According to the project suggestions, students are permitted to choose the company or a making company for this report. I have chosen a making company in Hong Kong with global resource chains - your garden Company Small (hereinafter called Garden). Their major upstream suppliers are from the US, Canada, and Australia whereas their two biggest downstream suppliers in Hong Kong are supermarkets Wellcome and ParknShop. Although Garden products are also being sold outside Hong Kong and China, like the Northern American, Canadian, Australian marketplaces, I would target this survey only on its market in Hong Kong.
Background information of the organization
The Garden Company Small is a Hong Kong-based bakery and confectionery manufacturer. The company was one of the first Chinese owned business as intended to sell Western-style food products in Hong Kong, but also has a global supply chain network. Founded in 1926, Garden has experienced speedy societal changes and technical advancement before 80 years. Today, they are still persisting using their paramount ideals in quality, advancement and progress.
Garden supplies a large number of food products to today's retail and catering market segments, with many of their products internationally awarded. Among the largest bakery creation firms in Hong Kong, these are well equipped with state-of-the-art large-scale equipment. Their technology, quality, productivity and market development have long reached International Standards. Garden's large assortments of products, high sales quantity and intensive market penetration have long been broadly known.
To further deal with increasing market demand, they continue to inject large sums of investment into product research and development as well as changing their technology and production hardware. The various production procedures are finished with the most complex equipment in their factory. Computer automation is integrated in all the procedures from creation to packaging, totally manifesting the impressive results brought about by clinical management. Furthermore, their primary factory in Sham Tseng with a total area of 70, 000 square meters bears out the development lines for bakery, cakes, biscuits, candies etc.
Unlike most firms in Hong Kong, Garden was a pro-China company and have been supplying bread to Chinese military during World War II. The firm closed its operations through the Japanese job of Hong Kong from 1941 to 1945. The company expanded with the expansion of Hong Kong before and after World Battle II and benefited from the influx of immigrants from Mainland China. In the 1980s and 1990s, Garden products were shipped overseas to Chinese language communities surrounding the world. Besides their major business in Hong Kong, Garden in addition has been actively taping in to the Mainland China market because the 1980s. Factories had been set up in Dong Guan and Yang Zhou to introduce the advanced technology into the food processing industry of the Mainland.
Achieving the ISO9001 qualification in 1997 was a milestone in their record. It demonstrates that Garden, with its world-class commercial management and modern procedure system, is a internationally acclaimed food producer. Today, the company remains a privately possessed family (Cheung family) business with several joint ventures with mainland Chinese firms. It really is mostly of the Hong Kong firms with manufacturing functions still in Hong Kong.
All Garden products are constructed of the finest substances selected from all over the world, for example their barley is from Australia, flour from america, dairy and butter from New Zealand, merely to name a few. Their long-standing experience, fully-automated technology and packing equipment as well as careful quality control guarantee that each product of theirs can meet rigorous quality tests and safety requirements in many countries.
With the past 80 years of superiority, Garden has efficiently established itself as a distinguished brand supported and well-liked by many consumers around the world. Their products currently reach many major Chinese language communities in so far as European countries and America. Today they are really actively developing overseas markets to be able to offer their quality foods to consumers in different sides of the world. With more than eight decades of experience in food production, your garden Company's determination in offering quality products and services and its innovative heart are as strong as ever. Looking ahead, they'll continue with their commitment to producing nutritious and quality food with the quest for perfection.
QIE, which stands for "Quality, advancement, Efficiency", will serve as Garden's commercial objective with the objectives to lead their staff to pursuit of superb quality, ongoing technology and achieve efficiency improvement. It is through the implementation of QIE that the reputation and reputation of their brand have been greatly raised. To realize their goal of QIE, the business sets LTC - "Learn, Think, and Connect" - into practice with almost all their working alongside one another to continuously enhance the developing of quality products, developing new technology and new product beliefs to be able to satisfy the ever-heightening needs of consumers.
SWOT (Advantages, Weaknesses, Opportunities, and Dangers) analysis
Garden has a global brand, it is a strong brand, talents including brand acknowledgement, brand quality, economies of level, strong syndication network, strong syndication chain, supply string, strong international businesses, online expansion, good reputation, reputation management, market share leadership, effective online marketing strategy, experienced staff, strong management team, effective communication, considerable customer base, faithful customers, cost advantages, asset leverage, competitive costs, original and unique products, high research and development, advanced machines, innovation, etc. Apart from each one of these company strengths, they are simply famous in Hong Kong. I believe all homeowners in Hong Kong ingest their products, one or the other on a regular basis. They are considered first rate in the bakery industry.
Due to Garden's huge range of products, coupled with a considerable global retail network, bad communication is unavoidable, it happens every once in awhile. Furthermore, they experience diseconomies to range, sometimes over leveraged financial position, and weak commercial regulating practice. Since Garden's selection of products is designed for the public generally speaking, a lot of their competitors go directly to the high end market, for example to 'high school' customers such as hotels and delis, and leave Garden in the low end market for quite some time.
Garden in essence has a healthy financial position. They did some acquisitions, merger and takeovers on a tiny scale basis. They also connect up with international situations to capitalize on synergy opportunities for expansion of the operation. They constantly look for new markets; grow in Asia, expand into online shopping; decrease its taxation through donations to charity organizations. Inside the era of introduction of international middle class, and change in consumer lifestyles, they are really constantly changing their products to broaden their customer platform, and their service lines like new products such as drinks and goodies, and new service such as mail order.
Although Garden has a lion talk about in the bakery industry, they have many opponents in the high end sector. With Hong Kong coming back its sovereignty to Mainland China, Garden is facing many economically strong rivals from the Mainland. You can find new rivals from the Mainland getting into this relatively small market. So far as their international business can be involved, foreign exchange rate changes have an effect on its imports/exports strategies. The volatility in fuel costs, rising costs of business, costing pressures, probably slowing global overall economy, changes in demographics, change in consumer life styles, changing to cheaper technology, alternative products, changing consumer habits, growing electricity of customers to set the price etc. are possible risks Garden has been facing in the past couple of years.
Porter's Five Pushes analysis
Competitive Rivalry within an industry:
Since multi-market competition prevails, rivalry between competition in the industry is extremely powerful. Companies in the industry have began new businesses to improve the level of competition with one another and compete heavily for geographic market segments. There is no clear dominating market show player on the market. Though the industry currently has relatively high development, much of the business enterprise is cyclical, which leads to intensified competition in economic downturns. High fixed costs also donate to intense competition. Recently, the continued development of online shopping, email orders, combined with increasing knowing of door to door logistics preparations have been giving Garden 'problems' plus they have been streamlining their services in this competitive environment. Some remarks are the following to introduce some of Garden's international and local rivalries.
Sara Lee Corporation
Sara Lee Organization is a global consumer products company with food, drink, and home and body attention lines of business. With powerful brands, such as Ambi Pur, Ball Park, Douwe Egberts, Hillshire Plantation, Jimmy Dean, Kiwi, Sanex, Senseo and its namesake, Sara Lee, the business has leading positions in numerous categories in a lot more than 180 markets in which it competes.
In Hong Kong, Garden has two main competitors in its frozen and fresh breads. For freezing breads, it major rivalries are Maxims, Sara Lee. For fresh breads, Garden is facing numerous small size opponents, specifically in the american style restaurants which bake on an everyday basis because of its evening tea customers.
Competitive Rivalry is a solid drive in the bakery industry because the rivals use price slices to compete, there's a low cost product range and there is decrease in switching brands, and the companies in this industry can diversify and acquire other companies for strategic growth and for synergy purposes.
Threat of New Entrants:
The threat of new entrants into this industry is relatively low as a result of scale necessary to make companies in the industry competitive. Capital wants to fund all of the assets required on the market are extraordinarily large, making competition from business people or small companies very difficult at this degree of market competitiveness. Economies of level are essential for the business enterprise to be profitable and because of the intensity of rivalry, customers are difficult to appeal to. As the basic service of shipment goods would be relatively easy for new entrants to imitate, the rivals in the industry have created value and high switching charges for their customers through proprietary technologies.
Threat of New Entrants is a weak push in this industry. Each company presently in the industry has strong brand images, departing a harder job for new companies. The administrative centre expenditures to begin a bakery company are large, and the companies currently are achieving economies of scale by going global. Any smaller company will never be in a position to achieve these right away, not allowing them to contend on prices. Another factor threatening potential entrants is trade tariffs and international rules. Most companies presently on the market have already established relations with overseas countries. New companies will have to confirm themselves to overseas companies, suppliers, and customers.
Threat of Replacement Products:
The threat of substitutes is currently high for the industry, but major technological or governmental foods laws could change that. As mentioned above, although Garden has a lion share in the bakery industry, they have many rivals in the high end sector, for example Maxims, Saint Honore, Tai Skillet Bakery etc. Garden is also facing many financially strong competitors from the Mainland. The latter produce alternative products such as dumplings, dim amounts to suit the changing consumers flavor. This is one of the many explanations why Garden has been continuously modifying the materials and packaging of the products in the past few years.
Threat of Alternative Products is a strong force in this industry. There are plenty of substitute products on the market. Bakery shops such as Maxims, Saint Honore, Tai Skillet Bakery etc are quickly situated in all the 18 zones. One can actually find each one of these in almost every main neighborhood in Hong Kong. These competition also offer very competitive prices which make potential consumers lose their brand devotion and easy to change to another brand.
Bargaining Electric power of Suppliers:
Suppliers' bargaining power is fairly low in the industry, but different suppliers have just a bit different pricing ways of fight for their survival. Competitors are also on the same footing with suppliers, as they are all subject to the same prices, although they could have hedged diversely. Labour is a major factor of creation in the industry and dissimilarities between companies regarding labour deals subjects those to varying degrees of supplier electricity. Suppliers of raw materials, components, labor, and services (such as skills) to the company can be considered a source of ability over the firm, whenever there are few substitutes. Suppliers may won't use the company, or, e. g. , charge excessively high prices for unique resources.
This is a strong force if the suppliers serve different industries with the raw materials. If the distributor only has accounts or the majority of their accounts with different companies, they will not be able to control prices and equipment.
Bargaining Electric power of Purchasers:
Customers in the industry initially have vitality, but after they commit to a bakery, their bargaining power decreases significantly. Clients can easily check around for price or degree of service in the beginning, but after they have chosen a bakery and purchase their product, they're usually faithful to them. Customers are likely to become devoted to a certain service provider because of long-standing romantic relationships or personal conversation with the business.
This is a modest pressure in this industry because competition helps to keep prices similar among the companies. Really the only difference is level in commitment. Also, the potential buyers of the services in this industry are reactionary. They do not know the technology before it happens. They become dependent on the technology, service and swiftness offered by the firms in this industry and will pay for it.
SCOR (Supply-Chain Operations Research) Model
Garden's focus on customers will be the public generally, if they be as young as 2 years old, to as old as 99, they could be Garden's customers. Their charges strategy is 'value for money'. Their marketing slogan has been 'nutrition you need every day with the highest quality'. These planning activities have proved to be most successful and made Garden the best dealer in the bakery industry, specifically in the breads, biscuits and cakes sectors.
According to the reading materials I searched and found, Garden has been purchasing all the cooking ingredients directly themselves. However, they actually outsource through logistic companies in their delivery activities. Locally, they need to deliver their fresh breads every morning hours to a huge selection of retail outlets. In addition they need to deliver fresh buns to all or any McDonald's franchisees. Furthermore in addition they deliver a range of fancy breads to airline caterers, hotels and restaurants. Internationally, they outsource vehicles companies as well as freight forwarders for special orders such as wedding and birthday cakes. Internally, they outsource information solutions, financing and accounting, sales and marketing, foods examining etc. just to name a few.
"Make" or development activities:
Garden's upstream suppliers are worldwide. These included but not limited to flour, sugar, milk, cocoa, vanilla, wheat, soda natural powder, etc. again merely to name a few. Countries included however, not limited by (in alphabetical order) Australia, Canada, China, European countries, Latin America, and america.
Garden's bread production lines are powered by a 24-hour basis, of which one is the first fully-automated series for hamburger buns in Asia. Apart from the retail market, they offer a huge volume of wholesale goods, which include loaf of bread, pastry and iced dough products to major fast food chains, restaurants, hotels and air travel catering services in Hong Kong. With the far-ranging businesses, these are focused on providing consumers with better alternatives with continuous innovations.
Garden possesses diverse knowledge, equipment and automated production lines to produce a wide variety of biscuits including wafers, cookies, sandwich biscuits, saltine, crackers and assorted biscuit gift packs to meet market needs.
Their wide range of cakes is definitely well-known for its high quality and great tastes. To cope with market demand, Garden produces wedding cake products with highly successful production lines, of which one is fully computerized for producing mini-cakes. Which has a wholehearted contribution from over 1, 200 employees, Garden has generated itself as the most reputable manufacturer in the local industry.
Order processing & information systems
All market interactions, from the understanding of aggregate demand to the fulfillment of each order are not done wholly by Garden internally themselves. Some logistics are being outsourced, specifically for the international markets in Northern and Latin America, Australia, Europe, and Canada.
Garden normally gets their purchases through mobile, fax and e-mail or e-order. Its IT section uploads purchases to the printing invoice system. Automatically, these invoices cross to its distribution department for delivery. After deliveries, these invoices will be, again automatically, delivered to its accounting department. The latter section then issues credit notes to the correct customers. Currently they remain using the information systems designed by IBM.
Quality Control foremen in Garden are created accountable to ensure that expiry time, and appearances are properly done, and presentable. All delivery vans must have the correct heat for different sorts of products.
Different transportation teams are required for different products. Fresh breads, freezing breads, biscuits are being delivered by the China and Hong Kong transport teams. Fresh breads team has about 60 vehicles to provide 4, 000 orders per day. These pickup trucks are recognizable easily on the roads. Frozen breads and biscuits clubs have about 20 vehicles to deliver 400 orders per day. Three trailers are being outsourced for the Mainland China and Hong Kong market segments.
As mentioned above, Garden will outsource through logistic companies in their delivery activities. Locally, they have to deliver their fresh breads every morning hours to hundreds of retail outlets. They also need to deliver fresh buns to all McDonald's franchisees; deliver a range of fancy breads to airline caterers, hotels and restaurants. Internationally, they outsource travelling companies as well as freight forwarders for special requests such as wedding and birthday cakes. Not only that Garden needs to create the best products, they also want to provide their best delivery service.
Garden guarantees its products are fresh and proper. They guarantee their retailers that they can replace any ruined or rotten items, that is if that happens. Garden has decided with their merchants that they can pick up any expired items on the shelves.
Assess how well the organization implements the supply chain management
As pointed out right at the beginning of this statement, Garden's major upstream suppliers are from the US, Canada, and Australia whereas their three biggest downstream suppliers in Hong Kong are supermarkets Wellcome, ParknShop and Mcdonald's. So far as this report can be involved, I would concentrate in the downstream supply chains; and before I go into how well Garden implements the supply chain management, I'd like to create Garden's major downstream source chains Wellcome, ParknShop and Mcdonald's.
Wellcome - Wellcome is Hong Kong's longest-established supermarket chain, they have an overall staff of 5, 000 in more than 240 stores and functions more than 14 million customers every month.
ParknShop - ParknShop is one of both greatest supermarket chains in Hong Kong (the other is Wellcome Supermarket). ParknShop manages more than 260 retailers in Hong Kong, Macau, and Mainland China. ParknShop has more than 200 stores and 9, 000 employees in Hong Kong.
Mcdonald's - McDonald's Organization is one of the world's major chains of hamburger fast food restaurants, serving practically 47 million customers daily. Most of their breads in Hong Kong are given by Garden.
Although Garden does supply their products to airlines catering companies, hotels and restaurants, as well as supply chains such as 7 Eleven, Circle K and etc. , I am not going to add these supply chains on the one on one basis.
Basically these supply chains are managed by substantive and detailed companies with well-trained management teams. Top management, as well as middle management employees at Garden have very good business romantic relationships with their source chains. They may have properly done legal contracts specifying everything in products and payments. I have not had the opportunity to find any earlier information regarding any communication breakdowns between Garden and its supply chains. I've neither had the opportunity to find any past legislations suits about Garden suing any of its source chains for non-payments, nor any company suing Garden for not providing its responsibilities although there have been rumors that Garden has been finding it increasingly more difficult to get their obligations on time in the past few years. Based on these findings, I believe Garden has been successful in its source chains management activities.
Suggest solutions/ways to improve the business business; especially by advancements on supply string management of the organization
Supply String Management (SCM) is not created to suit for each and every company. It could be successful only with top management dedication and professionals' devotion in executing those management strategies. Garden's management groups need to spend time in assessing whether new SCM, including international networks, would work to be implemented to their company and how it could be successful.
Garden bakery has long record in Hong Kong that the fundamental target market ought to be the mass public dished up as the stable diet. Together with the increasing awareness of healthy eating, all of the 'healthy consciousness' products have been advertised like multi-grained, whole wheat grains, high calcium mineral & zero fat breads. It's the general social development and also functions among the marketing strategies that concentrate on the targeted middle-class, office-ladies and health awareness customers. The comparative advantage of Garden definitely is its long background and well-developed manufacturing factories, well-connected syndication stations, competitive retailing price and, of course, the well-known and long proven brand name. On the other hand, these relative advantages might add some shortcomings in conditions of the versatility of market positioning and variety of products in response to the ever-changing and ever-increasing market push.
Personally I am disappointed with Garden's decade-long use of coconut petrol as an element for their biscuits production. Corresponding to certain food mags, too much use in coconut essential oil is harmful to our health. Although all the reading materials I came across have been saying good things about Garden, nevertheless Garden is not a listed company, this is a privately had company. They don't have to reveal some of their operation details to the public. Particularly, they don't have to reveal their budget apart from to the Inland Revenue. My understanding of Garden is that it is a very traditional style traditional company. Its top management includes members of the family of the founder. It is solely family business. Its image is not capturing up with the young generation. Their product range is also traditional. It generally does not give any 'modern flare' to attract those expats from the west. They concentrate on Asians so far, that means there is a huge expats market for them to develop. Garden reminds me of the Green, Yellow and White Arrow brands nicotine gum company. The last mentioned company has been too conventional and is not innovative to meet up with the new entrants. Hence, Green & White Arrow chewing gums have been losing market talk about. Until today, they have not been able to gain again what has been lost.
The image of Garden should shift to target more evidently on each market section. For instance, Garden should develop a 'Gourmet' production range which focus on the finest materials, the progressive design, for example in its product packaging, and its adverts. They could consider making more selection of breads, land cakes comparable to those dishes from Italy and France, or from European countries at large. In order to shave off the old 'stable diet' image, instead, the building up of the delicate and professional 'crafted' food and also to declare that not only the five stars hotels can produce but Garden can also make and even better.
The efforts to ensure managers do well in the SCM program and not treat it as another flavor-of-the-month include however, not limited to the followings. Firstly, Garden has to ensure that the business's SCM strategies are specifically made. Subsequently, the SCM program need to meet their customers' needs and reduces the company's costs. Finally, the management team must buy-in this program. Also, all the huge benefits included from the program such as customer responsiveness, more consistent on-time delivery; shorter order fulfillment business lead times; reduced inventory costs; less expensive of purchased items; higher product quality; faster product invention and etc. must be evidently told all the worried managers in order that they know the importance of the program. Garden must be sure that the staff concerned understand the targets of this program, for example - to raised utilize the company resources yet with higher product quality. Finally, if professionals prosper in implementing and executing this program, the company should think about providing them with incentive such as bonus offer or additional rewards other than their normal payment. This will give them more desire to continue to operate this program.
Garden has to do detailed research and researches to discover what are the merchandise that their customers demand. They have to listen to the voice with their customers. Their views and recommendations could in turn help the business to create specifically the number of products the clients need. The company could also utilize their studies for meetings and discussions with their suppliers, both upstream and downstream and production managers to reduce the order processing time and inventories. The business would also be able to produce higher quality products with lower prices and less order handling time. In this manner, the company would be more attentive to both their customers and suppliers. By doing these, the company would be able to grow its market share from other opponents.
Further possible advancements can be capitalized in the improvements in scientific and informational environment. These improvements have major implications for any industries, especially logistics. If used effectively such advances may be considered a key way to obtain competitive benefits. The technology listed below could become a competitive advantage advantages for Garden in the future.
Radio-frequency identification (RFID) - not prepared to implement?
Radio-frequency identification (RFID) is the use of an object (typically known as an RFID tag) put on or integrated into something, pet animal, or person for the purpose of identification and tracking using radio waves. Some tags can be read from several meters away and beyond the type of view of the reader. It works such as a barcode, but instead of having to be passed before a scanning device for recognition, small transponders (known as 'tags' or 'potato chips') distribute radio alerts. Each tag is small, sturdy and unique so any one item can be monitored singularly throughout the resource chain.
Logistics and transportation are major areas of implementation for RFID technology. For example, yard management, shipping and freight and circulation centers are some areas where RFID tracking technology is used. Transportation companies across the world value RFID technology because of its impact on the business value and efficiency.
The new technology happens to be seen as very costly to put on individuals products, but large companies already use it to track transport items. RFID studies have fulfilled with blended customer reactions. Much like many such technical 'improvements' the consequences can be both positive and negative. RFID technology happens to be unsophisticated and mainly applied to logistical businesses. Training of personnel and informing all internal stakeholders concerning how RFID technology works and may benefit the company, proclaiming the effect on customers so that companies have the ability to improve their procedures.
Global Setting System (Gps navigation)
The Global Setting System (Gps unit) is a U. S. space-based global navigation dish system. It offers reliable positioning, navigation, and timing services to worldwide users on a continuing basis in all weather, night and day, anywhere on or near the Earth which includes an unobstructed view of four or even more GPS satellites. Gps device has turned into a mainstay of travelling systems worldwide, providing navigation for aviation, ground, and maritime operations.
Installing Gps navigation systems for delivery vehicles can boost the efficiency and success in providing products.
Even though transportation companies offer tracking and insurance services with their customers, you may still find chances that the customers' deals might be lost or taken. Imagine a Gps unit chip attached to the delivery deals; it may then be tracked anytime. Adding this technology can enhance the customer's confidence about Garden.
Garden's supply chains are held by substantial and stated companies with well-trained management teams. Garden has very good business connections with their supply chains. Garden has prevailed in its SCM activities. For even more improvements, Garden should keep themselves abreast of the current important trends being developed in the business arena, for example electric business has been trusted. Experienced users reveal that e-business reduces costs and time. It generates less turmoil between suppliers and consumers. Garden must realize that very few market sectors are shielded geographically; competition is getting increasingly more fierce. Garden's persistence to 'change' as the articles mentioned-above is crucial for its progress.
With Garden's top management team's dedication, together with professionals' work, I assume that Garden's personnel is more willingly to improve and Garden has a good potential for success in enhancing its current SCM program.
During the procedure of finding reading material because of this exercise and thereafter digesting the materials, I became more acquainted with what supply string management is. I am interested in looking material for other type of companies when time enables.
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