Where might some additional improvements still be needed as

Where might some additional improvements still be needed as part of the company\'s overall supply chain - both internally and externally? Explain.

Williams Companv Case Company Information Williams Company has made major changes to its supply chain over the last 3-years, all in an effort to improve its supply chain throughput. Improved throughput means cost savings, improved overall operations from materials acquisitions to inventory control, reduced returns and higher customer satisfaction levels Some (not all) of Williams Company Metrics Related to Their Supply Chain Metrics Over the Last Three Years e Planning: o Average Inventory carrying cost 3-years ago $0.58 per product item . Today = $0.41 per product item o Average percentage of obsolete inventory on hand · 3-years ago = 4.8% of total product sales · Today = 2.2% of total product sales Annual production volume 3-years ago=2.19M units Today2.47M units . Source: o Average material acquisition costs · 3-years ago = $2.98 per unit . Today = $2.46 per unit o Average payment period · 3-years ago = 31 days per supplier/partner ·Today = 22 days per supplier/partner Make: o Average number of defects per thousand units - 3-years ago 98 . Today=88 o Average make cycle time · 3-years ago = 21 days Today 23 days o Average capacity utilization (with no new expansion or capital expenditures) · 3-years ago = 92% . Today=83% Deliver: o Average fill rate 3-years ago=78% . Today = 93% o Average return rate per 1000 units sold 3-years ago=5.6% . Today= 4.1% Additional information Williams Annual Sales Today = $23.9M 3-years ago= $18.3M

Solution

Considering supply chain as the only factor for affecting operations of the company the following things can be suggested for the improvement in the company’s supply chain:

Internal measures:

The planning and making phase are the internal aspects of company’s supply chain.

The planning has improved in every aspect i.e. average inventory carrying cost (decreased than past), average percentage of obsolete inventory on hand (decreased), and the annual production has increased which shows that the company has improved its methods and thus there are no issues in this part. However, more improvements are always possible.

Making:

The making has depreciated in all the terms i.e. increased number of defects, increased cycle time, and decreased capacity utilization. This clearly shows that the production has degraded. Further, as stated in the very starting, considering supply chain as the only factor for affecting operations of the company, it can be said that not only the quality of raw material has been compromised but also the time to finish the operation has also increased. It is clearly because of the late arrival of the raw material. Also, the quality is not up to the mark.

Thus, this phase requires acute attention and needs to be maintained so as to increase the profits. For this the company should either ask its suppliers to supply quality raw material or it should start looking for another supplier. Also, it should ask its workforce to improve their working standards.

External:

The source and delivery both are external affair. Both can be only managed with the support of external units.

The source aspect shows that the material acquisition cost has decreased and so has the payment period. This shows that the company has emerged efficiently in this field. Thus, there is no specific urgency to focus on this part but there is also room for improvement.

The delivery aspect has also improved as the average fill rate (delivery to final consumer) has improved whereas average return rate per 1000 units sold has decreased, which is good. Thus, there is no deficiency in this phase also. It can be concluded that the company is doing well in this field. Thus, no issues but there is always a scope.

Thus, it can be concluded that some additional improvements are possible in the internal supply chain of the company.