Global Supply Chain Management Issue: Long Lead Time and Order Fulfillment Issues at Oryx KBM

Long Lead Time and Order Fulfillment Issues at Oryx KBM
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Table of Contents  Introduction  3 Organizational Background  3 Current Operations and Supply Chain Management System   4 Problem Statement  6 Long Lead Time  6 Order Fulfillment  6 Methodology  6 Analysis and Discussion  7 Conclusions, Recommendations, and Action Plan  12 Implement ERP System  12 Direct Deliveries to Clients 13 Action Plan  14 References  15
Long Lead Time and Order Fulfillment Issues at Oryx KBM
Introduction
Supply chain management remains a fundamental aspect of organizational success, especially in today’s changing and volatile business environment. According to Hugos (2018), supply chain management helps firms balance differing supply chain requirements that, when taken individually, are often conflicting. For instance, high customer service levels require high inventory levels, while high operational efficiency requires low inventory levels. These are conflicting requirements that call for the effective supply chain management. In addition, companies must ensure that their supply chains are flexible and responsive to the needs of the customers at the end of the supply chain (Langley et al., 2021). Failure to do so can contribute to customer dissatisfaction. However, many issues arise in the supply chain and companies must constantly make decisions on production, inventory, location, transportation, and information. This paper explores the supply chain management issues facing Oryx Kuwait Building Material (KBM) Company.
Organizational Background
Oryx KBM is a Kuwait-based established in 2017 as a subsidiary of Oryx Holding. The company primarily deals with the supply of building materials for Asphalt plants, Ready Mix, and Construction projects. Oryx KBM is approved by relevant authorities including the Ministry of Defense, the Public Authority for Works and Transportation, and the Ministry of Public Works. It is the company’s ambition to distinguish itself in Kuwait’s construction industry by providing its clients with quality products at stable prices while at the same operating at high-efficiency levels. The company not only meets governments’ standards but also the standards of ASTM International, a global body that develops technical standards for various materials, including those offered by Oryx KBM. Quality control is a key part of the company's supply chain, as the company has in place a laboratory for quality testing. The company's products are also subject to testing by government laboratories.
The company's mission is to assist innovators in the country by maintaining a steady supply of quality products that meet the expected requirements and standards. Oryx KBM sees to it that its products are obtained from reliable and secure sources to ensure its clients, which include the government and private and public sector companies, develop world-class infrastructure. Some key core values that guide the company's operations include integrity, compliance with international safety policies, cooperation, efficiency and reliability, and respect for the environment and stakeholders.
-76200352425Transport logistics by a trading company Stevedoring company at Shuaiba Port coordinates offloading Quality assurance is conducted by Oryx Trading company also coordinates shipping and stevedoring 3PL Company transports materials to company’s warehouseManufacturers/Crushers at FujairahStockyard in Sakamkam PortStockyard in Shuaiba PortOryx warehouse in Mina AbdullaOryx’s Clients3PL Company ships products to clients Oryx’s flow of goods 0Transport logistics by a trading company Stevedoring company at Shuaiba Port coordinates offloading Quality assurance is conducted by Oryx Trading company also coordinates shipping and stevedoring 3PL Company transports materials to company’s warehouseManufacturers/Crushers at FujairahStockyard in Sakamkam PortStockyard in Shuaiba PortOryx warehouse in Mina AbdullaOryx’s Clients3PL Company ships products to clients Oryx’s flow of goods Current Operations and Supply Chain Management System
Through the support of multiple quarries in the United Arab Emirates (UAE), Oryx KBM supplies up to 9.5 million metric tons of quarry products annually. Oryx’s supply chain system is characterized by sourcing products from Fujairah in UAE and transporting them to Kuwait to sell to clients in the country. The firm enters into an agreement with manufacturers in Fujairah regarding the specific quantities it will require for the following month. This lead time is often long and poses a key supply challenge for the company. The firm also enters into a contract with a trading company in Kuwait to facilitate logistics from the manufacturer to the stockyard in Sakamkam, near the port. The trading company is also responsible for making arrangements with charters to schedule a ship and facilitate stevedoring services to handle and deliver the materials to Kuwait. Once the materials reach Kuwait, Oryx’s arrangement with the stevedoring company in Shuaiba port allows the offloading of materials from the ship. Another player in Oryx’s supply chain is a 3PL company responsible for transporting the materials from the port to the company’s warehouse in Mina Abdulla.
The Mina Abdulla warehouse is 40,000 square meters in size and can hold up to 180,000 metric tons of materials. In essence, warehousing is a key part of Oryx’s supply chain process. According to Wisner et al. (2023), apart from allowing faster and frequent delivery of goods, warehouses help control the level of services provided to customers. Once the materials are in Oryx’s warehouse, the company carries out a comprehensive quality assurance process to ensure the quality is maintained before being sold to customers. A 3PL company is responsible for delivering the products to customers, which sometimes results in unfulfilled orders.
Problem Statement
Long Lead Time
One of the key SCM challenges facing Oryx KBM is long lead time, contributing to poor supply chain responsiveness. According to Wisner et al. (2023), supply chain responsiveness is the ability of a firm to meet customers’ needs by meeting the quantity requirements within the expected lead times without compromising the quality of customer service. Poor supply chain responsiveness hinders a firm’s ability to meet changing demand and variability as well as potential uncertainties along the supply chain. At Oryx KBM, longer lead times stem from the complex production processes faced by manufacturers (crushers). In addition, the specific standard requirements in Kuwait contribute to longer lead times on the manufacturers’ side.
Order Fulfillment
Companies that use 3PL providers have limited control over the tasks, and as a result of this loss of control, they end up with unmet expectations (Sanders, 2021). For instance, the use of 3PL providers at Oryx KBM has contributed to order fulfillment delays because the 3PL company cannot deliver clients' orders on time. At Oryx KBM, clients make orders one day before the expected delivery time, and the 3PL company is unable to deliver the orders on such short notice. This is also a key problem in the sense that consistent failure to fulfill customers' orders can jeopardize the company's image, meaning that important business can be lost to competitors.
Methodology
Based on the company's current processes, two major challenges in the supply chain were identified: long lead time and problems fulfilling orders. The paper thus seeks to examine these problems using supply chain management concepts and evaluate the extent to which they hamper the company's operations. The questions that this research aims to address include:
* To what extent is the long lead time affecting the company's performance?
* Is the order fulfillment issue a major problem for the company?
* What systems/processes can be implemented to address these issues facing the company?
Understanding and solving these problems will be essential in ensuring the sustainability of the company in the future. The Supply Chain Operations Reference Model (SCOR) is further utilized to understand which processes or part of the supply chain is experiencing a problem and what can be done to ensure efficiency.
Analysis and Discussion
SCOR is a key supply chain management model that can be used to understand the challenges experienced by Oryx. According to Qorri et al. (2018), SCOR is one of the supply chain frameworks that have been implemented the most across industries. The model is characterized by five phases that are integral in the process of meeting customer demand. These phases include plan, source, make, deliver, and return.
The planning phase is the most important one in the framework, and this is where Oryx is lacking. As informed earlier, the company makes orders to the manufacturer one month in advance, meaning it has little time to adjust to demands. In the planning phase, an organization is supposed to strategize for demand and supply, establish and communicate plans for the supply chain, set business rules, collect data, and meet regulations and transp...