Veeco Services Inc.: Supply Chain Management

Supply chain management is a very fundamental aspect behind the success of Veeco Services Inc. There is a literature review that introduces the concept of supply chain and the underlying key concepts. This paper brings out the current situation of supply chain management in the company. There is an analysis of the entire strategy of the supply chain including the capacities and weaknesses of the supply chain. Capacity building in the processes of the supply chain has also been tackled towards the end. The problems and weaknesses of the market strategy have been explained and further recommendations put forward on how capacity can be increased in the supply chain.

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Introduction

Supply chain refers to the flow of goods, information, knowledge, and services amongst relationships in an organization for the purpose of achieving the organization’s objectives. This is a common process in organizations that are product-based and service-based and requires good management practices for an organization to attain the desired goals in various ways. A good supply chain is one that meets the demands of the customers in terms of efficiency and it easily meets the enterprise targets. (Cohen et al 2005)The supply chain in many organizations is concerned with technology, people, and processes. It is within these three contexts that this paper is going to analyze the supply chain at Veeco Services Inc. The Company provides warehousing and transportation services to its wide range of customers. This company has been in operation for the last 45 years.

Research methodology

This study has relied on secondary sources of information in addressing the issues of the supply chain in the organization. This approach has necessitated acquiring information from the organization in a number of ways. Articles that have been written in the past about supply chain areas in the organization have been included in the organization.

Basic background information of the organization was obtained from books and other materials found within the management of the organization. Data concerning supply chain management was obtained from relevant books and has formed the main literature review for this study Much information was easily obtained in the study, however, it is vital to note that some of the sources were outdated and this was a major challenge in utilizing this methodology.

Literature review

The supply chain is the entire process of moving physical products, information, and people in an organization. It refers to a connection of networks in an organization that involves the physical movement of materials, flow of information that help the supply chain and the movement of resources be they human or financial that facilitate the supply chain process. (Halldorsson et al 2007)Supply chain management aims at designing, planning, and executing activities at various sections so as to deliver desired services to all customers in a profitable way. Inefficiency is an obstacle to profitability in an organization. All processes in the supply chain aim at eliminating inefficiency and saving a lot from it. Logistics is a very important aspect of supply chain management. It plans implements and controls flow within an organization to achieve customer satisfaction. Logistics includes important activities such as inventory management, transport, and warehousing. (Council for Logistics Management 1998)

Market strategy

The company has adopted the strategy of a Third-party logistics provider. It is both distribution and warehouse-based. Veeco is a provider of transportation and warehouse services to a wide range of customers in its market both locally and internationally.

Customers are very important assets to the business because they depend on the company and the company depends on them. The markets strategy for this organization aims at addressing the needs of the client so as to create satisfaction. The marketing team focuses on a better understanding of its clients and therefore all efforts in the supply chain are channeled towards meeting the needs of the clients after identifying them. For the organization to achieve its market targets, good practice in supply chain management is essential to foster efficiency in service and information delivery to the clients. This is the only strategy that can create customer loyalty in the organization.

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Good supply chain management entails a number of aspects which include cost, time, and flexibility.

Cost

The cost of the supply chain process should be within the capacity of the organization. This is where the financial resources matter in terms of meeting the demands of the supply chain. For efficiency to be maintained within the supply chain finance should be adequate to ensure that all that is required to facilitate the working of the network is available. It is the lack of adequate finances that has led to delays in the past for instance in the delivery of information to the clients and this negatively affects the supply chain.

Time

Time is a very important aspect of supply chain management. It is actually time between the various departments or sections that materials or resources go through before achieving the targets that determine the effectiveness and efficiency of the supply chain.

The time the elapses between ordering paying and delivery of service or products are very crucial in meeting the customer satisfaction index for the organization.

Quality

Quality is a fundamental issue that determines the efficiency of a supply chain in the organization. For the processes to achieve high-quality standards, defects in products resulting from various sections have to be eliminated. This is especially in the transportation department. (Boston, 2003)

Process structure

Information

Through the existing technology that has been adopted by the company, information is well managed within the company. Online availability through the use of passwords is a feature that is there for customers’ needs. Communication has greatly been enhanced in the company between the logistics, the warehousing, and the transportation department. Communication breakdowns are something of the past in the company because excellent IT staff has been employed to ensure efficient communication systems.

The staff is available on a 24-hour basis to answer calls from customers.

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It is an actually efficient information system that ensures proper coordination between the various processes to ensure the smooth running of the supply chain in the organization.

Inventory

This is all undertaken in the warehouse where all the orders from customers are handled before being transported for delivery. The company’s I information systems are in place to ensure efficiency in the management of the inventory.

The company has online stores that ensure stocks are managed online and can be accessed by customers at any time of the day.

Customers have access to the inventory and are able to check the status of their orders before eventual delivery is undertaken. Online dispatch system software is utilized to manage customer orders until delivery is done. In general, the inventory can be said to be well managed by the organization and that is why there are no delays or defects in product handling. (Sunil, 2004)

Transportation

The company has well-trained professional drivers who are ready to meet the needs of the customers without delays. The drivers are normally in uniform all the time for identification. There is a system of well-coordinated dispatchers who have a commitment to schedule and handle customer shipments in a quick and efficient way.

The private truck fleet has additional advantages of a state-of-the-art dispatch software system. These systems are the ones responsible for an online vehicle tracking system that is meant to confirm to the customer that delivery would be met no matter what. Efficient transportation is in place to ensure the quick and safe delivery of orders both locally and internationally.

Location

Veeco Services Inc is a strategically located company whereby its facilities are found near rails and ports. This enables the provision of daytime services to its customers. Customers do not have to go very far to access the services. This has also ensured not the only provision of quick services but quality services to the customers. The strategic location of the company’s facilities such as warehouses is responsible for the quick transportation of orders locally and their good quality.

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Process capabilities

Through the efficient truck fleet and dedicated drivers, the company has the capacity of meeting the desires of most of the customers by efficient delivery of orders in good time. The online vehicle tracking system is also a measure that is meant to ensure the safety of the deliveries without delays. This means that the supply chain in this company has really put in efforts to ensure that time is strictly observed in all its operations with customers.

In terms of cost, it is vital to mention that the cost of the entire supply chain in the company is not on the higher side considering the capabilities of such as supply chain. The services provided by the supply chain are able to compensate for the costs incurred for running and managing the entire chain.

In terms of flexibility, this supply chain is much flexible than any other. Customers are able to access information online and make their desired changes before deliveries. In case of emergencies, staffs are available always to assist customers and ensure efficient services.

This organization has the capacity to offer quality services and products to all customers. This is all possible because of the well-established and coordinated supply chain with state-of-the-art technology. It is indeed technology aspects that bring about efficiency and finally quality in the system. The qualified and well-trained staff in the organization is also committed to nothing but quality. The commitment by everybody in the various teams towards quality is the driving force behind better results in the future.

Challenges in the process

Complaints arising from customers on minor quality issues. In the course of shipment and transportation, a product might arrive at the anticipated destination but with some minor internal defects that do not affect the performance of such products. It is clear that some customers especially the new ones do not understand and they, therefore, go ahead with claims. This is a weakness because there is no better way of explaining to the client the situation.

Another weakness concerns some delays in the delivery of products due to some circumstances beyond the supply chain’s control. This can be due to traffic jams caused by accidents. It is also a big challenge to explain to new customers on such occurrences although unusual can affect the business.

The cost of these supply chain activities and the process is very high. The company spends a lot on maintaining the transportation trucks and other things like paying the staff. This is not the case as in other supply chains and therefore it is a weakness. But even though it looks like a weakness, it is all aimed at customer satisfaction and profitability in the long term.

Management of uncertainty is also a problem in this particular organization. This is because when unexpected events occur, they lead to compromised quality and increase the cost of the supply chain. This is a result of claims that result from defective products that can be delivered due to accidents and other insurance-related issues. (Ketchen et al 2006)

In terms of capacity, the process needs to have developed a better system of addressing customer complaints especially with regard to unforeseen circumstances like accidents. Addressing the issue of defects in delivery affects processes in the supply chain and can have a negative impact on the customers. If capacity is developed to address well the grievances that arise from delays in delivery due to factors beyond the control of the supply chain then it would be a major step towards improving processes in the organization.

Capacity building

It is through appropriate IT tools that capacity can be built to enhance efficiency in the processes and eliminate the uncertainty. Better mechanisms should be put in place especially on staff to ensure a very quick resolution and compensation to conflicts with the customers that come about due to defects from transportation and shipment processes. This is because defects in deliveries are a major challenge in the entire supply chain management and if capacity is built to improve the quality by reducing defects then the supply chain would achieve more profits for the organization in the future.

As for the delays in deliveries that can result from events such as accidents or traffic jams, alternative rescue tracks should be adopted to quickly respond to the crisis and ensure timely delivery of the products. The company can also endeavor to compensate the customer in such a special case.

Adopting an E-commerce strategy would be fundamental in increasing capacity in the organization. This is because the costs would be reduced substantially as it would reduce the storage in physical stores which increases the cost of the supply chain in many organizations. (Ketchen et al 2006)

Lack of physical stores would mean that only virtual stores would be in existence for the customers. This would further improve the quality of deliveries.

The flexibility of the process would be improved by a great margin as a result of e-commerce. Customers would have a good chance of choosing what they like from a variety and it would be very easy to cancel orders as per the wish of the customer if the need arises before scheduling for delivery.

This means that E-commerce has the potential of improving efficiency within the supply chain through enhancing service delivery in all the departments of the supply chain.

Implementation

A quick decision-making process would be instrumental in implementing the strategy. The implementation of e-commerce in the organization can be achieved through first of all enhancing the IT capacity in the warehouse and the transportation department. After the quick decision has been made, all mindsets should be directed towards e-commerce. This is because mistakes are not expected as they can interfere with efficiency. If the organization does not have the adequate IT capacity to undertake E-Commerce then it would be wise to opt for a third-party provider who would be able to guarantee the efficiency of systems from order placement to delivery. Implementation of an E-commerce strategy is expected to be fully complete in six months if a competent provider is taken. This is because it would involve additional features on the company websites and also undertaking logistic issues.

In the course of implementing this strategy, resistance is expected from all corners of the supply chain in the organization. Activity in the warehouse is expected to be reduced and some staff would be at risk of losing their jobs as the organization strives to reduce the costs. That is why some staff would be reluctant to implement and accept the change in processes. As already noted earlier, this process would require a quick decision-making process and this is expected to come from top management. Those who are against change in the organization because of their own reasons would be resistive to capacity enhancement through e-commerce.

The issue of training can also emerge and can lead to resistance in the supply chain.

Through prior arrangement and adequate communication, information would be available in the simplest form for all the concerned parties to be aware of what the strategy is about plus the underlying potentials. This would help to reduce the tendency of resistance from the various departments. (Simchi et al 2007)

Conclusion

From the analysis of the supply chain processes in the organization, it is clear that efficiency needs to be improved so as to cut costs and improve on the quality of services that are meant to satisfy the customers and still make profits. There is some level of uncertainty in the supply chain as regards emergency situations at the various departments in the supply chain. With this unaddressed, there is a risk of the organization failing to meet its quality and efficiency standards due to unexpected happenings in the future. Flexibility also needs to be maintained and even perfected in the organization just for the sake of the customers. Caution also needs to be taken with too much flexibility as it can be abused by customers. All this is achievable through an e-commerce strategy being adopted for supply chain management. (Sunil, 2004)

Recommendations

If at all the company is to achieve higher set targets in terms of profitability, then the possibilities of an e-commerce strategy need to be explored and adopted.

Quality is a very essential part of the supply chain management which should be protected at all costs with the main focus being a satisfied customer. Therefore amongst other domains, quality should be given top priority by the company.

Uncertainty management in the supply chain is also another priority area if the company is aiming at sustained improvement and growth with its quality product deliveries.

Emergency response is an important aspect of the supply chain that should be improved. It would demonstrate how well the organization is prepared to tackle emergencies and thus prevent customers from being disappointed due to emergencies. Customers in most supply chains are disappointed with delays that can result due to emergencies in the company’s processes.

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