According to one cause of under-supply n timber products can be traced to a poorly structured supply chain network characterized by lack of communication and coordination between producers of sawmill timber products and end-users (p. 1). In the case of Pinafores, the company’s partners such sawmill producers, harvesters of logs and others who facilitate the process of harvesting logs, transforming them into timber products, packing and transporting are located in Finland while the retailers and consumers are in the United Kingdom.
The distance between the two locations may pose certain inconsistencies in communication of orders and demands which make the first phase f supply chain long and tedious. Secondly, Pinafores suffers high inventory because of the need for storing the products before they are transported to the actual market which is in another country. Pianoforte’s supply chain generally consists of 161 days of inventory which is more than the 20 days of actual activity time for each step in the supply chain process to be undertaken.
The high inventory will cause problems with the financial status of the company because products in inventory do not generate income and the binding capital in those inventories prohibits the company from investing in other projects that would gain actual return (1997). Finally, the company has long lead time of exactly 50 days with each step of the supply chain process contributing to the total lead time except warehousing. The primary cause of the lead time is the complex arrangement of suppliers, distributors, manufacturers and retailers involved in the company’s supply chain.
Different entities handle the harvesting of logs, processing them into timber, and transporting them to the second location which add conflicts to the entire process as these various entities have their own interests, targets and goals. 1995) claims that the organizations involved in a supply chain function independently. These organizations facilitate each of the typical supply chain functions such as planning, purchasing, manufacturing and distribution without intervention from the other players.
Thus, the possibility of customer satisfaction and more sales while manufacturers underscore enhanced throughput without much consideration of inventory or distribution capacities. Considering the abovementioned situations, Pinafores needs to strengthen integration and coordination in its supply chain network to address the three robbers.
