Posted on

Reengineering Of Supply Chain Process In Production Systems Commerce Essay

Modern endeavors are faced with many challenges and continually altering competitory environment, such as globalisation of the economic system of developed states, the increasing demands for the quality and lower sale monetary value of merchandises and services, deregulating of the economic systems of developed states, demands for excellence and uninterrupted betterment. Because of these and many other grounds, there are lasting demands for alterations in public presentations, inventions, increasing flexibleness and bettering the economic public presentation of the company.

Main aim of this paper was to research possibilities for betterment of of import concern procedures, such as supply concatenation direction in fast traveling consumer goods industry ( FMCG ) with the technique of concern procedure reengineering ( BPR ) and concern procedure betterment ( BPI ) . Methodology used in this paper included measure attack in line with the Harvard Business School Business ( HBS, 2010 ) procedure betterment supported with value watercourse function ( VSM ) tilt tools. First, writers made a reappraisal of available literature on concern procedure reengineering and supply concatenation direction. In continuance, it has been analyzed the technique of BPI harmonizing to the HBS and so incorporate appropriate facets and stairss of BPI in supply concatenation procedure of domestic company. They included: fiscal analysis of company before BPI act ; execution of BPI and 2nd fiscal analysis of company ‘s public presentations after BPI execution.

The paper presents instance survey research made to indicate out the significance of BPR in supply concatenation direction. Writers tried to explicate chief countries of supply concatenation procedure in concrete production company so as the betterments that can be achieved by utilizing techniques of BPR.

Cardinal words: reingeneering, concern procedure betterment, supply concatenation direction, thin tools, VSM, FMCG

Introduction

Business processes represent a group of related activities that provide satisfaction of the demands and supplying value to the user. Since all the procedures in an organisation are directed towardsA strategicA ends, A it is necessary to decently pull off allA activitiesA and tasksA so they canA run into the operational aims ( Berber et al. , 2011 ) .

Business Procedure Reengineering ( BPR ) is positioned as an of import direction pattern because it provides organisations with a agencies of increasing fight and sustainability ( Magutu et al. , 2010 ) in clip of market uncertainness, increasing globalisation and invariably altering concern conditions.

Main aim of this paper was to research possibilities for betterment of of import concern procedures, such as supply concatenation direction with the technique of concern procedure reengineering and concern procedure betterment ( BPI ) . Methodology used in this paper included measure attack in line with the HBS Business Process Improvement. First, writers made a reappraisal of available literature on concern procedure reengineering and supply concatenation direction. In continuance, it has been analyzed the technique of BPI. After theoretical analysis, writers integrated appropriate stairss of BPI in supply concatenation procedure of domestic company. They included: fiscal analysis of company before BPI act ; execution of BPI and 2nd fiscal analysis of company ‘s public presentations after BPI execution. Besides, non fiscal public presentations were discussed.

The paper presents one instance survey research made to indicate out the significance of BPR in SCM. Writers tried to explicate chief countries of supply concatenation procedure in concrete production company so as the betterments that can be achieved by utilizing BPR techniques.

A Theoretical Review

Business Procedure Reengineering

Definitions of concern procedures are legion and most of them are from the theory of BPR from 1990s. Harmonizing to Hammer & A ; Champy ( 1993 ) concern procedure is a aggregation of activities that takes one or more sorts of input and creates an end product that is of value to the client. A concern procedure has a end and is affected by events happening in the external universe or in other procedures. In book of writer Davenport ( 1993 ) a concern procedure is defined as “ a structured, mensural set of activities designed to bring forth a specified end product for a peculiar client or market. It implies a strong accent on how work is done within an organisation, in contrast to a merchandise focal point ‘s accent on what. A procedure is therefore a specific ordination of work activities across clip and topographic point, with a beginning, an terminal, and clearly identified inputs and end products: a construction for action.

On the other manus, Rummler & A ; Brache ( 1995 ) stated that concern procedure is a series of stairss designed to bring forth a productA or service.A MostA procedures are transverse – functional and include “ white infinite ” between the regular hexahedrons on the organisation chart. Some procedures result in merchandise or service that is required by the organisation ‘s external clients – the primary procedures. Other procedures produce merchandises that are unseeable to the client, but are indispensable for the efficient behavior of the businessA -A support procedures. All these procedures are decently managed by BPM theoretical account that can be understood as: an incorporate direction doctrine and set of patterns that includes incremental alteration and extremist alteration in concern procedure, and emphasizes uninterrupted betterment, client satisfaction, and employee engagement ( Hung, 2006 ) .

Related to BPM construct, or better say the theoretical base for BPM is reengineering of concern procedure. It is the cardinal rethinking and extremist redesign of concern procedures to accomplish dramatic betterments in critical modern-day success standards such as cost, quality and service and velocity ( Hammer & A ; Champy, 1993 ) . The writers consider the re-engineering as something wholly new, which does non affect incremental alterations and betterments, but extremist redesign of concern procedures. Reengineering is the procedure of redesign with the purpose of betterment in the cardinal countries of concern followed by positive transmutation of public presentations such as quality, cost, and velocity ( Altinkemer et al. , 2011 ) . Reengineering is the extremist redesign of technological procedures in order to better economic efficiency. Extremist redesign means get downing from the get downing alternatively of altering or modifying the bing manners ( A A‡ekiA‡ et al. , 2011 ) .

In illustrations of successful reengineering there are meeting some subjects that are common:

Orientation to the procedure – every betterment is achieved by concentrating on the full procedure,

Ambition – means that little betterments are non plenty,

Misdemeanor of regulations – discards the unneeded tradition during the re-engineering of concern procedures,

Creative usage of information engineering – information engineering acted as a tool to enable organisations to run in a radically different manner ( Hammer & A ; Champy, 2001 ) .

Subject of reengineering is a procedure, non an organisation. Companies do non redesign their gross revenues or production section ; they are redesigning concern processes that people perform in these sections. Confusion over organisational units and procedure as objects of reengineering occurs because sections, divisions and groups are known to the people known but procedures are non. Reengineering is non:

Automation,

Reduce of non-active parts of the organisation,

Reducing the range of the organisation,

Reorganization,

Making fringy alterations.

There are four re-engineering positions: operational, dynamically-evolving, organisational and systemic. Operational position puts the focal point on the re-engineering of concern procedure direction, and giving precedence to activities that create added value. Dynamic-evolutionary position puts at the centre of implementing extremist reengineering activities aimed at uninterrupted betterment of concern procedures. Organizational position means that re-engineering should supply follow-highly advanced vision by all employees. Finally, from the position of system re-engineering is to supply equal concern environment for the execution of the alterations to the prioritization of clients and their demands ( Dassisti, 2010 ) .

Harmonizing to this construct, everyA portion of the organisation is a alone procedure, which successful executing leads to the satisfaction and fulfilment of the procedure at a higher degree. There is many ways for betterment of some organisation procedures ( see Berber et al. , 2012 ) , but this paper examines the supply concatenation direction procedure, as one of the important parts in entire concern procedure betterment.

Supply Chain Management

Definitions of Supply Chain Management are legion. SCM can be understood as “ a systems attack to sing the supply concatenation as a whole, and to pull offing the entire flow of goods stock list from the provider to the ultimate client ; a strategic orientation toward concerted attempts to synchronise and meet intrafirm and interfirm operational and strategic capablenesss into a incorporate whole ; and a client focal point to make alone and individualised beginnings of client value, taking to client satisfaction ” ( Mentzer et al. , 2001 ) . Supply concatenation direction is “ an integrative doctrine to pull off the entire flow of a distribution channel from provider to the ultimate user ” ( Cooper & A ; Ellram, 1993 ) . Supply Chain Management is the planning and control of all procedures that connect spouses in a supply concatenation with the intent of serving the demands of terminal users ( Harrison & A ; Van Hoek, 2005 ) . It includes two or more houses in a supply concatenation come ining into a long-run understanding ; the development of trust and committedness to the relationship ; the integrating of logistics activities affecting the sharing of demand and gross revenues informations ; the potency for a displacement in the venue of control of the logistics procedure ( La Londe & A ; Masters, 1994 ) . A comprehensive definition had offered writer Acimovic, who argues that “ provide concatenation direction includes all activities related to procurance of resources, the transition of these resources, every bit good as all logistics activities that involves coordination and cooperation of spouses in the supply concatenation, which can be providers, mediators, logistics suppliers and clients, in the finals, supply concatenation direction integrates and co-ordinates supply and demand within a house and between all members of the supply channel ; doctrine of the construct of supply concatenation direction is that it is, based on the duty that each concern map has, a major planimeter of concern maps within the company and between companies, in a cohesive and high-performance concern theoretical account ; supply concatenation direction involves all operational logistics activities, production and establishes organizing links with and through selling, gross revenues, merchandise design and IT support ( AA‡imoviA‡ , 2006 ) .

Stock & A ; Lambert ( 2001 ) explicitly determine what it needs to make any procedure of supply concatenation direction. Harmonizing to them, these are: the construction of the supply concatenation, which is the relationship between the members of the supply system, the concern processes within the supply system, every bit good as activities that sholud generate value for the client who is at the terminal of concatenation, while the managerial constituents are methodological techniques that integrate procedures and web in the supply concatenation.

In conformity with the above definitions, it is of import to advert that the cardinal thought of the supply concatenation is directed ot the sense that it ( provide concatenation ) must be controlled in order to be fast, dependable, cost-efficient and flexible plenty to run into the demands of their clients ( Janvier-James, 2012 ) . Decrease of cost and optimisation of procedures in supply concatenation, which has been dominant in the yesteryear within the organisation, focuses on using the same direction paradigm and engineering, but outside the internal supply concatenation. The end of direction is to extinguish all signifiers of “ waste ” produced by single entities in the supply concatenation, such as logistics, stock list, procurance, merchandise development, finance and others. ( Rejman PetroviA‡ et al. , 2012 ) .

As it can be seen from the figure 1, SCM involves complex relationships between companies and providers, on the one manus, and the company and clients on the other side.

Figure 1 A Framework of Supply Chain Management

Beginning: Cooper, Lambert & A ; Pagh, 1997.

Other writers proposed a incorporate concern procedure design model based on the paradigm of intelligence. Harmonizing them intelligence allows worlds and human-designed systems header with environmental volatility, and argue that its rules applied to the context of organisational procedures can increase the success rate of concern operations, in intelligent supply concatenation ( Siurdyban & A ; Moller, 2012 ) .A

Methodology

At the beginning of the analysis of procedure reengineering methodological analysis, it should be noted several thoughts by foreign research workers, when it comes to this. Zellner ( 2011 ) attempted to supply a structured overview of the attack to better concern procedures ( BPI ) and their part to the betterment of the current act. Although a batch of talk about the BPI, there is still a deficiency of support for the act to better the procedure. Most approaches dressed ore on what needs to be done before and after the betterment, but the act of bettering still appears to be a “ black box. ” In his plants, the writers have performed the analysis and critical rating of a big figure of entrees to BPR ( see Zellner, 2011 ; Reijers et al. , 2005 ) . In finding the stages or stairss in procedure reengineering there are different sentiments about how to implement the re-engineering of the organisation. On the reappraisal of the literature it can be concluded that we ever talk about a gradual, phased attack that starts from the finding procedure for the execution of re-engineering to execution and uninterrupted betterment of the new procedure. As antecedently mentioned, it can be assumed that the framers of reengineering are Hammer and Champy ( 1993 ) , but today there are many different attacks when it comes to this methodological analysis ( see Hammer & A ; Champy, 1993 ; Guha et al. , 1993 ; Kettinger et al. , 1997 ; MiladinoviA‡ & A ; AdamoviA‡ , 2010 ; HBS, 2010 ) . This paper presents a methodological analysis for application of the Harvard Business School ( Harvard Business School, HBS, 2010 ) for the execution of re-engineering undertaking in the nutrient industry in the procurance procedure.

Stairss in the analysis included:

analysis of fiscal indexs before BPI ;

execution of BPI ;

fiscal analysis of company ‘s public presentations after BPI execution.

besides, non fiscal public presentations were discussed.

A survey of the procedure of bettering supply concatenation direction is made aˆ‹aˆ‹in a company for production of fast moved consumer goods ( FMCG ) – nutrient industry, which we will advert in this survey as the SFC ( the existent name of the company is protected through an understanding with the top direction ( TM ) ) . SFC is a company founded in 1995 in north portion of Serbia that operates under HACCP and ISO 14001:2004, ISO 22000:2007 certified mill which has about 1300 employees. In August 2008 the company became a member of a transnational company that is one of the biggest in the field of non-alcoholic drinks and nutrient. Harmonizing to official fiscal informations, the company recorded a profitable concern. In order to acquire farther penetration into the company ‘s fiscal place and concern success, the cardinal indexs of efficiency are calculated ( Table 1 ) .

Table 1 Indexs of efficiency of the SFC Company ‘s concern for 2011

Indexs

Formula

Unit of measurement

Value

BEP ( breakeven point )

a‚¬

46.550.839,17

ROE ( return on equity )

%

0,2634175

ROA ( return on assets )

%

0,321157

Liquid

ratio

1,478649

Solvency

ratio

1,3762735

Stockss of concluding merchandises

From fiscal informations

yearss

10

Stockss of stuff

From fiscal informations

yearss

20

Stockss of natural stuffs

From fiscal informations

yearss

45

Time for the alteration of tools due to switching of production lines

From fiscal informations

yearss

0,5

Out of Stock – Lost gross revenues due to miss of available goods

CS= ( NDOSxAUSPDxPPU ) +CC

%

12 % of Gross

Write-off of finished merchandises and natural stuffs

From fiscal informations

a‚¬

218.476,191

Cost of leasing a warehouse

From fiscal informations

a‚¬

1.100.828,571

Cost of transporting

From fiscal informations

a‚¬

1.162.342,857

Beginning: Analysis of writers

Where:

TF – entire fixed costs ;

Television – entire variable costs ;

R – gross ;

C – Capital engaged ;

TC – entire costs ;

% Mp – % of fringy net income ;

Bl – concern purchase ;

Bp – Business net income, without fiscal incomes and outgos ;

L – Liquid ;

WA – working assets ;

STL – short term liabilities ;

S – Solvency ;

BA – Business assets ;

TD – entire short term and long term debt ;

CS = Cost of a Stock out ;

NDOS = Number of Days Out of Stock ; A

AUSPD = Average Units Sold Per Day ; A

PPU = Price per Unit ( some usage Net income Per Unit ) ; A

CC = Cost of Consequences.

A

What is of import in re-engineering of concern procedures is that the ascertained company, although have profitable concern, realized that at a given degree of efficiency and effectivity it should non discourage, but should do betterments, integrate and standardise procedures ( KuA?ar et al. , 2009 ) wherever is possible to find the place and promote on competitory market. In this sense, it has been made the analysis of the concern processes that are of importance for the company to establish certain countries where alterations can be made in order to better the of import concern indexs. The company, after reexamining the concern processes identified one of the cardinal procedures that have a important impact on the overall concern. That was supply concatenation procedure.

Harmonizing Harvard Business School ( HBS, 2010 ) methodological analysis for BPI is consisted from six reciprocally conditioned stages for the reengineering of the concern processes:

Planning of reengineering ;

Analysis of indentified procedure ;

Redesign of procedure ;

Obtaining resources ;

Execution ;

Continuous procedure betterment.

The initial measure to better concern procedures ( BPI ) is be aftering that involves three of import elements that are critical for the proper debut of the job: choose an bing procedure that the company wants to better, specifying the range of the betterment undertaking and choosing the squad to implement reengineering.

The following measure in the procedure of BPI is the analysis of bing procedures in the organisation, which includes function of procedure, job designation, questioning stakeholders in order to set up facts and valid information about the procedure, and benchmarking in footings of uncovering how other organisations have solved determined or similar jobs.

After analysing the bing procedure, it is necessary to redesign the procedure, which is conducted through several stairss: anticipation of better procedure ; test thoughts of the squad for bettering ; consideration of the deductions of the possible design of procedure ; certification ; obtaining feedback from stakeholders, and paring the redesigned procedures.

When the procedure is redefined, it is necessary to execute the 4th measure: obtaining resources, which is frequently related to human resources ( HR ) , information engineering ( IT ) and fiscal resources. What is of import in the procedure of alteration is that the new procedure frequently requires a alteration in the resources used. Changes in power, public presentation, and range of work, duties, and even the figure of employees are some of the most common alterations related to human resources. In add-on to new employment, the debut of new engineering is about ever an facet of reengineering, particularly in the domestic concern environment. Execution of IT in about all procedures of work is inevitability which, if decently implemented, leads to the decrease in manual labour costs, faster flow of information, more accurate information.

By forming the resources needed to better the procedure, the following measure, the 5th phase of BPI, is implementing a new procedure in organisation. This is the most hard measure in the betterment of procedure, since the new procedure is put into operation. What is of import in this measure is to place possible barriers to execution and ease the work procedure. The cardinal functions here have top director, leader of the company and proprietors of the procedure that must stay committed to the thought of a new, improved procedure, no affair how complex or impossible seemed to others.

If the redesigned procedure through the execution is accepted, we can travel on the following measure, which means uninterrupted betterment. Specifically, the new procedure is required to continually give consequences that are expected of him. In this sense it is used step of the public presentation of concern procedures ( quality, turnaround clip, client satisfaction, cost, etc. ) , placing possible jobs and update that alterations in public presentation steps and marks as necessary.

Business Procedure Improvement in the Company

Analysis of bing procedure included function of procedure, placing jobs, questioning stakeholders in order to set up facts and valid information about the procedure, and benchmarking in footings of detecting how other organisations solved determined or similar jobs. Map of procedure occurs as a consequence of the function procedure ( Van Ackere et al. , 1993 ) . It is a graphical representation of the procedure with the show order of undertakings utilizing different versions of the description of the procedure eg DTP-flow diagrams, AS2, IDEF, etc. ( Giaglis, 2001 ) . Writers have applied in this instance Sigma Flow VSM – tilt and six sigma tools for mapping procedure ( see BoA?iA?koviA‡ et al. , 2012 ; PavletiA‡ et al. , 2007 ; SokoviA‡ et al. , 2005 ) . Maping “ represents one of the get downing foundations in informations assemblage and system analysis that, following to the vision of the top direction and staff preparation, represents the foundation for successful reengineering procedure ” ( RadoA?eviA‡ et al. , 2011 ) .

Due to the complexness of the function with VSM – thin methodological analysis in the undermentioned image is given simplified representation of the procedure given endeavor ( Figure 2 ) . Gross saless ‘ planning is a sub procedure of SCM that is responsible for circulating information about the gross revenues program for a period of clip. Based on the one-year budget, directors in the section of selling and gross revenues are be aftering to make one-year, semi-annual, quarterly and monthly gross revenues programs. This is the initial information that ranges from the gross revenues program to the production program.

Production program involves planning of capacities, both manpower and machinery to transport out the programs created in the sub procedure gross revenues be aftering. Production program involves taking into history the status and capacity restraints ( the upper limit sum of production per month and hebdomadal dislocation of machines, the velocity of machines and the similar ) . Based on the gross revenues program, production contrivers make their programs, including hebdomadal and day-to-day production programs and work capacity. This is the operational planning degree. In this bomber procedure it is created information about how many merchandises will be produced in each group inside the merchandise mix. Merchandises are sent to the cardinal warehouse managed by a squad of people who are involved in be aftering supply shops. Besides, the production program is communicated with providers and this map sent them besides a program of needed purchases of natural stuffs. There are two possibilities for the company:

Contact with the providers straight exercise contrivers, built on the measures and rate of bringing ;

Another manner is to be after outgo of resources on the footing of the gross revenues program ( MRP and MRPII ) to be transferred sector of procurance, and they will choose a provider that will work with, how many providers of 2nd precedence will they hold, and to do the trade monetary value, which conveyance and ordered volume must be depending on the features of merchandises and volume of price reductions, and so on.

There are two possibilities for the company:

Contact with the providers straight exercise contrivers, built on the measures and rate of bringing ;

Another manner is to be after outgo of resources on the footing of the gross revenues program ( MRP and MRPII ) to be transferred sector of procurance, and they will choose a provider that will work with, how many providers of 2nd precedence will they hold, and to do the trade monetary value, which conveyance and ordered volume must be depending on the features of merchandises and volume of price reductions, and so on.

Figure 2 Compny ‘s SCM before BPI execution

Beginning: Display by the company on the footing of paperss and interviews with director SCM

The 3rd bomber procedure that receives the information is the program of distribution centres supply of the company. The undertaking of this sub procedure is to make conditions for the smooth and uninterrupted outstation of the merchandises of when and where they needed in distribution centres. The necessity of the distribution as a specific economic activity arises from the spread, mismatch between the production of merchandises and ingestion topographic point, clip, measure and quality ( merchandise scope ) ( Pranulis et al. , 2008 ) . Specifically, based on the production program, every bit good as information received from contrivers for bringing of goods to the clients, director of distribution centre supply sector should direct the day-to-day conveyance of the finished merchandises. In their paper, writers ( Park et al. , 2007 ) propose an algorithm based on the conveyance agents. This system consists of multiple entities – the agents who collect and portion information. The agents are divided on the function of agents for the distribution, fabrication and procurance. Multiagent system includes an optional incorporate SCM planning agent that is used for the incorporate planning of production and distribution. Personalization of merchandises to suit the demands of an single includes a supply of assorted goods and services expeditiously, rapidly and at a good monetary value ( GligoriA‡ et al. , 2011 ) . What is revealed here as an exacerbating circumstance is really frequently mismatching between market information and gross revenues program that is the footing for the production, stock list and bringing programs.

After analysing the current procedures in the SCM where it was determined that there are certain issues that boil down to hapless consciousness of certain activities in the procedure. Redesigning of the procedure that is carried out included the creative activity of the undermentioned elements of the procedure:

Introduction ( infusion from the gross revenues be aftering procedure ) a new procedure that would hold focused on the planning of demands ( demand planning ) .

Employment at least two workers, one for Serbian market, which is the largest, approximately 70 % of the entire company market, and one for the export markets.

Closely associating of demand program with the sale programs, because on the joint analysis those can find accurate and precise information on the measures of merchandises that are needed in the market, which leads to better use of capacity, smaller stocks, equal supply and gross revenues, and therefore a greater satisfaction of clients, and finally consumers. The clip and sum of merchandises that have been lost due to non-compliance of gross revenues, production and bringing will be reduced.

Bettering dealingss with the company ‘s clients and providers. Integration of the largest purchasers in the company ‘s information system can increase the efficiency of gross revenues in such a manner that the purchasers ( jobbers ) by emptying shelves and warehouses to the degree of safety stock send petition to distribution centres merely for those merchandises that are truly losing. Distribution centres would automatically react to petitions by reaching bringing contrivers, and those ( bringing contrivers ) will reach supply contrivers about what merchandises, in what measure and when are needed.

Integration of providers in SCM information system. The entree to information about resources that are consumed in clip, cardinal providers could be after their ain capacity and exercising bringing to the company when natural stuffs are truly needed. Bipartisan communicating means that the company, in add-on to the demands for natural stuffs, besides receives information and inquiries from the seller about which natural stuffs are available, and whether is needed to be after more or less natural stuff. This is a really of import portion of the procedure since certain natural stuffs are non produced in Serbia and environing states. It takes several hebdomads for the acquisition from Latin American states, including conveyance of several yearss. Bettering the procedure is shown in Figure 3.

Figure 3 SCM procedure after BPI execution

Beginning: Suggestions of writers for new procedure

In Figure 3 we can see clearly the changed relationship between the company and providers ; company and clients and developing strategic co-op and collaborative attack. Besides it is apparent the separation of demand planning from the gross revenues program, and their networking and facilitate of making accurate programs which would so go the footing for the production program ( there are add the trade selling activities, new merchandise development and launch, which are build upon the demand and supply program ) . Production in this manner gets instead specific demands for the merchandise on monthly, fortnightly or even hebdomadal program, and increasing the efficiency in footings of capacity use of machinery and labour. Besides, a big circle on the map that includes providers, clients and the company is ERP package that focuses on the integrating of internal procedures such as gross revenues, production and stuff handling. Integration supports different tools that combine information on all participants in the concatenation. When you get an penetration into the production of providers and the bringing agenda, the buyer may utilize the informations in existent clip, in order to be after its ain stock list degrees and production programs. Sharing information about the current province of order among the members of the concatenation increases the quality of services, speed uping the payment rhythm and provides productiveness ( Kelle & A ; Akbulut, 2005 ) . The velocity of bringing, guaranteed supply and a possibility to purchase merchandises, convenience for purchasers and other things may better the relationship between purchasers and Sellerss and heighten consumer satisfaction ( Banyte et al. , 2011 ) .

Discussion

After executing the SCM procedure betterment it is necessary to indicate out all the qualitative and quantitative alterations that have been implemented. Specifically, in the paper has already been mentioned that that there are several positive effects of alterations in concern procedures. For illustration, in this specific instance survey, these effects are summarized and presented in table 2. By and large, a decrease in stock list costs in footings of the stock list in figure of yearss, but besides the cost of storage infinite. The issue of stock list direction is decidedly one of the Fieldss in which it can construct a concern advantage over the competition.

Operation/activity

Situation

Before BPI

After BPI

Stockss of concluding merchandises

10 yearss

6 yearss

Stockss of stuff

20 yearss

15 yearss

Stockss of natural stuffs

45 yearss

38 yearss

Reducing the clip required to alter tools due to less switching of production lines

Decrease for 30 %

Out of Stock – Lost gross revenues due to miss of available goods

12 %

7 %

Reducing the write-down of finished merchandises and natural stuffs

Decrease for 45 %

Reducing the cost of leasing a warehouse – cut down the demand for higher stock

Decrease for 15 %

Reducing the cost of transporting finished merchandises to distribution centres

Decrease for 21 %

Table 2 Effectss of BPI on SCM of the Company

Beginning: Calculation of writers

The company managed to shorten the period of keeping stocks for an norm of 27 % by utilizing a new procedure for SCM:

Decrease in stocks of finished goods from 10 to 6 yearss ( an betterment of 40 % ) ;

Decrease in stocks of stuff from 20 to 15 yearss ( betterment of 25 % ) ;

Decrease in stock lists of natural stuffs from 45 to 38 yearss ( an betterment of 16 % ) .

When it comes to stocks, it is necessary to repeat the fact that the company had stock list direction job in the sense that higher stock list degrees over optimum because of inaccurate information on market demands, “ tied ” liquid assets, and at the same clip overdone costs of storage infinite and the unneeded stock list. The debut of a new procedure SCM reduced costs of keeping stock lists, taking to the release of liquid assets of the company. Particular attending must be paid to the supply of natural stuffs, which come from companies in Latin American states. The costs of keeping stock list and transit costs are really of import factors, and the decrease of these costs is one of the mission and ends of reengineering.

The following betterment in the tabular array is the decrease of clip and alterations in the figure of production lines due equal planning. As mentioned earlier, production planning procedure was burdened by unrealistic information about the demands of the market, and because of frequent alterations in programs merchandise line frequently suffered frequent accommodations. Preparation of the line and workers, or capacities now is determined on better program that emerges from more realistic information about the demands of the market for certain merchandises. As a consequence of this it has been noticed a decrease in the figure of capacity accommodations and clip for the readying of production by 30 % compared to the province as it was before the debut of the new SCM. In this betterment it can be specified besides the decrease of energy costs, fuel, stuffs, equipment.

Another really of import index of alteration is the decrease of losingss due to the deficiency of merchandises. When speaking about stocks, they may be disproportionately increased over the optimal, but besides reduced to degrees below the optimum stock list, which in bend leads to the job of irregular production. Specifically, in the company certain natural stuffs used to be deficient, which has led to alterations in the production program, the decrease of figure of merchandises, although those were truly a needed in the market. Due to the deficiency of a certain merchandise on the market, company recorded losingss in footings of unfulfilled merchandise sale for which there was a demand at the minute. This per centum has decreased from 12 % to 7 % ; really this was betterment for 42 % . For illustration, on the study on operations, that would specifically accounted for nest eggs of 1.214.964 a‚¬ ( as the disbursals of contractual duties to clients were 2.892.771 a‚¬ in 2011 ) . Losingss due to write-downs of merchandises and natural stuffs were reduced by 45 % as new programs enable more accurate alliance of production and procurance in footings of telling measure of natural stuffs that is truly needed, while bring forthing needful measure of the merchandises for the market. This is really of import since those are merchandises used for human ingestion. Their shelf life is from several months to a twelvemonth, as the shelf life of natural stuffs that are organic. The termination of natural stuffs and merchandises leads to write-downs and devastations of those that are non used or sold and disbursals that appear are write-offs and devastation of the merchandise.

Reducing the cost of leasing warehouse is besides one of the betterments that company made. Needs for more stocks were reduced, and this decrease is about 15 % . Besides, there was a decrease in conveyance costs of finished merchandises to distribution centres by 21 % ( for 232.469 a‚¬ compared to the old fiscal period ) .

Although these quantitative effects are most easy to be determined, alterations that have occurred have besides a qualitative nature. Model of be aftering market demand in add-on to cut downing costs besides enabled greater efficiency in the production, a higher quality of service bringing, which can be measured by client ( jobbers ) and consumers ‘ satisfaction studies. Besides, meeting of contrivers from SCM procedure, which used to be painful in the sense that everyone defends their ain public presentations and seeking to turn out to their superior, now have a different character. Weekly meetings are now being held in order to better program a plan of hebdomadal and day-to-day production of those merchandises that meet the demands of consumers and clients. Beside all mentioned betterments, besides it has been reduced unneeded and unproductive overtime remaining on occupation because divergence from such programs are analysing as the possibilities and are capable to certain planning responses. Communication between certain activities of SCM procedure is speeded up ; information are more accurate and dependable at the clip, which in bend leads to more efficient work of members integrated into the procedure.

Decision

One of the possible solutions for accepting and originating alterations in concern procedures is the execution of the construct of reengineering. The execution of reengineering as a cardinal alteration in the concern procedure implies extremist alterations and the creative activity of an entirely new concern procedure theoretical account for all companies – which are in crisis, those that are non yet, but their jobs are seeable every bit good as those that have been successful, but they want even more increase their success and competitory advantage.

Reengineering is a complex procedure that is consists of several of import elements that companies, that want to implement it, have to pay attending. First of wholly, it is necessary to detect the procedures instead than maps and activities of the company. Besides, it is necessary to organize a squad that will transport out reengineering, to happen a methodological analysis by which the alterations will be implemented, to mensurate and analyse all the alterations and betterments that will take the topographic point. During the execution of reengineering it is inevitable the usage of modern information engineering. Besides, necessary to implement the alterations through a phased attack, and that a top-down attack ( from top to bottom ) in footings of specifying the ends of the concern processes, resources, and so on.

Main aim of this paper was to research possibilities for betterment of of import concern procedures, such as supply concatenation direction with the technique of concern procedure reengineering and concern procedure betterment ( BPI ) . Methodology used in this paper included measure attack in line with the HBS Business Process Improvement which is consisted from six reciprocally conditioned stages for the reengineering of the concern processes:

Planning of reengineering ;

Analysis of indentified procedure ;

Redesign of procedure ;

Obtaining resources ;

Execution ;

Continuous procedure betterment.

After analysing the current procedures in the SCM it was determined that there are certain issues that boil down to hapless consciousness of certain activities in the procedure. Redesigning of the procedure that is carried out included the creative activity of the undermentioned elements of the procedure: debut a new procedure that would hold focused on demand planning ; employment at least two workers, one for Serbian market and one for the export markets ; closely associating of demand program with the sale programs, because on the joint analysis those can find accurate and precise information on the measures of merchandises that are needed in the market, which leads to better use of capacity, smaller stocks, equal supply and gross revenues, and therefore a greater satisfaction of clients, and finally consumers ; bettering dealingss with the company ‘s clients and providers. Integration of the largest purchasers in the company ‘s information system ( SCM procedure ) can increase the efficiency of gross revenues in such a manner that the purchasers ( jobbers ) by emptying shelves and warehouses to the degree of safety stock send petition to distribution centres merely for those merchandises that are truly losing ; integrating of providers in SCM information system.

With equal execution of BPR presented company has managed to shorten the period of keeping stocks for an norm of 27 % by utilizing a new procedure for SCM:

Decrease in stocks of finished goods from 10 to 6 yearss ( an betterment of 40 % ) ;

Decrease in stocks of stuff from 20 to 15 yearss ( betterment of 25 % ) ;

Decrease in stock lists of natural stuffs from 45 to 38 yearss ( an betterment of 16 % ) .

As a consequence of BPI it has been noticed a decrease in the figure of capacity accommodations and clip for the readying of production by 30 % compared to the province as it was before the debut of the new SCM. In this betterment it can be specified besides the decrease of energy costs, fuel, stuffs, equipment. Another really of import index of alteration is the decrease of losingss due to the deficiency of merchandises, where company succeeded to cut down this deficiency for 42 % . Losingss due to write-downs of merchandises and natural stuffs were reduced by 45 % as new programs enable more accurate alliance of production and procurance in footings of telling measure of natural stuffs that is truly needed, while bring forthing needful measure of the merchandises for the market. Reducing the cost of leasing warehouse is besides one of the betterments that company made. Needs for more stocks were reduced, and this decrease is about 15 % , and at that place was a decrease in conveyance costs of merchandises to distribution centres by 21 % .

Besides these fiscal indexs, it has been detected that communicating between certain activities of SCM procedure is speeded up ; information are more accurate and dependable at the clip, which in bend leads to more efficient work of members integrated into the procedure. These all lead to the greater efficiency of the procedures and higher satisfaction of the experts involved in SCM of the company.

Leave a Reply

Your email address will not be published.