Supply Chain Management and Decision Making

In this case, the company needs to make the best decision concerning the restaurant operations, in order to main its reputation. Specifically, this paper will concentrate on the best decision a supply chain manager should make concerning the shipment of ovens replacement parts in Al Baik Company. Moreover, the paper will provide the in-depth computation and analysis on the factors to be measured while outsourcing in a company. The primary objective of any supply management is to increase profit, but maintain customers’ preferences and needs by minimizing cost. In this case, Al Baik needs to keep in mind, their customers’ requirements, by choosing the best option that will enhance organization profitability and considers customers requirement. As a result, the manager should ensure all current ovens are well examined to be in good condition in the next five days before the replacement parts are delivered (Livanis et al 2016).

The primary concern is to ensure the company does not incur losses in term of inefficient ovens and customers dissatisfaction. Using transaction cost economics the five-day shipping is the best, but the supply chain manager needs to engage other people while making the final decision. Mostly, they should invite the planning committee to decide and evaluate all profits and losses associated with choosing the best alternative of shipping. For example, there should be the possibility of adjustment if the need occurs. Besides, outsourcing will assist Al Baik to engage in variables that lead to cost-effective growth. Therefore, they can be able to access new technology, better services, and recommended equipment in the restaurants with no direct investment. In addition, I would advise Al Baik supply chain manager to use automation in order to eradicate and reduce all errors and hearten competence.

Automation assists an organization to increase its performances and provide ways to reduce supply chain costs by covering all process of shipping and receiving cargos (Livanis et al 2016). Importantly, a supply chain manager should be able to evaluate company performance to reduce the underutilization of assets and allocate ways to boost utilization. As a supply manager, the process, origin, and product to outsource should be attributed to organization goals and objectives (Livanis et al 2016). Furthermore, the selection of the area to outsource from should be influenced by cost-effective and the overall benefit to the buyer. Therefore, the selection of five-day shipping or two-day shiping can be difficult if profitability and cost-effectiveness are not considered. In addition, the selecting of five-day shipping of oven replacement parts did not consider the consumer point of view.

This scenario proofs that many outsource decision are made for the benefit of the organization, where customers have no visible or pronounced decision making, decision of outsourcing remains in the hands of supply chain managers. Besides, the decision of outsourcing can be explained by the company association with the ruling authority. For example, if Al Baik has a strong imprint with the ruling government of Saudi Arabia, its decision will be influenced, in such a way they can outsource from particular region under drawn rules and regulations (Davis‐Sramek et al 2017). In the case of Al Baik, if the government rules select two-day shipment, it will have no other option than to follow the stated law. Supply chain management is also associated with risk and uncertainty avoidance.