Atlas Tire is a company with a century trading history. It operates either independently or with partners on the world market. Moreover, the authority of the company tries to advance business strategies and approaches to build critical capabilities, collaborate with other organizations, and link key activities. The design of superior supply chain organization is the staple strategy for company’s development.
Walter V. Harrison, the executive director of Atlas and Rubber Company, made his best to develop, enrich, and advance the company. In order to transform Atlas Tire, Harrison improved leadership turnaround in the company. He insisted on providing several principles of grow for the company. The principles included qualified and experienced workers, cost reduction, brand strengthening, cash flow improvement, enhanced relationships with customers, and product innovation. Admittedly, all these changes increased Atlas Tire’s financial turnover and raised the company to an international level. Elaborating the company’s success, Walter Harrison paid a great attention to supply chain development. He considered that competitive advantage of supply chain would result in Atlas Tire’s benefit. Therefore, Michael A. Brogan, a new leader hired by Harrison, established building of the supply chain organization. The superior supply chain was aimed at bringing together functional and planning operations.
In order to advance the company, Harrison does his best. However, as a result of collaboration with other companies, it became vivid that Atlas Tire has some disadvantages to address. A supply chain consultant from partner companies was hired to serve as a coordinator of inventory management. Moreover, he had to coordinate quality improvement group as well.
Padraig O’Brien, an executive coordinator, investigated that the company’s distribution network has the following challenges and characteristics. First, the inventory analysis is provided using database tools and spreadsheets. Second, the transportation management utilizes decentralized approach. Third, the information technologies used are not visible, so they cannot reach the sale data or analyze support data. Fourth, the production scheduling is prepared by manufacturing group while forecasts are handled by sales group. Fifth, several different logistics providers control the distribution centers of the company.
The experts’ decision emphasized negative characteristics of supply chain and degrading flows control that impact the company’s potential to minimize inventory investment while optimizing customer service (Dooley, 2005). Therefore, there appeared two tasks. The first one was to maximize the flow of goods and products in the supply chain, and the second task was to gain greater control over inventory.
Maximizing the flow of products implies the complex usage of tools and processes to ensure the supply chain’s optimal processes of manufacture and distribution. In order to optimize the flow of products in the supply chain, a company must decrease direct and indirect alternate costs by concentrating on material, financial, and informational flows in purchasing, logistics, forecasting, and planning. There are few important elements that must be optimized in the supply chain with the product flow optimization being the most significant one (Entrepreneur, 2013). The seriousness of product optimization depends on geographical distribution of the activities that are performed to transform the product in some way. Mathematical optimization is applied to enhance the product flow in superior supply chain.
The best way to optimize the product flow for Atlas Tire is to forecast future inventory demand as accurately as possible. It is compulsory to account statistical trends depended on the previous investigations. The main advantage of this approach is the possibility to be applied to the data affiliated at high level. According to forecasted demand, Atlas Tire Company has to provide supply chain manufacture and distribution plans to meet the product distribution at the lowest price.
Solving the second task, it is compulsory to underline that inventory control is the key element in supply chain management. It is known that supply chain management helps to save costs mainly due to inventory reduction. The majority of inventory-reduction strategies in the supply chain are pursued by cost saving. Therefore, it is compulsory to understand the nature of product demand, supply chain capabilities, and inventory cost.
There are three major approaches to control inventory. First, a number of companies that are mainly processing raw materials do not actively manage inventory. The second approach is to monitor inventory levels by items. It is the most widely-used strategy to control inventory. The third approach depends on the manufacturers’ concentration with production scheduling. It means they use the flow management to control inventory. However, the inventory management is an important sphere for each company no matter what approach the company uses. It is significant to note that some companies deal with a secret issue. They involve extra inventory, so-called safety stock (Donovan, n.d).
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The best way for Atlas to solve its inventory issues is considering the fact that funds tied up in inventory could be beneficially spent elsewhere. It means that debt reduction, new product introduction, marketing and sales expansion, modernization, re-engineering, and acquisitions might be more urgent questions to solve for Atlas Tire.
The improvement group discovered that the company needs renovation to become an advanced and profitable chain on the market. Harrison, a chief executive officer, did his best to raise the company to the international level. However, his sacrificing efforts were not enough to ensure success. After a detailed examination, experts concluded that the company needs involving concrete business strategies to gain more control over inventory and optimize the flow of products in the supply chain. To develop the advanced logistical approach, a company must consider inventory cost, the nature of product demand, and supply chain capabilities. Moreover, the inventory availability provides the customer service. Thus, new optimization solutions for supply chain emerge to record and manipulate huge databases.