Consulting the supply chain : development of supply chain services for the food manufacturing industry

Kerkveld, Marije (2009) Consulting the supply chain : development of supply chain services for the food manufacturing industry.

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Abstract:The aim of this research is to provide a detailed description on which supply chain (SC) services LBB Teams can provide in Asia and to advice on organisational requirements for providing these services. LBB Teams is a small company with a background in consulting and research which operates from Kuala Lumpur, Malaysia. Dutch food manufacturers are the target group of the research. These companies are primarily engaged in producing food for human or animal consumption. In order to develop a solution a ‘new service development’ approach is adopted. Having this inductive approach implies that theory is build upon gathered data. The research process starts at goal formulation by LBB Teams. Next primary and secondary data are collected. The obtained data results from an analysis of relevant literature, firm resources, customer design input by qualitative interviews and environmental factors. A concept is derived from this data and tested by interviews with SCM experts in the food manufacturing industry. Then a service is developed which is described in terms of strategy, a business model and operational requirements. Derived from literature and interviews management of physical distribution processes is identified as a viable focus for the new service. When offering this service it could be an option for LBB Teams to operate as a 4PL. By doing so it will conduct operations as an integrator that brings together the resources, capabilities and technology of both its own organisation and other organisations to design, build and run complete supply-chain solutions. Analysis of firm resources however indicates that LBB Teams is not (yet) ready to manage supply chains as a 4PL. Capital requirements and lack of operational experience are the most important limitations of LBB Teams in this respect. Benchmarking also results in the conclusion that LBB Teams will not be able to live up to requirements of a 4PL. Further, findings from interviews and a macro-environmental analysis reveal opportunities for LBB Teams to advice on a diverse range of SCM processes. For this activity congruity is identified with LBB Teams’ core competences in consulting & research. These and other conclusions are modelled and conceptually tested amongst SCM experts. Findings are that the services offered before, during and after purchase are most critical for success. Further LBB Teams’ should operate as an integral part of its client’s IT-systems. Thus this will enable LBB Teams to function as an extension of its client’s organisation. Further it is concluded that LBB Teams should operate by a focus strategy. It should offer high perceived benefits; i.e. substantial improvement of its clients EurAsia SC processes. This should justify for a price premium. Derived from opportunity identification it is concluded that LBB Teams should target small and medium sized enterprises wanting to distribute or distributing to Malaysia and surrounding countries. It should serve these companies by consulting and physical distribution management services which should evolve around marketing as well as logistical related activities. Consulting the Supply Chain Kerkveld, M.C.H. (2009) University of Twente 4 The researcher designed a phase model whereby LBB Teams should serve its clients. This model enables the establishment of a step-by-step cooperation with the client. Also it provides LBB Teams with the opportunity to develop operational strength and to gather capital. The different phases by which LBB Teams should operate are: o Phase 1: Consulting & Research solutions for EurAsia SCs o Phase 2: Project based SCM & improvement o Phase 3: Contract based SCM & improvement The following value proposition will hereby be provided to the industry: LBB Teams is the service provider which advices, designs, manages and improves product and information flows to and in Malaysia and surrounding countries in order to create exceptional value in supply chains for European and Asian small and medium sized food (ingredient) manufacturers as an extension of their organisation. Strategy formulation is followed by a business model (BM). In the BM first the individual elements of the three-phased-service are mapped. Further it presents a blueprint which depicts LBB Teams positioning in its customer’s value chain whilst offering its services. Conclusions are that phase 1 services have the least implications for the customer’s value network. By offering these services a good reputation can be established which will enhance opportunities for offering phase 2 services. When offering phase 2 services LBB Teams will not only retrieve information from the value network, but also act as an intermediate whereby it manages and improves identified process(es). During phase 3 services the client will become really dependent on LBB Teams because it will manage and improve all SC processes for its client’s EurAsia SCs. Next operational requirements of LBB Teams are provided. Primary activities, which are centrally important to LBB Teams’ strategic capability, are identified. Secondly human capital, organisational and technological resources required are assigned to the primary activities. Specific requirements of the relationships which should be established when offering the value proposition are identified by using Lambert & Cooper’s SCM framework (2000). It is concluded that the extent to which LBB Teams will be able to manage its client’s SCs in phase 2 and 3 solutions depends to a large extent on the cooperation agreements it can establish with primary SC members and non-member links. One can conclude that there are many possibilities for LBB Teams whereby it can facilitate key processes in its client’s EurAsia SCs. Some options are currently too demanding for LBB Teams. It is recommended for the company to continue its consulting & research activities first. When good relationships and mutual trust are established with its client and the SC members it can offer its management solutions by the identified phase model.
Item Type:Essay (Master)
Clients:
LBB Teams
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/60129
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