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Oper 8340 – Gogreen Global Supply Chain Management

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OPER 8340 – GLOBAL SUPPLY CHAIN MANAGEMENT

INDIVIDUAL ASSIGNMENT # 1

SUBMITTED BY

Marqus Collingwood

STUDENT ID: 7848524

SUBMITTED TO

MICHEAL KHUKTA

 June 12, 2018

GoGreen is a biofuel company which produces bioethanol in brazil and export to Portugal and different parts of Europe. As it is a huge company, several strategies and methods of supply chain management need to be implemented to prevent being stocking out inventory and to deliver goods to its customers within time which are productive and cost effective as well. A few of them include,  

MRP (Material Requirement Planning) which involves production planning, Scheduling and inventory control system required to manage manufacturing. GoGreen can use this method to improve its blending efficiency and can meet following objectives.

  1. Can ensure goods are available for production and delivery to customers.
  2. Maintaining less amount of material in the store
  3. Plan Purchasing and manufacturing activities and delivery schedules.

MRP helps to deal with problems such as what items, how many and when they are required.

 (JIT) Just in Time production model is a manufacturing method where the goods are manufactured as per the demand. There will be no surplus, overproduction of goods for further need. It is the ideal method of production for companies which have huge demands for their products. As European production of biofuels from Go Green is several million tons short of the amount required to meet its targets. There is a need to increase its supply and JIT is one of the best strategy to deal with.

In addition to following techniques, there are few categories in which GoGreen should follow standards which include,

  1. Inventory of initiatives
  2. Terminology
  3. Greenhouse gases
  4. Environmental aspects
  5. Social aspects
  6. Economic aspects
  7. Verification and auditing
  8. Indirect effects

Inventory stock outs are caused by different reasons such as, inaccurate data, inefficient product ordering etc. these may affect company’s performance adversely. GoGreen may overcome these problems if it can,  

  1. Use RFID (Radio Frequency Identification Tags) which allow to identify the stored products. By scanning these tags, one can know the left material in the stock at any time.
  2. Forecast demand which includes, creating a repeatable monthly process, integrating data from sales channels, determining what to measure and how often.
  3. Use a reliable order point formula which tells you exactly when you should you order more stock. (Average Daily Unit Sales x Average Lead Time in Days) + Safety Stock = Reorder Point
  4. Order safety stock inventory is a small, surplus amount of inventory you keep on hand to guard against variability in market demand and lead times. (Max Daily Sales x Max Lead Time in Days) – (Average Daily Sales x Average Lead Time in Days) = Safety Stock Inventory
  5. Use a Cloud based inventory system which track your inventory in real-time from anywhere in the world. You’ll know up-to-the-minute when stock is low or sales are high.

Inventory location for storing and distributing biofuel is also one of the key aspect for maintain optimum inventory levels. Few of those Inventory strategies involve,

  1. Maintaining central storage sites in Lisbon and distribution inventory sites in Germany, Slovenia and the Netherlands, from which blended fuel can be transported to fuel companies on demand
  2. Shipping raw bioethanol to storage sites in Europe and blending the bioethanol with petroleum products when demand from fuel companies in that country dictates additional supplies are required

The transportation of biofuel from inventory is not a thing to be taken for granted. The importation of biofuel is one of the important step in supply chain and selection of best and cost-effective transport mode for importing is always a difficult task.  Few of transport modes that are cost effective are mentioned below.

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