Priority of Recommendations

To maximize effectiveness, recommendations should prioritize ‘easy wins’—initiatives that are quick to implement and yield immediate benefits for the organization. For Mainland Tools, the optimal initial steps involve addressing two recommendations focused on integrating infrastructure elements to advance the business.

Step 1

The first step is to reorganize the layout of departmental locations within the building. Currently, the shipping and receiving department is situated at the far end of the building from the warehousing area. These departments should be colocated to enhance efficiency. Since loading docks are fixed, this will necessitate relocating staff, office furniture, forklifts, shelving units, and other warehouse equipment. Although this relocation will take some time, it will not require initial capital investment, making it cost-effective. Additionally, reducing the distance that paper documents need to travel will minimize lost delivery instructions. Immediate results will include decreased downtime for warehouse associates, who will not have to walk across the building as frequently. The estimated implementation time is 3-5 days, though it could be shortened to 2-3 days if staff members work overtime on weekends.

Step 2

The next step involves investing in a new email procedure and ERP software to facilitate electronic intradepartmental communication, reducing reliance on paper documentation for tracking shipments. While some paper files, such as pick lists and packing slips, will still be used, the majority of information should be available on the network. This change will enable employees handling orders to access necessary data more efficiently. Like Step 1, this step will yield immediate results, improving on-time delivery by ensuring everyone is informed about customer requirements. Implementation within 30 days is achievable, although preliminary work is required. Ideally, Mainland Tools should adopt the ERP system used by Thompson Tools in China, if support is available. This would reduce costs and ensure compatibility between US and China office systems. If not, both companies will need to collaborate on selecting a system and planning for training, customization, and redesign if needed. ERP system costs vary by provider and user count, with costs per user ranging from $50 to $150 for small businesses, plus start-up, training, and customization expenses totaling between $75,000 and $750,000 for small to medium-sized businesses (BetterBuys, 2020). Despite the significant investment, the ROI is expected to be favorable, with the system potentially paying for itself within a few months.

Step 3

The final recommendation involves integrating other operations players, such as sales, marketing, and material planning, into the ERP system. This step requires more time due to extensive training and internal advocacy for system use. A top-down approach, with managers demonstrating the system’s importance, is crucial. Introducing a new tool that changes business operations can be akin to a cultural shift and may take up to a year to fully realize benefits. The ERP database will expand to encompass the entire organization, including accounting, finance, sales, customer service, marketing, supply chain, inventory management, manufacturing, and human resources. Costs for this step are included in Step 2’s explanation. Although this step involves a significant capital investment and slow implementation, it will greatly impact the business and offer a competitive advantage.

Global Operations & Supply Chain Infrastructure Elements

Efficient global operations and supply chain infrastructure require integration of physical and informational assets (Fallon, 2015). A holistic view of infrastructure is crucial, as poor capital-investment decisions can be detrimental long-term. An organization can be viewed as a living organism, with departments as essential organs that need individual care but function as part of the whole. Aligning the warehouse and shipping & receiving areas will reduce internal material movement time, increasing productivity and inventory readiness. Similarly, investing in an ERP system will support the company’s informational assets. Key activities include maintaining material flow through the organization, enabling effective order handling by sales and customer service, and simplifying shipping and receiving for warehouse associates. Companies often fail to recognize missing links in their supply chain infrastructure due to inadequate integration of information technology (Fallon, 2015).

Quality Assurance Practices

The future state value stream map from Assessment 1, included in Appendix A, highlights new quality check points for incoming and outgoing material. These check points will act as gatekeepers to inspect raw materials before manufacturing, reducing defective components in inventory, and ensuring outbound material meets customer specifications. This practice will decrease defective goods sent to customers and enhance reputation. As Peter Drucker stated, “You can’t manage what you don’t measure,” broader supplier assessments and internal measurement programs are essential (Sparta Systems, n.d.). Suppliers must be informed of performance expectations, such as a 99.25% quality rating. Monthly report cards can be used to communicate performance metrics, fostering transparency and enabling corrective actions to prevent supply chain issues. The goal is to enhance visibility, traceability, accountability, and profitability (Sparta Systems, n.d.).

Planned Closure: Production & Inventory

Planned shutdowns, though often perceived negatively, can be beneficial if managed correctly. The five phases to make a planned closure productive are: planning, coordinating, procurement, execution, and returning to standard operations (Beck, 2015). Planning involves outlining the project schedule, production and inventory plans, key roles, budgets, and resources. Identifying potential obstacles and proposing solutions can minimize downtime. Coordination, the most time-consuming phase, requires ongoing departmental collaboration, with communication being crucial to prevent project delays. The procurement phase involves acquiring equipment, software, and tools, and negotiating with vendors. Execution brings the planning and coordination phases into action, with checkpoints to monitor progress. Finally, returning to service involves testing implementation efficacy and making necessary adjustments. To mitigate production risks, cross-training employees and utilizing distributor facilities for inventory can help. Although overtime may be unavoidable, leveraging existing staff and keeping inventory at distributors can alleviate some pressure (Greco, 2010).

Time Constraints & Alternative Solutions

Adhering to the project timeline is vital to avoid additional costs and customer dissatisfaction. Planning and coordinating phases are critical for managing potential delays. One alternative solution to extending the closure is involving sales and marketing in communicating the shutdown, possibly by promoting slow-moving items or offering incentives like free shipping for extended lead times. This approach can shift customer perception of the shutdown to a benefit rather than an inconvenience. Internally, staff not critical to the roll-out can focus on value-adding tasks, such as inventory cycle counting and maintenance.

Cultural Differences throughout the Implementation Process

Cultural differences, particularly in communication styles, must be considered during implementation. Language barriers and differing communication styles can create friction. As discussed in Assessment 2, the cultural concept of ‘face’ can make staff reluctant to express concerns or share information, while US staff may be perceived as too direct or aggressive. Awareness of these differences is essential to ensure smooth interactions and effective teamwork.

Conclusion

Investment in infrastructure is essential, as management cannot afford to adopt a reactive approach to capital utilization (Fallon, 2015). Although the initial costs may seem high, the long-term benefits will include increased profits and sustained growth. Mainland Tools should proactively address infrastructure needs rather than wait until issues become critical. While Step 1 provides a quick fix, the success of Steps 2 and 3 will be crucial for overall success.

References

Beck, J. (2015). Managing a Successful Temporary Plant Shutdown and Return to Service. Retrieved from Area Development: https://www.areadevelopment.com/siteSelection/Q2-2013/managing-temporary-manufacturing-plant-shutdowns-6666774.shtml

BetterBuys. (2020, April 17). How Much Does an ERP System Cost? 2020 Pricing Guide. Retrieved from BetterBuys: https://www.betterbuys.com/erp/erp-pricing-guide/

Fallon, C. (2015, April 30). Infrastructure: Supply chain’s missing link. Retrieved from The Supply Chain Quarterly: https://www.supplychainquarterly.com/topics/Technology/20150331-infrastructure-supply-chains-missing-link/

Greco, S. (2010, July 28). How to Handle a Spike in Sales. Retrieved from Inc: https://www.inc.com/guides/2010/07/how-to-handle-a-spike-in-sales.html

Sparta Systems. (n.d.). Four Best Practices to Improve Quality in the Supply Chain. Retrieved from Sparta Systems: http://marketo.spartasystems.com/rs/spartasystems2/images/eBook%20-%20Best%20Practices%20Supply%20Chain%20Quality.pdf

OPS FPX 5620 Assessment 3 Implementing Global Operations and Supply Chain Infrastructure Changes

Tyndall, G. (2019, November 20). The Real Cost of an Enterprise Resource Planning System. Retrieved from The Balance Small Business: https://www.thebalancesmb.com/how-much-does-an-erp-system-cost-14132