IntroductionOrganizations are continuously exposed to the impact of various volatile external and internal factors and therefore must adjust their leadership, structure, procedures and systems in order to seek new opportunities and succeed. “Trade and academic journals have reported cases in which companies achieved operational excellence through targeted process improvement and effective management and planning of limited resources” (Gupta, Chahal, Kaur, & Sharma, 2010, p.864). Since supply and demand are never in balance, there is always room for improvement in operations. Demand volatility and fierce rivalry require the greatest supply responsiveness.1. Prepare a SWOT (Strengths – Weaknesses – Opportunities – Threats) analysis on the current supply chain management setup at Upsmoke Corporation. Upsmoke Corporation is primarily engaged in the sale and manufacture of tobacco products worldwide. The tobacco market has been gradually declining over the years, mainly due to (a) aging populations in mature markets, (b) growing public concerns related to health risks, and (c) rising indirect taxes. Tobacco incidence and consumption are gradually decreasing, and this trend is expected to continue. Tobacco taxation for the majority of emerging markets is one of the main sources of revenue for national economies. In mature markets, governments use fiscal leverage to limit consumption (Hanson and Sullivan, 2009). Exhibit 1. Upsmoke Corporation – Supply Chain – SWOT Analysis In contracting markets, where margins can be improved through cost reduction alone, competitiveness is vital. Planning lead times (3 months) are estimated as the industry average. However, this is more of a weakness than a strength, which can be easily improved through rivalry and becomes difficult to overcome and gain competitive advantage. Upsmoke's supply chain vulnerability stems from disintegrated planning and performance management goals. The SHINE program was successfully implemented; however, this is limited only to manufacturing efficiency. The consolidation of production facilities made it possible to capitalize on economies of scale, optimize capacity utilization and increase compliance with quality standards. However, distribution and manufacturing have conflicting goals. Manufacturing aims to reduce material costs and benefit from larger batch sizes, as well as stabilize production schedules and reduce start-up costs; however, excess inventory is created to ensure safety stocks. Emergency production changes result in additional manufacturing costs. Production deficits are compensated by higher transport costs (delivery by air). This approach is characteristic of push systems. Despite the proven effectiveness of a pull system in a volatile demand environment, Upsmoke secures inventory because their shortfall has an immediate effect – the customer switches to a competitive product..