POS Data and Perishability of Products - Essay Example

The environment characteristic of the cargo a) takes the form of controlling cargo storage and distribution via the most relevant ways. Product quality is fundamental to the undertaking of these activities, and therefore only the best company in terms of its logistics is chosen.

b) Internal coherent and competent logistics should be accounted for in considering any given company. Such a company should be pursuing entries into newly opened market opportunities. The resource portfolio of the company is important in determining the strategy to adopt. Where resources are not adequate, internal strategies may be adopted, but this may consequently necessitate outsourcing some well-defined operations to a third party within the same level of logistics as the outsourcing company.

c) A recent entrant company in the manufacturing industry makes a good choice. Such a company undertakes vigorous activities in its operations in a bid to improve the output level. The principle focus here is the product design, manufacturing process, and volume of product sales. Cargo handling in both storage and distribution of raw materials and final products is handled by an external party through outsourcing arrangements.

Question 2

a) Quick response: This is a system in which decisions about amounts of orders and times of replenishment are made by the retailer. On the other hand, POS data analysis is handled by the supply side. The importance of data analysis by suppliers is that it allows for an effective means through which future predictions can be made, consequently making it possible to make plans and schedules of production. A quick response is best suited for newly interacting retailer-supplier, where each is uncertain about the other. Inventories are controlled by the retailer, although POS data availed to suppliers can improve their operational performance. The lack of adequate resources to affirm the relationship between the retailer and the supplier necessitates quick response practices.

b) Continuous replenishment: POS data are made available to the vendors through this system. This provision is tailored towards the realization of shipment activities that are further necessary for the maintenance of the desired inventory characteristic. Shipping frequency is agreed upon at an earlier stage and all the guidelines of the system are outlined to ensure that the inventory exhibits the required characteristics and amounts. This system strikes a balance between quick response and a Vendor-Managed Inventory system.

In this case, lesser risks are taken relative to VMI, and at the same time, the retailer-supplier relationship is well-defined in this system as opposed to the quick response system.
c) VMI (Vendor-Managed Inventory system): Levels of inventory to maintain in the system are solely determined by the suppliers. Policies are formulated and implemented to ensure that the agreed-upon inventory levels are observed. Replenishments in this system are taken care of by the vendors. This replenishment management by the vendors does not take place automatically; rather, it is the retailers that charge the vendors with full responsibility to do that. VMI system is complex, and a strong buyer-seller relationship needs to be upheld. An effective VMI system realizes a general system saving, contrary to the other two types of retailer-supplier partnerships.

Question 3

The manufacturing company is undergoing pressure from the retailer regarding the delivery and stocking of diapers. The retailer and the manufacturer observe a VMI system, meaning that the two exhibit strong relationships in the operations and activities that bring them together. The Kimberly-Clark and Costco case study show that a company can take advantage of the pressures characteristic of the case study. To start with, the retailer-supplier relationship is well-defined and strong enough to allow either party to learn the characteristics of the other. The retailer claims that the manufacturer bears the sole responsibility of making stocks available at all times. When this fails to be, the retailer does not bother to get stocks for the store. A company can revoke this deal and operate its store without engaging in any business with the retailer.

Warehousing and transportation costs are purely met by the supplier. At some point, the supplier is forced to alter the product packaging or even change the size due to a rise in delivery costs. Such a company can employ an external party and rule out the operations of the retailer. The external party would engage in the business through outsourcing procedures. Such processes would relieve the company of a great burden that is imposed by the retailer. The distribution channel would have to change to fit the direct demand created therein by the act of bypassing the retailer.

The primary objective of the company is to eliminate the retailer if only losses are counted in the dealings of the supplier and the retailer. Raw materials need to be employed, and the aspects of fixed costs are still evident. As a result, it would necessitate the company to cease operations through the retailer by directly entering the market to meet the direct demand. This would mean that the consumers would not have to travel to the only retailer supplied by the company. Consumers can make purchases of the diapers from designated points of sale when the retailer stores are alleviated from the supply chain. Read More