Whenever supplies are ordered, there is always a risk that they will not be delivered on time. It is therefore the role of both the procurer and the supplier to put up measures to ensure that the process is faster and that late delivery does not strongly affect the procuring company. Providing a systematic way of ordering supplies can ensure that products are on hand by the required deliver date.
The research paper has been created through intense research on various federal and state government departments, using peer reviewed journals and accessing information on military websites. The main role of this research is to determine the various challenges that are met during the procurement process and devise ways to resolve them. It will be the intention of this research to ensure that only reliable materials are used for the sake of this research. Reliable in the case of this research will imply information that is certified by government departments or that which is peer reviewed for the case of academic materials.
According to Parlier (2011), the period of time between the when the procurement is initiated and the time the item is received is known as the acquisition lead time. This time is divided into administrative and production lead times. The administrative lead time runs from the time the time procurement is initiated to the time when the contract is awarded to the supplier. The production lead time is the time between the moment when the contract is awarded and the time when the item is delivered. Since predictions of acquisition lead times are prediction of when the item is expected to be delivered, the late delivery results in a series of undesired results.
Parlier (2011) notes that the according to a report by GAO, the Defense Logistics Agency and the Army Material Command (AMCOM) had underestimated 40 % and 60 % of their procurements by over 90 days. AMCOM has experienced problems with meeting the demands of supply on various grounds. First, since the Operation Iraqi Freedom started, the demand for supplies has been high (Dacus & Hagel, 2014). They have therefore not had ready supplies. They have also suffered insufficiency of funds, limitations of industrial capacity, and long lead times of items related to aviation.
According to the military website, a total of 40 % of all orders made within the 60 day period prior to November were more than 30 days late on delivery. This implies that the issue of late deliveries is rather prevalent in the US Army (Parlier, 2011; Plewa & Jodejko-Pietruczuk, 2012). It is for this reason that the US Army needs to identify a means of resolving the issue once and for all. The research needs to identify a faster and more reliable method of resolving this issue. This will be specifically done by introducing a systematic method of creating orders. This will comprise of every step in the procurement process such that every issue in the process is taken care of.
Causes of delays in the US army
Late delivery is amongst the most cited problem of supply chain management. It accounts for the majority of customer complaints (Dacus & Hagel, 2014). Missing the date of delivery is caused by a variety of issues. Misinformation, breakdown of machinery, insufficiency of funds, or failure of the procurement process may all result in delays in the procurement process.
Misinformation comprises of giving either insufficient or unreliable information. Whenever procurement is being done, it is important that the procurement department makes sure that the entire procurement information is provided and confirmed (Plewa & Jodejko-Pietruczuk, 2012). This way, the procurement department will avoid unnecessary delays as well as avoid deliveries that are incomplete.
Companies that use highly networked systems suffer the highest risk of not succeeding. The system of a company can be compromised to output values other than what is expected (Parlier, 2011). Bugs and malware have been used to affect and even collapse entire system networks. A good example is the love bug that was used in 2002 at the Pentagon, Ford and NASA to shut down emails that were estimated at billions of dollars (Plewa & Jodejko-Pietruczuk, 2012).
Disasters can also be a major reason for getting late deliveries. When disaster strikes, road networks may be disconnected (Dacus & Hagel, 2014). It may also become very unsafe for transportation by either sea or air travel. Thus, it becomes almost impossible to manage. Park, Hong and Roh (2013) point out that the Japan earthquake of 2011 caused losses of close to $235 billion. Initially, only the destruction associated with loss of human life and destruction property. Later, as the country produces over 60 % of the world’s semiconductor chips, the computer industry worldwide halted until supply resumed (Park, Hong & Roh, 2013). This is one scenario where disasters have negatively impacted supply of goods to customers. According to this article, the area of disaster management has not been adequately explored in the area of supply and procurement.
Changes in demand
Changes in demand can also negatively impact on meeting delivery time. During the war in Iraq, the demand for supplies increased in the US army. Due to the changes the suppliers of army equipment could not meet the demand of their customer (Parlier, 2011). The changes in demand may often make it impossible for the supplier to catch up with the demand. For the armed forces, failure to obtain supplies at the right time means loss of lives or the success of terrorist organizations.
Every point of the supply chain could result in failure at some point. It is vital for the company to create measures to ensure that the procurement process is free from risk (Park, Hong & Roh, 2013). In order to do this, a fool proof system should be created to ensure that supply will never at any point lag behind due to any of the common risk factors.
Documentation can often result in late delays in any organization. If the documentation is unclear, misinformed or wrong, then the supply process will definitely be late. Top deal with this issue, various measures can be put into place. First, there should be a department for creating orders (Dacus & Hagel, 2014). All orders that are required within the organization should be done through the department. This will enable the combination of multiple orders to big single orders. The company will also be able to manage its cost due to its capacity to make big purchases. The company should also develop order creation software (Plewa & Jodejko-Pietruczuk, 2012). One advantage of order creation software is that it can only be influenced by changes in prices. For orders whose prices are stable the software is foolproof. If any errors are identified, they should be corrected as soon as possible. The order creation can however make mistakes. To minimize the risk of making mistakes this way, the company can ensure that orders are checked manually for any errors before being sent to the supplier.
Another thing that can be done to improve on this problem is to follow up on the order. Following up on the order eliminates any form of misunderstanding and makes it clear if the organization needs to make any changes (Park, Hong & Roh, 2013). If the organization needs to send another order, this may also be made clear through follow up. A clear method of follow up should be created with the organization involved so that clear information is available at the time of follow up.
Since the system networks of a company can be compromised, it is necessary for supply chain networks to create methods of dealing with system failure when it happens. One very important method is to back-up data progressively so that a lot of information is not lost in case of anything (Chopra & Sodhi, 2012). This way, the data can b recovered and operations resumed within a short while. Another method is using system restoration software that is very effective. This way, even after the system is compromised, it is very easy to recover the system effectively.
System risk can also be reduced by storing hard copies of all information that is stored in the computer. While this method will often require longer time to operate, hardly any information is lost except that which is misplaced (Park, Hong & Roh, 2013). The method is also easier to adopt than any other and is used together with the rest of the system. It is important for the entire company to learn how to use the manual form of data storage to ensure that in case of operations resume as soon as the system is compromised.
Finally, system risk can be alleviated by the use of data encryption to ensure that only authorized personnel are able to access computers in the company (Park, Hong & Roh, 2013). This way, in case the system is compromised, the company can save some of the computers from being compromised. The best way to obtain a good software is to contract a good data management company to install and manage the system for the company.
Changes in demand
During times of high utilization of resources, the demand for certain materials may increase. To resolve the supply gap that is created, it is important to increase the level at which the company makes its orders (Dacus & Hagel, 2014). This way, the company alleviates the possibility of completely running dry on certain items. The minimum level of supplies available at any one time should be high enough to serve an average length high risk period.
The company can also obtain multiple suppliers to resolve the demand. Multiple suppliers are able to meet much higher demand than the usual single supplier (Plewa & Jodejko-Pietruczuk, 2012). It is also possible for the company to start developing its own products in times of high demand (Park, Hong & Roh, 2013). This way, the company will ease the demand on its own.
Disaster is often to blame for lack of supplies. When natural disasters like floods, earthquakes and volcanic activities occur, they may cause the ceasing of supply. Other disasters like war, and fires can also prevent an organization from obtaining supplies (Chopra & Sodhi, 2012). To resolve this issue, it is necessary for the company to create measures to protect it from lack of supplies. Various methods can be employed to make that the system fool proof.
First, the company can outsource from various companies. If possible, the two companies should be located in different jurisdictions. This way, the risk of disasters hitting both suppliers is minimized (Park, Hong & Roh, 2013). The company also protects itself from the risk of other factors like failure to cater for a certain level of demand.
Second, the company can deal with disasters by having sufficient back-up supplies. It should have enough supplies to cater for all its operations for a time sufficient to make new orders from another company or to redevelop the new old company (Dacus & Hagel, 2014).
The company can also create agreements with other companies to supple it during periods of either high demand or disaster (Dacus & Hagel, 2014). This method is however to be more expensive as the funds obtained by the company during this period would require to be sufficient to run the company during the times when demand is lower or during periods of normal operations.
Other changes may also be implemented to make the procurement process more reliable. It is important for as many of the measures as possible to be employed as possible. A good process of procurement should be put up to be used up while accommodating the situation on the ground.
The company should be strict when obtaining supplies. The best way this can be done is by writing contracts with supplying companies. Many studies show that customers who have a running contract are served better than the rest (Blocher & Chhajed, 2007; Chopra & Sodhi, 2012). If demand rises, customers who have contracts are often served first while the others are served later. This is often done to ensure that the clauses of the contract are not violated. For this reason, it is also important for a company to include a clause that protects it from getting under supplied for the sake of servicing other organizations.
The company should also employ measures to back-up the system in case there are any difficulties on any part of the organization (Dacus & Hagel, 2014). If the transportation systems of the supplier fail, the company should offer to provide its own transportation (if possible, but not strictly, at a discount) (Plewa & Jodejko-Pietruczuk, 2012). The company can also offer to back-up the supplying company by offering its own labor force during times of high demand.
By providing back-up measures to the supplier, the company reduces the risk of going without supplies. The company also reduces the risk undergoing losses (Dacus & Hagel, 2014; Viale, 1996). For service companies like the Army, lack of supplies means loss of lives and property. The organization should be ready to get to any level to ensure normal operations resume as soon as possible if they ever stop.
Finally, the company should be more accurate in calculating projections for the date of delivery. This way, the company will be able to make orders earlier and hence avoids inconvenience (Chopra & Sodhi, 2012). Since the expected delivery date will be more accurate, the rate of missing the delivery rate will be lower. The company will therefore have late deliveries during periods of high demand, during disaster and during and when there is poor documentation.
In conclusion, every company should put up measures to deal with lack of supplies and to ensure the risk of lack of supplies is minimized. A fail proof method should be employed to ensure that the company meets minimum disruptions when the supplier cannot meet demands (Dacus & Hagel, 2014). There are various causes of lack of the supplier’s inability to meet the expected delivery date. Some late delivery dates are caused by poor documentation, disaster, changes in demand and system risk among other reasons.
The company should devise a procurement system to ensure that all its deliveries are made on time. Methods that can be used to prevent late deliveries include appointment of multiple suppliers to prevent lack of supplies during times of disaster and high demand; inclusion of back-up suppliers and back-up assistance method, encouraging suppliers to create systems that are easy to back up and restore and difficult access without entry passwords; and insisting to have all orders provided under a contract. With such measures in place, it is difficult for the company to develop hitches associated with late deliveries.
Blocher, J., & Chhajed, D. (2007). Minimizing customer order lead-time in a two-stage assembly supply chain. Ann Oper Res, 161(1), 25-52. doi:10.1007/s10479-007-0289-7
Chopra, S., & Sodhi, M. (2012). Managing risk to avoid supply-chain breakdown. MIT Sloan Management Review (Fall 2004).
Dacus, C., & Hagel, S. (2014). A Conceptual Framework for Defense Acquisition Decision Makers: Giving the Schedule Its Due. Defense ARJ, 21(1), 486-504.
Park, Y., Hong, P., & Roh, J. (2013). http://www.strategy-business.com/article/re00226?gko=5282d. Business Horizons, 56(1), 1-2.
Parlier, G. (2011). Transforming U.S. Army supply chains (1st ed.). New York: Business Expert Press.
Plewa, M., & Jodejko-Pietruczuk, A. (2012). THE REVERSE LOGISTICS FORECASTING MODEL WITH WHOLE PRODUCT RECOVERY. Reliability: Theory \& Applications, 7(1).
Viale, J. (1996). Inventory management (1st ed.). Menlo Park, Calif.: Crisp Publications.
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