Organizations use different inventory types depending on the causes of imbalance that occur between supply and demand rates. Decoupling inventory is used to enhance the independence of processing centers and departments (Slack, Chambers & Johnston, 2010, p. 375). When using this type of inventory, different processing units should have similar processes. Therefore, these areas are designed to have independent processes, and the operations within one area do not influence the operations in another area within an organization. Departments are given the necessary processing resources based on their task schedules. Processing centers set processing time to optimum because it is not affected by factors within other areas (Slack et al., p. 375). Therefore, previously coupled tasks would be decoupled so that each department would be assigned particular jobs to process. Processing stages are also decoupled within independent processing areas when synchronizing processes are impossible to actualize (Slack et al., p. 376). A series of processing stages is planned well so that they ensure efficient workflows. For example, if stage A feeds stage B and processing, stage A has to accumulate an adequate amount of semi-finished products to meet stage B requirements. This is particularly important in peak times of product processing.
Once managers identify the priority of tasks, processing starts, and work batches would queue awaiting their processing time. Collections of work would be given priority, depending on how they are required in the market. For instance, if product A is in short supply in the market, and customers have placed huge orders, the management would prioritize the processing of this product. On the other hand, products that are inadequate supply and those that have small orders would be processed last in decoupling inventory. This arrangement would ensure that there is a balance between the rates of supply and demand of a product.
Specialized equipment is required for the processing of products within departments. The equipment implies that an organization would spend much money on processing. Also, specialized equipment requires better-trained personnel to lead the processing stages of various products. The requirements are likely to increase the cost of production. In my organization, the decoupling of processes has led to a significant increase in product prices. As a result, the affected products have decreased sales, and this has negatively impacted the organization. The rise in prices could have offered competitors a better avenue to position their competing products strategically.
Meeting requirements of end-customers
The supply chain should aim at satisfying the end-customer requirements by fulfilling the following: quality, speed, dependability, flexibility, and cost (Slack et al., 2010, p. 375). The quality of a product is determined by the quality performance of many operations within an organization that is involved in supplying it. If errors occur at many stages of the supply chain, the quality of a product can be compromised (Slack et al., 2010, p. 376). Speed in the supply chain refers to the pace at which an organization serves customers. Also, it could refer to the time taken by goods to move through the various stages of the supply chain. The management should focus on reducing the time taken to serve customers and for goods to move through the supply chain. The government should concentrate on assuring customers’ dependability by ensuring that ordered goods are delivered in time. The overall costs incurred in the supply chain should be minimized so that customers can buy goods at a low price. An adequate supply chain that aims to satisfy customer needs should be able to deal with disturbances and changes. If management addresses the five objectives of the supply chain, then an organization could have happy customers who would be loyal and do business with the organization for a long time (Slack et al., 2010, p. 376).
A common and central goal
Satisfying the end-customer is a common and central goal of the supply chain of all organizations across the world (Slack et al., 2010, p. 375). Workers at every stage always consider whether their activities would result in customer satisfaction. All business aspects in a supply-chain context share a margin for the value they add to a customer’s product (Slack et al., 2010, p. 375). Therefore, because each operation is benefiting from a product sale, all processes should focus on delivering high-quality products that would satisfy the needs of end-customers (Slack et al., 2010, p. 375). To illustrate the crucial roles of various supply chain operations, let’s think about a business that has received 50 orders, 40 of which were produced and delivered to customers on time. The remaining ten orders were not accepted by end-customers as promised by the business. Also, 120 customers could have requested the service, 20 of whom were not sure whether the company could deliver, 30 of whom did not find the right products in the business, and 20 of whom felt that the place was offering the products at very high prices. This illustration supports the idea that it would be critical for the supply chain to supply customer needs at every level of production.
Slack, N., Chambers, S., & Johnston, R. (2010). Operations management (6th ed.). Essex, England: Pearson Education.