Supply Chain Management: Logistic Network - Term Paper Example

? Full Paper Introduction Supply chain management (SCM) is a debatable topic. It is gaining popularity and value. As per the practitioner’s point of view, it is most likely a vital process for surveyed executives. Moreover, SCM is a frequently discussed topic between researchers and practitioners, as it was illustrated to be the only topic with a rapid surge on articles published on the Internet (Naslund & Williamson, 2010). The rationale for gaining significance is its value, as organizations rely on processes of supply chain management, which is a core element and contributing factor, for gaining competitive advantage in the global market. In the context of operations and management, supply chain management is defined as “the management of the movement of goods and flow of information between an organization and its suppliers and customers, to achieve strategic advantage. Supply chain management covers the processes of materials management, logistics, physical distribution management, purchasing, and information management” (Supply chain management.2007). SCM is a logistic network that is constructed on four elements i.e. suppliers, manufacturers, warehouses / distribution centers and customers. Likewise, the raw material, work-in-progress inventory (WIP), finished products flows and communicate between these four elements. The ultimate goal is to produce and distribute the manufactured goods in adequate quantities, to the correct locations and at the accurate time. However, there are certain factors that may lead to highlight difficulties in supply chain management processes. For instance, uncertainty may cause issues related to travel times, scheduling of transportation including vehicles and machines, weather forecasts, natural disasters, war, politics, labor issues etc. Similarly, in the same context military supply chain management networks are multifaceted as they are globally located and are managed by conventional and regulatory processes. Moreover, the management of these networks is convoluted due to segregating responsibilities for command, across different levels in the supply chain management network. Likewise, frequent promotions and job rotation in a rising-cost environment is a challenge. Furthermore, SCM has also encountered vulnerabilities. A security definition in the context of SCM is defined as “The discipline of contingency planning for any authorized delay, diversion, compromise or other related incident that could create a negative disruption or cost to a company’s flow of material, data or payment across international borders, from the point of conception to final delivery.” (Peck, 2003). Discussion The military supply chain management processes have witnessed many shortcomings in terms of improper communication channels between the SCM four elements i.e. suppliers, manufacturers, warehouses / distribution centers and customers. Moreover, there are several issues related to military supply chain that are discussed in separate headings. RFID Integration with Military Supply Chains “Radio Frequency Identification (RFID) is an enabling technology that will allow military logisticians to create synthesized and integrated end-to-end information on assets” (Estevez, 2005). Tracking troops is essential for the military supply chain, in order to align supplies in a reachable location. US faced a similar challenge during an Iraqi freedom operation, as the rapidly moving troops were tracked by incorporating information technology. Each combat unit was equipped with Radio frequency identification (RFID) transponders. Radio Frequency Identification (RFID) is a technology to recognize objects. This technology is for eternity classified as a technology similar to Automatic Identification and Data Capture (AIDC). AIDC consists of Barcodes, Biometrics and Smartcards. Apparently, RFID and Barcodes technologies are considered as one of the key drivers in supply chain management operations to categorize objects or merchandize at various workflow stages. In the intervening time, Biometric and Smartcard technologies are employed for access control procedures, banking and communication industry. The prime advantage of RFID technology is its ease of use and minimalism. That is the reason why it is adopted and deployed in multipurpose applications i.e. Supply Chain Management (SCM), Inventory Tracking, military supply chain management, Theft Protection, Location based Services, Electronic Health Monitoring for health care systems, RFID integrated travel documents, payment systems and context-aware applications. In recent years, this technology is flourishing robustly due to its extensive usability in upcoming technologies i.e. Ubiquitous Computing, Pervasive Computing, or Ambient Intelligence Solutions. RFID technology comprises of transmitters spreading electromagnetic technology in the environment to send and receive signals. The communication is conducted between two elements i.e. transceiver and transponder. Consequently, by incorporating RFID transponders to individual combat units and inbound logistic materials during shipment, real time information management is possible via a single interface. The interface will show instant updates of troops and logistics movements over the globe, which may provide real time dominance on the information for both logistic management and strategic military decisions (Morales & Geary, 2003). Conversely, RFID is inappropriate for global logistics management, RFID operates on airwave communication in a limited frequency range that is not similar in different regions. For example, RFID frequency broadcasted in Japan will not work in USA, as these countries have different frequency ranges. Likewise, in USA, federal communication commission has permitted only 433.5 to 434.5 MHz frequency ranges for the spectrum that can be used only for commercial shipping containers (GIERMANSKI, 2011). Furthermore, the federal communication commission rules specify the RFID can transmit frequencies longer than a minute. The RFID transponders attached to the shipping containers related to defense department will only use the RFID frequency after the arrival of the containers at U.S port. After transmitting the RFID frequency, as per FCC permitted range, the transponders will reply the transmission with data including shipping data and container activities such as ‘how many times the container was opened during transit’. All the information is passed via certain protocols, as these protocols allows the transponders i.e. RFID tags attached on the containers and RFID detectors that will detect these tags via certain protocols, in order to retrieve information and establish a small communication channel. However, there are no international standards for RFID protocols and standards (GIERMANSKI, 2011). These protocols specify the methodologies and languages that will be used in RFID communication spectrum. These RFID systems are efficient, convenient and robust at a domestic logistics management level but are not effective at the international level. Moreover, the overland movement of cargo internationally is an issue, as it requires RFID management by incorporating antennas and RFID readers or detectors at the landing or departure points. Therefore, there is a requirement of creating RFID environment or land infrastructure. It is impossible to virtually organize, manage and track the transition phase of these containers. However, checkpoints are the only solution where these containers can be tracked, managed and organized (GIERMANSKI, 2011). Likewise, these land based check points are difficult to manage, as each RFID transponder attached to a container, must have to examine the transceivers before establishing a communication channel. Moreover, different landscapes and geographic factors on a different location of the planet make the installation of antennas a difficult task. For example, there are frequent changes for supply paths from the coalition forces by travelling via a highway that may connect other routes to central Asia and may become defenseless. For addressing these issues, the department of defense must establish a strategy to administer infrastructure issues that are triggered by new routes. In order to protect the installed antennas on the land-based infrastructures and transit routes of the containers, there is a requirement of gaining access to the land by the local government. Resources Unreachable A painful lesson was learned by the US during the Gulf War, where supplies of 60 days were stored in the theatre, prior to ground attack. The massive amounts of supplies were successfully relocated from one location to another, but the troops were unable to consume these resources. The reason is probably due to broken links in the military supply management. Consequently, nearly half of the material comprising of 40,000 containers, was never utilized by the troops (Morales & Geary, 2003). This concludes that a well-managed inventory is of no use, if it is not delivered to a relevant point and at a relevant time. As Major General Dennis Jackson, who is logistics chief for Central Command during Operation Iraqi Freedom, do consider it a challenge but it is not impossible. However, there is always a predictability factor, even in well-organized and managed battlefields. Consequently, there is a requirement of integrating the predictability factor to an appropriate amount of resources in a secure pipeline i.e. logistics back room, providing fluent supplies of combat units (Morales & Geary, 2003). Supply Chains Vulnerable to Terrorist Attacks After discussing infrastructure threats, RFID has more to share, as there are threats that are associated with port facilities around the globe. The FCC has only allowed a limited frequency spectrum for the US ports that are applicable on both public and private sectors, resulting in a possible threat from strategic terrorist attacks that may use frequency range for activating bomb or explosive device. As in November 2007, a university, contractors of the department of defense, container retailer, an international security organization and a bomb disposal squad created an artificial environment to demonstrate activation of a detonator available globally (GIERMANSKI, 2011). Moreover, an undergraduate student also demonstrated the activation of a detonator by using RFID signal. The RFID signal that travelled via an approved frequency spectrum i.e. 433 MHz, exploded a small explosive that was isolated in the container. The demonstration was observed by the department of defense officials including Government Accountability Office, Department of Homeland Security and Coast Guard. Later, the two officials including the chief engineer and the supervisor went on the sight to examine and observe the device that was used by an undergraduate student. The statement that came out from the department of defense is as follows (GIERMANSKI, 2011): “Army representatives examined the device and wiring and confirm that a commercial RFID interrogator was used to 'wake up' a commercial RFID tag. When the RFID tag responded on the 433 MHz frequency, the relay closed and the blasting cap set off the explosive charge.” Moreover, the demonstration video was sent to the ‘house homeland security committee’ and therefore, concluded that RFID is capable to detonate RFID integrated bombs at supply chain locations. However, this fact was denied, as the global supply chain management does not use a similar frequency range and varies from location to location. The statement from the department of defense concluded the same as stated (GIERMANSKI, 2011): “While it is technically feasible that the detection of RFID emissions could be used to trigger an explosive device within a container, DHS does not agree with the report's assessment that ports that employ RFID technology become more vulnerable to terrorist attack” High Level Commitment and Oversight Required It is essential for the US department of defense to manage the ‘supply chain management’ procedures effectively. Likewise, some factors need consideration, which are as follows (Solis, 2005): DOD impact on military readiness and operations Substantial investment in inventory Management of military forces with unparalleled capabilities Timely Supply support For instance, in order to facilitate ‘Operation Iraqi Freedom’, DOD has managed over two million tons of cargo. However, shortage of tires and vehicle track shoes disrupted operations. Similarly, DOD spent a massive amount of money on supplies. For instance, the statistical data shows the inventory levels have grown in recent years from For example, its supply inventory levels have grown in recent years from “$62.3 billion in fiscal year 2001 to $77.4 billion in fiscal year 2004 and expects to spend approximately $50 billion in fiscal year 2005” (Solis, 2005). The ‘inventory management process’, under the supervision of DOD, was identified as a high-risk zone in 1990 (Solis, 2005). It was declared as a high-risk zone due to venerable problems including overload of inventory levels, derisory controls and cost overruns. The United States Government Accountability Office (GOA) highlighted that these problems are affecting the supply chain management for the war fighters. In order to eliminate these venerable issues from the supply chain, there is a requirement to identify and address issues. Therefore, by integrating DOD with Office of Management and Budget’s (OMB), a plan was constructed to address issues highlighted below (Solis, 2005): Accurate forecasting in supply chain requirements Material distribution Visibility of Assets The initiation of the plan is an adequate move, as it addresses long-term systematic issues and weaknesses along with factors considering supply support to the war fighters. Although, there is a requirement of continuous efforts in order to implement the plan for a successful resolution of ‘supply chain management’ issues. Therefore, DOD must sustain commitment from the top leadership along with long-term support from the institutions (Solis, 2005). Moreover, DOD must also ensure dedication from defense logistics agencies, military service, deploy planned initiatives within the department, observe and monitor progress towards identified targets and ensure validated data usability for performance and monitoring targets (Solis, 2005). Importance There are two core reasons that may highlight a broader picture in order to have an effective supply chain management in the supervision of DOD. The first reason is to supply resources to the war fighter, as inadequate supply will influence military operations. Most importantly, the supply chain is an essential factor in order to determine the victory or loss in a front line military battle. The second reason is related to the requirement of supply to the US military operations that are accomplished by investments in the supply chain. Apart from these two factors, DOD will provide supply management on accurate time, as supplying resources to the military on time is a critical factor in a combat. The troops are highly trained to protect the nation by utilizing effective resources and strategic movements. On the contrary, supply shortages can disrupt armed forces in many ways. For instance, in 2003, during Operation Iraqi Freedom (OIF), there was a shortfall of track shoes, the military tanks named as Abrams and Bradley fighting vehicles were not able to participate in that operation. Moreover, short falls of tires prevented many vehicles grounded, in spite of functioning properly. Analytical Architecture for Management Innovation The current US army logistic network is gigantic in both scalability and capacity. On the contrary, its worldwide expansion does not define the overall problem, as the policies and structure provisioned within the system illustrates some persistent problems that are severe than the global SCM issues (Parlier, 2009). In the past, military logistics SCM has encountered systemic and unrelieved issues. However, by incorporating SCM principles, inventory management theory and logistic system key analysis are considered as the vital factors of diagnostic power (Parlier, 2009). Moreover, the project including these vital factors was launched five years back and highlighted several issues that are highlighted as (Parlier, 2009): Deficiency of an empirically calculated readiness production utility Inadequate understanding of mission-based, operational demands and associated spares consumption patterns that will facilitate to poor operational and tactical support planning Not able to optimize retail stock policy for accomplishing effective readiness Not able to assist reverse logistics management Improper management of depot repair operations facilitate a gap in essential repair Autonomously operations along with uncoordinated and unsynchronized stages create bullwhip effects in a supply chain management No mechanism for centralized supply chain management resulting in multiagency, consensus-driven, bureaucratic responses over-involved by lack of an Army supply chain management science Absence of innovation engine that will boost factors such as continual improvement for an organization Conclusion In order to overcome the challenges, there is a requirement of developing new approaches for military supply chain management and performance measurement. The first step is to divide the network in to separate systems, most likely, an integrated system approach. Likewise, integrated systems will facilitate better management, performance, quality and reliability to the entire military supply chain management network. Moreover, in order to construct end-to-end supply chain management, there is a requirement to examine the challenges, distinctiveness and interdependence at the system level. The end-to-end supply chain management will demonstrate high involvedness, dissimilar military requirements, regulatory oversight, long life cycles and varied potential of the supplier. Furthermore, supply chain management requires a display system that will demonstrate end-to-end supply chain performance. In addition, prediction system will enhance the supply chain process by indicating potential warning of system degradation and at the same time illustrating options to stabilize or improve supply chain integrity. Redefining SCM Supply chain management has its value in terms of gaining competitive advantage and effectiveness in terms of a military organization. However, very few organizations follow appropriate procedures that are considered as success drivers to gain perfection. Senior vice president of Manugistics, identifies factors that will enhance processes related to SCM (Sengupta & Turnbull, 1996. The factors are (Sengupta & Turnbull, 1996): Comprehensive guidelines facilitating the decision-making procedures Eliminating factors such as functional and organizational barriers Making the supply chain transparent in order to modify demand Military supply chain systems are complex and located in a global environment. These systems rely on multiple supply chains that are connected with compound systems to gain mission success. One of the major factors that may contribute to enhance SCM performance is to maintain and organize data from numerous resources and revealing it in to a comprehensive information system presentation. References Morales, D. K., & Geary, S. (2003). Speed kills: Supply chain lessons from the war in iraq. Harvard Business Review, 81(11), 16-17. GIERMANSKI, J. R. (2011). Military supply chain tracking system both inefficient and dangerous. National Defense, 95(687), 22-23. Estevez, A. (2005). RFID vision in the DoD supply chain. Defense AT&L, 34(3), 23. Solis, W. M. (2005). DOD's high-risk areas: High-level commitment and oversight needed for DOD supply chain plan to succeed: GAO-06-113. GAO Reports, , 1. Naslund, D., & Williamson, S. (2010). What is management in supply chain management? - A critical review of definitions, frameworks and terminology. Journal of Management Policy & Practice, 11(4), 11-28. Supply chain management.(2007). Bloomsbury Business Library - Business & Management Dictionary, , 7197-7197. Peck, W. G. (2003). The real definition of supply-chain security. Journal of Commerce (15307557), 4(45), 13-13. Sengupta, S., & Turnbull, J. (1996). Seamless optimization of the entire supply chain. IIE Solutions, 28(10), 28. Parlier, G. H. (2009). Transforming army supply chains: An analytical architecture for management innovation. Air Force Journal of Logistics, 32(4), 64-77. Read More