A loaf of bread is a perishable commodity that must be delivered to retailers as soon as possible before the expiration date. It is a food that is often eaten at breakfast. As a result, it is in high demand. The bread’s supply chain is outlined below. It begins with purchasing the required raw materials from farmers or agricultural cooperatives, such as flour, maize, sugar, and others. As a result, they have a range of potential vendors to choose from, and they can pick those with reasonable pricing (Vutete and Bobo 2015, p. 2). The bread consumption is on a daily basis, and, therefore, manufacturers have to ensure that the shelves in the store are full so as to meet the increased customer demands. During the manufacturing supply chain stage, a company converts the raw ingredients into a baked bread. The process depends on whether the firm wants to ship the product worldwide or for home preparation. When it is to be transported internationally, they add preservatives to minimize perishability. Companies operating on a global scale will be required to use airlines when transporting most the perishable raw materials and the product itself. Usually, bakeries obtain wheat from farmers directly or from reliable suppliers, both locally and internationally. The known suppliers are situated close to manufacturing centers as a way of saving transportation costs and enhancing the vendor relationships.
Its production process is quite easy and less costly as it uses plastic bags or wax coated materials in its packaging (Vutete and Bobo 2015, p. 7). Hence the manufacturers can make decisions on whether to outsource the wholesaling or distribution services or perform them to avoid the return of expired products that is an enormous waste to such companies. The opening of millions of retail stores globally facilitates accessibility of fresh products by the end users.
Making decisions on the bread distribution strategy is tactical since it demands the shipment of fresh products. Moreover, the Material Planning Processes (MPP) and customer order fulfillment are the key issues to consider as it facilitates delivery times and expanding the economies of scale. The type of supply chain network adopted by the bakers determines the cost to serve the various customers and channels. It tends to focus on stock item profitability, fleet maintenance approach and the costs of transferring the products. The sales forecasting in the supply chain aids in inventory control and management to ensure a firm produces and transports the right product at the right time hence fulfillment of the customer ordering processes.
Supply Chain for a Television
On the contrary, a television is a durable product that cannot require quick transportation compared to a loaf of bread, and it is in the manufacturing industry that seems to have a more complex supply chain compared to a baking industry. It can be stored in the warehouse for an extended period, however, the changes in fashions and lifestyles can increase the demand hence faster distribution to the required centers. The raw materials needed depend on the following four parts, the exterior housing, the picture tube, the audio reception and speaker system, and the complicated mass of electronics (Antonyova, Antony, and Soewito 2016, p. 3). Most of the TV manufacturers outsource products on a global supply chain by creating a win-win situation. The require parts are shipped from all over the world to the factory for assembling and later transported to the retailers for easy delivery to the customers. A television supply chain is open and widespread as it relies on the standard components from the known suppliers. The supply chain design of a TV depends on the following key factors, the modularity and standardization in the product design, the economies of scale, and the new sources of materials. They can source raw materials from home country or use the local free trade zone.
The advancements in logistics have made it easy for shipment through the just-in-case or just-in-time delivery schedules, thus leading to a better production industry. Using the global supply chain processes is a differentiation strategy that brings a competitive advantage other than standardization of the product, identifiable market, and popular channels (Antonyova, Antony, and Soewito 2016, p. 5). The supply chain model is virtually integrated, whereby, a company depends on the effective coordination of external suppliers hence changing the perception of television manufacturing. The TV makers tend to have strategic procurement offices in specific areas to facilitate sourcing of better components at preferred prices. The use of a master production schedule in the supply chain design facilitates getting the TV sets into the store or warehouse on time.
Difference in the Supply Chain Design of a Loaf of Bread and Television
The differences arise from the following seven primary elements that determine the nature of the supply chain design networks, location and distance, current and future demand, service requirements, size, and frequency of shipment, warehousing costs, trucking costs, mode of transportation (Robinson, Fernandez, and Goode 2007, p. 5). The supply chain design of a television requires a broader supplier base and a great deal on the physical materials. The inputs of a TV are costly and the capital investments in the machinery and equipment needed in the production process are high. The size and weight of the raw materials and end products of these dissimilar products are different. The logistics activities such as transportation and shipment to various locations are not the same for TV manufacturing company and bread baking firm.
The trucking costs for a loaf of bread is low since most of the distribution centers are concentrated in the home areas, and the risks of theft are not that high. However, TV sets are vulnerable to theft and manipulation of data used in production. Therefore, there is need to keep a regular track of all goods, services, and information transmitted across all the networks (Antonyova, Antony, and Soewito 2016, p. 8). It is easy to predict the current and future, and present demand of a loaf of bread since it is a daily consumption product and customers will continue purchasing it unless there are natural environmental conditions that can deter the supply for raw ingredients and demand for end products. For the television, it can be quite hard to develop an accurate sales forecasting that helps in controlling inventory in the warehouses.
The frequency of shipment for a loaf of bread is higher compared to TV sets and calls for day and night production rather manufacturing a television for even a whole year as it requires more skilled labor and complicated procedures in assembling all the required parts. The mode of transportation for a loaf of bread is usually the road networks because of home consumption, but a baking company can use airlines to transport the inputs which are perishable (Robinson, Fernandez, and Goode 2007, p. 13). The TV sets are massive and, therefore, if it is local use the roads are suitable but if exported railway or shipping is appropriate. Most television makers tend to outsource the assembling parts since it does not access all of them in specific parts or from a particular supplier.
Differences in how Decisions are Made
Supply chain decision making for both products differ based on the following areas. Deciding on the source of raw materials to use, the modes of transport to use, when to receive and store the required inputs and whether to accept or reject a shipment. Moreover the decision on whether to use an electronic warehouse for storage or not, the packaging material to establish and how to process the customer orders and fulfill their needs. The procurement department has to make sure that the supplies are safe for human consumption. Making decisions on how to reduce the lead time is the main difference in the supply chain management of a loaf of bread and television (Chibba 2007, p. 20). It is easier to reduce the time between the placements of an order to the date of delivery for a baking company compared to an electronic manufacturing company. Therefore, inventory management decisions vary accordingly. Since the supply chain in the bread market is perfect competition, the decisions on sales forecasting and future are simple compared to television where it is not easy to predict the future trends in the electronics industry due to the rapidly changing technological advancements. Other areas that bring differences on how decisions for different products include outsourcing make or buy decisions, supply chain efficiency and purchasing, production and customer satisfaction. However, all the designs aim at optimizing the content of the supply chain.
Differences in the Production Strategy
In producing a loaf bread, there is need to focus on the cost leadership production strategy. Creating a large volume of bread gives an opportunity for a company to enjoy the economies of scale hence getting a high competitive pricing. However, for television manufacturing, it requires that a company fast carries out a market research on the customer needs, culture, lifestyle and tastes and preferences before producing a large quantity as most of the products will have to be exported to other global markets. Differentiation in the production of bread is quite simple compared to a TV set since it only involves changing of the premium ingredients or developing unique recipes (Antonyova, Antony, and Soewito 2016, p. 10). However, the latter requires assembling of new and unique parts so as to achieve the differentiation production strategy. The rollout technique in the industry is different from that used in the manufacture of televisions.
The production strategy for a TV is quite complex compared to baking a loaf of bread. Therefore, it requires the hiring of skilled personnel at the production stage, ensuring that procurement procedures are accurate as a way to access modernized assembling parts from known suppliers who specialize in providing inputs of high quality. Being innovative and use of advanced technological methods of production are the key drivers in this stage (Roy 2005, p. 45). Hence, the need to establish and implement a global supply chain network and design that can facilitate faster product development at a short time.
Differences in Importance of Quality and the End Consumers
Quality measures the supply chain performance. Quality assurance of both inputs and outputs is crucial for these different products. However, the importance of quality and the end users differs (Roy 2005, p. 59). A loaf of bread is in the category of foodstuffs that consumers eat and, therefore, quality is of great importance. Hence, it is crucial for a bread making firm to ensure that they supply high-quality products to their customers. Total quality management starts from the procurement of safe and excellent raw materials and other inputs. The workforce needs to incredibly observe a high degree of cleanness and the packaging items and transportation trucks, Lorries or other vehicles should be of high quality to secure the products being transported from contamination. The importance of the quality of the television only depends on the consumer’s perception of a given company (Chibba 2007, p. 20). End customers of a loaf of bread measures supply chain quality depending on the speed of order fulfillment and also the taste after eating it. End users of a television perceive the quality by taking into account the durability and design of the product and the ability to deliver it at the required time.
In summary, supply chain management is a crucial function in a given organization, and it plays a greater role in ensuring the delivery of the right product at the right time to the expected distribution centers. It requires proper coordination of suppliers, manufacturers, wholesalers, retailers and consumers. Despite the similarity in the end goal of the supply chain activities, there are differences in design, decision making, production strategy and importance of quality to dissimilar products. It is evident from the ideas discussed above between a loaf of bread and television.
Antonyova, A., Antony, P., and Soewito, B. (2016). Logistics management: new trends in the reverse logistics. Journal of Physics: Conference Series 710: 1-10.
Chibba, A. (2007). Measuring supply chain performance measures: prioritizing performance measures. Luleå University of Technology, 8-26.
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Roy, S. (2005). World class supply chains in the computer industry. p. 44-95. [Online] Available at: http://ctl.mit.edu/sites/ctl.mit.edu/files/Sc2020%20_Computer%20Industry_Phase%20One.pdf [Accessed March 23, 2017]
Vutete, C., and Bobo, N. (2015). The impact of bakery industry supply chain on the pricing of bread in Zimbabwe. Greener Journal of Business and Management Studies, 5(1): 1-15.