FOUNDATION STUDIES IN BUSINESS (SEM 3) FSB 111: Business Information System

INRODUCTION

Supply Chain Management is the joined partnership among all relations in

the flows of goods and service to customers. They created for the purpose to
improving quality, reducing costs and achieving competitive benefits in a world
where they lean manufacturing and specialization force companies to depend on
one another for valuable productive activities. In supply chain management, there
included planning, sourcing, producing, delivering and providing for returns to
handled collaboratively within an integrated supply chain to ensure the maximum
use of share resources.

Supply chain management is the active management of supply chain

activities to maximize customer value and achieve a sustainable competitive
advantage. It represents a conscious effort by the supply chain firms to develop and
run supply chains in the most effective and efficient ways possible. Supply chain
activities cover everything from product development, sourcing, production, and
logistics, as well as the information systems needed to coordinate these activities.

Moreover the concept of supply chain management is based on two core

ideas. First of all is that practically every product that reaches an end user
represents the cumulative effort of multiple organizations. These organizations are
referred to collectively as the supply chain. The second idea is that while supply
chains have been for a long time, most organizations have only paid attention to
what was happening within their “four walls.” Few businesses understood, much
less managed, the entire chain of activities that ultimately delivered products to the
final customer. The result was disjointed and often ineffective supply chains.

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The organizations that make up the supply chain are “linked” together
through physical flows and information flows. Physical flows involve the
transformation, movement, and storage of goods and materials. They are the most
visible piece of the supply chain. But just as important are information flows.
Information flows allow the various supply chain partners to coordinate their long-
term plans, and to control the day to day flow of goods and material up and down
the supply chain.

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FOUNDATION STUDIES IN BUSINESS (SEM 3) FSB 111: Business Information System

Background of Synthomer Company

Synthomer’s origins date back to a production site in Harlow, UK,

constructed in 1952. The primary products were polyvinyl acetate resin dispersions
and solid polyvinyl alcohol resin. Following their global expansion and strategic
acquisitions, the company also provides customer focused services from its
operational centers in Marl, Germany and Kuala Lumpur, Malaysia, as well as
sales offices in Shanghai, Dubai and Atlanta.

Within the commercial organization, marketing and technical services are

organized in global Strategic Business Units (SBUs), working closely with
regional sales organizations in Europe, Asia, Middle East, South Africa and North
America. The Business Units are supported by technology groups specialized in
different product chemistries and located with marketing and technical services to
ensure fast innovation, strong customer focus and rapid speed to market of new
products.

The company’s business is founded on expertise and experience. So the

company’s HR strategy was to ensuring a high educational level amongst the
employees. They have leadership team accordingly reflects their long experience in
the chemical industry, although they approach towards markets and customers is
based on fresh thinking to add value to customers´ businesses and shareholders´
expectations.

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Person That I Interview

NAME: MANIVANAN S/O PONNUSAMY

AGE : 52

RACE: INDIAN

ADDRESS: NO. 22, JLN 3/24, TAMAN KLUANG BARAT, 86000 KLUANG

WORKPLACE: SYNTHOMER IN REVERTAX

WORK AS : STORE SUPERVISOR

EXPERIENCE: 30 YEARS

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QUESTIONS

1. Explain the importance of effective supply chain management

in achieving organizational objectives?

They develop and implement purchasing strategies to deliver company’s business

objectives and the company does tender to the suppliers which of give low
potation, the suppliers get the tender. To ensure that for the defined areas of spend,
the company achieves the most competitive prices, credit terms and other
contractual conditions sustainably over the long term, while ensuring quality is fit
for purpose and delivery from suppliers on time. The company progresses and
implements sustainable purchasing strategies taking into account the balance of
short and long term, cost and risk, for the assigned purchase categories in
agreement with the Head of Department (HOD) and the production sites involved.
Moreover supplier relationship management via continuous contact with existing
suppliers, innovating and developing new supplier relationship as well as existing
supplier’s capability. So they measure and improve supplier’s quality and delivery
performance using data supported by it systems. So it will carry out supplier audits
and vendor rating as appropriate. Issue the appropriate nonconformance for any
goods or service which does not meet the required standard, maintain records and
follow up to ensure root causes are understood and preventative actions taken. The
company discussed prices, payment terms, delivery and other contractual
conditions according to delegated authority levels from the Head of Department
and prepare contracts for agreement and signature. Supply of RMS at competitive
market terms and conditions including but not limited to price, payment terms and
include also in certain logistic and demurrage management. Other than that
determine the efficient organization of procurement in the defined spend area and
simplify procedures to take work out of transactional purchasing including for
example the use of new technology such as procurement or outsourcing to third
parties with better expertise, systems and access to greater spend leverage, reduce
complexity, consolidate spend with suppliers.

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2. Explain the link between supply chain management and

business functions of the Synthomer?

The order constitutes the company’s offer to the supplier to purchase the goods
and/or services upon the terms and conditions set out in these conditions and the
order which may not be changed or supplemented except as expressly agreed in
writing by a person suitably authorized by the company. Provided the company has
not previously withdrawn the Order, the order will be deemed to be accepted upon
the terms and conditions set out in these conditions and the order, if such order is
not rejected by the Supplier in writing within 2 working days (in Malaysia) of the
company placing the order. Should there be any uncertainly; the occurrence of any
of the following events will be deemed conclusive evidence of the supplier’s
acceptance upon the terms and condition’s out in these conditions and the order
were the supplier issuing to the company a written acknowledgement without any
variations or changes to the terms and conditions in these conditions and the order
or notification by the supplier that the goods are ready for delivery and services are
ready to be performed and also delivery of the goods and performance of the
services. The terms and conditions set out in these conditions and the order shall be
deemed to be incorporated into the contract to the exclusion of all other terms and
conditions include any terms which the supplier purports to apply under any
quotation, order acknowledgement or any other document issued by the supplier.
Moreover the delay in exercising or failure to exercise a right or remedy under or
in connection with the contract will not constitute a waiver of, or prevent or restrict
future exercise of, that or any other right or remedy, nor shall the single or partial
exercise of a right or remedy prevent or restrict the future exercise of that or any
other right or remedy. So the waiver of any right, preparation, breach or default
will only be valid if it is in writing and signed by the party giving it and only in the
circumstances and for the purpose for which it was given and will not constitute a
waiver of any other right, preparation, breach or default. Not only that all goods
must be accompanied by a detailed advice note stating the company’s purchase
order number and giving full particulars of the goods supplied including all
operation and safety instructions, warning notices and other information as may be
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necessary for their proper and safe use, maintenance, storage and repair except
when such goods are sent directly to a third party, the advice note sent with the
goods should not show the supplier’s name or any pricing information. A copy of
the advice note must be sent to the company on the day upon which the goods were
delivering. If the supplier delivers more or less than the quantity of goods ordered,
and the company accepts such delivery which it will not be obliged to do and a pro
rata adjustment will be made to the invoice for the goods based on the price to
reflect the quantity of the goods actually delivered and the supplier shall waive any
demurrage or waiting charges which would otherwise have been incurred by the
company in respect of any delays relating to delivery.

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3. Discuss the key drivers for achieving and integrated supply

chain strategy of Synthomer Company?

The products typically provide one or both of two critical functions were
providing a barrier and bind or stick two or more components together. The
company don’t sell a chemical and they sell a formulation such as the Intimate
knowledge of customer’s products/production process AND frequently their
customer’s products. They used 50% water for logistics costs rapidly become a
significant proportion of total cost and need to manufacture close to customers.
The supplier warrants and represents to the company that the goods and the
services will conform in every respect with any specification, drawings and
samples and any other descriptions or instructions provided by the company or
provided by the supplier and accepted by the company and with the particulars
stated in the order and these condition

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4. Discuss the factors that must be considered when improving

logistics practices of Synthomer Company?

Suppliers delivering goods to or carrying out services on the company’s

premises must ensure they and their employees, agents and subcontractors fully
understand and comply with all applicable environment, health and safety
legislation, rules and regulations include all relevant site rules and regulations of
the company which may be imposed from time to time. Moreover the supplier
warrants that in the design, formulation, manufacture, packaging, storage,
transportation and use of the goods and in the performance of the services, the
goods and services will be safe and without risk to health. In line with the group
policies on Corporate Social Responsibility we put strong emphasis on our safety,
health and environmental responsibilities and have a solid record of continuous
improvement in all areas of our SHE performance. The employees work closely
with regulatory authorities to ensure that they continue to meet or exceed health
and safety legal requirements from their proactive programed includes risk
assessments were regular auditing, improved communication and regular
monitoring. Continued and ongoing reduction in the number of accidents and
injuries to employees mean that our performance in this area is better than average
for the chemical industry. Synthomer is also acutely aware of its environmental
responsibilities, and substantial investment has been made in their plant and
production facilities and they will continue to do. So the environmental
performance indicators show significant decreases in the Company’s
environmental burden in all areas such as energy consumption, emissions to air,
water usage, hazardous waste and non-hazardous waste. The company objective is
to keep driving down these safety and environmental indicators, year on year. Not
only that the supplier warrants, represents and undertakes to the Company that it
will at all times comply with its obligations under REACH define that any
equivalent regime operating in any relevant jurisdiction. The Supplier further
agrees that all the costs of such compliance will be its responsibility to the extent
permitted by law.

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CONCLUSION

Efficient material and supply chain management is crucial for the success of
any small scale manufacturing & fabrication project and can be the deciding factor
between a successful project and a project full of delays and claims. Better material
management methods and decision models are needed to improve the electrical
industry current practices, thus increasing efficiency and minimizing costs. An
effective supply management system is essential for managing efficient material
management to avoid material shortages, misplacements, loss, and theft which
might result in increases in crew idle times, loss of productivity and delay of
activities. The primary goal is to have the material needed, in the amounts needed,
with the quality required, and the time that they are needed. An integrated
approach for material procurement provides better decisions on what to order, how
much to order and where to deliver. Future research will be needed to develop a
more complete framework integrating other decisions needed in areas such as
supplier selection and preliminary material scheduling during the prefabrication
phase. A fully integrated approach will better improve communication and
minimize gaps in information flow among all the parties and departments involved.

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REFERENCES

1. W.J. Hopp and M.L. Spearman. Factory Physics: Foundations of

Manufacturing Management. Irwin, McGraw-Hill, 1996.

2. Y. Narahari and S. Biswas. Supply Chain Management: Models and

Decision Making.

3. David Simchi Levi, Philip kaminsky, and Edith Simchi Levi. Designing

and Managing the Supply Chain: Concepts, Strategies, and Case Studies.

Irwin McGrawHill, 2000.

4. Ram Ganeshan and Terry P. Harrison. An Introduction to Supply Chain

Management

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