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Dealing with Operational Problems Assignment Help
Haigh’s is a leading confectionary business which is owned and managed by a family and the company is well known for its high quality chocolate products and the gifting assortments all over south australia, wales and other parts of australia. The company was found in 1915 and headquartered at adelaide in australia. The study aims to describe the operational issues and impacts at haigh’s in australia and the strategies used by the company to deal with the problem situation (sotiris, 2000).
As the company is well known for its high quality and great tasting chocolates apart from the gifting packages and chocolate frogs which are a king of signature product of the company, the company is keen to make us of the best quality raw materials to maintain the quality and taste of its products. The company starts its production with sourcing and processing of the best quality cocoa beans that are obtained from new guinea and ecuador in africa and certain other parts of the world. Various other ingredients at the company includes cocoa butter, sugar, etc which are obtained from various parts of the home country. In order to get the raw materials in good quality and condition and for the distribution of the finished products the company has a partnership with the chep. The company products are distributed through the company owned stores located at more than 14 locations at australia and through the partner chep.
The company found that the amount of the pallets received from the supplier were not getting in to the accounts of the company in the same quantity and there was a discrepancy in he company’s led to the condition of holding more pallets than what they were being invoiced for. Thus the warehousing supervisor found that they were holding around 600-800 pallets while the weekly transfers coming from the warehouse was showing only 100-120 each week. The company also noticed that the transfers used to double up during the peak demand periods like christmas when the demand for the company products is relatively high. Thus the company took note of the situation of holding more inventory than that was invoiced and they started to inquire in to the situation with the supply chain partner chep (steffens, 2012).
Impact: the impact of any kind of the discrepancies in the supply chain is not only the affected profits due to loss in production efficiency but overall company reputation is at stake due to increase in the waiting time or the lead time for other parts of the supply chain and the customers or due to effect on the quality specially in case of perishable nature of products. As the company haigh’s is known for its great tasting products and the gifting assortments, the poor supply chain management practices would impact the customer expectations from the company. As the company was having problem with the control over the pallets and logistics problems with the supply chain partner chep as this small issue can lead to big effects on the company resources apart from impacting the quality of products on shelf. Also in the global financial crisis scenario, the company is facing problems like
- The reduction in the number of the customers visiting stores while their spending power is almost same as before
- The company is facing huge competition from the global brands like nestle and cadbury in the $ 3.1 billion confectionary markets at australia
- Swiss brands like lindt have started to sell the chocolate products at half the process and their products are available throughout australia across all the leading departmental stores.
However through the use of effective supply chain strategies, the company can attempt to strengthen its relationship and transfer of information with the supply chain partners and meet the customer satisfaction in the long run through providing for the high quality and great tasting products. This will also help the company in more effective utilization of its resources (cannella, 2010).
Though the company was hit by a pallet control operational problem but its impact can be seen on the company’s overall operations and impacts its competitiveness in the australian confectionary industry. The company took no time and took the help of the supply chain partner in solving the problem through taking a note of their asset managing practices. The company took the help of an outside consultant, racheal silby to deal with the pallet problem in the company. The consultant helped in integration of the pallet issue throughout supply chain and advised the company in having transparency with the supply chain partners. Also the consultant helped in instilling of an operation management function at the company in order to ensure the proper control over the pallets and thus making a check of what comes in and matching it with the dockets.
Supply chain management deals with integration of the various functions in an organization like purchasing, business operation management, manufacture, purchase function, distribution of finished products, etc in order to provide better services to the customers and develop an edge or competitive advantage. The various people involved in a supply chain or an organization includes vendors, third party suppliers, transportation partners, distributors, etc.
Lean strategies: the company might have used the lean strategies in order to maintain its overall supply chain and gain stability in terms of production and making use of lower cost strategies to gain back its stability and position (haigh’s chocolates, 2016).
Agile strategies: these strategies are more capable of gaining the competitive advantage for the company in case of highly changing environment through appropriate decision making. The company must have made use of both the strategies in order to maintain its supply chain and in order to provide the satisfaction to the customers through long term business planning.
The company has already started making use of “portfolio plus system” for making order for pallets, tracking and making transfers in to the supply chain which helps the company to be more effective in handling its logistics. The company also ensures that it do have enough pallets in its manufacturing sites in order to meet the needs of outflows.
As haigh’s is one of the largest confectionary businesses at australia and it supplies quality and fresh chocolates to visitors from various parts of the world, thus it must improve the customer satisfaction through supply chain management activities in a better manner. As seen in the case, the company had reacted quite swiftly over the management of the operational issue in the company. Thus the company must focus on selecting the right supplier and must look for quality certification of the suppliers long with their practices and policies towards asset management (krajewski, 2005).
There are various strategies in management of the supply chain effectively as it could be done by:
- Reduction in the number of suppliers to decrease complexity and improve efficiency
- Improvising the sourcing strategy on basis of abilities and importance in the process
- Green supply chain activities in the infrastructure to attract customers
- Analysis and modification in the supply chain model, distribution network and outsourcing of components.
In the supply management process, the relationship between the buyer and the supplier is an important aspect in management of the strong global supply chain for the company. Also in the global operations of the company, the use of the modern technology is vital as it helps in reducing the distance between the buyer and supplier through improving sharing of information and improvement of communication (haigh’s chocolates, 2016).
Through the development of integration in the company’s strategies and the value chain, their strategies can help in meeting the necessities of the global and the highly competitive environment. Thus the relational between the supplier and manufacturer should not be merely a transaction but be based on strategy and this relationship must provide for the exchanges of meaningful and relevant information between the two. Also the supplier like chep and the manufacturer or haigh’s must involve with improvement in the communication processes and the sharing of the use of the modern technology. Thus the use of standard agreements with the various suppliers and use of outsourcing agreements will add more value to the company. Thus the company must focus on developing more communications and sharing of technology and information with the various parts of its supply chain while being involved in outsourcing agreements in certain areas.
Thus the company can be benefitted from the use of legile strategies in the maintenance of its supply chain activities globally and thus benefitted through
- Maintenance of the efficiency in the operations globally
- This will help to reduce the lead times and thus impact the customer satisfaction through lesser waiting times and thus faster delivery
- This will help the company to increase its profits through better meeting of the demand of the customers around the world
- Placing emphasis on the forecasting of the market demands and making arrangements to meet the demands in a satisfactory manner.
This will help the company in reducing the costs and thus transferring the benefits to the customer to enhance their satisfactions while maintaining continuity of supply along with shortening of lead times to all the components of supply chain (ellram, et al, 2006).
The enhancement of the overall value delivered to the customers by the company can be done through management and synchronization of all the activities involved in changing of the raw materials in to finished products in an organization. The supply chain management is a growing concern for big companies like haigh’s which are operating worldwide and impacts their business planning in order to deliver better customer satisfactions at reduced costs to the customers. All the more as the business environment has become more complex and challenging thus the global supply chain management is the need of the hour for big companies. In order to compete in the highly volatile business environment management and minimize the impact of the outside events, the company must involve in developing a more strategic rather than transactional approach towards the elements of the supply chain and adding more value to the process.
Sotiris, z. (2000) supply chain management (online) available at http://www.adi.pt/docs/innoregio_supp_management.pdf last accessed on 1 august 2016
Haigh’s chocolates (2016) (online) available at https://en.wikipedia.org/wiki/haigh%27s_chocolateslast accessed on 1 august 2016
Haigh’s chocolates (2016) (online) available athttp://www.chep.com/resources/case_studies/haighs_chocolates_-_more_effective_logistics_processes/last accessed on 1 august 2016
Steffens, m. (2012) sweet taste of success follows a familiar path (online) available at http://www.smh.com.au/small-business/sweet-taste-of-success-follows-a-familiar-path-20120325-1vsg8.html last accessed on 1 august 2016
Ellram, l. M. Et al, (2006) product-process-supply chain (online) available at www.emarldinsight.com last accessed on 1 august 2016
Cannella s. (2010) up-to-date supply chain management: the coordinated (s,r). In "advanced manufacturing and sustainable logistics" dangelmaier w. Et al. (eds.) 175-185. Springer-verlag berlin heidelberg, germany.
Krajewski, j.; (2005) operations management: processes and value chains. Upper saddle river, new jersey: prentice hall. 3rd ed p.45-98