Question: Question Draw a basic Supply Chain map for the above. Plexet is a mid-sized manufacturing firm located in Auckland, New Zealand. The company produces a


| Question Draw a basic Supply Chain map for the above. |
Plexet is a mid-sized manufacturing firm located in Auckland, New Zealand. The company produces a range of plastic containers that includes their flagship product range, Goodseal. The Goodseal brand includes a range of plastic food storage containers, designed to be sold to retailers and grocery stores for home use. The containers are sold in 3 and 6 packs, in three different sizes: 0.25L, 0.5L and 1L. They are typically marketed to consumers for food storage in the refrigerator or freezer. Currently, Plexet has achieved a 9 percent annual sales growth over the past five years. Within the manufacturing plant, each product size runs on dedicated molding machines to avoid changeover time and expense. The company is running three shifts, to meet the demand for the smaller sized containers, although the plastic molding equipment is running at only 58 percent of its optimal production capacity. Production levels fluctuate frequently, and Plexet adjusts its labour schedule around their forecasted sales demands. The sales manager is concerned about sluggish sales over the past six months, and is aware that manufacturing targets are based on the recent sales forecasts. Having an excess of product is of concern with Plexet management. Therefore, increasing production is not a strategy considered to help boost quarterly sales targets. Instead, Plexet is considering offering a discount to their suppliers, as well as adopting a new marketing strategy that will offer consumers coupons to buy one Goodseal product and receive a 3 pack of 1L containers free. Plexet do not receive as many orders for the 1L Goodseal container from their customers as they do for other container sizes. As a result, Plexet has decided to discontinue the 1L product and focus manufacturing efforts on the more popular sizes. This will enable the manufacturing plant to replace the 1L molds with 0.25L and .5L components. This is may help alleviate the low 58 percent utilization rate of production because more of the equipment will be set up to handle the production of the two remaining product lines. Managers believe this will increase their production utilization levels. The coupon strategy is designed to help move some of the obsolete 1L product from their inventory, in addition to retaining consumer loyalty with the smaller sized products. The manufacturer will implement the sales and production strategies over the next fiscal year. Meanwhile, back at the retail store Plexet has a reliable supplier relationship with a large retail chain, KiviMart (KM). The head of purchasing at KM Auckland acquired 4000 cases of containers this quarter at a 4 percent discount from Plexet, but has sold only 1800 over the last two quarters. She decided that KM's in regions outside of Auckland would also benefit from the discounted price, and has sold 1800 to them. In addition, she has sold 400 cases to a wholesaler at cost, with a negotiated deal to buy them back at a 3 percent premium within 90 days if KM needed the supply. This has helped the other KM's throughout the country, as well as solved any inventory issues with the Auckland KM. The plan is for the Auckland KM to discount 1000 cases for a special in-store promotion. Soon after the deal with Plexet had been negotiated, Chinex contacted the head of KM's purchasing Department. They offered a significant 7 percent discount on 5000 cases of assorted Goodseal products. The deal was far too good to be ignored and KM accepted the deal. The purchasing department contacted Plexet and cancelled their next three orders. KM received the Chinex products over a month late. Unfortunately, the KM purchasing manager receives reports only on the dollar amount of overall Goodseal inventory and was unaware of the situation on the ground in the local KM. The shelves holding the Goodseal line had an ample supply of the 1L six packs, but no other size was on the shelf. Worse yet, Plexet's competitors were stocked next to the Goodseal line, and had a full line of product sizes all of which were in stock. What's the problem? Plexet is under the assumption that they have a sales crisis. Domestic (Australia/New Zealand) sales are lower than forecast. They have decided to help resolve this by adjusting their product line, and adapting their production line to manufacture more of the products that sell faster. Offering coupons would help boost sales of smaller sized containers and consumer loyalty. The purchasing department at KM believes they have addressed a potential inventory crisis by moving inventory around the country, are secure in the amount of supply they have acquired, and have perhaps even boosted their bottom line through the recent acquisition of the cheaper Goodseal product from Chinex