Developing Market Specific Supply Chain Strategies - Case Study Example

? Evaluation and Application of Thesis Lecturer: Evaluation and Application of Thesis Introduction In the current dynamic global market, organizations have resorted to effective design of supply as one way of surviving in this competitive environment. The ability of a company to roll out its products depends on its ability to maintain design effective supply chains that will link them to their target customers. Advancement in technology has a great impact on the market environment and companies have been compelled to remain flexible to keep up with the ever growing competition. Apart from product differentiation and cost-reduction methods, organizations have to invest in product mobilization to ensure that their products are effectively distributed and are accessible in the market. The design of supply chains has become a complex issue due to the difficulty that many organizations are currently experiencing in attempting to predict the demand of their goods. Competition has further been fuelled by new market entrants and the existence of alternative products in the market that have greatly affected the customer preferences and tastes. Consequently, the ability of an organization to establish an effective product pipeline will have a direct impact on the viability of a business system in terms of revenue and profit generation. Managers have to choose from a number of various pipeline strategies to apply in their business environment, which is the main challenge they have to face today. While selecting a product supply mechanism, the main aim of managers is usually to expand their coverage in the market and to improve the accessibility of their goods. Hewlett-Packard (HP) is one of the organizations that have been faced with market forces that are threatening to push it out of computer sales business. With the proliferation of computer technology, many companies have flooded the market to capitalize on the high demand that over time has maintained an upward trend. One way that this company would maintain its over one billion customers that it currently controls over the globe, the company has to define a modest pipeline strategy. The most appropriate pipeline strategy for this company would be optimization of material and product flows in the market. This demands that the company determine a digital content management initiative to ensure that they keep it simple and efficient to provide information to their esteemed customers concerning their products. To satisfy the demands of their customers, this company requires adopting lean or green production strategy that has become a feature of successful manufacturing companies. Multinational Corporations have resorted to lean production as part of modeling their product flow paths within the diversified market environment. As Hsu, Tan Kaman and Koeng (2009) point out, the success of a firm passes through the control of its supply chain and that this strategy has become a core element in international markets. The supply chain management improves the flow of materials and information from the source to the delivery points; thereby satisfying the demanding needs of the customers. In essence, employing lean strategy will have a significant benefit on the manufacturer as well as the customers in the market. A unique benefit of the lean design is its ability to improve product flow through time and cost based strategies as part of improving the operational effectiveness. In lean strategy, the manufacturing company aims at reducing cost by reducing the amount by product associated with manufacturing of a particular good. In addition, the company optimizes its production cost by reducing any business operations that have no associated contribution to the business revenues. By minimizing the cost of production, a company that employs a lean strategy will be able to reduce its prices per unit products and hence attract more customers in their organization. The link between lean design and supply chain is that it is much easier to push low price products in a competitive environment rather more than marketing expensive products. In this view, as Simpson and Power (2005) state clearly, a lean supplier has the ability to maintain a stronger relationship with its active customers. Consequently, by adopting this strategy, HP will be guaranteed of loyalty from its customers and hence will have a high chance of survival in the competitive environment. Another reason why this model will fit in HP Company is because it will be an add-on on its endeavor to maintain high level social responsibility with its business environment. Employing a lean strategy is one way of revealing that the company is environmentally responsible for its practices and hence will have a positive impact on its public image. The research surrounding the issue of environmental management practices in the supply chain, which is often recognized as the green supply chain strategy has profoundly focused on environmental issue and it includes customers working with their suppliers to improve the environmental performance of the products (Simpson and Power, 2005). The impact that such a procedure would have is that it would establish a mutual relationship between the company and the customers, hence forming a smooth path for their goods. Lean strategy has garnered lots favoritism among many managers due to its integrative approach to supply chain modeling that enables managers to combine various supply chain design tactics. Christopher and Towill argue that supply chain management must shift from the idea of cost but the emphasis in supply chain management in the future must be on agility (Christopher and Towill, 2002). In this view HP will enjoy maximum flexibility in this strategy and integration of various supply techniques will allow them to conform to different environmental conditions offered on the diversified global market. Agility is a business-wide capability that embraces organizational structures, logistics process and information system; therefore employing agility for supply management can fit the strategy of HP Company. The market condition in the 21st century demand that product pipelining strategies conform to the requirements of customer demands (Christopher and Towill, 2002). HP Company is a technology driven company that has to face the pressure exerted by the business environment in the 21st century that has experienced a paradigm shift in technology. The adaptive supply chain must have the capacity of switching pipeline as demanded by the necessities of the market (Christopher and Towill, 2002). Although there are numerous challenges associated with adaptive pipeline strategy between the retailers and manufacturers, analyzing forecasts to decide on offshore production commitments is vital. The best way that HP Company can achieve differentiation is by providing engaging in innovative strategies of product modification. For instance, the company can differentiate by capitalizing in both computing and non-computing products that have a supplementary relationship. A good example would be sale of both computers and printers within their distribution outlets as the demand of the two products has a mutual relationship. HP Company identifies innovation of products, services and business models as significant strategies for achieving competitive advantage in the ever competitive business world. Effective product design plays significant roles in the supply chain but product design is often expensive; therefore, redesigning products in order to reduce logistic costs or supply chain lead times is effective (Picaud, Johnsen and Calvi, 2013). With lean perspective, HP will be able to redesign its product while maintaining loyalty of its esteemed customers, which is cheaper than establishment of new products In summary, the ability of organizational managers to design a smooth product distribution path will determine the success of their farm in the competitive global business market. The challenge that managers have to face is to make wise and prompt choices effective pipeline strategies among the various available options. For a company such as HP whose business goal is to maintain customer loyalty and edge out competition, it would be necessary to adopt a lean product design model. This model has its superiority in its flexibility and ability to conform to the demand of the market environment. In addition, a company such as HP that has a high regard for its social and environmental responsibility will find this model as a best fit. The expected outcome of effective application of this method in the business environment is that a company will be able to exercise flexibility, dynamism and efficiency as far as product redesigning is concerned. In this view, lean design would be a superior tool in the design product chain for Hewlett-Packard Company. References Christopher, M., & R. Towill, D. (January 01, 2002). Developing Market Specific Supply Chain Strategies. The International Journal of Logistics Management, 13, 1, 1-14. Hsu, C.-C., Tan, K. C., Kannan, V. R., & Keong, L. G. (January 01, 2009). Supply chain Management Practices As A Mediator Of The Relationship Between Operations Capability and Firm Performance. International Journal of Production Research, 47, 3, 835-855. Picaud, K, Johnsen T., & Calvi R. (2013). Discontinuous Innovation (DI): A review Definitions, Theoretical Perspectives and Measures – Towards an Empirical Study of the Role of the Purchasing Department in DI, 1-12. Simpson, D. F., & Power, D. J. (February 01, 2005). Use The Supply Relationship To Develop Lean And Green Suppliers. Supply Chain Management: an International Journal, 10, 1, 60-68. Read More