After reviewing Module Two’s resources, consider what balance can be struck betw
ID: 399276 • Letter: A
Question
After reviewing Module Two’s resources, consider what balance can be struck between growing demand for goods and the demand to perform as a sustainable operation. In your post, discuss the impact that freight movement has on the environmental and financial sustainability of a supply chain. Considering how congestion can affect the effectiveness of a company’s supply chain, what options would you recommend to improve freight sustainability and why?
Reading and Resources
https://www.epa.gov/air-research/research-near-roadway-and-other-near-source-air-pollution
Explanation / Answer
here is a need of proper demand planning to perform a sustainable operation. This is possible if planner consider all possible factors (such as season, festival, competition etc.) that affect the demand. If planner fails to consider any unusal factor which causes rise in demand, then whole supply chain of the organization gets affected.
Sudden rise in demand decreases the efficiency or usage of truck loads. Because of which the the cost of freight increases. Organisation has to bear the extra cost, if it cannnot increase the end price on customer to sustain in market. More vehicles are needed to be used in such situation which causes increase in non renewable resources like petrol and diesel. Rise in number of vehicles will cause rise in air pollution.
Congestion is caused if the number of orders are more than that of capacity of servicablity of an organisation. Organisation gets more orders in less time . The time to service is constant. The organisation has to compromise on its cost , quality and service in such situation. Then the organisation may fails to satisfy end customer.
For e.g..
A wholesaler supplies refrigerators to a retailer. If sudden rise in demand for a particular brand because of its advanced technology can increase demand and it causes wholesaler to plan and get the required products on high priority. The lead time to supply product to end customer increases. Both wholesaler and retailer cannot able to fill the orders in right time.
The options that an organisation has in this case is
1) To calculate the lead time with buffer. The same has to be communicated to end customer in case there is rising demand.
2) Contingency plan has to be created by planner by considering all possible unusual factors that will trigger demand. Then he has to order stocks (Using EOQ mdel). Simultaneously planning of freight has to be done accordingly.
These options will cause an organisation to have safety inventory and the organisation will be prepared with operational plan. So congestion will not occur and the balance in demand and supply will be created