Hyundais Supply Chain Management

Hyundais Supply Chain Management 1.0 Introduction Supply chain management is concerned with the management of upstream and downstream interactions and activities between various entities/organizations in order to maximize the value creation to the benefit of the customer (Christopher, 2005). Globalisation has resulted in supply chains crossing international borders thus leading to greater exposure to disruptive risks. Hyundai Motors is an automaker with a strong global presence. Its supply chain entities, from manufacturing to retail, include external suppliers; plants manufacturing intermediate and/or finished products; distribution centers; demand zones; and transportation assets. Between 20th June and 6th August 2003, there was a major disruption in the companys ability to deliver passenger cars to its customers due to a labour strike at its biggest production plant. Although labour strikes are highly probable, the duration of this strike (47days) was highly unforeseen. The timing was also critical as the labour union targeted the strike to a time when domestic sales were expected to rise due to newly implemented excise-tax cuts for new car buyers by the Korean Government. The impact of the disruption was thus highly significant; a staggering $1.1billion in lost sales together with other unquantifiable losses, as a result of the inability of the supply network to remain completely resolute during the strike. 2.0 Literature Review Supply chain disruptions are the outcomes of the materialization of threats which results in a serious halt of the operations of one or more production or distribution entities and subsequently affects other entities/nodes within the supply. Handfield et al. (2008) suggest that the likelihood of disruption in: * Global sourcing supply networks; characterized by workforce instability, customs regulations, potential for terrorism, natural disasters, number of transfer points etc. * Supply networks with constrained dependencies; characterised by limitations on number of sources, uniqueness of sourced parts etc. Kleindorfer Saad (2005) classified sources of disruption risks into three groups: * Operational contingencies; such as equipment malfunction and systemic failure, loss of a supplier and human centred issues like labour strike and fraud. * Natural disasters; such as hurricanes, earthquakes and storms. * Terrorism and political instability. Sheffi (2005) suggests that in order to build resilience against disruption risks into a supply chain, each type of disruption should be anticipated and guarded against individually. Handfield et al. (2008) suggest two types of resilience: proactive e.g. flexibility, in which the supply chain is re-routed away from the anticipated source of the disruption; and reactive e.g. redundancy and responsiveness, in which supply chain resources are coordinated to respond to a supply chain disruption. 2.1 Global Operations (Hyundai Motor Company) As at 2003, Hyundai Motor Company (HMC) was the seventh largest automobile manufacturer in the world in terms of volume. HMC had 3 manufacturing plants and 8 CKD assembly plants. Hyundais target markets were classified into 3 types: advanced; emerging; and developing markets. Table 1.1- Hyundais Global Operations Plant Type Location Regions Supplied Type of Markets Supplied Manufacturing Plants S. Korea Domestic North America Advanced China Domestic Australia Emerging India Domestic Emerging Assembly Plants Egypt Africa Developing Pakistan Middle East Developing Malaysia Asia Developing Russia Eastern Europe Emerging Taiwan Asia Developing Indonesia East Asia Developing Brazil South America Emerging Turkey Western Europe Middle East Advanced The company located manufacturing plants in the emerging markets such as China and India, in order to meet growing domestic demand as well as take advantage of relatively low labour costs in the countries. HMC however did not have any manufacturing plants in the advanced markets but relied on imports to meet demands in the zones. In order to compete with established automotive manufacturers in the advanced markets, especially the United States of America, HMC focussed its strategy on improving quality and maintaining low costs using TQM and supply chain strategies such as just in time and assembly postponement. HMC operated the largest integrated automobile plant in the world, the Ulsan plant located in South Korea, with an output of about 1.6 million units annually, in form of cars and Completely Knockdown (CKD) kits. The plant had a co-located privately owned port which made export convenient. In order to respond quickly to specific customer demands, at minimal costs, Hyundai practices JIT and holds limited finished goods inventory of not more than 7days, at its plants and distribution centre. Delivery lead time for export vehicles was 45days with shipping lead time of 30days (Hahn et al., 2000). 2.2 Hyundais European Supply Chain Importing passenger cars into European Union (EU) was relatively easy because as at 2003, the 15 members and 10 aspiring members of the EU shared import and export policies thus had no local content regulations on car imports. Turkey was chosen as a location of the CKD plant to supply Western Europe because of its low labour costs and surface transport links to Western European countries. The other CKD plant supplying European nations was located in Russia, a non EU member which probably had its own peculiar automotive import regulations. However due to domestic demand opportunities in Russia, its influence and available transportation links to other landlocked Eastern European countries; it was a good choice to locate a CKD plant. The Korean plants produced CKD kits which were exported to the Russian and Turkish assembly plants. This supply strategy meant freight charges and other logistics costs were reduced by: producing whole cars in form of parts and modules in Korea; shipping to CKD plants located in Europe, assembling based on customer demands in Europe and distributing assembled cars, mainly via surface transport, to the customers around Europe. However, the dependence on the Ulsan plant as the only plant capable of supplying passenger car CKD kits to the Turkish and Russian plants, which were responsible for supplying the European market, had a major risk inherent, as would be shown subsequently. 3.0 RESILIENCE FRAMEWORK 3.1 Theoretical Framework The possibility of disruption is a reality to every modern global supply network. Supply chain resilience should therefore involve more than simply recovering from disruptions but must be a proactive, systematic and integrated exploration of capabilities within the supply chain to cope with unforeseen events. The framework below uses this approach. The different parts of the resilience framework are consistent with supply chain resilience literature. For instance:  · The framework proposes the use of excess/ redundant resources as a reactive strategy to mitigate risks. Another recommendation is to improve the ability to detect disruptions and subsequently improve responsiveness through investment in visibility systems. Supply chain planning and collaboration would help to aid the robustness of the supply network. Finally, the framework proposes that the supply chain should be redesigned if the effect of the disruption is so enormous that it cannot be efficiently mitigated. * Continuous cycle of monitoring and reassessing disruption risks. 3.2 Mapping the Supply Chain Identifying Risks The map shows the paths through which materials move in the supply network as well as major risks at various critical nodes. The identified risks are grouped in Table 3.1. The most probable disruption risk is selected at each node and its potential primary effect on the supply chain is determined. TABLE 3.1- Hyundais European Supply Chains Risk Assessment NODES RISK TYPES DISRUPTION RISKS MOST PROBABLE/ DISRUPTIVE EVENTS PRIMARY EFFECTS Korean Plants Operational Labour disputes; Pilferage; Quality issues; Parts damage, Loss of critical suppliers; Labour Strikes; Loss of critical supplier  · Disruption of supply of cars to domestic and export markets(mainly US)  · Failure to supply CKD kits to European plants Natural disasters Typhoons; Terrorism/ Political Devaluation of the Korean currency (Won); Terrorist attacks Ulsan Port Operational Labour disputes; Dispatch errors; Parts damage; Pilferage; Typhoons ; Dispatch errors  · Port Closure: Disruption in ability to ship finished cars and CKD kits Natural disasters Typhoons Terrorism/ Political Terrorist attacks Turkey CKD Plant Operational Labour dispute; Turkish port closure Earthquakes; Terrorist attacks  · Disruption of plants operations.  · Disruption of transportation links to Western European markets( a high demand zone) Natural disasters Earthquakes Terrorism/ Political Changes in governments import export policies; Terrorist attacks Russia CKD Plant Operational Labour dispute, Turkish port closure; Natural disaster; Political instability  · Disruption plants operations  · Disruption of assembled cars exports to Eastern European markets Natural disasters Earthquakes; Floods; Tornadoes Terrorism/ Political Changes in Russian governments import export policies; Terrorist attacks; Eastern Europes political instability European Union Countries Operational Fluctuating demand; Transport links disruptions Fluctuating demand  · Sales disruption Natural disasters Earthquakes; Floods; Tornadoes; Hurricanes; Terrorism/ Political Changes in European Unions import export policies; Terrorist attacks; Grouping the disruptive events into the vulnerability matrix shown below would help to prioritize resilience strategies to the high severity disruptions. However the low severity events are not entirely ignored. For instance, dispatch errors at the Ulsan port are operational risks can be managed by actions such as introducing RFID while political instability can be managed through maintenance of good relationships with Government. Steps for making supply networks resilient against high severity disruptions * Identify nodes with high impact disruptive risks * Identify probability of occurrence of the disruption * Select degree of flexibility: Higher degrees of flexibility would be required for high probability risks, while lower degrees of flexibility would be required for low probability risks. 4.0 Hyundais European Supply Networks Resilience 4.1 Hyundais Resilience of the Labour Strike Disruption Redundancy: Excess resources were used reactively by Hyundai to maintain operations while the disruption lasted and also to subsequently recover. Speed of recovery: As shown in figure 4.2, Hyundais monthly sales grew speedily within 1-3 months after the disruption ended. The following inferences/ assumptions are made about how this was achieved: * Hyundais redundant production capacity at its plants aided the speed of recovery. The plants must have used production ramp up strategies to increase output. * Logistics of the CKD kits away from the plants was enhanced by the co-located shipping port. It is assumed that some CKD kits were flown by air to the CKD plants. * Management at Ulsan plant had visibility and control over the entire supply network. This aided the co-ordination of expedited international logistics of the cars to the customers. Although excess resources proved to be a useful resilience strategy, it can be quite expensive. Moreover, as observed, the extent of the disruption was difficult to predict and eventually resulted in complete depletion of some inventories. On the other hand, appropriate levels of redundancy combined with appropriate levels of supply chain flexibility is believed to enable organizations to not only cope with unanticipated events but also improves normal operations efficiency while providing oppourtunity to utilize disruptions to gain competitive advantage ( Sheffi Rice, 2005;Fawcett et al., 1996; and Skipper Hanna, 2009). Hyundais European supply network however lacked the required flexibility because of dependence on the Korean plants for CKD kits. A major supply chain redesign (as suggested by the framework), is thus required to mitigate impact and/ or ensure business continuity in the event of occurrence of these types of high severity disruptions. 4.2 Avoidance/ Reactive Strategies business continuity (for the high impact/high probability disruptions) 4.2.1 Labour strike in Korea To cope with a future occurrence of this, Hyundai needs to reduce dependence of the Turkish and Russian CKD plants on the Ulsan plants by increasing the manufacturing flexibility of the CKD kits. The India plant was the only plant not affected by the labour disruption. This was attributed to its minimal dependence on any supplies from Korea. It can thus be easily made an alternative manufacturer of European CKD kits. Also, Hyundai may adopt outsourcing complete components design and manufacture to suppliers. This would eliminate the need for manufacturing plants to supply the 4.2.2 Loss of a critical supplier at Ulsan Plant 4.2.3 Natural Disasters or Terrorism at Assembly Plants Regions Two common risks across both CKD nodes of Hyundais supply network are: natural disasters; and terrorism. These are low probability external threats thus redesigning to avoid them may be costly and eventually unjustified. Rather, the supply chain needs to be made reactively resilient against them. This can be achieved by designing a robust supply network. To cope with effect of any of these disruptions to any of the CKD plants redundant capabilities would be required. For instance the Russian plant should have the capability of assembling passenger car models made in the Turkish plant. However for economic reasons, this capability should lie redundant until actual occurrence of the disruption risk. However Russias exclusion from EU countries may make it difficult for it to supply the Western European markets (all EU countries) because of trade regulations. Thus another plant located in the EU may be required to supply Western Europe if there is a disruption at Turkey. However this plant would not use redundant capability but should constantly supply both Eastern and Western Europe. As at June 2008, the EU country with the lowest VAT was Czech Republic. Assuming this was the case in January, 2004, when it joined the EU, this would make Czech a good location for the alternative manufacturing or CKD plant. DEMAND FLUCTUATION AT EU DISTRIBUTION CENTERS The distribution of the passenger cars across Europe can be made flexible across both European zones Table 4.1- Proposals Evaluations Resilience Strategy Requirements Proposals Implications Manufacturing flexibility Parts Standardisation Capacity increases Manufacture CKD in India Relatively lower transportation costs; Increased manufacturing costs Manufacture CKD in a low wage European Union country Much lower transportation costs; Increased manufacturing costs; Long term investment in new facility. Modularization Capable suppliers Outsource components design and manufacture Significant cost reduction; Increased efficiency of JIT; technical difficulties THE ROBUST SUPPLY CHAIN Combining the manufacturing, assembly and distribution nodes would give the new supply chain design shown below. Testing the New Supply Chain Scenario Manufacturing Assembly [Effect] Distribution Labour strike at Korean plant [closure of Korean plant] Ramp up manufacturing at Indian plant [strain on Indian plants resources to supply both Turkey and Russia CKDs] Turkish and Russian plants operate as usual [little or no impact] EU distributions operate as usual [little or no impact] Earthquake at Turkey [closure of Turkish CKD plant] Indian and Korean plants operate as usual, but supply all CKD kits to Russian CKD plants Ramp up assembly operations at Russian CKD [Strain on Russian plants resources to Supply passenger cars to Western European countries] EU distribution operates as normal [little or no impact] Sudden demand growth in France with simultaneous drop in Portuguese demand Indian and Korean plants operate as usual Turkish and Russian plants operate as usual [little or no impact] Portuguese distribution center re- routes supply to French retailers. SOURCES OF COPETITIVE ADVANTAGE The robustness of manufacturing, assembly and distribution would help * The supply chain match demand more responsively. This would lead to reduction in inventory holdings * Flexibility to customize to customer requirements is enhanced. 5.0 Recommendations (Business Continuity) Hyundai should develop contingency plans for each of the identified risks. The major flexibility and redundant resources available in the supply network would need to be coordinated for the supply chain to remain resilient in the event of a major disruption. Also the supply chain proposed is for short term implementation. To build resilience in the long term Hyundai would need to build a facility in the EU and depending on demand

Importance of Books in Individual Life Essay

There is a well-defined comfort for those who visit book stores and libraries. The books are there like faithful friends waiting to be called upon, read, valued, and appreciated. Let us not also forget, however, the joy and anticipation when visiting used book stores. They are everywhere, and they all tell a story; but not only from within the pages. They have a history; they came from somewhere; they are going somewhere. If everyone who ever had possession of any given book had written their name, the city or town in which they obtained the book, the purchase price, and the date thereof, consider what an incredible account would exist about the adventures of just one book. To realize that a book may have traveled through numerous hands and a century of time is a fascinating and exciting concept. Just imagine the many lives it may have touched. With the pages perhaps yellowed, thick and dusty, or thin and delicate, the word is still alive and just as profound and beautiful as it was when it was created so long ago. Whether fictional or nonfictional, there can be derived a value, relevancy, and importance to the book. For example, consider a book written in 1918 on the history of Poland. Much could be learned about the country and the author’s perspective. But also consider what the author could not have known about the country’s future at the time of writing. It is a study in itself. It not only gives a story of Poland but an idea of how much things have changed since the book’s publication. Nothing can or should replace the book; not the internet or any other popular electronic devices. Consider the rudimentary and necessary efforts involved in the editing and critiquing of a book before it goes into print. Can the same be said for the deluge of information available on the World Wide Web on any given topic? Is the information being scrutinized to assure accuracy or grammatical correctness? Is too much being placed on the web that will only create more confusion and misinformation on any given topic? Appreciate the physical aspects. Turning the page of a book does less damage to the wrist than dragging and clicking. If a book is read through an electronic device, there is the memory of it, but not a physical reminder. For example, there is no book to place on a shelf, nothing to return to the library, or no book to pass on to a used book store. There is an undeniable feel to a book, to its texture, to an interesting cover and enticing title that invites the reader to open it. There is a sense of accomplishment as the reader makes his or her way, page after page and chapter after chapter. And at book’s end the reader will recall the intrigue, joy, and passion for beloved characters, their story, and a conclusion that may hone the reflective nature and spur the reader to seek more of the same. Books are as important now as they were during the dark ages when all stories of experiences and places would have been lost had it not been for the dedicated and devoted people who penned them onto parchment or labored over a manual typewriter.

Vitality and prosperity of the University

I am most pleased to apply for the A. Bannister scholarship. I have been exposed to persistence and hard work since I worked in a restaurant to support my schooling. I have also worked effectively with teams. The atmosphere in my past student life is one of great openness for new insights, possibilities and differing opinions.I know that in most situations, I need to be a veritable leader, integrating the different inputs, troubleshooting tasks to be sure that each person is contributing what is needed at the right moment, and controlling the flow of events through the postproduction conclusion. I view my experience in the restaurant as one of the most substantial accomplishment to date because of the great challenge it represented to me. Part of that learning is to have faith in my ability to meet difficult challenges.I believe in team productivity that would help serve self-development and personal fulfillment, and by extension, the vitality and prosperity of the University. I have the passion to create myself through everyday work, yet I thrive in that and I cannot wait to channel my energies towards these worthy efforts at the University. During my first college search process, I still did not realize that one’s personality must be congruent with the university he wants to study. I would have spent more time deciding where I want to attend college.I would have challenged my ideas of what I wanted to do. I am once again faced with the chance to do things I did not do the first time around. Now that I am more mature and have a better idea of what my priorities are, I will have a better grasp of what I really want to do in my life later on. I will take an active role in organizing groups whose efforts are focused on the spiritual area of one’s life and not only the academic part.From my talks with friends, I learned that this University provides the intellectual and social experiences from which the students can develop skills, knowledge, interes t and attitudes that characterize people as individuals that shape their abilities to perform adult roles. Some of these influences are intentional, such as instruction in a specific subject, and some are unintentional—for example competitive grading, possibly leading to low motivation. In a changing society, the challenge continually facing educators is how to transmit the society’s diverse cultural heritage, as well as prepare individuals for the future.I know that I have cultivated the habits that encourage me to become an energetic team member. This has sharpened my sensitivity in working well with people of varied backgrounds and I am able to utilize the specific strengths of others to develop workable solutions to problems. In a team environment, one is required to both give and take. I have had the chance to develop these skills in the past.These are the reasons why I think I am deserving of the A. Bannister scholarship considering my career goals. This seems al l abstract to me now but I believe in the school’s overall thrust and I feel that this is one big step towards achieving my personal goals and at the same time contributing my own share to the university.  

The Novel The Song Oceans By Hillsong Essay

â€Å"You call me out upon the waters, The great unknown where feet may fail, And there I find You in the mystery, In oceans deep, My faith will stand.† In the song â€Å"Oceans† by Hillsong, people sing about God calling them out into the great unknown of life. Like in the song, God calls every one of his children in the great unknown of our lives. However, for God, it is not the great unknown. He has a plan for our lives, and he presents our plans to us through callings. First off, when people start to look for their calling, they need to look at their identities. As Christians, we know our identities are in Christ, but do we act like our identities are in Christ. Most of the time, Christians only act out their faiths on Sundays. Go to church, sing in the choir, give a weekly offering, and then leave the Christly identity at the door so they can go caught the Vikings play on the television. I ask you this: is that living out your identity in Christ? While reading the book Vivid: Deepening Your Colors written by Syd Hielema and Aaron Baart, I found a passage that speaks volumes in the way of identity: â€Å"There’s an old legend that when Michelangelo had finished sculpting his masterpiece David, he said, ‘when I began working on this slab of marble, I didn’t see a slab but I saw David waiting inside it, and all I had to do was remove everything that was not David.’ That’s how the Father, Son, and Spirit see us too. In some ways we’re like a slab of marble, and the Father looks