Inventory and Supply Chain Management

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One of the most important areas of focus in pursuing operational excellence is improving inventory and supply chain performance. In addressing the following questions, support your response with specific references to this week’s course materials.

Locate and post a link to a news story from the last six months published in The Wall Street Journal or another reputable source about an inventory or supply chain issue.
Briefly summarize the issue including what went wrong and the impact this had on customers.
What steps did the organization and/or its supply chain/logistics partners take to address the issue? What were the outcomes?
Given the information available at the time, what could have been done differently to mitigate the impact on the supply chain?

Sample Solution

News Story Link:

UPS Ground Delivery Faces Delays Amid Surge in Online Shopping – The Wall Street Journal ([invalid URL removed])

Summary of the Issue

In late 2021, UPS experienced significant delays in ground delivery services due to an unprecedented surge in online shopping.

The company struggled to keep up with the increased volume of packages, leading to delivery delays and customer dissatisfaction. Factors contributing to the issue included labor shortages, increased package density, and operational challenges in handling the influx of packages.

 

Organizational Response and Outcomes

UPS took several steps to address the issue:

  • Increased hiring: The company invested heavily in hiring additional workers to handle the increased package volume.
  • Operational adjustments: UPS implemented changes to its network operations, including optimizing routes and increasing the capacity of its sorting facilities.
  • Surcharge implementation: To manage demand and recover costs, UPS introduced surcharges for peak shipping volumes.

 

While these measures helped alleviate the situation to some extent, the company continued to face challenges in meeting customer expectations, and delivery delays persisted for a period.

Potential Mitigation Strategies

Given the information available at the time, UPS could have potentially mitigated the impact of the supply chain disruption by:

  • Anticipating the surge: More accurately forecasting the increase in online shopping volume could have allowed for earlier preparations, such as hiring additional staff and expanding facilities.
  • Diversifying transportation modes: Relying less on ground delivery and exploring options like air freight for urgent shipments could have helped alleviate pressure on the ground network.
  • Strengthening communication: Proactive communication with customers about potential delays could have managed expectations and reduced frustration.
  • Improving network visibility: Enhancing real-time tracking and visibility of packages would have provided customers with better information and allowed UPS to optimize delivery routes more effectively.

By implementing these strategies, UPS could have potentially mitigated the negative impact of the supply chain disruption on its customers and its reputation.

 

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