Chicken Run - The Poultry supply chain
How might Wings and Thighs combine a lean and agile approach in its source chain?
The lean and agile paradigms, while particularly different, can be and have been joint within efficiently designed and operated total supply organizations. In the Wings and Thighs case, value is an important industry winner which is decreased by leanness. In the case of flexibility the key level is that Wings and Legs operate within an extremely unstable marketplace. Therefore the solution is to develop a cross types supply cycle.
Combining Trim and Snello
The main strategy used in regards to incorporating lean and agile may be the decoupling point. Hoekstra and Romme (1992) define it as the " stage that shows how deeply the customer buy penetrates into the goods flow". Determining the location of the decoupling point is aimed at finding a balance between the costs of procurement, production, distribution and storage on the one hand and the customer service to be offered one the other side of the coin. According to Hoekstra and Romme you will discover three crucial aspects to the decoupling stage: -
1 ) The purchase driven and forecast powered activities happen to be separated by the decoupling stage.
2 . The decoupling stage is the main level of inventory from which the customers are delivered.
3. The forecast influenced activities could be optimised in some manner, as they are in a roundabout way influenced by irregularities of the market.
The key determinants from the decoupling stage are divided into two teams.
1 . Item and market characteristics such as required delivery reliability, necessary delivery time, predictability of demand and specificity of demand.
2 . Process and stock attributes such as business lead times and costs of steps in the production process, likelihood of obsolescence, costs of share holding and value added between stock details and controllability of manufacturing and procurement.
Many of these factors influence the location from the decoupling point for example the shorter the required delivery time the closer the decoupling level will be on the consumer. Hoekstra and Romme (1992) determined five standard locations intended for the decoupling point: -
1 . Make and send to stock
2 . Make to stock
3. Build to order
4. Help to make to order
5. And buy and generate to buy
In Wings and Hip and legs case delivery times happen to be short and delivery reliability needs to be consistently high (99%). Although demand is currently unpredictable the odds would be the retailers possess point of sale info which could and really should be distributed to Legs and Wings. Better co-operation would be beneficial and open up possibilities for longer business lead times. Since noted in the case study, Wings and Hip and legs have a big diversity of goods, originating from variations in packaging size, labels and brands. The very best before particular date adds to the specificity in 2 different ways. First of all because the best before date is actually a technical security limit to offer the product, and secondly mainly because retailers do not accept the same best prior to date about subsequent deliveries. As such the commercial finest before date is much shorter than the technological best prior to date advises.
The case research mentions that although top quality is handled variations can happen. The result of this really is a downstream effect on the decoupling stage. Cleaning make up times are also important factors in Wings and Legs situation. Long build times include a downstream effect on the place of the decoupling point. The perishability of chicken means products could become obsolete simply due to the limited shelf lives of food products. Another point to consider may be the value of stock. Two factors needs to be taken into consideration in this article the value added in the process as well as the value of purchased materials. If the cost of the value added is high it triggers an upstream movement of the decoupling level, as it is even more profitable to stock low value supplies instead of quality value finished items.
Merits of current circumstance
The inventory buffer...