Advantages of Supply chain management

Advantages of Supply chain management Explain the advantages and disadvantages of implementing a Supply Chain Management (SCM) system. The advantages and disadvantages of Nike implementing a supply chain management system include cost of buying and handling inventory, processing orders, and information systems support. Advantages of implementing a (SCM) by Nike By implementing the process of supply chain management, Nike will be able to set up networks and facilities that transforms raw material into products that will be delivered to customers. This will give Nike a huge advantage over their competitors by helping them use information more efficiently along the entire chain which can result in significant cost savings, it also helps regulate the movement of inventory coming in and going out of the organization, orders will be process much faster than formal times, and predictable delivery with updated information system. The networks in each level must handshake or interact to help connect suppliers to the Manufacturer, to the retailer then the finished product is delivery to the customer in just-in-time (JIT). Implementing supply chain management will enable Nike to be more effective and efficiency also transportation costs will be reduced, cost of inventories will be fair and inexpensive, increase number of capable suppliers, it maximizes the means of transmitting messages and information effectively within the organization and it will help Nike adapt to technology changes more quickly than before. SCM will also help Nike gain the buy-in of all key markets, increase supply chain speed and the bullwhip effect. Disadvantages Implementing Supply chains management in Nike had proven to be very difficult in the past, this is due to the problem cause by the I2 software which required significant customization to make compatible with Nikes legacy systems. Other downfalls of implementing supply chain management system is that it can become highly complex and dynamic in the short-run, switching cost are relatively high, increasing uncertainty, high competitive pressure urges, increase implementation costs. Developing a planning system that effectively coordinates information technology and people is a considerable challenge, changing market conditions, negotiating terms and conditions required huge amount of risk and forecasting. Describe the options for acquiring a SCM system with the advantages and disadvantages of each option. The first option for acquiring a SCM system is implementing an ERP Enterprise Recourse Planning System using the SAP software; ERP system can facilitate SCM Needed production planning and purchasing systems already in place. ERP integrates sales, order, inventory, manufacturer, and customer service activities. One advantage is that it allows sharing production plans along the supply chain to occur in real time and helps them determine whether to buy regionally, establish a collaborative team or appoint a global lead buyer. Other advantages of ERP include efficient business processes, inventory reduction, lead-time reduction, improved customer service, improved decision making, real-time insight into organization and higher profitability. The disadvantages are the combination of the people, procedure, hardware, software and data in the organization or problem in the operational, managerial, and strategic level of the organization. Inadequate or inconsistent data, mistakes in customer ID numbers, and bad customer service. The second option is implementing a Customer Relationship Management Systems. CRM supports the business process of attracting, selling, managing, delivering, and supporting customers. CRM addresses all activities and events related to customers in a single repository data about all customer interaction. CRM also stores all customer data in one place and make it possible to access all data about the customer. CRM will allow Nike to be more flexible, productive and efficient in handling customers private information. Flexibility ensures them to recognize manufacturing issues, to response to design changes requested by the marketplace. Nike will also be able to response to unexpected or uncertainty the company has and will provides the means to adjust to the consequences of inevitable risks, and reduce total costs. However, flexibility is costly, uncertain environments companies with highly flexible supply chains perform better than companies with less flexible supply chains while in ce rtain environments the opposite holds. The disadvantages or implementing CRM include system overload, turnover, inconsistence data, people and hardware and software. Outline the raw material inventory purchasing process from the identification of the need for an item to the supplier payment. To optimizing and regain control over control over production planning Nike must utilize the approach of raw material inventory purchasing process to help increase efficiency, increase lead times and to help increase the rate in which product is being delivered to the customer. When a customer demands for a product or item, the primary retailers sends an order for the product to the major raw material supplier which sends the raw material needed for the production of the product to the manufacturer, then the manufacturer outs all the components of the product together and sends it the distributor. The distributor in turn purchase the require items from the manufacturers, and then distributes the products to the retailer which then delivers the product to the end consumer. From the distributor point all the way back up the supply chain to the raw material suppliers there is no further injection of cash. The money you spend on the product or equipment is passed back up to the supply ch ain as payments for gods or raw material. Customer is the only source of revenue. By reducing numbers of suppliers and increasing efficiencies in the entire distribution chain, manufacturers are able to reduce raw materials inventory. Bennett,R..(2009). Trade Usage and Disclaiming Consequential Damages: The Implications for Just-in-Time Purchasing.American Business Law Journal,46(1),179. Retrieved April 21, 2010, from ABI/INFORM Global. (Document ID:1665640451). Describe the potential pitfalls that may be encountered in implementing a SCM system. Along with the great advantages that come with switching to a supply chain management system there are some potential pitfalls that can cause money loss or confusion within the system. The system will be set up with a great deal of rigidity but must also leave room for some exceptions because things do not always run as smooth as they were planned out. The supply chain may not have the same information systems so incorporating the different systems and getting them to work together without confusion may be a hard thing to set up and cause orders to be messed up. The companies within the supply chain may also have different goals which could cause the companies ideals to clash causing different tasks to be taken with more urgency then others. The delivery dates may also not match from the supplier to the retailers causing wrong delivery dates being told to the customer. Customer service expectations may be different from company to company along the chain as well, causing different go als in quality and customer support for the product. Some companies will not have a sufficient information system to receive the information and relay back, which can cause more confusion in the system. Making sure that everyone along the way in the system is trained well enough to deal with any problems that may arise is a big help. Assuming a SCM system is purchased and customized; explain the major tasks that need to be completed in order to implement this system. The tasks should be presented in chronological order. If Nike were to introduce the SCM system they would need to start out with setting up a strategy that the companies can agree with to keep the system working smooth. Getting all the companies on the same page is the crucial first step to setting up a SCM system and will help the companies work together easily. Configuring the system to work with all the companies is the next step, getting compatible information systems or a way to enter the information into each information system is a key in keeping the companies joined in the system. Making sure the constraints of the systems and requirements are right for the use each company needs them for. Figuring out the locations for all the pieces of the system is the next step making sure they will work together to benefit the company and not cause more costs to the companies. Planning the source of resources and the resource requirements to set up and make the system functional is the next step in the process of setting up. Also making sur e that sufficient man power to make the system work properly is in place is very important to having a strong SCM system. Setting up the supply chain controls is the next step, and this consists of deciding which information to keep a watch on and the measurements needed to control the system. The performance of the system needs to be maintained and watched over so these evaluations of the system are important to keeping the system beneficial. The last step would be developing the internal and external relationships, keeping them working together. Identifying the systems needed to keep the information passed to each company is very important so the information doesnt get misinterpreted and orders get messed up. The key to smooth running SCM is communication between the different sectors of the system, if they all receive the right info and can reply back easily then everyone is kept up to date on the time periods. References He,Y.,andJ.Zhang.Random yield supply chain with a yield dependent secondary market.European Journal of Operational Research 206.1(2010):221.ABI/INFORM Global,ProQuest. Web. 21 Apr. 2010. http://proquest.umi.com.libdbauth.nait.ab.ca/pqdweb?did=2004689781sid=1Fmt=2clientId=58918RQT=309VName=PQD Frisk,M.,M.GÃ ¶the-Lundgren,K.JÃ ¶rnsten,andM.RÃ ¶nnqvist.Cost allocation in collaborative forest transportation.European Journal of Operational Research 205.2(2010):448.ABI/INFORM Global,ProQuest. Web. 22 Apr. 2010 http://proquest.umi.com.libdbauth.nait.ab.ca/pqdweb?did=1973809221sid=2Fmt=2clientId=58918RQT=309VName=PQD Su,Y.,andC.Yang.Why are enterprise resource planning systems indispensable to supply chain management?European Journal of Operational Research 203.1(2010):81.ABI/INFORM Global,ProQuest. Web. 22 Apr. 2010.http://proquest.umi.com.libdbauth.nait.ab.ca/pqdweb?did=1897588531sid=7Fmt=2clientId=58918RQT=309VName=PQD Suresh Subramoniam,Mohamed Tounsi,andK V Krishnankutty.The role of BPR in the implementation of ERP systems.Business Process Management Journal 15.5(2009):653.ABI/INFORM Global,ProQuest. Web. 14 Apr. 2010. http://proquest.umi.com.libdbauth.nait.ab.ca/pqdweb?did=1964591951sid=1Fmt=2clientId=58918RQT=309VName=PQD Bennett,R..(2009). Trade Usage and Disclaiming Consequential Damages: The Implications for Just-in-Time Purchasing.American Business Law Journal,46(1),179. Retrieved April 21, 2010, from ABI/INFORM Global. (Document ID:1665640451). http://proquest.umi.com.libdbauth.nait.ab.ca/pqdweb?did=1665640451sid=12Fmt=2clientId=58918RQT=309VName=PQD

China Dolls Essay

Jeffrey Cheong picked up the folder marked â€Å"URGENT†, which his secretary had just placed on his table and looked at its content. The folder contained letters from two of his major clients, KiKi and Houida. Both KiKi and Houida, two European fashion houses, were Haute Couture Fashion Berhad (HCF)’s first customers and have been with HCF since its inception. They were writing to Jeffrey to inform him that they may be looking to China to â€Å"contract manufacture† for them as the prices there were very competitive. Jeffrey stared out of his window in contemplation. He was in a dilemma. Loss of its two major clients would be disastrous to HCF. As it stood, HCF had been experiencing falling margins and profits over the last few years as evidenced in the financial statements enclosed. Loss of Kiki and Houida would mean that HCF would then be incurring losses. As soon as his other clients heard of this new development, they too would be taking similar steps. Jeffrey realised he had to review his strategy quickly if he wanted to retain the present clientele. He knew the inevitable. During the late 1990’s and into the early 21st century, China had made inroads into the textile industry and was forecasted to grow further. Following the relaxation of trade barriers, many of the European and American fashion houses were looking at importing clothes from China at very low prices. This was mainly due to its low operating costs. This had a massive negative impact on many companies operating at higher costs and based elsewhere. The previous adverse perception of â€Å"Made in China† labels had slowly changed as China now manufactured clothes that are higher quality at substantially lower operating costs. If Jeffrey wanted to survive in this industry, he too must consider moving his operations to China. Haute Couture Fashions Bhd (HCF) Houte Couture Fashions Bhd was established in the 1974 by the Tan family. Tan Boon Kheong, the patriarch of the Tan family was a skilled master cutter,  trained by British cutters in 1950s in Penang. He ran a small but successful business tailoring men’s clothing in Argyll Road, Penang until his retirement in 1980. Peter Tan, the oldest son of Tan Boon Kheong, initially under his father as a young 17-year-old but after three years left for Europe as he was interested in creating for both men and women’s fashion, rather than merely tailoring men’s suits and pants. His sojourn in Europe saw him training at Yves St Laurent and Gucci. He had a keen eye on women’s silhouette and soon established himself as a talented designer. Many of the fashion houses were happy to employ him into their team. He returned to Malaysia with a wealth of experience, eager to put his newly acquired knowledge into use. His return to Malaysia coincided with the trend of European clothes’ manufacturers looking at Asia for outsourcing. Peter saw this as an opportunity to kick-start his business venture, especially with his contacts with the European fashion houses. HCF started out as a family owned business with all of its shares being held by the Tan family. Peter prepared to bid for contract manufacturing deals with the European fashion houses. With the help of his contacts and excellent track record with the fashion houses, he soon managed to convince three of them to sign outsourcing deals with him. These fashion houses were keen on doing business with the people known to them as they set-off their new venture. HCF’s Growth HCF started its first fully equipped factory in Penang in November1974. Under Peter’s helm, HCF very quickly established itself as a high quality manufacturer of both men’s and women’s clothes. It had no difficulty meeting the demand of the fashion houses as Peter had recruited several European-trained Malaysian designers to join his team. By late of 1970s, HCF’s turnover had reached RM10 million. Over the ensuing five years since its inception, HCF had managed to add two more European fashion houses into its customer base. HCF’s talented designers were  providing inputs toward the development of the ready-to-wear designs and were well received by the fashion houses. HCF was now faced with a problem. The factory located in Penang was no longer big enough to cope with the production capacity. Peter quickly sourced a large plot of land in mainland Penang – Butterworth and began building a new and much larger state-of-the-art factory to cater for the growing demand. In July 1980, HCF opened its new factory in Butterworth. Peter, then the Managing Director of HCF, decided not to shut down the Penang factory but operated both factories. HCF then employed between 80 to 100, mostly tailors in the Penang factory, while the Butterworth factory employed about 300 employees. HCF continued to experience growth in sales throughout the early 1980s to mid 1990s, charted annual sales of around RM100 million. Its customer base had also increased, drawing in customers from Europe as well as America. Profits were also riding high. HCF opened two more factories. In 1990, it opened its third factory in Jitra, Kedah. The factory had a capacity of producing 1 million garments a year with a strength of 300 employees. In 1995, due to even increasing demand for its clothes, HCF decided to open its fourth factory with a production capacity of 2 million garments a year. This time, it looked to Thailand, as labour was very cheap. HCF set up a wholly owned subsidiary Haute Couture (Thailand) Pte. Ltd to operate the Chieng Mai based factory. It recruited about 500 employees. In 1997, Malaysia was facing financial crisis, with foreign exchange market volatility being the main issue. Manufacturers with foreign customers were unable to honour their contract price as exchange rates fluctuated. HCF was cought unaware. HCF had to tender for a contract six months before the delivery of the consignment. Fluctuation in the exchange rates made it impossible to predict the cost of material that HCF had to purchase form the fashion houses. HCF found itself selling its garments at very low margins for the very first time. 1998 saw HCF suffering its first loss since its inception. Many of its competitors also suffered losses and some even had to cease manufacturing. In a bid to survive the financial tsunami that had hit  Malaysia, Peter Tan consolidated HCF’s position by deciding to cut operating costs. HCF’s major cost apart from the cost of imported material was labour cost. Peter Tan made the decision to shut down the Penang factory, much to the dissent of his father. HCF was still able to meet the demand while still operating the other three factories in Butterworth, Jitra and Chieng Mai. He also decided to shift as much of the production to Chieng Mai, as the labour cost was a quarter of the labour cost incurred in the Malaysian factories. Moreover, HCF was facing labour shortage problems in Malaysia, as many of the labour force were moving to the cities for better prospects. As a result of this consolidation exercise, about 300 of HCF’s employees were made redundant, many of whom had been with HCF since its inception. Over the next few years, its profitability increased gradually and HCF slowly pulled itself out of the loss making situation. HCF managed this difficult feat because of its customer base as well as its reputation for high quality clothes, which commanded premium prices with its customers. The financial crisis had not affected Europe much, and as such, demand for the clothes continued. HCF’s Contract Manufacturing Structure The contract manufacturing deals signed with the European fashion houses were such that the designs were provided by the fashion houses and HCF had to adhere to the designs when producing the respective labels. The fashion houses welcomed suggestions from HCF’s designers but were particular that the designs were not crossed between the various labels that HCF was producing. Cross producing design between labels would be disastrous for HCF as it would immediately loose the contract for the labels involved. Further, the European fashion houses would supply the material for the clothes as they wanted to maintain the quality of the output. HCF purchased the material, sourced for appropriate accessories locally and produced the clothes. The fashion houses would contract for â€Å"a specific quantity of a specific design at a specific quality† to be delivered at a specific time. Any variation outside the contract stipulation would have to be borne by HCF itself. Usually, the contracts were for delivery of clothes one season ahead. This meant that summer’s design clothes would have to be delivered by the beginning of spring. HCF would sell the manufactured clothes at a contracted price. The fashion houses allowed HCF to tender for the contract price based on the design, quantity and price of material supplied. The contract tendering process usually took place about six months before the due date for the delivery of a season’s batch. HCF’s Customers HCF manufactured ready-to-wear clothes for a number of European and American fashion houses. Its clothes were well-sought after for its modern designs and high quality finishing. HCF’s customers have remained loyal over the last three decades, although its major coup was the securing of 2 major American fashion houses as its customers within the last 5 years. All of HCF’s clothing was manufactured under the customer’s own label.

How A Network Can Be Attacked - 2312 Words

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The Social Functions Of Political Systems - 1001 Words

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