Read the case study and answer the following questions Finestone Inc Finestone Inc., based in New Orleans, US, is a company which produces and sells electronic components for industrial automation. They sell about 30 000 different products, most of them from stock and others with a competitive lead time. One product group is called smart-devices, which are mainly produced in a production facility in Austria. Ready products are shipped to a distribution centre in the Netherlands from which they are distributed to (national) wholesalers in Europe and the US. These wholesalers distribute the devices to smaller distributors in the various countries. For a certain range of product, called SD-X, performance was below standard. Inventory at the DCs was very high but it seemed that the wrong products were always available. Only 70% of customer orders were filled in time. Lead times from the production facility in Austria ranged between 4 and 12 weeks and one never knew exactly what was being delivered. Within the SD-X range, 100 different products were delivered, and all showed an erratic demand pattern. Even fast-moving items like the SD-X2a, which is responsible for 10% of the SD-X volume, seemed to be unpredictable. Safety stocks are based on demand variation and an extra safety time of two weeks was added to cover for uncertainties in lead time from Austria. This was just not enough, however. Finally, everybody was blaming everyone. Sales blamed logistics for not having the right products in stock. Logistics blamed production for not delivering on time and for making the wrong products. Production blamed sales for not forecasting correctly. And everybody blamed IT for their slow performance. So supply chain director Henry van Bunnik decided to call in external expertise to solve the problem. The external consultant did some research and concluded that most of the problems originated from the erratic demand. Sometimes large orders depleted stocks which caused rush orders for Austria, which disrupted their production schedule, resulting in extra set-ups and longer lead times. The funny thing was that the most erratic demand was found for fast-moving items. It turned out that the spikes were caused by demands from the largest customer, the national distributor from the US. Which, by the way, was owned by Finestone Ltd. The consultant proposed a fixed delivery schedule to the US: every week they would ship 2 500 pieces from the Netherlands. He also suggested instructing the production plant to produce 1250 per week (or 2 500 per two weeks) for this customer. The same concept could be used for similar fast-moving items. Henry was convinced but needed extra backup for his monthly talk with his boss Juanita Perez, the global supply chain director. So he needs some information.

QUESTION ONE Discuss the conflicts in supply chain which interface with other internal and external departments as evidenced at Finestone. under the below four (4)categories (20 Marks)

1.Conflict in Supply Chain with Category Department -

2.Conflict in Supply Chain with Quality Assurance Department -

3.Conflict in Supply Chain with Distribution Department -

4.Conflict in Supply Chain with Customer Service Department

Please do not give me the answer below as per Abhishek Shekhawat ANSWER BELOW, I want the answer based on above 4 categories

ANSWER :

INTERNAL AND EXTERNAL CONFLICTS OF SUPPLY CHAIN :

1. FINANCIAL :

Borrowing money from a financial institution to finance your inventory is an external factor. Be mindful of the economy, and make sure to watch those interest rates. Remember that the payment of an installment loan isnt linked to the sales you make, whereas an equity loan will not require any payments until youve made some profits. You need to ensure that you factor in the cost of borrowing the money. Tax write-offs are internal factors that always come into play, especially when you prepare for your financial year-end. A few other internal financial factors include the cost of your warehouse operations as well as your transport costs while the costs of fuel are an external factor that you have no control over.

2. ECONOMIC FACTORS :

Sales and customer service are internal factors that are in your complete control. Economic downturns, politics, and competition are external factors that you have no control. But, by understanding your consumer buying habits and being able to forecast buyer behavior by keeping a close eye on seasonality and trends through your internal systems and platforms such as social media, you may well be one step ahead in terms of your stock holding and demand forecasting.

3. EMPLOYEES :

Although you employ people to manage and oversee your inventory, they are usually not as vested in the business as you are. So to this end, they are seen as an external factor. You cant control whether they remain in your employ, but you can reward your high performers and those that are important to the management of your warehouse and supply chain in an attempt to keep them.

4. SUPPLIERS :

Although sourcing and utilizing supplies is an internal decision, it can also be an external factor that is difficult to manage. Your product may be rather specialized, meaning you could be limited to choice in terms of the number of suppliers available. If the supplier pool is small and mostly inadequate, make sure you understand your lead times and add in some extra buffer time. Also, ensure you have a backup supplier that you can call on should the need arise. You cannot control your suppliers business but you can ensure that they meet your selection criteria and required service levels.

5. NATURAL OR MAN-MADE DISASTERS :

Natural or man-made disasters are important external factors in your supply chain, and these could have a significant impact on your business even if your primary location is relatively safe from such incidents. Implementing disaster contingency plans is an internal measure that can help you avoid potential losses and extra expenses that many companies cannot afford. Supply chain disruptions can occur from extreme weather, natural disasters, failing infrastructure, and more. Again, consider your location and your risk factors and check what contingency plans you should have in place in case a disaster impacts your business.

6. COMMODITIES :

Commodities prices continually fluctuate beyond your control, which makes this a clear example of an external factor. Keep an eye on the costs of key inputs for your business that regularly shift. From an internal perspective, you can shop around for cheaper suppliers, but make sure that you dont forsake quality when replacing suppliers.

7. PRODUCT RECALLS :

Product recalls from suppliers are an external factor, and an ill-timed recall can have significant repercussions on the profitability and reputation of your business. One way to lessen your risk is to conduct a thorough investigation into the quality of your suppliers products before you embark on a business relationship with them by checking on their history. Make sure that you have a product recall policy in place to make this unfortunate possibility a little less disastrous.

In summary, your internal factors are known entities that you can control; its those external factors that tend to throw you curveballs. While you cant have a plan in place for every potential scenario, it is advisable to draw up a list of external factors and how these could impact your business. Ensure that you revisit the list regularly to update and make sure that you have all the policies, processes, and procedures in place to help mitigate the fallout.

Anything needs to add means, just leave me a comment I will sort it out.