Supply Chain Management - Tasty Treats – Case Study Example
What recommendations should Rachel make in her presentation to Tasty Treats senior management? Rachel should give advice that can help the business solve the challenge of how much stock to order from their suppliers. She should propose introduction of a system that gives Tasty Treats a real time analysis of stock levels. This would involve the introduction of computerized systems, such as QuickBooks, which provide an easy way of assessing stock levels. Such systems indicate the amount of stock at hand at any time, thus alerting the supply department of the need to make more orders when the stocks approach the reorder level. A just in time stock system would also minimize the levels of stocks that would lead to excessive holding costs. A reduction in holding costs minimizes the expenses of the business, which translates to a better bottom line, and more capital.
The management of Tasty Treats faces a challenge of realizing the importance of high service levels, and Rachel should highlight the integral role it plays in business. A high level of customer service, for instance, ensures that the business does not receive any stock outs, leading to customer satisfaction. Therefore, she should insist on Tasty Treat offering their customers impeccable service. Such service draws more customers to the business, thus increasing the average sales. An increase in sales would result in greater profits for the business. More to these, excellent customer service distinguishes an organization from competitors, leading to a competitive lead in the industry. Therefore, she should insist on a 99 percent service level for Tasty Treats.
Tasty Treats faces a problem of not taking advantage of discounts offered by suppliers. If the business works at achieving a high customer service level, the company’s sales ought to increase. Consequent to these, Tasty Treats would be compelled to order more, thus take advantage of available discounts from suppliers. The discounts help in lowering the ordering costs, thus releasing substantial finances to other activities.