Logistics/SCM Inventory and Distribution

Scenario:

In early 1975, brothers John and Michael Phillips founded the Stone Horse Supply Company. John and Michael, both horse riders and horse owners, had developed a horse

feed to keep their own horses healthier and happier and found it in demand from other locals and neighbors. In response to that growing local demand, John and Michael

converted their small home operation into a rented building in town and went forward with the business of manufacturing and selling specialized horse feeds.
Through the late 1980s and throughout the 1990s, the Rock Horse Food Supply Company enjoyed modest prosperity, providing niche products to the local area with their

products selling in most of the nearby counties. However, in early 2006, the situation began to dramatically change. In early 2006, John and Michael were contacted by

representative of the largest chain of stores in the region. One of the officers of the large chain was a horse owner and had been buying the special horse feed for

his horse. The officer felt that because she enjoyed the product so much and knew that other local customers had used the product and perhaps the product could have

success on a statewide or even a national scale.

Since its onset, John and Michael had run their business on virtually a manual basis. Suppliers were mostly local with sourcing decisions based on the supplier’s

proximity. Forecasting and ordering from suppliers were completed through phone calls and faxes with new orders based on manual counts rather than any systematic

process. Stone Horse Supply Company often found itself with either excess material or expediting material in from suppliers at the last minute to keep from missing a

customer deadline. Likewise, Stone Horse Supply Company was in the same facility it had started in, a smaller facility that had an unusual layout that John and Michael

had made minor modifications to through the years to adapt to problems encountered during those years.

While John and Michael were excited about the prospect of the company and its product becoming a mainstream product with vastly increased sales, they both knew that

they were already struggling to meet current customer demand and that the current methods used to run the company would be insufficient as it entered this next phase.

More specifically, John and Michael were concerned about the company’s ability to order and maintain the correct inventories to meet the new sales projections or even

if many of its suppliers could meet the higher volumes. John and Michael also were concerned about how they would get the materials to Stone Horse Supply Company

because they currently used a single company truck to pick up most of the local materials. Finally, John and Michael were deeply concerned about inventory levels and

the cash required maintaining those inventories because they were already experiencing excess cost and issues in this area.

Having decided to move forward, John and Michael’s company faced many questions regarding the new sales opportunity. Both John and Michael knew that while the

technology they had to offer was superior to any other product of that type currently on the market, they also knew their company needed help in developing a supply

chain strategy to ensure that this fantastic new sales opportunity did not overwhelm the company and end in failure.

Your task starts with assisting John and Michael with an assessment of their current and desired situations. You will follow with assisting Stone Horse Supply Company

in developing a supply chain that will support its future operations while also knowing that now that John and Michael’s product is going mainstream that there is

great likelihood that other competitors will follow and that any strategy must address the future competitive landscape of the company.

Required Task
Using the Library, Internet, or any other available materials, explain what a supply chain is and discuss the importance of a company having a supply chain strategy.

Identify at least four key drivers of any supply chain strategy and discuss why each is an important ingredient to a supply chain strategy. Cite an example of a

company that has used its supply chain as a competitive advantage and explain how. Be sure to reference all sources using APA style.

Please take note that your objective is to-
-Identify the strategic role of the supply chain.
-Describe key drivers of supply chain performance.
-Apply research in the latest supply chain, production operations, logistics, and manufacturing management to a real world problem.