Strategic Supply Chain Management Business Essay

Abstract

In first stages supply chains were viewed as just the supply process from a company's immediate supplier to the immediate customer. They had their own goals, goals, deadlines, margins, and regulations and also all these were be based upon them based on how to cater the market demand. It is easy to execute especially in a monopoly market with hardly any retailers which is disperse in a limited area. However when the business keeps growing they have to take sound decisions about enlargement guidelines as well as the integration of supply chain functions to survive in the market and to gain the competitive benefit with the speedily changing competitive environment.

The manufacturing industry encounters great challenges equally as some other industry, which really is a result of economical crisis, particularly when it involves the varied, large-scale companies with huge expansions and a customer base, as Performer Sri Lanka PLC. In particular to perform in the current competitive environment its not only the existing methods are important, but the latest logistics and offer chain management methods are things a great deal as well. Time has altered and out taking into consideration the way we control our improvement activities also offers to change. Good is inadequate - Only our very best will attract the customers in the current competitive environment. Producing a great product is not "cut the mustard" today.

Over the years Vocalist (Sri Lanka) structure has strengthen hugely to include with the strategies developed to handle the changes in the surroundings. A critical study was completed to comprehend the major competitive priorities in current source chain of Vocalist Sri Lanka PLC; the supply chain management rules, strategies and techniques that are being used in attaining these competitive priorities; other possible tools that could be utilized for improving today's performance of the organization and the way the company can go beyond the quality by using these techniques as well.

(Abstract is not contained in the word count up)

1. 0 Opportunity of the Assignment

To investigate Vocalist Sri Lanka PLC's source string with a view to,

Understanding the resource chain systems and procedures and to examine its impact on the chain.

Identify the existing supply chain strategies and the influence from various market conditions.

Make recommendations to be able to improve the current supply string in the company and over come the determined critical issues and obstacles by applying proper supply string management principles.

Company Overview

Singer Sri Lanka Started its operation in 1872 in Sri Lanka and is a corporation that is continuing to grow over the years into a benchmark entity in Sri Lanka in conditions of level of popularity, modernity and reach. Vocalist today is synonymous with quality, large reach, and wide product range across diverse lines and large charm to consumers across the whole spectrum of buying power. Source -Performer (Sri Lanka) PLC Total annual report

Singer Sri Lanka PLC is a diversified, large-scale company, which was established and started out its operations with few retailers and now Vocalist has almost 550 shops spread all over the country with a group of more than thousand long term employees. Furthermore Singer has generally spreaded distribution channels, such as Singer Plus, company's greatest distribution channel, Performer Mega, which optimises true modern trade retailing, encouraging a shopping experience on par with the best in the planet, Singer Homes, the "furniture store" added to offer high quality and stylish furniture, Sisil World, encourages mainly Sisil brand products and it is the second slot machine game in the circulation hierarchy, Singer General, Satellite shops and Duty Free etc are the other programs of circulation. Singer's product profile is highly diversified and consists of products across a variety of household, professional and financial categories.

Singer product portfolio

(Source: Performer (Sri Lanka) PLC Total annual report - 2009)

Organization Structure Pyramid

Singer Organization framework includes three main management levels which include Junior, Midsection and Senior. Older and middle levels has two sub layers as illustrated below.

A - International Component Suppliers B - Local Component Suppliers

Prodimix International - Germany Arpico

Haffle Fittings - Italy Regional Sharpeners

Dolken Company - Germany St. Anthony's Company

Hevea Company - Malaysia

Laminex Company - Australia

C - Other Local Suppliers D - Overseas Suppliers

Soft Logic Country wide/ Panasonic

Epsi Personal computers Sony

Craft Suppliers Samsung

Nilkamal Hitachi

TCL

Whirlpool

Wedge

Unix

E - Retail Outlets F - Commercial Customers

Singer Mega Dilmah

Singer Homes Nestle

Singer plus John Keels Holdings

Sisil World Advertising Services (Pvt) Ltd.

The Supply String & Competition

Supply String is "a network of connected and interdependent organizations mutually and co-operatively working mutually to regulate, manage and improve the movement of materials and information from suppliers to get rid of users"

(Source: Christopher 2005, p. 6)

It is clear that current world companies cannot act separately and endure or gain a competitive benefits searching for a long run. Therefore source chain integration is a robust concept for success and growth in today's business environment. Something or something must have key features to compete in the market place, which are known as the competitive priorities. The competitive priorities may change with the marketplace segment. For example, when consider the Vocalist customers in a rural area may be interested generally in the expense of product while the customers in cities are interested in quality of the same product.

3. 1 Identifying the Competitive Priorities

Cost Benefit:

This is a technique where the company seeks productive facilities and uses small cost controls to produce products more efficiently and effectively than opponents.

Singer Sri Lanka got only around 10 brands in early 2000 and mainly focused on market penetration by providing affordable products to the mass market. In order to bring down the price, the business has shifted to strategic sourcing of its major brands via an intermediary which buys for the whole south Asian region which impacts economies of size.

Eg: i. Discontinued it plant at Vocalist Sectors Ltd. , Ratmalana in 2001 and started out sourcing form China.

ii. Began the stock in Piliyandala for furniture & water pumps to reduce imports as well as responsibilities and offered progressive products at a competitive prices.

At the same time manufacturing plants should plan their systems so that all resources such as materials, labour and machines are efficiently used to lower the price significantly. Also company should make sure you keep sufficient margin to cover all other overheads before going to lessen the selling price to get more volumes. This is illustrated the following;

Value Advantage:

"Customers don't buy products, they buy benefits"

Adding value through differentiation is a powerful concept of attaining a defensible benefits in the market. Singer has moved to a differentiation and multi brand strategy to enter into a new time of retailing. In every categories, different brands placed to charm different customer sections.

Singer trade name has transformed to "Vocalist plus" from Performer on 1st of January 2007 and the slogan to "MORE BRAND - MORE CHOICE". It enables to boost the charm to customers and the subject matter of "choice" available in the stores and brings differential 'plus' over competitive offerings.

Singer brings value through service by giving unmatched service with their customers by giving not only a product but with a full package which includes ultra shopping environment, friendly customer support staff, product demonstration, discount strategies, easy payment techniques, free delivery to the door step, free assembly, customer training, free services for chosen items like A/C's, extended warranty scheme, excellent after sales service, etc.

When taking into consideration the product designs, certain designs may increase inventory holding or travel costs with long production lead time. In Vocalist essentially in furniture factories this matter is seen. This is a huge impact on the whole production of Singer factories if not properly solve the problem.

Multi Route Strategy

(Source: Vocalist (Sri Lanka) PLC Annual report - 2007)

Delivery & Business lead Time :

Consumers in all markets, commercial or consumer are progressively time sensitive which is mirrored in their purchasing action. This should be noticeable from the time of production to the delivery of that.

In all the Performer factories they use Computer Numerical Control (CNC - Programmable machines) to ensure speedy, reliable and reliable developing process. As a policy they also maintain average three months completed goods inventory in all the stock keeping units (SKU's) on the whole and 1. 5 to 2 weeks completed goods inventory for recognized fast paced items in the sub warehouse. Performer also offers the island vast distribution network with more than 500 outlets and goods are carrying everyday to all the locations from the central warehouse. Retailers are also allow to keep sufficient inventory in their stores.

But here the key issue would be that the uncertainty of holding more inventories. Though they have reduced their lead-time, with the volatility of the markets some times they have resulted in excess inventory situations, where sometimes losing can be quite high. That is mainly for the things such as tv sets, refrigerators and white goods (washing machines, home theatre systems) etc. since these can be out dated with the new technology improvements. This will be attended to for an instantaneous solution, since it can have a huge impact on the complete supply chain in the long run.

Quality:

Quality should be there atlanta divorce attorneys aspect including design quality, process quality, product quality, service quality, etc. While keeping ISO 9001:2000 expectations Singer Sri Lanka factories ensure that every item produced up to the required or expected level in conditions of both quality of conformance and quality of design.

In overall company's perspective it is also an essential factor to maintain the balance procedure between your price and quality of all the products. So to have a full selection of products in each category company has went with multi brand strategy, where the company doesn't want to compromise quality and harm the brand image scheduled to get the price advantage.

Analysis of key areas in Performer Supply Chain

Analysis of these competitive priorities has given a specific insight about the issues that can be impacted on the existing supply string and also here I would like to draw the attention on major key areas that ought to be considered to get an effective and efficient involved network for the business organization.

Areas to be analyzed;

Supply string competitive strategy

Supply string agility, versatility and responsiveness

How well the resource string is synchronized

4. 1 Resource String Competitive Strategy

Competitive context of business remains to change because of four major reasons;

i. The new rules of competition

ii. Globalization of industry

iii. Downward pressure on price

iv. Customers take power to demand on goods/ services

Analysis of Current Situation

Currently Singer Sri Lanka comes with an internally included system which provides mainly a finish to get rid of planning framework and they highly be based upon the hierarchy. So there is a high opportunity of delaying the decisions scheduled to insufficient confidence and authority levels. Also the focus on lowering obsolescence properly is also a significant issue.

Possible Strategic Recommendations

Singer Sri Lanka must move ahead with external integration with their international

suppliers this will lead to control better up stream and down stream connections in order

to maintain a powerful and successful value chain and get a much better cost gain.

By having an effective ERP system they can handle all the ventures and information

regarding the developing, logistics, distribution, shipping and delivery, invoicing, accounting,

human resources, shop sales, market promotions, bargain or public sale sales, promotion

activities, etc. through this and also through the use of internet, intranet and extranet facilities

the company can avoid having extra inventories and keep maintaining an effective inventory

which is aligned with customer needs, specially when it comes to the multi brand

multi channel strategy. The other important fact is to identify the energy position of

Singer relative to their suppliers and customers in regards to to the size matters.

Finally in this aspect they have to focus on managing 4R's (responsiveness, dependability,

resilience, connections) carefully to fortify the linkages between the customers

and suppliers, where in fact the competitor would find hard to break.

Best easily fit into an organization can be illustrated as follows;

4. 2 Source Chain Agility, Versatility and Responsiveness

Demand in today's volatile markets triggers most of the current pressure on resource chains to contend as networks and also to use designed network configurations to drive versatility, agility and responsiveness.

Agile or Trim?

Analysis of Current Situation

In the existing status of Vocalist Sri Lanka, they keep sufficient shares of finished goods in ware houses of each channel and also raw materials at the primary Performer factories, where some times it can cause huge deficits because of more than stocks. Though the overall business lead time is reduced when under taking special orders such as providing custom-made items for corporate clients locally or internationally, there can be situations where timely response may be poor.

Possible Strategic Recommendations

By making the resource chain more agile it can make the procedure of the company more

smoother. Because of this applying the seven rules which is given in Desk 1will make a difference.

Efficient responsiveness should be better by de-coupling the up stream and down stream functions and utilizing the principles of postponement whenever we can.

As the business strongly assume that there should be a flexibility and variability in every categories. It could be improved by growing new products, by including some product changes to fit the customer requirements and also quickly in a position to respond increasing and decreasing demand due to the seasonal sales routine and also can position different brads to appeal different customer sections in terms of quality and the purchase price.

Table 1: Basic Principles for the creation of agile resource chain

Principle

Application

Synchronize activities through distributed information

Needs to enhance the company's new IT systems (ERP system, Electronic fund transfer, Internet, e-mail etc. ) which permit effective on line purchasing &other services

Work Smarter not harder

Reduce non value adding activities such as manual activities &identify the parallel processes in the business (already this is performed up to certain level of transactions)

Partner suppliers to reduce inbound lead times

Work more better with suppliers and talk about information about different demand schedules to lessen time delays

Seek to reduce complexity

Enhance the move forward capabilities of information systems &increase the transparency of operations to reduce misunderstanding &delays

Postpone the final configuration

This has already been being used for several selection of items

Manage processes not merely functions

Needs to manage across its supply chain or the inter related cross useful processes to become more versatile &agile in responding to demand

Utilise appropriate performance metrics

Singer already uses performance monitoring metrics, but can make out the other opportunities which suits the composition of the organization &do necessary changes &design improvements

Enhance the supply chain strategies through agility:

4. 3 How well the Singer Sri Lanka Supply String is Synchronized?

"Synchronization implies that each stage in the source chain is connected to the other and that they all 'march to the same drumbeat'. The way in which entities in a source chain become linked is through shared information. "

(Source: Christopher 2005, p. 177)

Key processes that needs to be connected, up stream and down stream to provide string synchronization of Vocalist Sri Lanka

Key Processes

Analysis of Current Situation

Possible Strategic Recommendations

Planning &Scheduling

This is performed by posting information between each tier, but the key concentrate is on the first tier customers &suppliers.

Properly connected information system should be put in place with a ERP system in order to have a proper control over the lead time &inventory.

Design

Since the poor communication with the tier 2 suppliers it has lead to a lack of market development and confidence about new design developments

IT based mostly systems (e-mails, internet etc. ) may be used to optimize the connection among all the tiers

New Product Introduction

Though this is performed through the differentiation strategies, still there are loop holes where the styles are not clearly discovered and communicated

When this comes to the bulk production it is essential to identify obsolete items and replace them with new product designs. to gain competitive advantage For this properly linked network channel is essential

Product Content Management

When a change is required it offers implemented after going right through a very long process where totally based on the hierarchy of management, which is very frustrating and complex

Should have a proper positioning with the strategies and the critical techniques in the resource chain to minimize the impact within the customers

Order Management

Most of the main suppliers have their own person order monitoring systems and basically the order processing is done by basic methods as connecting via telephones, where timeliness is a question

To boost the agility with the highly volatile market requirements Singer has to be inline with new technological progress where they can decrease the order management time and enhance the efficiency of the complete supply chain

Sourcing &Procurement

This is performed well in today's system, but this is bound anticipated to high confidentiality

As some of the suppliers use competitors this should be remain but can be increase the visibility insurance firms strategic partnerships

Properly synchronized system would be the following

4. 4 Other advice for further advancements in supply string management:

Mini Warehouse Concept: Since vocalist has more than 500 retail shops islandwide, keeping sufficient stock at each locations is affecting significant amount of money. So it's better to locate minuscule warehouses in each district to maintain required inventories.

Be Green Through Opposite Logistics: Company can reverting back again all outdated and outdated goods directly from the clients and make an effort to send these with their suppliers at a nominal amount, which they are sometimes able to upgrade the merchandise again. This change logistic strategy can prolong into having a far more greeny environment as a liable commercial citizen.

Convert Major Suppliers Into Strategic Partners: Vocalist can try to consult with its major international suppliers and convert these to strategic partners via joint venture or partnership contracts, which would permit to truly have a long lasting method of trading to both celebrations.

Optimize Supply Chain: By nature consumer durable market is categorized as a seasonal market. Singer sales style has two main seasonal results throughout the year (Apr/May and Nov/Dec). Extremely common to run from the stock during seasonal times and having extra stock during off times. Both ways this isn't good for the business since they are loosing customers during the season while significant amount of money tangled up in the inventory during the off season period.

Structure Vs Strategy: Company's typical high hierarchical composition in not infavour of the decision making system since each modest decisions is going above the range to the top hierarchy, which needs lots of the time to get the final decision to the down the layers. If the business can effectively empowered its midsection and first range professionals company can become more proactive than the existing situation.

Red to Blue Sea Strategy: Singer has amount of head to head competitors in the market who are engaging in the business enterprise in similar nature. So company can immediately identify its advantages and competitive priorities (which can be experienced management team, islandwide network, etc) to be advantage over others in the competitive environment. Quite simply they can enjoy lots of advantages by following the Blue ocean strategy.

5. 0 Conclusion

Supply Chain Management concepts and techniques are not common to all the establishments. Some times it can be a complex scenario where it also change time to time anticipated to internal professional factors such as union actions, product line changes, design changes, etc. and due to exterior factors such as changes in monetary condition, other company rules and regulations imposed by the government, new market competition, international market causes, etc.

Singer Sri Lanka has strong designed strategies and also as per the analysis carried out considering the proper recommendations could be more effective in attaining sustainable competitive edge in the industry by efficiently taking care of its supply string.

So it is vital to be more realistic when choosing the proper source chain management rules and tools in a highly volatile and active environment. This can also be cause reflecting the bottom line profitability of the business.

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