Supply Chain Management
Founded in 1903, Ford Motor Company now manufactures or distributes automobiles across six continents. Ford employs about 164,000 people in about 70 plants worldwide. The company's automotive brands include Ford and Lincoln. According to Ford's corporate website, in 2010 Ford earned $6.6 billion, their highest net income in more than 10 years.
In 2010 Ford launched 24 new or redesigned vehicles in key markets around the world. Ford expects 70% of its growth in the next 10 years to come from its Asia Pacific and Africa region. By 2014 at least 80% of the vehicles sold under the Ford brand globally will be built off 13 core platforms. By bringing suppliers into the development process earlier, Ford hopes to generate a healthier and more efficient supply chain.
The recession had at least one positive effect for Ford: it forced them to closely examine their supply chains, analyze their assumptions, and move to eliminate major inefficiencies.
Ford must contend with serious challenges that include:
Changing business conditions of the 21st century ranging from globalization and economic uncertainty to new technologies and increasing consumer demands
Manufacturing processes that design and build vehicles globally
Increasingly complex supply chains with challenges that undermine profitability and shareholder value
Long order-to-delivery (OTD) lead times, unreliable production schedules, excess inventory across the supply chain
Lengthy demand planning cycles
Lack of visibility of suppliers
The global economic meltdown increased pressure on automotive executives to make good decisions about their supply chain in hopes of improving performance. Not surprisingly, Ford faces a highly challenging and competitive environment wherein the supply chain is viewed as a tool for improving organizational competitiveness. These conditions necessitate an efficient and effective supply chain strategy for Ford and its component manufacturers in order to meet changing consumer demands.
Ford's website describes the automotive supply chain as one of the most complicated in any industry. Automakers like Ford rely on thousands…… [Read More]
There are a lot of benefits of supply chain management, to the point where it is absurd to ask what they are. What benefits are there of not engaging in supply chain management? None. So the reverse is also true. Supply chain management, among other things, ensures that you get the products/materials you need on time, on cost and to spec. While this obviously enhances the firm's value, it also enhances customer value. Customers get products at a lower cost, with fewer delays, and also to spec. The benefits of supply chain management are often passed onto the customers to help the firm gain competitive advantage.
Supply chain integration reflects the process by which the supply chain system is integrated with the demand system. An example would be a retail store that sees demand for snow shovels in advance of a blizzard, and the integrated system ensure that manufacturers can tap their inventory supplies and get them to the stores in time to sell them. This process will typically involve multiple organizations, and certainly multiple departments, so a lot of the integration aspect is the result of communication between relevant parties. Customers enjoy superior outcomes as the result of supply chain integration because the company is better able to meet demand. The customers create the demand, and supply chain integration better enables the company to meet that demand, so customers do not experience shortages or cost increases as the result of this process.
3. If a company fails to embrace supply chain integration, there are many outcomes, most of them negative. Essentially, supply chain integration when it works allows for the company to work smoothly, cutting out excess inventory, reducing shortages and simply better aligning the goods coming in with the demand for output. Thus, if there are no supply chain integration efforts, the company is likely to experience each of these negative consequences. It is likely that the…… [Read More]
G. Reza Nasiri, Hamid Davoudpour, & Behrooz Karimi. (2010). The impact of integrated analysis on supply chain management: a coordinated approach for inventory control policy. Supply Chain Management, 15(4), 277-289.
The concept of the demand-driven supply network (DDSN) and its implications on inventory control and management are discussed in this analysis, along with examples being shown of how these objectives can be achieved despite uncertainty in key markets. This analysis also includes insights into how integrated supply chain programs and initiatives can be used for creating an entire DDSN framework which can cut inventory cycle times significantly from existing orders and create more effective frameworks for managing new ones.
Robert A Novack, & Douglas J. Thomas. (2004). The Challenges of Implementing the Perfect Order Concept. Transportation Journal, 43(1), 5-16.
The concept of the perfect order is predicated on having the right product in stock at the right time to fulfill the customers' unique requests. The perfect order metric is used to evaluate how well synchronized an entire supply chain is relative to the unique needs and requirements of users. It is often used in conjunction with the hierarchy of supply chain metrics to evaluate the overall performance of suppliers relative to objectives. This analysis provides insights into how the perfect order can be achieved over the long-term.… [Read More]
This information is building off of the findings from Uthayakumar. This is illustrating how the two tier system can help to streamline operations. However, as time goes by these ideas will become obsolete. The reason why is because they are focusing on particular aspect of supply chain management (i.e. during emergencies and backlogs). Where is it is failing, is through understanding how this strategy could be used when a firm is not facing these issues. (Reza, 2009)
This is problematic, as this approach has been shown to have trouble maintaining these levels consistently. Instead, it creates the necessary momentum to help a firm deal with critical issues. Then, it does not provide any kind of direction going forward. This is troubling, as these kinds of challenges will have an adverse impact on the ability of firms to streamline their supply chain management. (Reza, 2009)
As a result, our research will deviate from these findings by identifying other ideas that can be used during the process. These findings will be augmented with key ideas from other sources to provide a better approach for enhancing supply chain management issues. It is at this point that firms will have a working protocol they can use on a regular basis. This is when productivity will increase and costs will remain low. Over the long-term, this will help a firm to understand the challenges they are facing and how to quickly adapt to them. (Reza, 2009)
To deal with some of these challenges, many individuals believe that decision making must be streamlined during the process. The reason why is because the management can engage in more effective strategies in determining how they will address a host of challenges. According to Garg (2011), this is a part of an overall philosophy that can help to improve the supply chain management system. What he found is that most firms are often focusing on maintaining a single agent system. This places them at a strategic disadvantage. The reason why is because the approach limits the ability of firms to integrate their operations. When this happens, it becomes more difficult to communicate with others about critical issues. This is the point that costs will increase and productivity will decline. (Garg, 2011)
To avoid the challenges, those entities that…… [Read More]
Supply chain management in FMCG sector
Fast Moving Consumer Goods (FMCG)
Managing supply of FMCGs
Demand and Supply
Traditional channel of FMCGs distribution
National Vs Global Presence
Products and Services
Supply chain opportunities
Usage of Supply Chain Management
Overall Business Performance
Issues in global supply chain management: FMCG sector
Multi-channel Supply Chain Management
The FMCG sector is represented as manufacturers and distributors of packaged products. They are also coupled with mega retail brands in common understanding. The business segment includes a variety of products including grocery, food, non-food, and home use items. The business segment is categorized as low margins and high volume industry. The presence of this margins and competitive environment requires innovative techniques for cost reduction and consumer satisfaction.
It is also observed that it requires time and increased amount of capital investment to establish a FMCG brand. The requirements for global market presence and cost reduction require incorporation of sophisticated technological techniques to create value for stakeholders. The implementation of supply chain management has leverage business performance and increased revenues in this industry. Effective use of technology can automate several business operations facilitating cost reduction and performance optimization.
The latest trends in industry can be valued as collaboration and a treatment of suppliers, manufacturers, distributors, and customers as strategic partners. Technology and multi-channel approach for distribution are regarded as enablers of cost reduction and increased presence. However the industry requires a diligent approach to establish credibility and a customer's centric supply chain can assist organizations in gaining market share.
Supply chain is the system of people, organizations, information, and resources that are involved in moving the products and services from the suppliers to the customers. Raw materials, components, semi-finished, and finished products are handled in a supply chain. Thus, management of a supply chain will involve planning, organizing, leading, staffing, and controlling of a supply chain destined to deliver products and services…… [Read More]
Supply Chain Management
Concepts of SCM and the evolution to its present day form
Critical factors that affect SCM
Information sharing and Knowledge management
Culture and Belief -- impact on SCM
Global environment and Supply Chain management
"Social" and "soft" parameter required for SCM
This chapter aims to give an outline and scope of the study that will be undertaken in this work. The study lays out the issues faced by manufacturing organizations when it comes to the management of supplies, inventory, operations and distribution. Any study that can help organizations understand the factors that impact the management of these resources in an organization is beneficial. This chapter also contains the purpose and the hypothesis of this study.
Purpose of this study organization, big or small, is driven by the need to generate profits for its stakeholders. As a result, these organizations are constantly looking for new ways to increase their profitability. While management concepts have been around for centuries, their progression and evolution have never been as rapid as that in the 19th and 20th century. E new management style introduced in recent times has been declared as the "best" and most effective. Companies that "created" these styles as a result of their companies' own internal factors defined many of the management styles, as we know them today.
The need to constantly generate profits for any organization if forcing management within the organization to evaluate and understand the internal and external factors that have the potential to create the most variance.
Management of organizations is a complex process. In turn, organizations constantly seek methods and use tools that will help them understand their operations and optimize their operating processes for higher profits. Attempts to run organization in a "lean" manner with awareness of the criticality of continuous improvement is growing among manufacturing-based organizations. Creating a constancy of purpose towards improvement and strategy planning based on long-term goals of the organization can help enlighten those involved with the organization to problems that they face or might face.
Supply chain management (SCM) has been used with varying effectiveness in organizations all over the world. This study…… [Read More]
Supply Chain Management at DIMCO
The supply chain relates to the entire cycle and process through which raw materials are purchased, processed and developed in to goods and services which can be traded in the market. The management of such a process would involve creating improvements in the supply chain itself to make it more profitable and efficient for the company (Davis, 1993). Therefore the supply chain encompasses not only raw material providers or experts that provide their services during the production period but also the distribution channels the company adopts, and its internal production departments and channels.
The Durham International Manufacturing Company has the option to either improve its supply chain with its suppliers or its distributors, and considering that DIMCO has already settled in to the markets it is currently trading in; it would be more beneficial to work on the company's connection with its suppliers.
By improving relations with suppliers as well as better organizing how raw materials reach the production plant, DIMCO can be sure to decrease production time for each unit produced as well as decrease wastage during production. Also by having a better network of suppliers in place DIMCO will be more likely to source products more cost effectively and also be able to manage the right materials when they are needed rather than wasting time either searching for the raw materials or purchasing them at a higher cost. Not to mention that once the supply process of the raw materials has been ironed out the production process can also be tailored to suit the supply, so as to produce most efficiently. By enhancing relations with the suppliers it may also be possible for DIMCO to find substitutes for raw materials they are currently using, or to find superior products altogether which they can use both to increase the end products' quality, or to lower its price. In order to improve its current relations with suppliers DIMCO may consider issuing some form of extrinsic incentive for its suppliers which may include things such as smaller credit periods. By paying off their credit to suppliers faster…… [Read More]
Supply Chain Management related to DIMCO
Supply Chain Management and other issues related to DIMCO
In this paper, we will determine whether integration efforts should start with suppliers, distributors or both for the firm DIMCO. We will also attempt to explain the rationale for our decision, after this we will recommend ways that DIMCO could benefit from leveraging B2B e-Commerce. We will then determine what steps DIMCO could take in order to improve its relationship with suppliers and finally look out for the most effective ways for our chosen firm to eliminate waste in its supply chain.
For our chosen case of DIMCO it is more appropriate to start integration efforts with the suppliers. Since DIMCO uses approximately one thousand three hundred and fifty different raw materials or components in manufacturing line which are purchased from approximately three hundred and seventy five different suppliers throughout the world, it is very essential to manage all of this with great efficiency. Also, since the distribution greatly depends on the supply factor therefore it must be considered as a prerequisite to the integration efforts with distribution. Now, lets focus on the integration efforts with the suppliers in some detail.
"It is very important to recognize that the process of supplier integration must be properly managed so that optimum efficiency regarding the deals being done is achieved" (Brudney, 2000). Some of the important practices and strategies for the successful management of supplier integration are as follows.
First, "the usage of supplier integration must be done selectively" (Byrnes, 2003). Second, "it is very important to choose the correct suppliers to deal with" (Earl, 1998). Third, a firm commitment must be built towards the integration efforts in the buyer as well as the supplier organizations. Fourth, the targets and metrics must be clearly defined, the suppliers must also be given a voice in the overall establishment of the targets and metrics. Fifth, the suppliers must be provided the chance to perform an active role towards the development. Finally, any information regarding all of these mentioned operations being conducted must be done extensively as well as openly among all…… [Read More]
Supply Chain Management
Purchasing and Supply Management: A Key to Competitive Advantage
Purchasing and supply management is an essential function of any business. Regardless of the size of the business, or the product are service that they offer, every business depends on some type of supply in order to produce goods or services. If supplies do not arrive on time, the business could be it a standstill. This not only means lost money and lost time, but it also means angry customers and potentially lost business. This research will support the thesis that purchasing and supply management play a significant role in customer relations and maintaining competitive advantage.
Definition of Purchasing and Supply Management
Purchasing and supply management means placing attention on the procedures and policies of the organization in the acquisition of goods with which to produce their products. According to Johnson, Leenders, & Flynn (2010), many academics are only concerned with the purchasing processes of buying. They do not concern themselves with the processes involved with the strategic side of the process. Purchasing and supply do more than simply fill purchase orders as directed by others in the organization. They must actively seek to find a need within the organization, find appropriate suppliers, and negotiate a price. There are many considerations in the purchasing process. In an earlier edition, the authors defined purchasing and supply management in the following manner,
"Purchasing, supply management, and procurement are used interchangeably to refer to the integration of related functions to provide effective and efficient materials and services to the organization" (Leenders, Johnson, Flynn, and Fearson, 2006).
As one can see, the role of purchasing and supply management goes far beyond pushing paperwork and filling orders. Purchasing and supply managers now play a vital role in the profitability of the organization. The work of the supply manager has a definitive impact on the success and grown of…… [Read More]
Supply chain management careful attention paid process sees materials, information, finances move supplier manufacturer wholesaler retailer consumer. Supply chain management focuses efficiently effectively coordinating flows supply chain process companies.
Supply chain management
True or false: Coca-Cola's experience with inventory forecasting supports the principles set forth by CPFR
The modern day economic agents function in a more and more dynamic business environment, in which they have to simultaneously serve the growing needs of numerous categories of stakeholders, such as customers, employees, business partners, the general public and so on. In such a setting, the firms devise and implement a wide array of methods and strategies by which to serve these needs and to also maximize their chances of attaining their pre-established business goals.
Given this complex setting, companies across the globe turn to supply chain management as a mechanism of integrating all actors which ensure the efficient creation of the products and their reaching the end consumer. The Coca Cola Company has devised its own supply chain management system and has implemented in it a highly successful manner. The Coca Cola Bottling Co. Consolidated used supply chain management to allow its field agents to collaborate on matters of inventory forecasts. The result of this decision was that of the slashing in half of the inventories and the absorption of 150 new products.
In such a setting, a question is being posed relative to the company's experience with inventory forecasting applications, namely whether this usage of inventory forecasting has supported the principles of collaborative planning, forecasting and replenishment. In order to answer this question, it is first necessary to reveal the features of these principles, and then to reveal if and how these were attained by the Coca Cola Company.
At a generic level, the scope of the Collaborative Planning, Forecasting and Replenishment Committee (CPFR) is a three fold one, namely to ideate, execute and educate. In terms of idea creation, the scope of CPFR is that of "provid[ing] the leadership and innovation to reduce overall value chain costs and better serve our customers" (Voluntary Iterindustry Commerce Solutions, 2011).
Then, at the level of execution, the goals of the committee are to "own the CPFR framework, provide stewardship for it and keep it relevant; […] create the common language and standards." Last, in terms of education, the…… [Read More]
Supply Chain Management
True or False:
Coca-Cola's Experience with Inventory Forecasting
Supports the Principles Set Forth by CPFR
In a one-word clear stand: true.
The Collaborative Planning, Forecasting & Replenishment (CPFR®) System promoted by the Voluntary Interindustry Commerce Solutions (VICS) Association (Voluntary Interindustry Commerce Solutions Association, 2011) was piloted between Wal-Mart and Warner-Lambert in April 1996 (Purpura, 1997). Their CPFR collaboration allowed Wal-Mart and Warner-Lambert to jointly evaluate the supply chain in process, particularly regarding "Listerine," a Warner-Lambert product. That joint evaluation and inter-company feedback gave Wal-Mart more accurate selling rates and inventory of the product while giving Warner-Lambert more efficient predictions of amounts, types and times to supply the product to Wal-Mart (Purpura, 1997). Over a period of 5 months, Wal-Mart increased in-stock levels of "Listerine" "from 87% to 98%" (Purpura, 1997) while reducing inventory of Wal-Mart's "Listerine" products by approximately 20% (Purpura, 1997), reducing inventory-related costs. In sum, the pilot project achieved several of CPFR's main objectives by inventory reduction, higher efficiency and lower costs.
Encouraged by the efficiency of this pilot project and others, various large companies, including the Coca-Cola Bottling Company Consolidated (CCBCC), studied the possibility of applying CPFR to their own supply chains. Prior to 2002, the Coca-Cola Retailing Research Group found that efficient supply chain management could result in a 1.5% - 2.5% cost savings potential in end-consumer prices (Seifert, 2002, pp. 22-23). Once CCBCC opted for CPFR, it did so wholeheartedly, developing "upfront collaboration" linking trade directors with sales and marketing in the field, incorporating a "Look for Success" plan and establishing step-by-step opportunities in sales (Coca-Cola Bottling Company Consolidated, 2011). CCBCC also invested heavily in supply chain integration, concentrated on agility and skills and encouraged "thought-leadership" (Coca-Cola Bottling Company Consolidated, 2011), which can be defined as "having the answers to the biggest questions on the…… [Read More]
"Wal-Mart has the biggest IT systems of any private company in the world and supply chain Wal-Mart has made important investments in supply chain management" (Why Wal-Mart's supply chain is so successful, n.d.).
Wal-Mart's way of doing business is founded on a low price approach and low transportation expenses which permit it sell its products at the lowest achievable prices. "In return for its Everyday Low Price Strategy, Wal-Mart's suppliers, both large and small, either break even or make profit supplying at Wal-Mart's stores. But the real winners are Wal-Mart's customers who save thousands of dollars buying at low prices. Since Wal-Mart stores began selling groceries almost three dozen regional grocery suppliers have struggled to match or simply run out of business. On average Wal-Mart's annual sales are $350 billion and it has more than 7,000 stores, 120 distribution centers and operations spanning fifteen countries. Nearly two million employees at Wal-Mart focus on cost, customers and continuous improvement on a daily basis. Other major retailers like Target and Home Depot have emulated Wal-Mart's logistics strategies and tactics" (Why Wal-Mart's supply chain is so successful, n.d.).
Every Wal-Mart store functions like a small company. Store managers are taught to run one store at a time, run one department at a time, and take care of one customer at a time. Decisions are made by store teams in order to make the individual stores function at their best with superior execution. With recognized vendor affiliations with top manufacturers, Wal-Mart has put into practice advanced logistics solutions like RFID (radio frequency identification). These resolutions help maintain lower expenses, recognize out-of-stocks and increase sales (Why Wal-Mart's supply chain is so successful, n.d.).… [Read More]
Supply Chain Management and Concentrated Clusters
Concentrated Clusters and Improvement in Supply Chain Management and firm's overall performance
Clusters are geographic concentrations which comprise of interconnected organizations or associations that manufacture products or deliver a service to a particular industry or field. Clusters are mainly a mix of companies belonging to the same industry or located in the same technological facility sharing resources like infrastructure, suppliers and distribution networks. It mainly consists of three or more companies with downstream extension to channels and customers and lateral extension complementary goods' manufacturers including companies with industries related skills, technologies and inputs (Cognizant 20-20, 2011).
Concentrated clusters have immensely wide benefits to each firm's performance, particularly performance pertaining to supply chain management efficiency. There are certain common characteristics which clusters hold and thus benefit the firms in improving their overall performance and supply chain management are; physical proximity, complementary core competencies, activity base, collective growth potential, competitive position and industrial organization and coordinating mechanisms (Cognizant 20-20, 2011).
Due to the close relationship built between the suppliers and customers, the customers and suppliers are more likely to be familiar with their particular needs, giving customers a more personalized feel about the product/service provided to them. Forming clusters, in terms of logistics, is all about various entities creating a bond benefiting all involved and as a result produce and provide a consistent product. Furthermore, increased acceptance of a cluster as a tool helping improve customer service and reduce costs is the biggest benefit clusters provide in supply chain management. Another major benefit that companies which are part of clusters enjoy are the benefits of better access to resources like employees and suppliers, specialized information, complementarities that businesses share, institutions and public goods and better motivations and measurements helping them achieve operational and productive efficiency. The concentrated clusters help firms by facilitating…… [Read More]
This dynamic is more than an experience effect or network effect, as it is multiplicative across the many members of the supplier network, in effect creating an entirely new platform for sharing knowledge and information. The reliance on analytics for creating the necessary integration links and platforms for decision making also dominate this phase of maturity in any supply chain network (Wang, Huang, Dismukes, 2004).
With the findings that what gets measured dictates the culture of an organization as much as how information is shared across the network, the development of an effective DDSN framework can begin. The initial steps of creating a common set of key performance indicators (KPIs) and metrics first needs to be completed, and the integration points across each area also defined. Third, there is the need for defining the idealized state of metrics performance followed by a best practices benchmark for comparable supply chain networks. With all of these factors in place, a supply chain can be effectively measured and compared relative to peers, so that a relative level of performance maturity can be assessed (Schlegel, Murray, 2010). With these factors in place a DDSN will over time transform itself into a knowledge sharing network provided that the key goals and objectives of the supplier chain itself continue to be accomplished (Dyer, Nobeoka, 2000). The ability to generate knowledge over time based on supply chain performance can then be achieved.… [Read More]
This lack of trust within the supply chain has a rippling effect across the flow of goods and services, and should therefore be addressed with a high degree of priority. Trust must be built through a process of regular communication across the supply chain, which includes all parties involved in the flow of goods.
Communication can be established by a variety of means. In addition to electronic communication, face-to-face communication via meetings is also a good idea. Trust is easier to establish by means of personal meetings, where ideas and information can be shared among the various stakeholders. Trust can also be established and maintained by means of a contract stipulating that information is not to be shared with parties outside the supply chain or those who do not have a direct interest in the supply chain itself.
A long-standing relationship with suppliers will also create a basis of trust if goods and services supplied are of a consistently high quality. In order to ensure this, each company within the supply chain should share its specific requirements for the goods, services, and delivery times that they require. These requirements should also be consistent with the demands of customers at the end of the supply chain. APS and EPK systems are a useful way to organize and disseminate such information with efficient speed across the supply chain.
Through meetings, the needs of each company in terms of information technology should be established. A regular schedule for communication should be established in order to promote trust and information sharing among companies.
The purpose of communication and trust among supply chain companies is to match the demand for bedroom furniture products with the supply in order to establish a lean manufacturing paradigm. This can be done by means of a Materials Requirements Planning system, which allows suppliers to plan for future materials supply. Known future orders are recorded with forecasted orders to ensure the on-time delivery of…… [Read More]
Managing Supply Chain
Managing the supply chain
The organization that I work for deals in interior finish of houses with the range of services being the floor finishes, plumbing works and sanitary ware, home furniture and office furniture as well as curtains. The outsourcing levels within this organization run to close to 70-75% of the goods and services. In as much as there are some materials that are manufactured by the company, most of them are outsourced. Once the tenders are secured for making a final fine finish to a given block of offices, the company often outsources the skills and manpower from the companies that deal in these interior finish and decorations. The company also outsources for the skilled manpower that helps in the assembly of furniture that is delivered to the homes or offices where they secure orders. Even though the company has a few transportation vehicles that helps in transporting its merchandise to the company stores as well as from the stores to the customers, most of it is outsourced to the transport company that deals in safe transportation of even fragile goods. Bearing the extent of the outsourcing that the company engages in, it can be estimated that 70% to 75% of their services and goods are outsourced.
Of the five recommendations given in the article, the fifth is of greatest significance to the organization I work for and is the one that is most widely used (Cecere L., 2014). The company strives to maximize the use of Electronic Data Interchange (EDI). This is very important to the company since it depends on importation of most of its goods and merchandise from countries in Asia like China. Their status while on transit is important so that the company can also secure orders and give the correct timelines for the delivery of the goods to the customers without delay. The EDI is also important on the delivery side since as the goods leave the company stores headed to the customers, there is…… [Read More]
This shift in responsibility that a payoff can force over time needs to be dealt with from a business process management and change management standpoint over the long-term (Jacobs, Chase, 2010). By concentrating on the unique requirements and needs of the internal stakeholders, payoff analysis can be profitable and productive over the long-term.
Juan Alberto Aragon-Correa, & Enrique a Rubio-Lopez. (2007). Proactive Corporate Environmental Strategies: Myths and Misunderstandings. Long-Range Planning, 40(3), 357.
Jacobs, Robert, & Chase, Richard. (2010). Operations and Supply Chain Management. Upper Saddle River, NJ: McGraw Hill Higher Education. 13th Edition.
MacMinn, Richard D., & Han, Li-Ming. (1990). Limited Liability, Corporate Value, and the Demand for Liability Insurance. Journal of Risk and Insurance, 57(4), 581.
6. What strategies are used by supermarkets, airlines, hospitals, banks, and cereal manufacturers to influence demand?
There is an abundance of strategies used by retailers and members of distribution channels, healthcare providers, service providers and consumer packaged goods manufacturers to influence, shape and drive demand for their products, services and upsell programs (Jacobs, Chase, 2010). The most common of these strategies is to concentrate on selling solutions and benefits over just features and price. This strategy concentrates on value over just price alone.
Influencing demand through the use of customer endorsements is also considered one of the most effective strategies each of these types of companies rely on to influence demand. Endorsements convey trust and invite prospective customers to see their unique requirements also reflected in the needs of customers who have already bought the products as well. Customer testimonials are very powerful as a means to influence demand through trust and relevance.
A third approach all of these businesses rely on to influence demand is their reliance on the unique experiences each of these businesses and their products and services offer (Tynan, McKechnie, 2009) . Each of these companies attempt to influence demand by providing well-communicated marketing messages that describe the experiences their products or services deliver. They are each attempting to influence demand through the marketing of exceptional experiences using their products or services, leading to trust being created with the brand (Tynan, McKechnie, 2009). Ultimately, each of these companies is attempting to become a trusted advisor in the markets they compete in (Urban, 2005).
Jacobs, Robert, & Chase, Richard. (2010). Operations and Supply Chain Management. Upper Saddle River, NJ: McGraw Hill Higher Education. 13th Edition.
Tynan,…… [Read More]
Communication was kept constant, so any problems were dealt with before they resulted in delays.
Demand forecasting is a critical aspect of World Co's success. It is essential that new product lines are responsive to the consumer's needs and desires. Both aggregate demand for the products sold by the company, as well as category-specific demand for specific types of clothing was closely monitored (Raman & Fisher, 2001, pp.6-7). Responsiveness was also required to minimize wasteful production of unpopular lines of clothing and reduce the build-up of unsold inventory. Monitoring of past inventory and current sales, as well as speedy transmission of information between headquarters and the factory floor enabled demand forecasting to have a significant impact upon inventory waste reduction.
Department store's significant impact upon sales of product lines such as Untitled meant that brands were constantly struggling for better placement within expensive retail spaces. But cost savings were achievable through Accurate Response monitoring, which enabled World Co to balance overstocking and under-stocking cost risks and achieve a happy medium between these two extremes.
Quick inventory turnovers are useful in the fashion industry because inventories that build up frequently are usually sold at a loss, once the trends have become stale. Yet small inventories may mean that some customers may leave stores dissatisfied and there may be insufficient capitalization upon new trends. Accurate Response was thus an effective risk management technique.
Through materials preparation, such as standardizing zipper lengths and other relatively inconsequential details, production time was reduced. This also reduced waste, as inventory for obsolete products was less apt to become stockpiled. Also, this enabled the company be more responsive to demand, as existing input materials could be used in new clothing.
Financial impact: Supply chain design, short lead times and quick inventory turnovers
By increasing its ability to respond to subtle changes in demand in an immediate fashion,…… [Read More]
In addition, outsourcing is seen as one way of freeing HR professionals within the client organization from more mundane and time-consuming tasks so as to better concentrate on core competencies and provide a more consultative and strategic role (Cooke 186). Although the growth of HR outsourcing business has been dramatically facilitated by the introduction of innovations in information and communication technologies (ICT) throughout China in recent years, many companies also report an increasing use of e-HR in-house. For example, in some large Chinese organizations, employees are encouraged and even expected to use e-HR to update their personnel records as a cost-saving initiative (Cooke 186).
Based on the available evidence from secondary sources of data, the outsourcing of HR in general remains relatively limited in China; however, there are trends of the increasing use of external providers for their services such as recruitment and training (Cooke 186). According to the Watson Wyatt's Greater China e-HR survey of 268 firms in the region, a fundamental constraint to the further development of outsourcing and/or shared services of the HR function is simply the paucity of such options for outsourcing and shared services. Further, the Outsourcing in Asia-Pacific survey (conducted by the HR consulting firm, Hewitt Associates) found that many companies in China today remain unfamiliar with the processes and procedures of HR outsourcing or are unfamiliar with the important players in the market (Cooke 186). More importantly, perhaps, the author suggests that it may be difficult for companies in China to justify a decision to outsource a given function on the basis of potential cost reductions because administrative labor is still relatively inexpensive in China and it may actually cost more to outsource the function than to retain it in-house; in addition, the same survey also emphasizes that most outsourcing activities in China come from multinational…… [Read More]
When information is shared in confidence, then supply chain members can make better and more informed decisions that will benefit the customer.
Strategic alliances happen in a variety of markets with different combinations of suppliers and customers; however, the most typical supplier-consumer alliance involves just a one supplier and one customer. To get a better idea, take a look at the relationship between Wal-Mart and Proctor & Gamble, "which have worked together to establish long-term EDI linkages, shared forecasts, and pricing agreements"
. There are alliances that can come about between two horizontal suppliers in an industry, like the relationship between Dell and Microsoft -- "organizations that collaborate to ensure that the technology road map for Dell computers (in terms of memory, speed, etc.) will be aligned with Microsoft's software requirements"
. Last of all, a vertical supplier-supplier alliance may include various party members, like trucking companies that have to work with railroads ocean freighters in order to make sure that proper time of delivers for multi-modal shipments is maintained
The concept of strategic alliances makes perfect sense, but the big question remains: how does one form or initiate a strategic alliance? When and how should they occur? There are some supply chains that don't need to put forth effort or commitment when it comes to managing an alliance, which seems unfair, but there isn't some magical equation to know if, how, when, where and why one should form a strategic alliance. Unfortunately, many strategic alliances occur after a company is already very successful and it forges or makes a strategic alliance with a successful company as well -- such as the case with Wal-Mart and Proctor & Gamble.
Strategic alliances can improve many different aspects of a supply chain's functioning. For example, management of supply-channel conflict; on-time product delivery; quick response to problems and complaints; a much better consistency in parts, supplies and other products; detailed agreement when it comes to handling the products' problems as well as any complaints about a specific product; better supply chain productivity; specific product volume commitments; contacts that are committed to your business's account; increased supplier loyalty; quick responses to requests for quotes and/or pricing issues; privacy when it comes to shared business strategies.
Strategic alliances can be very beneficial for supply chains, but even if a company…… [Read More]