Product manufacturing today has become a truly global activity. Companies that previously kept production close to their development centers now look to move this activity offshore. Economic and political changes, coupled with advances in technology, have opened up new, lower cost opportunities for manufacturing in regions stretching from Asia to Eastern Europe. In addition to changing the global manufacturing landscape, these developments have brought with them a new set of management challenges. On a very practical level, the sheer logistics of picking up and transferring production capabilities to factories in far-flung parts of the globe can be formidable. Further, a boardroom decision to move manufacturing has a major impact on organizational structure and entails a potential amount of risk. A fundamental rule in transitioning to outsourcing--or moving from one outside location to another--is that it will always be more complicated than it first appears. This article focuses on those challenges of moving product manufacturing capability, particularly where offshore locations are involved.
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For this assignment we have chosen the supply chain management of businesses which works through channel members (factory to dealers to customers) as a case assignment, to analyze the strategy employed by the organizations, to take a note of the advantages of the supply chain to their organization and to suggest any improvements that can be made in the area of supply chain to the management.
Traditionally most organizations have viewed themselves as entities that exist independently from others and indeed need to compete with them in order to survive. There is almost a Darwinian ethic of the 'survival of the fittest' driving much of corporate strategy. However such a philosophy can be self-defeating if it leads to an unwillingness to co-operate in order to compete. Behind this seemingly paradoxical concept is the idea of supply chain integration.
In the words of Meindl, 2001, supply chain management is not the same as 'vertical integration' - Vertical integration normally implies ownership of upstream suppliers and downstream customers. This was once thought to be a desirable strategy but increasingly organizations are now focusing on their 'core businesses - in other words the things they do really well and where they have a differential advantage. Clearly this trend has many implications for logistics management, not the least being the challenge of integrating and co-coordinating the flow of materials from a multitude of suppliers, often offshore, and similarly managing the distribution of the finished product by way of multiple intermediaries. It is still the case today that some companies will seek to achieve cost reductions or profit improvement at the expense of their supply chain partners. Companies such as these do not realize that simply transferring costs upstream or downstream does not make them any more competitive. They have realized that the real competition is not company against company but rather supply chain against supply chain. This is the reason this assignment of supply chain will make sense because efforts have been taken to find out various problems faced by the organizations in this area by having a thorough assignment on supply chain problems starting from suppliers ( factory to sales in the context of factory location)
Problems of supply-chain management can be complex, and their solution requires special knowledge and experience .The value a supply chain generates is the difference between what the final product is worth to the customer and effort the supply chain expends in filling the customer's request. This assignment is done basically finding out the problems faced by the organizations in supply chain.
2. PRACTICAL PROBLEMS OF ORGANISATION IN SUPPLY CHAIN MANAGEMENT
2.1 Managing uncertainty:
Business environment is becoming uncertain and complex day by day. In the face of such uncertainty, companies are finding it difficult to predict likely changes that take place in their competitive environment. Nonetheless, businesses are bound to cope up with future uncertainty. Understanding complex customer : Customer requirements are becoming more and more complex, understanding his taste, preferences, likings and disliking, is a must for a company to delight its customers though unique value added business mission. And this is possible only through a supply chain management technique. This can be achieved through a proper channel network. In this assignment it is concluded by saying, keeping the channel members (factory to dealers) satisfied, who are the best connecting link between the company and the consumers. For this to happen products should reach on time from the factories to dealers on time at the least possible cost.
2.2 Channel management:
Always on Time
Marked to Standard
In the words of Anderson and Weitz (1989), clearly argue that power imbalance leads to a perception of decreased continuity in a channel relationship, suggesting that balanced power relationships imply greater stability. Buckling and Sengupta (1993) found from a assignment of co-marketing alliances echo these points, showing that alliances characterized by imbalances in either power or in the resources invested by the partners are less successful than more balanced alliances. The question that lingers around the organizations is that the channels of distribution are managed properly? Because the organisation clearly knows that it is the dealers who are in direct contact with the end users and also with the organization (products from factory) .The success or failure of a product launched does not only lie on its features, price and quality but also depends on how well they are supplied through the channel from factory to dealers. So it is inevitable that the channel members have to be properly managed to get the best out of the business, but this can happen by proper channel management from factory to dealers.
2.3 Channel motivation:
There are many devices for achieving such motivation. It is highly important on the part of organisation to motivate the channel members from factory to dealers to customers to have an impact in the market, because only through them the organization can realize its goals. The company needs to determine intermediaries' needs and construct a channel positioning such that its channel offering is tailored to provide superior value to these intermediaries. The company must constantly communicate its view that the intermediaries (from factory to dealers to customers) are partners in the joint effort to satisfy end-using consumers. (Handfield and Nicholas, 1999).
2.4 Monitoring and managing channels:
In much, the same way that the organization's own channel (factory to dealers to customers) activities need to be monitored and managed. Because the organisation takes many conscious efforts to motivate its channel members so it is important for the organisation to monitor its channel members. Therefore how channel's (factory to dealer) performances are measured is discussed as follows through the financial performance ; (The supplier)'s cost of servicing the channel is reasonable, given the amount of business that the channel members generates for the (Supplier - factory). The channel member's demands for support have resulted in inadequate profits for (the supplier - factory), all these have to be measured and monitored.
According to Handfield and Nichols (1999), in the field of supply chains, there are many different strategies, for a variety of problems. There is an abundance of information that outlines every new concept and idea on how to improve supply chain performance. The key to supply chain success lays in dynamic management-matching the right strategies with the right situation. This is hardly a new concept. Furthermore, these supply chains often interact with each other in complex ways that complicate how strategies are developed and executed. Whereas Shah (1999) observed that unless supply chains are aligned properly, companies risk squandering cost-saving opportunities, revenues, competitive advantage and asset productivity. Choosing the right chain (factory to dealer to customer) for the right business requires thinking strategically about how your business operates and what your company needs, which includes how many supply chains it takes to serve your customers. This is the reason so much efforts should be taken by the organisation to keep the channel members in highly satisfied mode. So that whatever decisions taken by the organisation like introducing new product ( factory ) or a change in the price of the product will be taken care well by the satisfied channel member . They are in a position to find out which product is a success and which product is a failure and also they know the reasons for the success or a failure of a particular product. And finally it is highly important for the organisation to determine what the channel wants from the organisation. As adapted from Buckling and Sengupta (1993), it is found that the channel members expect the following before choosing a particular organisation like: accepting damaged merchandise returns, Has quick and easy ordering procedures, Accepts defective goods manufactured from factory , Provides prompt delivery, Maintains adequate supply, Handles complaints ( defective products ) promptly, Has good reputation of supplying quality products from factory , Carries large product breadth, Requires no minimum order size, Makes new products available, Provides adequate margins on suggested list process, Offers quantity discounts, Extends supplying within minimum days from factory to dealers . Therefore through this assignment the satisfaction level of the channel members with respect to the above criteria is proved to be very vital for effective supply chain management.
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Reducing Lost Time to Increase Profitability
Lisa Danes. Yard & Garden. Fort Atkinson: Sep/Oct 2009. Vol. 32, Iss. 7; pg. 16, 5 pgs
The above said article is one of the 6 parts series on Operating Lean. This particular deals with focusing on lost time and waiting. All 6 parts deals with cutting overhead & other stuffs in operation which will eventually Lead to increase profits.
I wanted review this article by actually testing out the facts of the article in an experiment. And then judge the usefulness, importance and benefits of this article/study.
Looking for those areas of the business that create lost time can be a challenge. If you ask anyone working they always reply they almost every day come on time, do their job and leave only in the closing time. They reply gave an impression that they start working as soon as they enter office and stop only at Stroke of closing time
But was this always the case?
I decided to observe my fellow employees to find are they wasting time. As the article helped me as a guide to follow up and know what exactly is happening.
Well the result of a weeklong experiment was
People soon after arriving to office in the morning waste lot of time. They are not getting on with the work as the arrive but chitchat, relax themselves,etc.., Productivity at this time is only 60%. This means they are wasting around 20 to 30 mins.
The middle session of the day is where the productivity is very high. This period their seems to be no loss or waste of time. Productivity is above 150% in most cases.
Last session or period before closing time is again where the productivity reduced. Theirs is wastage of time. This is due to the act that people are eager to leave work after hours of hard labour. Here the waste around 10 to 20 mins.
My office total wastage is nearly 1 hour. Not including lunch break.
1 hour per day means 1 hour is wastage every 8 hours.
In a week which there is 6 working days. Which means 6 hours is wasted in a week.
In a month there is total of 24 hours wasted. Hence every month 3 full days (24 hours) are wasted.
Every months the business loss 3day of work.
3 days loss is above 10% every month. So every month we lose 10% of our profit.
10% is a huge deal for any kind of company from small to large.
If you can reduce the waste of time by half. You will only lose 5% whereas you gain 5% the additional profit then your usual.
Thus by reducing the wastage of time it will lead to increase in profitability.
The article gives the following ways we can reduce lost time or wastage time on different sectors or fields in a business. The Few mentioned below are more useful and relevant to my business. Hence the mentioned below are solution to my business from the article.
Evaluate the technique used.
Find out new technique which saves time.
Eliminate unnecessary task.
Try to mix it up, don't make routine get better of a person
Make sure employee reduce time wasted at start the daily work and at the end of daily work
Downtime can be easy with the help of a software program that effortlessly assigns repair jobs to techs, and manages them throughout the process
Cutting cost helps to increase profit but customer and clients are people who are coming and buying your goods and service. Don't let cost-cutting get in the way of customer satisfaction.
This article helped me realize that Time management is as important as other aspects of the business. The concept of reduction in Wastage or loss of time will increase profitability is a concept which can be universally applicable to any business. Thus the Review for this article was the experiment conducted and it proved this article is more beneficial and is important to every business. This article helps as tackle this problem of wastage of time and will help in reduction in the wastage of time which will result in increased profits for the business. It has been proved through experiment.