IntroductionOrganizations are permanently exposed to the impact of a variety of external and internal volatile factors and therefore must adapt their management, structure, procedures and systems to seek new opportunities and maintain success. “Both industry and academic journals have reported cases where companies have 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 to improve operations. Demand volatility and fierce rivalry require maximum 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 manufacturing of tobacco products throughout the world. The tobacco market has been gradually declining over the years mainly due to (a) the aging population in mature markets, (b) growing public concerns related to health risks, and (c) increases in indirect taxes. Smoking incidence and consumption are gradually decreasing and this trend is expected to continue further. Tobacco taxation for most emerging markets is a major source of revenue for national economies. In mature markets, governments use fiscal leverage to limit consumption (Hanson, & Sullivan, 2009). Figure 1. Upsmoke Corporation – Supply Chain - SWOT Analysis In shrinking markets, where margins can only be improved through cost reduction, competitiveness is vital. Planning times (3 months) are estimated as industry average. However, this is more of a weakness than a strength as it can be easily improved by rivalry and become difficult to overcome and gain a competitive advantage. Upsmoke's supply chain vulnerability stems from the disintegration of planning and performance management objectives. The SHINE program has been successfully implemented; however, it is limited only to production efficiency. Consolidating production facilities capitalized on economies of scale, optimized capacity utilization and increased compliance with quality standards. However, distribution and production 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, excessive inventories are created to ensure safety stocks. Emergency production changes result in incremental production costs. Production shortfalls are compensated for by higher transportation costs (delivery by air). This approach is characteristic of push systems. Despite the proven efficiency of a pull system in a volatile demand environment, Upsmoke protects inventory as stock shortages take effect immediately: the customer switches to a competitive product.