Baldinini Srl: Italian SME Footwear Company - Case Study Example

? Baldinini Srl: ItalianSME Footwear Company By of the school Baldinini Srl: Italian SME Footwear Company Baldinini srl is a global company thus requires proper strategizing so as to perform well in the competitive global market. For this reason, the company may have to employ various strategic moves that include use of third party logistics as a part function of their operations. Recently, after realizing that most of their customers are based in the Middle East, Baldinini decided to outsource most of their resources to these areas so as to maintain, as well as increase their sales. The firm therefore adapted the use of third-party logistics functions. In the modern business age, the global environment has become very competitive requiring companies to deal with several different sources so as to ensure customer satisfaction as well as their own success. Such competitiveness is what has called for strategic plans such as use of third party logistics providers (Rodrigo 2012: 12).With such an approach, one has to look at both the benefits and disadvantages of the approach. In covering the benefits, it isnecessary to evaluate whether such decisions would be easily assimilated by the company.That is, issues such as product availability, labor force, meeting of customer expectations the third party logistics capabilities would have to be considered, amongst others that may arise in the process.Supply chains do not only involve materials, logistics, ICT and facilities but also include people in charge of operations or people involved in the chain operations. Thus, a manufacture should always consider “supplying people” when designing the supply chain. That is, considering the right human expertise in the supply chain. Question 1 In analysis and evaluation of the Baldinini srl strategy, major focus will be on the effect towards the company’s performance. With Baldinini outsourcing most of their activities to a third party logistics, they ease most of their work thus focusing on other important activities of the company. By concentrating on other activities, the company can easily make them the core activities of the company (Rodrigo 2012: 22). In terms of inventory management, Baldinini stands a chance of lowering costs associated with storage, moving in and out of their products into the inventory. Most of all, the company is lifted off the burden of tax accumulation generated by increasing value of products included in the inventory. It becomes way affordable and manageable to hire a 3pl provider. In terms of company and customer relationships, the end receivers of Baldinini products fail to realize the company, this works negatively for Baldinini. Question 2 Traditionally, several companies have seen their advantage in competitiveness as a derivative from their product or services that they provide. With time, however this has changed as products and services become replicated by the day (Keifer, 2012).This possesses a greater risk of competing with counterfeits causing companies to shutter in their own market place. Several companies now no longer see their competitive advantage as a result of their products and services but as a result of how they run their businesses (Keifer, 2012). Supply Chain Management (SCM) plays a specific role in meeting customer demands, developing strategies, proper management of inventory, control of production orders and also maximization of customer fulfillment. One fundamental of SCM is the SCM Objectives. Supply chain management aims to meet rising customer demands or increase it in target markets. It also includes optimization of the supply chain with as minimum cost as possible, Nitl (2008).This approach maintains that a company should clearly understand their customer needs and also have a clear view of their market place. By having the objectives figured out, a company already possesses upper hand in the market place.By doing so, a company eliminates unnecessary activities throughout their processes. Nitl (2008), SCM Philosophy looks at the end benefit where a company acquires the actual returns and profits. Services and products finally get delivered to the end consumer. This may be through a series of companies such as 3PL providers. Often, for products and services to reach the end consumer, complex shifts between companies become present. It is unlikely for the supply chain to be direct.By employing the supply chain system, a company should ensure that there is not any inefficiency in the whole process. An existence of inefficiency may cause the whole chain to fail, achieving the intended goal. A clearer way of putting it is that, supply chains compete with other supply chains in the modern business world rather than companies competing amongst them as it has grown to be known. Question 3 In supply and demand, demand management must be employed by a company so as to ensure logical flow. Demand management function recognizes services and goods demands. With such recognition, it prioritizes demand whenever supply lacks (Barve, 2002: 24-44). Accurate prediction becomes necessary towards the success of demand management initiatives. However, demand management is way wider than just market prediction and forecasting. In demand management, the analysis is different and better since it looks at all demand and supply components. This ensures that the forecasting is more accurate. Goor (2006), from a consumer point of view, demand management is essential for every chain. (Saint-Leger),thus demand driven SCM should be employed, consisting of four major aspects; logistics, marketing, purchasing and ICT. For demand to be fully met, marketing aspects should be at parwith supply and should also properly approximate purchasing with respect to demand in the supply side. ICT and Logistics are essential towards facilitating functions of the Demand & Supply in Supply Chain Management (Goor, 2006). Goodwin (2012:44-58) Economic principles are rather restrictive and at times one may be required to manipulate them so as to control their outcomes. One way of manipulating D&S and S&D is by positioning the company as a hard to access commodity. That is, taking for example diamonds. These are rare and valuable commodities. If they were to be made readily available to any market, the prices would go down. The perception that diamonds are a rare mineral already makes it valuable without being actually rare. Another way of manipulating the market is by taking control of the supply. From the example of diamonds, one can be able to tell when supply needs to increase or decrease as per the trends of their company. Question 4 The marketplace at this time is more dynamic and versatile but mostly unpredictable than there before. This is especially for electronic products which will be used as the product example in this part of the essay. Developing an optimally performing supply chain provides a competitor with upper hand in the competitiveness of the marketplace especially the production. Before developing the supply chain, it has to be designed first so as to ensure it works properly. First, one has to look at the outsource design (O’Keefe, 2010). Product design is usually the first design step in supply chain development. This is unlike what many manufacturers and goods producers think. For the outsource design to be optimal, it is advisable to use external expertise in getting it done. Getting input from partners earlier in the phase can hugely facilitate market impact. Another factor is that of understanding the end use of the design. Many manufactures usually get distanced from their customers by third party intermediaries such as distributors. It is important for manufactures to understand their user preferences whenever they design their products. These user preferences may be such as user anticipation and user requirements. Understanding these needs greatly boosts the manufacture to design a chain that best suits their market. Financing is another crucial area to consider while designing a supply chain. Cost of capital is very important in today’s economic environment. With bank terms and conditions being more restrictive, manufacturers ought to discover more reliable waysof financing their operations then and also in the future. An area where such finances may be required is in situations such as catering for external expertise in the design phase. Another benefit of considering financing at this stage is so as to decrease upfront capital and possibly reduce profit-sharing arrangements (O’Keefe, 2010). Electronic products’ lifecycle gets shorter by the day. No matter the amount of warrantee or guarantee issued by the manufacture, more innovative and better electronics continue emerging, or upgrades to older versions being produced momentarily, easily damaging the market performance of early electronics. For this reason, while designing a supply chain, manufactures should consider future-proofing. That is, the ability for manufactures to anticipate any future developments on their products (O’Keefe, 2010). A manufacture should consider insurance and security coverage over possibility of their goods being lost or damaged. Conclusion From the essay, it is clear that supply chains are very essential in the performance and growth of a company. For these chains to work properly in optimally benefiting a company, they must have been able to run through proper design in the design phase and must include the right management team. An addition is that, companies should be able to evaluate and easily manipulate supply and demand trends so as to make them move in their favor. References Barve A 2002. The Supply Chain Resource Cooperative article. Lessons in Demand Management.NC State University.P: 24-44. Goodwin, 2012. How to Manipulate the Law of Supply and Demand…and Make a Lot More Money.Quick Sprout. Pg: 44-58. Goor V. R., 2006. Demand & Supply Chain Management. A Logistical Challenge. Amsterdam Free University. Keifer S 2012. Does supply Chain Excellence Offer an Advantage? All About B2B. Accessed 2012, http://www.gxsblogs.com/keifers/2012/06/does-supply-chain-excellence-offer-a-competitive-advantage.html. Nitl, 2008. Four Fundamentals of SCM. National Institute for Transport and Logistics Accessed from, http://www.nitl.ie/Four_Fundamentals_of_SCM/Default.126.html. O’Keefe S, 2010. Designing a Supply Chain? Don’t Overlook These Eight Factors. Electronic Design. Accessed2010 from, http://www.electronicdesign.com/archive/designing-supply-chain-don-t-overlook-these-eight=factors. Rodrigo, 2012. Advantages and Disadvantages of Hiring Third Party Logistics Providers (3PL). The WritePass Journal, Accessed 2012 from, http://writepass.com/journal/2012/11/advantages-and-disadvantages-of-hiring-third-party-logistics-providers-3pl/. Saint-Leger, R 2004. Importance of Forecasting in Supply Chain Management. Small Business by Demand Media.Accessed from,http://smallbusiness.chron.com/importance-forecasting-supply-chain-management-46181.html. Read More