exercise 7 supply chain management

Allen Flavors usually acts as the second tier supplier. The company, specifically the purchasing agent, source raw materials such as vitamins, teas, fruit concentrates, and chemicals from other suppliers and growers. These are used in manufacturing and blending at Allen Flavors’ plant. Allen Flavors’ circumstances are unique as its path to the final customer may vary with each of their customers. Some customers are distributors or wholesale suppliers. Some customers sell directly to the consumer such as a number of coffee flavor customers. This would mean, the material is going from the supplier to the retail facility where it is added into their product and sold to the consumer. In most cases, the blended vitamins and flavors leave Allen Flavors and ship to the co-packer’s warehouse. From there they usually go directly to the retail facility or a warehouse waiting to be ordered.
The performance of Allen Flavors as far as quickly getting material out to their customers also varies. Some items are make to stock, although there are probably only about 300 items out of thousands that are make to stock. The standard lead time from Allen Flavors to bottling warehouses is 14 days plus shipping. This may also vary depending on the availability of raw materials, but for the most part this lead time is feasible. Regarding ‘delivery’, Allen Flavors is probably on time 95% of the time. As mentioned the lead time is 14 days plus shipping. Many customers do not allow for the full lead time when they are in a rush for product. Their requests are always considered, but not always possible. Flexibility once the order is placed is not always possible. Once the product has been run, it is usually not possible to increase or decrease the order. The production schedule is set a week in advance and must be adjusted to squeeze in an extra batch when an order is increased. Allen Flavors always tries to accommodate these requests however. Again time management, especially regarding the shelf life on inventory is carefully monitored by the inventory control manager. Cost is also carefully monitored by the purchasing agent and vice president of technical services.
Allen Flavors would probably benefit from process simplification. As it has grown, many customers have different paths followed regarding the supply chain. There are probably a number of ways this process can by simplified.