Availability and Quality of Suppliers

The purchase of raw materials is essential for processing nickel alloy and delivering it to customers. As a result, a tailored raw materials acquisition procedure that fits the present business climate is required.

Outlining the needs for the raw material acquisitions, evaluating the bids from various suppliers, choosing the most suitable supplier, and establishing the terms of engagement are the logistical procedures involved in the procurement of raw materials by Pro-vision LLC.

The amount of raw materials needed will depend on the ultimate needs, quality, and price. Following the determination of this data, Pro-vision LLC will ask various vendors for quotes. Potential suppliers of raw materials will be required to provide quotations. The company will have a strategy that will guide the selection of suppliers, and the selection will include screening the suppliers. The quotations will be scrutinized to ensure that the potential supplier has the capacity to deliver the required materials. The quotation that represents the best value will be chosen. The key competitive advantages that will be taken into consideration when determining the suitability of suppliers will include reliability, financial security, partnership, and service.

Reliability is a key aspect when vetting suppliers because any form of delays may adversely affect the manufacturing process and ultimately delay the delivery of nickel alloys to the consumers. Additionally, the quality of the raw materials has to be always of a high grade because poor quality raw materials may cause the company to lose its customers. The value for money will be determined based on the quality and capacity to deliver (Chamber of Commerce of Metropolitan Montreal, 2017).

An excellent communication approach and active service will also be a determining factor because all parts of the supply chain have to work in tandem. The financial position of the suppliers will be considered to be among the key competitive advantages because it will be an indicator of whether the supplier has the required cash flow to purchase and the deliver the necessary raw materials (Chamber of Commerce of Metropolitan Montreal, 2017).

The selected supplier of the raw materials will have to illustrate that they have previous experience working with nickel alloy manufacturers. Furthermore, the supplier will be provided with additional information such as lead-time planning, product liability, and charges associated with quality (delays and poor quality raw materials) among others. Detailed instructions regarding the supply chain of the raw materials and other specifications will also be stipulated. Finally, the scheduling, quality, payment, and technical issues will be finalized and the acquisition of raw materials process initiated.

Sourcing and Procurement Strategy

Nickel alloys find use in diverse applications such as components for jet engines. This is because the alloy has appropriate material properties such as magnetic properties, corrosion resistance, modulus of elasticity and thermal stability.

Nickel is derived from ((NiFe)9S9) ore, which is abundantly available in Madagascar. To derive nickel from the ore, the production process will involve disintegrating the ore in water. Subsequently, heat will be employed to remove sulfides from the rest of the minerals. Subsequently, silicon and iron will be removed to derive high purity nickel (Groover, 2002).

There are different forms of nickel alloys that Pro-vision LLC will manufacture based on the intended end use and customer specifications. The alloys will range from Nickel C, Nicrosil, Hastelloy, German Silver, Chromel, and Alumel. Therefore, to make the different alloys, the following additional raw materials will be required: aluminum, chromium, silicon, manganese, carbon, iron, molybdenum, titanium, tungsten, and copper (Helmenstine, 2017).

The procurement of the raw materials for nickel alloy production will be uncomplicated because nickel is among the key raw materials found in Madagascar, in fact in nickel is the leading mineral export for Madagascar representing 23% of the export earnings according to the Observatory for Economic Complexity (Simoes, 2017).

The nickel mine in Madagascar, which is of interest to Pro-vision LLC, is situated within the Analamay and Ambatovy deposits, which are about 128 kilometers from the capital city of Madagascar. The mine is strategically located in an area serviced by railroad and good road network. The transportation system will help to transport the purified nickel ore to the Toamasina port from where it will be loaded onto ships and transported to international destinations.

Another unique procurement feature in Madagascar is the fact that its nickel reserves are among the largest in the world; therefore, there will be no shortage of raw materials (Ambatovy, 2014).

The procurement strategy adopted that involves constructing the alloy processing plant close to the nickel ore site will ensure that there is optimization of production, and supply chain delivery of the output to the customers via the Toamasina port. Besides, Pro-vision LLC will enter into a long-term lease agreement with the government of Madagascar to ensure that the company has unrestricted and long-term access to the nickel ore in the Ambatovy mines. Other metals that are not locally available such as aluminum, chromium, silicon, manganese, carbon, iron, molybdenum, titanium, tungsten, and copper will be sourced from pre-vetted suppliers as discussed in the preceding sections. The adopted procurement approach will ensure that there are minimal delays in the supply chain and this will give Pro-vision LLC a competitive strategy.

Inventory Management Strategy

The inventory management strategy for Pro-vision LLC will comprise of eliminating all complexities associated with the supply chain. The second strategy will involve outsourcing some activities to the experts. For instance, transportation will be outsourced to DHL Company, which is a global leader in logistics management. The third strategy will involve the utilization of inventory tracking programs.

According to the findings published by the Chief Supply Chain Officer Insights (Gilmore, 2011), most of the companies have sophisticated supply chain systems. When the supply chain is sophisticated, it makes it difficult to keep track of inventories and manage the entire supply chain efficiently (Safrit, 2014). Therefore, to reduce the complexity of the system, all supplier activities will be monitored using the vendor management inventory (VMI) system and enterprise resource management software. Another approach that will be used to eliminate the complexity in the supply chain will involve combining the deliveries made by some suppliers so that the raw materials can be delivered in bulk. This will ensure that there is optimization of time in the nickel alloy production process. Besides, this approach will ensure that Pro-vision LLC is only directly dealing with a few key suppliers. For instance, instead of having five suppliers of iron, copper, and silicon, one supplier will be tasked with collecting the raw materials from the other four suppliers and delivering the materials to the processing plant. Additionally, this will ease the warehouse organization, shipment sorting, and the ordering of purchases.

The VMI and supplier networks will be one of the systems that will form part of the outsourcing. The VMI will enable third tier suppliers to remotely deliver inventory to any location and ensure that there is an adequate supply of components required for each phase of the alloy production. Therefore, employees within the plant can focus on the most important tasks such as the refinement of the nickel ore. Outsourcing will enable managers to have an easy time supervising the staff and the entire supply chain process. This will enable the company to achieve lean manufacturing objectives. By the time that the on-site raw materials are exhausted, the system will ensure that the selected supplier will be in the process of shipping in the next batch of raw materials to avoid any production downtime and stock outs. The VMI will help to track raw material usage and production trends, and this will facilitate the on-time delivery of raw materials and all other necessary inputs by suppliers.

The last strategy will involve the employment of optimization tools for inventory management such as state of the art materials handling and inventory software that takes into consideration the supply and demand variability, production uncertainties, production downtime, among other key aspects that influence the manufacturing process. This will enable Pro-vision LLC to determine the most appropriate rate of raw materials utilization. Therefore, since the company will be able to lower the risk of under supply or over supply of raw materials, the investors and the management will be able to reduce the cost of the initial investment associated with procurement of the materials handling the software.

Among the key competitive advantages derived from using the software is that it has, inbuilt algorithms that enable the user to accurately predict production outcomes based on programming. This eliminates the need for manual labor, which is often prone to error.

Warehouse Distribution Center Strategy

To create a working and effective warehouse distribution strategy, the following approaches will be adopted: all items in the supply chain will be tracked, and processes will be automated. Moreover, data will be synchronized, and vendor compliance programs will be initiated, the picking process will be streamlined, and the major focus will be on constant restocking of the warehouse (Bisk Education, 2017).

Tracking of all items is crucial because it will ensure that all raw materials, processing

chemicals, and equipment are stored in the right location. All destination sites will be scanned, and the materials in the warehouse will be placed close to the pickup location. Besides, fast moving materials will be placed in areas where it can be easily accessed.

The automation of all data processes will ensure that there is increased accuracy and productivity in the warehouse because computers can store multiple data and eliminate redundant labor. Besides, radio frequency identification tags and bar codes and will help the warehouse team to maintain real time information concerning the warehouse stock. Additionally, the bar coding will help to eliminate the errors associated with manual data counting that is often undertaken when receiving goods. The automation of processes will enable Pro-vision LLC to maintain a historical account of all warehouse processes because automated data is backed up by cloud storage. Unlike manual data, which is stored within the company’s premises and is difficult to retrieve when needed (Bisk Education, 2017).

The warehouse management system will be used to synchronize all information and processes in the warehouse to enhance the data integration and the visibility of the organization. SKU’s will be tracked using the most suitable scan validation methods. The anticipated outcomes of all these processes are that warehouse operations will become more visible and open, which means that all employees can access all the information when they need it.

Vendor compliance will be implemented via the following approaches: suppliers will be required to avail key information such as prior shipment notifications, proper labeling of raw materials with a bar code, or RFID labels in all in bound shipments. The vendor compliance best practices adopted will require suppliers and distribution centers to share information and expertise on matters concerning procurement and merchandising. To achieve this objective, Pro-vision LLC will have a vendor compliance manager to ensure that all supplier activities are in line with the procurement, inventory, and warehouse strategy (Bisk Education, 2017).

Robotic equipment will be installed as part of the warehouse automation process. Robotics will reduce the need for physical labor while at the same time facilitating the movement of large volumes of materials around the warehouse. The final nickel alloy will pass through the automated taping/sealing stations. This will reduce the human contact, which is often the cause of theft and loss of ready to sell nickel alloys. The cross-docking approach will be used to ensure that the processed nickel alloy is shipped out as soon as there is enough stock to fill a shipment. This will help to reduce the charges associated with handling extra products.

The strategies mentioned have both advantages and disadvantages, the advantages will be in the form of the cost savings by automating the processes. The automation will also reduce the cases of theft and human errors that are far too common when human labor is involved. Nonetheless, automation will present the company with the challenges of having to invest significant resources in automation machinery and software in the first phase of the project. Cross docking will also make it difficult for the company to enjoy economies of scale associated with transporting large shipments to the customers.

Nonetheless, the warehousing approach selected will enable the company to have a competitive edge when competing with other established mining and processing companies in other regions of the world such as Norilsk Nickel in Russia and Vale SA in Brazil.

Customer Relationship Management

To implement the consumer relationship management, Pro-vision LLC will be required to purchase and install a CRM system. Currently, the CRM systems available in the market include SugarCRM, NetSuite, and Salesforce (Robles, 2015) among others. The adoption of the CRM system will enable Pro-vision LLC to be efficient because employees in various departments will be able to collaborate on diverse tasks. Besides, the CRM system will facilitate the management of data. In specific, the CRM system will enable the customer service department to be more adept towards consumers’ needs by eliminating all inefficient processes. This will be achieved via the combination of various processes such as marketing, which will help the company to interact with consumers on a higher level. The adoption of the CRM system will enable the company to take stock of the customer lifecycle and use the resulting information to enhance the consumer experience (Robles, 2015).

Besides, the CRM system together with the installed third party applications will enable the company to visualize and analyze the trends concerning consumer purchases and preferences. Apart from eliminating redundancies, the CRM system will enable the company to increase its level of accountability to customers. This is because the CRM system helps the management to allocate duties and responsibilities to employees who interact with customers. Therefore, if there are any failings on the part of the company, the management can quickly identify the employees that were responsible. The enhancement of consumer experience will enable the company to record better sales and profits, which will allow Pro-vision LLC to have a competitive strategy because it can use the additional resources to create a niche market (Robles, 2015).

6. Performance Management Strategy

The performance management strategy will encompass planning, monitoring, acting, and strategizing. A performance management strategy is a crucial tool in tracking and quantifying changes in the supply chain. This is because it is easier to take stock of quantifiable changes. The adoption of the performance management strategy will enable the company to develop clear goals and reward employees who have made commendable achievements. Managers will use the performance management strategy to set tailored targets to each department, and this will enhance the overall efficiency of the company in achieving its supply chain objectives.

On the other hand, employees will use the performance management strategy to work towards the achievement of the supply chain objectives that are of utmost importance to the company. The goals will include increasing the company’s market share in the nickel alloy industry. Performance metrics are a crucial component of the performance strategy. Performance management will enable Pro-vision LLC to keep track of the demand of nickel by following the four-phase cycle of planning, strategizing, monitoring, and execution. The performance management strategy will enable Pro-vision LLC to have a competitive advantage over its competitors because the company’s operations will be more efficient and there will be minimal delays in production, raw material, and nickel alloy delivery. In addition, the company will be able to streamline its operations, and this will result in better revenues due to the enhancement of the customer’s experience.

Conclusion

In light of the information presented in the above sections, it has been observed that the acquisition of raw materials is one of the key requirements in the nickel alloy supply chain. This is because raw materials form part of the components needed in the processing of nickel alloys by Pro-vision LLC. Therefore, there is need to develop a customized raw materials acquisition process that suits the business operations. The logistical steps involved in the purchase of raw materials by Pro-vision LLC will include outlining the requirements for the raw materials that need to be purchased, analyzing the bids from potential suppliers, selecting the most suitable supplier and determining the terms of engagement.

The following additional raw materials were identified as key components in the manufacture of nickel alloys; aluminum, chromium, silicon, manganese, carbon, iron, molybdenum, titanium, tungsten, and copper (Helmenstine, 2017). The procurement of nickel ore in Madagascar will be easily done because the country has large reserves of nickel.

The inventory management strategy will involve eliminating all complexities associated with the supply chain, outsourcing some activities to experts such as logistics to DHL and utilization of inventory tracking tools.

To create a working and effective warehouse distribution strategy, some of the approaches that will be adopted will include tracking all items in the supply chain and automating the processes. Moreover, data will be synchronized, and vendor compliance programs will be initiated. The packing process will be streamlined, and emphasis will be made on constant restocking of the warehouse (Bisk Education, 2017).

Pro-vision LLC will be required to purchase and install a CRM system such as sales force. The adoption of the CRM system will enable Pro-vision to be efficient because employees in various departments will be able to collaborate on diverse issues. In addition, the CRM system facilitates the management of data.

Recommendations

It is recommended that Pro-vision LLC should diversify its operation from the mainstream nickel alloy production. One of the potential and key areas for diversification is the manufacturing of jet engine components and other nickel products. This will ensure that the company has a diversified product offering that will cushion the company when there is a decline in commodity prices in the global markets.

Another recommendation is that Pro-vision LLC should apply for quality management systems and supply chain certification standards from leading international organizations such as ISO and Bureau Veritas. This will ensure that the company is operating according to industry best practices. Besides, certification will enhance the reputation of the company globally, and this will improve consumer confidence in the nickel alloys. If the recommendations are adopted, the company will be able to have a competitive advantage in the nickel alloy supply chain, which will translate to higher profit margins and optimal production capacity.

References

Ambatovy. (2014). Mine Site. Retrieved July 13, 2017, from http://www.ambatovy.com/docs/?p=377

Bisk Education. (2017). Warehouse and Distribution Center Best Practices. Retrieved July 13, 2017, from https://www.michiganstateuniversityonline.com/resources/supply-chain/warehouse-and-distribution-center-best-practices/#.WWdK8-lLfIU

Chamber of Commerce of Metropolitan Montreal. (2017). Supplier selection process. Retrieved July 12, 2017, from http://www.infoentrepreneurs.org/en/guides/supplier-selection-process/

Gilmore, D. (2011). Five Strategies for Improving Inventory Management Across Complex Supply Chain Networks.

Groover, M. P. (2002). Fundamentals of Modern Manufacturing (2nd ed.). John Wiley & Sons.

Helmenstine, A. M. (2017). List of Metal Alloys From A to Z. Retrieved July 12, 2017, from https://www.thoughtco.com/list-of-alloys-by-base-metal-603716

Robles, P. (2015). The five biggest benefits of CRM systems. Retrieved July 13, 2017, from https://econsultancy.com/blog/66287-the-five-biggest-benefits-of-crm-systems/

Safrit, M. (2014). Inventory Management Strategies That Work. Retrieved July 13, 2017, from https://falconfastening.com/lean-learning/inventory-management/3-inventory-management-strategies-that-work/

Simoes, A. (2017). Madagascar. Retrieved July 12, 2017, from http://atlas.media.mit.edu/en/profile/country/mdg/