Heavy Machinery: Supply Chain Management

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Introduction

Heavy duty industries as well as the small businesses rely on supply of raw materials, machinery, spare parts and maintenance to successfully achieve their objectives. Plant machineries require regular maintenance for maximum outputs; any delay results in heavy losses and can halt operations as well as the marketing flow of its products. It is therefore necessary to have an effective supply chain to maximize on production.

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A workshop and maintenance manager is credited with ensuring smooth running of the plants with every necessary repairs and maintenance services done as fast as planned to reach their targets. This paper will attempt to discuss how the workshop manager can ensure a sustainable, continuous supply of the components and parts of expensive plant machinery whose operational lifespan is very long and liable to heavy losses (Simchi-Levi, Kaminsky & Simchi-Levi, 2008).

Definitions

Supply chain is the channel which involves the transportation of the required product or service from suppliers to the customers who may be manufacturers, retailers or producers. Supply chain management entails a system of organizing and managing the activities in supply chain. The activities may include procurement, conversion or even sourcing. It involves the connection of all parties involved in a network of communication for better service delivery. It acts as a link between the companies in activities of productions, transportation and safe delivery. Supply chain management is a vital component of production without which the production, manufacturing and marketing can be adversely affected for example, delays , inadequate storage facilities, shipping methods may destabilized the flow of goods and services(Chen & Paulraj, 2004, 119-150).

Supply Chain management

The term supply chain management has been used consistently for the past 30 years; its development was hatched to help in the integration of the business channels, and to allow for exchange of information on the fluctuations in the market and ease the knowledge on production abilities of the companies. When the network is complete, service delivery can be optimized thereby cutting down on production cost for better overall results. Integration of the supply chain management and its operation changes the kind of competition involved in the market from company-company to supply chain-supply chain (Oliver&Webber, 1982, pp63-75).

The main reason for the need of supply Chain management is to cut down on inventory levels and hence lower the overall production costs, this can be done by use of the chain supply risk management software which is available on order (TechTarget, 2010, pp1).

For a large mining company with heavy plant machinery, located in the remote central Queensland. There are many factors the workshop and maintenance manager in charge of the daily repairs and operation of the plant would consider when handling the chain supply. First, the Plant requires a daily service for safety and to maximize daily output, at each service the manager will require all the components in case they need to be replaced. Servicing technicians are required to be of high efficiency as there are no chances for mistakes or delays that may come with strong repercussions. Adequate funds should also be availed whenever required to avail and service the machineries.

With these technicalities, an efficient supply chain management system is therefore required to effectively operate the plant. Supply chain management involves the acquisition of the correct products, at a minimal price on time. Optimization of the business should be key in driving the industry since supply chain is very important part of overall cost raisers in an organization (Cognizat, 2007, pp5). Other movers of a sustainable chain supply management include adaptability, profitability, velocity and synchronization (Holcomb, 2010, pp1).

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Central Queensland, a state in Australia is a major centre of production especially for primary industries due to its high quality coking coal. Mining is one of the economic activities in the area; the manager would have to take the geographical location and the terrain of the area in considering effective management of supply chain. Supply chain starts with the biological and ecological natural resource guidelines, which must be considered, and then it proceeds to the mining of the raw materials which involves many links of production such as assembling of the plant machinery. It finally moves to storage, where they get their way to the consumers.

These are done with a view to saving on production costs and hence maximizing profits. Long life span require frequent maintenance, since new technologies are developed and they may not conform to the new products or production methods, besides, the supplier of its components may have rendered it obsolete on developing a new model, increasing the task of acquiring its spare parts. Keeping tabs with the maintenance is also an obligation, this is because any delay brings with it heavy losses. Maintaining a sustainable supply chain is therefore vital for the success of a company.

Sustainable supply chain

Sustainable supply chain, involves the management of the goods or services that are moved to the manufacturer with great care to improve on environmental and social effects. It involves business, purchaser and supplier communication. For efficient management, focus should be placed on ensuring the supply chain is audited for better planning and execution. Several steps should be taken to maintain a continuous flow in operation of the plant and efficiency for its products.

The workshop and maintenance manager should first have an overview or the general idea on the prospective components that may be required in the repairs and maintenance of the machinery. During this overview, consideration should be taken on the lifespan of the equipment; regular updates should be made since the manufacturer of the components may have developed advanced components and / or machinery to replace the current one.

The manager should have an inventory of the key components of the machinery that require regular maintenance to save time during repairs (Timon, 2009, 27). Supply channel basically entail five levels namely: Raw materials, Intermediate goods, Basic components, Main components and the final product. Sustainable chain supply can be made by ensuring high profit yields without sacrificing the very essential corporate citizenship (Andel, 2007). This paper tackles the levels three and four, which deals with the components of the machinery.

Implementing sustainable chain supply

The manager should look at the processes involved in the plant to map out the risks involved in the efficiency of the machinery. Keeping record of previous repairs will help in noting future needs for maintenance. It is vital that the manager and his team understand the internal processes so as to be in a better position to manage concerns on the machinery. This will also help them in identifying the best organization in their supply chain.

If the internal processes are well managed and understood, sustainable chain supply is achievable and workable. The manager will have to understand the machinery, all its components, operational measures, cost of each component, time taken for maintenance which has to be lesser and lesser with better understanding of the machinery (NZBCSD, 2003, 14). The manager should choose the potential risks and start ways of improving them. This is called risk monitoring and should be done with focus on environmental, social and economic impact.

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Procurement

The supply of components for the machinery should be monitored, to investigate if the source is reliable, in case of a machinery of very long lifespan; long-term supply is encouraged for sustainable chain supply. The source should be consistent for economic viability given the heavy loss that would be caused in case of a halt to operations due to inadequate component supply. Cost of the components to the business and their full utilization should be considered. The quality of the components and their ability to fulfill the task must be monitored for sustainability. Moreover, reliability of the supplier is vital to help in eliminating unreliable manufactures.

Pay to the suppliers should be checked, for example the mode and time of payment which must agree with the financial base of the company. Inventory levels should be monitored to ensure adequate procurement is done. The manager should also choose on local or oversea supply, whichever is viable to the company. The overall cost of supply and its effect on the production should be monitored and controlled to workable level. Perceived health and safety impacts during maintenance and effect of the maintenance on competitiveness of the company should be guarded. Rating the risks monitored is desirable so as to have a planned structure on mitigation process, starting with the most demanding.

The second step in implementing sustainable supply chain is by identifying the supply chain. To accomplish this, the manager will need to fit the components supply to the other supply chains. Pointless transporter packaging should be minimized to streamline the freight delivery pattern. In essence, the workshop manager should ensure that transportation costs for the materials are streamlined and just the required materials are brought.

This will be cost effective and time saving considering the cost of shipping for an oversea supplier. Possible problems that identifying the supply chain would solve are: Government procurement requirement which may change with time, rendering the acquisition of the components difficult, considering the lifespan of the machinery.

The third step is to make the process of supply chain integrated into the business strategy. The manager in this case can hire a sustainable development manager who will efficiently carry out the procurement process on behalf of the company for the components of the machinery. Skills that are related to sustainability are currently on demand; recent research by Dooley&Atzert (2010) showed that over 97.5% of executives would prefer to employ those with sustainability skills (Cygnus, 2010, pp1).

This would fasten the servicing and maintenance of the machinery since its maintenance is a vital part of business strategy. Lawn (2003), the director of operations at Christchurch City Council describes the sustainable development manager as one who functions as a conscience to the company and moves the internal processes to maintain sustainability (NZBCSD, 2003, 15).Another way of ensuring sustainability in this area is to add sustainable development to the key indicators of performance from the least of staffs to the head or management of the company. In return, efficiency would be at its best as everyone in the company would understand its importance.

In Step four, the manager should ensure that policies regarding the handling and maintenance of the machinery are adopted. In doing this, the company will have a common strategy followed in dealing with chain supply and hence sustainable development.

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Risk managements can be handled with prolonged chain supply management strategy in place. Examples of approaches for this are conformity and process management. The former ensures the origin; delivery and the condition of the components of the machinery are identified. Verification of the components of the machinery can be done by systems such as ISO14001, for environmental management among others. Another way of guaranteeing conformity is by process management. The workshop and maintenance manager will ensure that management systems concerning the supply of the components are followed by the supplier before they are used (Ritchie, Brindley & Armstrong, 2008, pp248-247).

Step five entails the engagement of all parties concerned both internally and externally to find initiatives in the company. Full participation by all the staffs in sustaining the chain supply is needed. The manager must therefore keep involving everyone to achieve sustainability. The manager should also interact more with the suppliers of the components to improve sustainability across the chain supply. Arrangements with regular contacts to the original manufacturer should be maintained so as to allow for improvements on the machinery with increasing technology. The communication with the manufacturer is also vital in ensuring continued servicing and assembling, since they understand their technology better. The manager should develop a model that will help in sustaining the chain supply.

Logistics is the cream of sustainable chain supply; the manager should ensure this is done as is set. It is through logistics that the supplier will deliver the right components in the correct measure and on time and to the correct place. To save time, and effectively save on losses, logistics must be prime on the manager’s actions, The timing for maintenance should be right for example during off peak times, regular maintenance will ensure reduced cost on management hence sustainable productions with increased profit margin (Mehrmann, 2007, pp1).

Sustainable chain supply is very necessary for continual of productions in the company, the workshop and maintenance manager must therefore have an organized plan on how to accomplish this. The components are very heavy and expensive, their shipment should be a major concern, and the mode of transport should be effective. Regular maintenance is encouraged to help in understanding the needs of the machinery as well as reducing (on long term) the operational cost.

It reduces any chance of a total halt of operations due to irregular maintenance. The quality of the parts of the machinery should be confirmed to avoid malfunctions and damage to other parts they may come in contact with. It would be advisable to use only the manufacturer’s approved components. Servicing should be done by either the manufacturer or those trained by their personnel unless clearly stated, to avoid misuse, health hazards, damage or safety. Since the machinery have very long lifespan, an arrangement should be made with the manufactures to keep continual supply of the components and sub-assemblies till it is either replaced or become obsolete. This would help in efficiency of the machinery, thereby leading to a sustained chain supply.

Advantages of Sustainable Chain supply

Increased profit margin is the driving force behind the establishment of any business. Management, planning and purchasing of the components to service the machinery is of great benefits to the company as this translates to increased profit margin. It mainly attributes to the reduction in cost of production and other operational costs. The use of compatible, manufacture approved components and servicing greatly reduce the mining cost. Improvement on the machinery using advanced technology improves efficiency and reduces energy consumption since they tend to be environmentally friendly. This results in high quality products and hence higher returns (Cognizat, 2007, pp5).

Branding is an important asset to the company, efficiency and sustainable chain supply improves on the company’s reputation, employees are more involved in the production and there is a feeling of ownership since this is part of the implementations for a sustainable development. Sustainable chain supply is therefore responsible for building accountability and social responsibility of the company. The higher the reputation, the higher the customers, efficiency and trade name.

Sustainable chain supply involves risk management measures which greatly impact on companies. If measures are taken to mitigate on environmental issues, it gives a company better reputation, control on health hazards and hence safety which goes well with the surrounding community. It will eventually help in lifting the brand of the company, leading to a higher social responsibility.

A better managed company with a sustainable chain supply appeals to the market over its competitors. This results in great financial benefits, sustainable production and efficiency. The result is an increasingly progressing organization, vast expansion and achievements of objectives. This will increase the brand security.

Supply chains nowadays require more visibility due to the many standards and regulations that drive it (Business for Social Responsibility, 2007, pp6).Costs are always cut whenever there is increase in efficiency; Legislations by the government also support businesses that enforce sustainable chain supply in conserving the environment. Kyoto process is an example. Disposal of the wastes is an important part of conserving the environment, noise, and other pollutants which are minimized by a sustainable supply chain. Overally, supply chain has significant finish on the businesses and should be managed for better growth (NZBCSD, 2003, pp11).

Summary

Heavy machineries used in mining need regular maintenance; they are complex and are always made of very long life-spans. There are numerous changes and advancements that can occur during the lifetime of plant machinery; it is therefore advisable to keep tabs with the latest modifications on the plant machinery that can be made so as to improve their efficiency in productions. Besides, such heavy machinery is very expensive and their sustainability depends on their maintenance and production levels.

Delays or damage can lead to a halt that can impact heavily on the profit of the company. For this reason, a well managed, planned, and organized set up is required to effectively improve on the reputation of the company. Supply chain as has been discussed connects the supplier to the customer and networks them for faster and efficient delivery of the services or goods (components). A workshop manager in charge of the industry is entitled to organize and supervise the implementation of a sustainable supply chain. In doing this, the manager is required to implement the structures to maximize on communication.

The manager is supposed to monitor the risks on the business so as to understand the internal processes in it. This should be closely followed by the identification of the kind of chain supply, then the inclusion of the process of chain supply into the main Business strategies. This improves the staff awareness on chain supply and gives them a chance to participate fully in business building by getting actively involved. Adoption of written policies is very vital at this point.

Such policies should be aimed at improving supply chain and managing the risks involved. The manager should ensure all parties are involved in service delivery for this improves the employee-employer relationship. In essence, the manager should have an elaborate plan to handle all the logistics involved in maintaining a sustainable chain supply. The outcome as has been discussed are important to any company, increased profits, secured branding, high level of social responsibility, faster growth and expansion among others.

Conclusion

Finally, it is quit important to note that a sustainable chain supply is vital for any kind of business. The result speaks for itself as opportunities offer themselves to give the business a better financial position. As a manager therefore, it should be very important to succeed in implementing policies that help in sustaining chain supply. This guarantees an effective and timely maintenance on the plant machinery with the right components over the lifespan of the machinery with the minimum possible expenditure.

Suggestions subject to opinions are that during the process of maintaining the machinery, a lot of focus should be put on acquiring more technology friendly machineries to replace the outdated one rather than modify. More research should also be done on long term cost of production effects of the replacement. Sustainable supply chain is the key to reduced production cost for companies.

Reference List

Andel, T., 2007. Make your Chain Sustainable. Web.

Business for Social Responsibility.,2007. Perspective on Information Management in Sustainable Supply Chains. Web.

Chen, I. J.& Paulraj, A., 2004. Towards a theory of supply chain management: the constructs and measurements. Journal of Operations Management, Vol. 22, No. 2, pp. 119-150.

Cognizat Company. 2009 Spare parts supply chain services. Web.

Cygnus Interactive., 2010. Educating the Next Generation of Sustainable Supply Chain Leaders. Web.

Dooley, K. J., & Atzert, A. “Job opportunities in Sustainable Supply Chain Management”. Web.

Holcomb, M., 2010. The Five Drivers of sustainable Supply Chain Management Practice. Web.

Murray, M., N. d. Selected Third Party Logistics. Web.

Mehrmann, J., 2007. Reverse Logistics in Supply Chain Management. Web.

New Zealand Business Council for Sustainable Development (NZBCSD).,2003. Business Guide to a sustainable supply chain. Web.

Oliver, R. K. & Webber, M. D., 1982, “Supply-chain management: logistics catches up with strategy”, Outlook, Booz, Allen and Hamilton Inc. Reprinted 1992, in Logistics: The Strategic Issues, ed. M Christopher. London: Chapman Hall.

Ritchie, B, Brindley, C. S. & Armstrom , N., 2008. Risk assessment and relationship management: practical approach to supply chain risk management. Int. J. of Agile Systems and Management, Vol.3, No. 3-4, pp. 228-247.

Simchi-Levi, D, Kaminsky, P. & Simchi-Levi, E., 2008, Designing and Managing the Supply Chain: Concepts, Strategies and Case Studies, 3rd Ed. New York: McGraw-Hill.

TechTarget. 2010. Supply chain risk management software Guide. Web.

Timon, P. 2009. Component Supply Chain, GF Drive train Technologies. Web.

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