Logistics and Supply Chain Management - Assignment Example

AN ESSAY ON LOGISTICS AND SUPPLY CHAIN MANGEMENT. Customer Inserts His/hers Name Customer Inserts Grade Course Customer Inserts Tutor’s Name Part A Strategic Alliance Strategic alliance can be described as a temporary arrangement between two or more independent parties who join forces in light of given series of events, so that each makes gain from the competitive strengths of the other (Isoraite 2009, p 39). This concept has been commonly used in the business sense, where there is competitive pressure due to the heightened intricacy. The benefit of the union is usually competitive advantage over the rival firms. The details of such marriages will, interestingly, depend on the agreeing parties. Some points of convergence may however include; the sharing of technical human resource, ideas, or any other resource. An example of such strategic alliance was when Apple, Matshuita, AT & T, Motorola, Phillips and Sony joined forces for the objective of developing telecommunications software. (Elmuti & Kathawala 2001, p 205). Literatures from various authors have already given strategic alliance a higher rating, based on the number and volume of constructive yields, as compared to evidence gathered from firms that assimilate through acquisitions and mergers. Such yields include an increased return on investment, better dividend pay out to equity holders as well as an improved success rating. Customer Relationships A prerequisite of effectively competing is the capacity of entrepreneurs to hastily fine-tune their operations and products to the rationale and needs of consumers. By doing so, a company aims to personalize customer’s encounter across all contact points. Complex business processes have enabled these interactions, which allows for a firm to maximize on client’s utility which transforms to improved sales and subsequently revenue (Sahaf et al 2011, p 5057). Customer Relationship Management or CRM, as it’s popularly known, infers to a strategic course of sustenance by providing value to different stakeholders, particularly buyers, in order to gain increased output and wade of rivalry from other firms. It’s deemed as a commercial course of action in business which grooms the firm to progress and endure in trading (Alipour & Mohammadi 2011, p1). CRM is based on the propositions of: upgrading and intensifying business-client relationships, understanding and segmenting the customers, reacting to clients’ grievances, and drawing buyers near and cushioning them from external ‘magnets’. Information Sharing With relevant information sharing between business stakeholders, of different levels, there is an opportunity to make reduction in cost and mitigate risks which adds to the competitive strength of firms. This is brought forth by the fact that uncertainty about the nature and quality of the product will be minimized as well as the purchasing behavior of the buyer, which influences demand (Pandey et al 2010, p 226). Spreading information, a vital ingredient of supply chain management, can be classified on the basis of different functions such as stock management, forecasting of the demand, requisition orders, production schedules and sales registers. A careful analysis of this flow reveals that stock and production plan depict a communication link between the upstream and downstream structures on the supply and distribution network. Similarly the demand forecast and the sale schedule show flow of information from the downstream stakeholders to those in the upstream. Information can be shared through various platforms such as the print and electronic media which shares information regarding financial stability or critical strategic moves. One can also use social media such as company websites, facebook or twitter and other communication tools. To practically understand the importance of information sharing among stakeholders, one can look at Dell and Wal-Mart companies which by a large proportion depend on this flow to correlate the various services and in decision making. At Dell, for instance, the sales schedule is cross-linked to information of previous functions to develop a supply chain that is open and effective. This allows Dell to function with a four day Stock Management plan and thus reducing cost while improving consumer’s value and utility. Information Quality In a world where information is everything, quality information gains the organization competitive strength. To achieve this, the firm must consider the information it speaks to everyone, including its own employees, as a product (Talburt 2011, p 6). He adds information quality be given egg-like treatment. A firm must have a clear guideline on the individuals and departments who are charged with the responsibility of maintaining quality. Many management teams are ignorant of the quality of information used and perceive that data handled by computer software is free from error. Data of low quality can have devastating consequences to the survival of the firm (Redman 1995, p 99). If a retail firm cannot get a debtor’s or a creditor’s account numbers correctly, then we can comfortably say that their capability to pay debts and to make money will be sabotaged. Alternatively, the level of trust will diminish amongst employees’ and prompt witch hunting and accusations of corrupt deals. Most modern firms oversee this through the Total Quality Management ((TQM) strategy. TQM is founded on the ideology that every aspect of the business is crucial for its long term sustenance. Currently, this philosophy is geared towards attainment of ISO. Lean Thinking Oftenly, the perks of Lean Thinking cannot be quantified nor physically touched. It is a strategy that details the absolute structure of production, particularly in manufacturing process. It relates strongly to the concept of Physics of the Factory moreso in their ultimate goals. Lean manufacturing pays attention to the sum sytem efficiency and the constant upgrades that border on value addition and respect for all stakeholders. It strives to eliminate the frequency of deviation. Most managers review their business’s progress by critically analysing audited and published financial statement and documents yet they ignore the study of the operation systems and what can be done to improve them as one identifies possible loopholes. Understanding such processes will lower the rates of speculation in critical decision-making. The general norm in measuring Lean Manufacturing has been the Total Cycle time, which evaluates how much time specific tiers of production take. The shorter the time, the better the system. Lean strategy is however not explicitly tuned on eliminating wastes, but also in transforming the overall Corporate behaviour (Bhasin & Burcher 2005, p 58). Part B Case Study: Chapter 2 (page 63-66). Question One Mr. George Shelton’s grievances begin with the introduction of the new sytem of operation that Presto Cleaners, adopted after the installation of the Computerized system. He argues that it is not simple, convenient and time-saving as they claim it is. Firstly, the new system would be costly. This is because, it requires that George buys a new bag for his laundry every time he wanted to use the new system which would cost him an extra 3 dollars. This situation was made worse by the long queues, that were rumoured to have ended, and the extended time it took to be served. This was as a result of the fact that, the counter person had to make an entry with clear desription for each item of clothing that was dropped and by whom. Yet, the quality of this entries were questionable. Mr. Shelton’s aggravation went to new heights when the Cleaners lost his laundry and frustrated his efforts in trying to get them back. They demanded that George should produce a receipt as proof of his claim, yet the counter person had clearly expressed that they were not necessary with introduction of the computerised system. He believed that the manner in which the employees treated his grievances was with disregard and degrading. Although he has been a loyal customer, they still distrusted him and considered his issues as petty. Futhermore, his reliance on the counter person to relay his desires to Mr. Hoffner about the claim leads to nothing but dissappointment. George talks of the way in which Mr. Hoffner, the Claims Manager, kept ignoring his calls as well as the messages that he, George, left him. George is agitated by the fact that he has to explain himself constantly and that no level of progress seems to be made with regard to his claim. To top it all off, Goerge had to buy four new shirts and the organization seems not to care about compensating him. Remedy The appropriate remedy that should be given to Mr. Shelton is a formal apology by Mr. Hoffner. Although he may not be entirely at fault, but in a business the customer is always right and should be treated with care. Plus, the exit of Mr Shelton, as a dissatisfied customer is likely to cause other clients to vacate. Furthermore, the president should also make an apology on behalf of the company. The matter regarding his compensation is however not practical as he got his lost laundry back and the four new shirts were for George’s own benefit. What can be done, is to offer him fully-paid service the next time he drops his clothes or give him an appropriate discount. Question Two To begin with, it is necessary that the cleaning firm trains its employees well in advance to avoid the scenario of learning on the job. It can be suggested that, the implementation of the new system be done in phases , this is to allow some of the inconveniences of the system to be detected before-hand. The other alternative is to concurrently run the new and the old system to ensure that system operations are checked as well as the final outcome. In addition, information sharing with regard to the business and its customers should have been done. This alerts the customers, like Mr. Shelton, that the computerised system is the future of the cleaning business but may take a while before it is close to efficient. The system must also keep track of information regarding their clients. This would be useful for Presto Cleaners when they are classifying between loyal and one-time consumers. This is important, because different customers require different treatment. Moreover, in developments such as those mentioned in the case study, where another client takes clothes that do not belong to him, a follow up can be made despite not being a constant customer rather than relying on customers’ goodwill. The response time with regard to customer complaints and claims should also be hastened since there already exists personnels who are responsible for channelling them. For instance, the counter person, should have reported the matter of Mr. Shelton’s missing clothes immidiately when he made the complaint. He/She should not have waited for the plant to search for the lost clothes. In addition, the system should also reduce the response time, 10 days for correspondence with the store and the plant is extensive and might create the impression that nothing is being made to assist the dissatisfied client. This is not withstanding of the fact that the customer must be given a progress report or at least be contacted at intervals to re-assure them that something is being done to the solve their claims. The channel of communication between all of the firm’s setups should be effective. The methodology of communication should not always indulge the cleaning plant. For example, the suburban outlet could communiccate directly to the outlet at the intersection of Adams and Broadway directly as well as Mr Hoffner’s office. This would have saved on time and could have avoided the letter being sent to Presto’s President. Furthermore, Mr. Hoffner claims that he does not understand how the claim form which he supposedly sent to Mr. Shelton got disappeared. This is not rational, as he has resources that can trail the path the claim followed. In general, all protocols should be modified to keep the needs of the consumer first at all times, everyday. Case Study: Chapter 13 (page 507). Question One Getting licensed multi-national corporation to adopt a major change in their corporate culture is an uphill task. This is because of the compound bureacratic processes and the fear that such a major change could ulter its market leadership (Gordon 1992, p 29). Such firms, need to re-think this stand because it the discovery of modern technology and globalization as a whole, there would emerge competitive pressure that is bound to distabilize their business. One such technology is the internet, which has aided many enterprises into reaching the heights they are today. Mcdonalds alone, is only one in a long list of corporations. Online ordering systems which allow customers to order or give feedback on a company’s product are very efficient in modern day. For example, if an individual would order for the installation of security system online, and agents of the company which they contacted can make the necessary provisions and installations. Payment can then be done online or via the agents. An online ordering system can be at one angle, be perceived as an adoption of the Lean Thinking Philosophy. It is a methodical technique of re-structuring business operations with the aim of eliminating inconveniences in the system and using less of its resources to satisfy their consumers (Venkat & Wakeland 2006, p 1). This exactly describes the functioning of the online ordering system, which reaches out to a large number of individuals, firms and goverments at very low cost. From another angle, the online ordering system can be a concept of customer relationship management (CRM). CRM involves a number of processes that are involved in provision of fresh value for consumers, improve returns in the long run and build lasting impressions. Online ordering services will always create this experience, that is if efficient, and will probe consumers to re-think on their allegiance. Online ordering systems also enhance information sharing protocols. In the manual system, channels of relaying information were full of fault. With the new system, complaints and orders can be made online which takes less time and effort than the manual form. Instantly, the personnel responsible will send this to higher Management where necessary customer response measures are taken. Question Two The information sharing in logistics and supply chain management is not all linear meaning it does not flow in only one direction. But for the purpose of illustrating the supply chain we shall use Figure 1.1 as shown below: Figure1.1: Supply Chain Map for McDonalds Food Growers They are the core of the supply chain. They include the farmers who plant the required crops. To identify the produce that are in demand, they have to carefully analyze the market but with considering what one can produce on their plantation perceiving relevent climatic conditions and other factors. Due to the provision of upgraded technology and improved means of transport, they can be able to review different markets globally. Large Scale farmers place their efforts in identifying bulk buyers, such as manufacturers or corporates, who are finacially stable. For instance, McDonald can purchase large quantities of fresh produce and not default on payment. Producers might also require information and contacts of different distributers as producers can sometimes be involved in catering for transport arrangements Distributors. They are found in almost all levels of the supply chain. They include the likes of Perseco and Martin Brower, outsourced distributors for McDonalds. Distributors must be well versed on the various transport networks as well as the value of their employers. They must have all contacts of their partners and know all pick-up and drop-off points. These companies should also be cautious of time so as to be relevant on time-strict deliveries. Furthermore, distributors should know their clients’ annual calender so as to know when specific items are usually transported. For example, when to transport the happy meal toys which McDonald uses during promotional events held on specific days of the year. Manufacturers Manufacturers should know where to source their raw materials, they should therefore make strategic alliances with appropriate food growers. The reason for this is to avoid having a breakdown of the production process. Further more, proper research should be done on the different life cycle of food growing, such as the time for harvest or time for planting. This will allow manufacturers to know the high and low peaks of their business. Manufacturers should be able to segment their customers and know their different demand schedules. This is to avoid inconveniencing them, through shortage, or engaging in over-production. They should also solicit distributors who can ferry their raw materials from food growers on time as well as transport the processed raw material to the required customer. Corporate Structure. Corporate heads regulate many activities. They are the crucial part of the McDonalds body as they make the important decisions. They should be able to communicate with the retail restaurants so as to man the inventory levels. They should have current contacts of the food growers, manufacturers and the distributors so that they can order for goods whenever it is appopriate. They should also communicate adequately the manner of payment to the different stakeholders. Restaurants Restaurants should have their own inventory management. When inventory are falling below the re-order level, they should requisition for new stock from the corporate house. This should be done with the inception of lead time.Restaurants should have contacts of the food growere, manufacturers as well as the distributors. This is for the sole purpose of, occassions that require direct delivery and then refer them to the corporate house fo payment. Question Three Regular food items Devising the efficient information systems for foodstuffs is sometimes a complex process. The communication amongst employees regarding the storage area for such goods is very critical. Information regarding proper storage should be made possible to them, such as the use of refrigerators. The management should be able to elaborate how the different food in the store is stored because various food items may require different environmental setups. For instance, the Temperature or humidity of the store room should be specific for vegetables, meat or certain sets of beverages. Foodstuffs such as flour, sugar, can be kept in shelves where it is cool and dry. There should also be adequate labeling of the shelves or creating compartments in the refrigerator for the different food items, which employees should know. For example, poultry meat and pork should not be in the same compartment. Information regarding inventory management should be in check in order to avoid wastes particularly with regard to perishable goods, such as meat. There should be adequate communication with the suppliers and distributors so that these food stuffs can be brought on a daily basis and time for delivery should be convenient like in the early morning. News relating to market behavior should be shared to know the demand that one gets in a day or week, so that McDonalds ordering levels are adequate. In cases where there are big events scheduled, they should be done in advance so that there is adequate time for handling of such events. This is seen by the policy of preparing proportional items one year in advance. Non food Items Unlike food management, this may require one less attention as they do not have the capacity to become obsolete but become out-dated. This may include items such, napkins, table cloths, cutlery, furniture and others. They can be stored in shelves which are clearly labeled so that one can distinguish where each item is located. This information should be known by all employees to avoid mix-ups. This will aide in the simplifying stock account and asset management. Caution, should be made however when dealing with fragile items. There should be adequate spacing and such items should be kept where they are least disturbed. Dissemination of information regarding this items, can be made on interval basis for example, quartely or when need be. Information involving the time with which goods arrive at the retail outlets is vital. Reason being that, McDonalds like any other enrerprise, may not want overstocking of non food items which occupy space in the store. Information regarding breakage or those items which are out-dated should also be known at all mangement levels. Some items can be purchased in bulk because there are ocassions where demand can be overwhelming, such that extra items would be required, this is with the example of cutlery and linens. Promotional items There is usually clear guidelines and protocols at McDonalds when it’s holding major events. For instance, if they are offering a discount promotions, they take twenty-eight days. They take time in organizing these events to avoid any manner of delay. Planning well in advance is necessary so that incase any retail outlet is not satisfied with the purchase, they can be substituted for by others. Reference Alipour, M & Mohammadi, MH 2011, ‘ Effect of Customer Relationship Management on Achieving Competitive Advantage of Manufacturing Tractors,’ Global Journal of Management and Business Research, Vol. 11. No. 5, pp 1-11. Bhasin, S & Burcher, S 2005, ‘Lean Viewed as Philosophy,’ Journal of Manufacturing Technology Management, Vol. 17, No. 1, pp 56-72. 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Venkat, K & Wakeland, W 2006, Is lean Necessarily Green, Portland: Portland State University. Read More