Part 1- Introduction The report contains the...
Global Supply Chain Assignment
Introduction: Global Supply Chain AssignmentGlobal Supply Chain Assignment is dealing with the information systems, information systems and their impact on socio-technical system of an organization and it will also evaluate different types of management styles and organizational performance structure and their impact on information systems. Here we have tried to present the key issues faced by Global Supply Chain Management System in the form of questions and answers.
Question-1 what problems / issues were there with the ‘old M&S’ distribution system?Answer-1 some of the major problems and issues related with the old M&S distribution system were as follows:
- Basis supply chain strategy: The Basic supply chain strategy of the company was designed around the low cost production system. This strategy of low cost production system for the company has give birth to the problem of slow response to the changes required by the market.
- Binding on supplier: The Suppliers of the company were having restriction in terms of production of goods only for the M&S due to which they were not able to produce the goods for other retailers hence they were shifted in other countries for low cost of labour cost which become a problem for the company as the company have to bear high cost of transportation.
- High lead time: Due to the location of suppliers of the company in east countries for low labour cost the lead time of the production become high. Since it takes about 4 to 6 weeks from transporting material and goods to the country hence the lead high time created the problem for supply chain of the company.
- Capacity vs Demand: The Company has to do the trade off among the volume of goods supplied and the ranges of colour in which it will be produced. As the company have to buy the high volume of products for buying in more ranges of colour while for buying in less ranges company was able to buy in less volume as well. So there was always a trade off involved in supply chain of the company (Banagahan,1990).
- No flexibility: Mark and Spencer were not having the flexibility for the short lead time in production system hence due to this they only produced single brand items for their products which created problems for the company. As with the single brand company was not able to operate in sub brand for the products due to which different standards and ranges can’t be served to the customer. If the sub brands have been introduced initially then it would have been easy for the company to more number of customers among different segments.
- No speciality in production: The suppliers of the company were such that they all were producing the all ranges of the goods hence the no supplier was having the speciality in producing the particular range of the products. It can be seen as a problem since the industry is having high competition and speciality in production can lead to competitive advantage or the competitors.
- New product development: Production of new product was also a problematic area for the company since it was quiet slow and costly as well.
- High development cost: As all the suppliers of the company were producing all the range of the products hence company have to waste lot of resources in deciding who will produce what and in how much quantity which also given rise to the high development cost for the company.
Question-2 what changes did M&S make?
Answer-2 There were many changes which were done in order to improve the supply chain of clothing business of the company are as follows:
- Less lead time: M&S reduced its lead time in order to respond to customers in faster time so that the customers can be served as per their requirements. Hence the number of suppliers was reduced by company and better lead time was achieved this way.
- Integration of buyer supplier information: Company tried to collect the information about the preferences of buyers for buying the goods and this information which was collected through the buyers was given to the supplier so that suppliers can produce the goods according to the customer choice and customers can be serves in better manner (Herald, 1998).
- Strong brand name: Company initially tried to leverage on its single brand name which was there but afterwards company tried to produce several sub brands and used these sub brands to capture the market.
- Focus on quality: Mark and Spencer started giving due focus to its quality of goods hence the company have extended their entry level pricing and provided high quality goods to their customers. This has given a high quality store image to M&S.
- Standardisation: Company have standardised both their products and layout of their shops in order to give the uniform image in front of their customers (Lawrence, P.R. 1988).
- No trade off: initially company have to make a trade off among the volume and range of the goods produced by its supplier. But now since the company have reduced its number of suppliers hence there is stronger strategic relationship between the company and the supplier hence the suppliers are ready to produce the required amount of volume with required amount of ranges for the company. Hence company do not need to make trade off while buying the goods from the suppliers.
- Customer loyalty: M&S enjoys a very healthy brand image among its customer segment that is why it has got the high customer loyalty and which brings lot of word of mouth publicity for the company.
- One size fit all product approach: This is the special range of clothing manufactured by the company in which average size clothes are manufactured and these clothes fits to everyone. Hence the company can generate the volume by doing so.
Also Read: Logistics Supply Chain Assignment
Question-3 what changes were made to the M&S supply chain strategy? Focus on specific changes to supply chain strategy?Answer-3 Supply chain of M&S which was initially narrowly focused around the low cost went through certain strategic changes. Some of the major strategic focuses of the company at present are as follows:
- Reduce complexity: The key strategic focus of the company should be on reducing the complexity by consolidation of their warehouses. They have consolidated many of their warehouses and a larger area now is assigned to one particular warehouse. The Process simplification is another step to add to the complexity reduction for the company. Company which has got more than 110 warehouses should try to close some of its warehouses and try to develop the super warehouses for the company. Company tried to get the raw material and supplies from the selected number of supplier hence reducing the complexity.
- Efficiency achievement: Company have identified various opportunities to reduce the cost of supply chain for them. The main focus of the company was onto removing the duplication and increasing transparency hence by doing so company achieved the target saving of $120 million in the year 2000.
- Improved stock management: Company should try to reduce the stock keeping level which will further reduce the working capital and results into lower cost for the supply chain of the company. For managing the company stock, Stock management software can be implemented. The Retailers of the company can be contacted for the real time sales data which will help to generate the figures of stock which need to be stocked by the company. Hence the use of technology can help the company to reduce the stock level hence the lower cost.
- Reducing number of suppliers: Company also taken major step by reducing the number of supplier for the goods. Hence by reducing the total number of suppliers for themselves also reduced their cost for the supply chain. And by reducing the number of suppliers their relationship with the supplier also get enhanced. They were able to produce the customised goods according the customer needs (Fites, D.V. 1996).
Question-4 what are the order Winners and Qualifiers for the different M&S ranges?Answer-4 The Different M&S products range were as commented:
- Classic range: Perfect and classic range of products were basically designed for the high end customers who have the motive of buying the high quality products at high prices. These clothes were made with high innovative design and takes high cost of production as well. The Order qualifier criterion for the company was the good design and low price of the clothes. The Order winner criterion for the perfect and classic clothes was quality and value provided in these clothes.
- Autograph range: The Autograph ranges of clothes were designed by the top designers for the high street pricing. The order qualifying criteria for the autograph range of clothes was quality and fit while the order winner criteria for the autograph range of clothes was the highly innovative design which was designed by the top designers.
- Per una range: these ranges of clothes were ring fenced and produced to provide the different variety of the clothes. It was having high quality as well. The order qualifying criteria for per una range of clothes was the low price and design of the clothes. The order winning criteria for per una range of clothes was the different product standardisation. For example the whole range was in similar standardised form and size.
Question-5 what are the different logistics performance objectives for the different product groups? Fill in the table below.Answer-5 Following table demonstrate the logistic performance objective for different range of products for Mark and Spencer:
|Product Range||Perfect and Classic Ranges||Autograph Range||Per una range|
|Use||Timeless, everyday wear||Occasional wear||Usual wear|
|Design changes||According to customer lifestyle||According to latest trends||Designing over the clothes was in Ring fenced method|
|Price||Value for money||High street price||Affordable price|
|Quality||High quality||Medium quality||High quality|
|Sales volume SKU||High sales volume||Low to medium||High|
|Order winners||Quality and Value||Innovative design||Product standardisation|
|Order Qualifiers||Design and value for money||Quality and fit||Affordable price and design|
|Operations Priorities||Low cost production||Short lead time||Wide ranges|
The Product range for the M&S consist of mainly three types of clothing which were perfect and classic, autograph range and per una range of clothes. Design changes for the Classic range design are changed according to the customer preferences, for autograph range design changes according to the latest trend while for the per una range design are ring fenced. The Pricing of the clothes was according to the different range of clothes which was manufactured by the company. The Pricing for the perfect and classic range was value for money. While for Autograph range it was high street price and for per una range prices was in affordable range.
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