E-procurement and Supply Chain - Haier - Case Study Example

E PROCUREMENT AND SUPPLY CHAIN CASE STUDY-HAIER Author’s name Institutional affiliation Instructor State/City Course Date E-procurement and Supply Chain Case Study-Haier The decision patterns that shape long-term capabilities of any company operations as well as their contributions to the overall strategy via some market requirements with operations resources are essential to the realization of the company’s long-term objectives. Compared with its competitors Haier is one of the fastest expanding industry in home appliances. For instance Haier India boasts of a number of new refrigerators that include French door and Side by Side refrigerators. Most of Haier competitors such as Gree Company have also integrated technologies that revolve around Research and Development, marketing and service technologies. So far, Gree has established three brands that include, TOSOT, GREE and KINGHOME coupled with a wide product range such as residential air conditioners (Sun & Bao 2010 401). However, the technology employed in the marketing and servicing concentrate on short-term economic interests. Most of this technologies ensure that these competitors possess a short and temporary relationship between the company, suppliers, and customers (Sun & Bao 2010 410). Other companies such as Hisense and Midea rely on technological innovation and advanced procurement process hence in the process making their market response and response to the demand changes by customers very high (Chen Ouyang & Pan 2013 973). In the process, Midea has moved from being a local appliance provider to a global player. However, as compared to other companies, Haier has incorporated a more modern technology such as BBP, ERP, JIT and BPR in the manufacturing process of its refrigerators and other home aplliances. They ensures that there is little inventory cost, timely delivery of goods, and reduction in costs, there is a quick response to the demands of customers and market changes, efficient supply channels. One striking similarity between Haier and its competitors such as Midea is the fact that they both boast of a huge and extensive scale and nature of their integrated industrial complex with more modern technologies. The difference between these two is how effective their internal technology is working with this large scale production. In this case, re-engineering processes such as BPR enable Haier group companies to improve their customer services by making their product more unique (Sun & Bao 2010 401). For instance, Products from Haier competitors like Samsung are easy to imitate because they are made from hardware’s and software’s that are easy to imitate. For instance, the Samsung mobile phone business has started slumping and most of the blame is blamed on the emergence of Imitation smart phones from Asia. However, through the employment of BPR techniques, Haier has introduced a computerized technology in place that can be able to detect forgery and imitations (Chen & Sarker 2010). In so doing, this technology as compared to its competitors ensures that Haier saves millions through this simple but more efficient technique since it helps in reducing the number of workers that were initially employed to help in identifying and spying on potential imitators. Gree company possess 9 production bases globally with over 70, 0000 workers that are employed to help in the management, manufacturing and to see to it that the company runs efficiently (Sun & Bao 2010 401). However, ERP is of benefit to Haier Group Company because it helps in cost management, sells, and design order, control of its finances and helps the company in planning for its production processes (Chen & Sarker 2010). In other words, it helps Haier company to save costs that revolve around labor and consequences of employee turnover. Additionally, since ERP reduces the whole time process time taken from commercial flow, customer, warehousing, work planning supplier procurement and response time significantly, it ensures that Haier Group Company can improve its product accuracy (Sun & Bao 2010 410). Moreover, owing to the fact that Haier has established its ERP in such a way that its customers and suppliers can be able to interact with it over the internet or rather online, the possibility of external sharing with clients and vendors is high hence making its production and procurement process more efficient and shorter (Chen & Sarker 2010). Siemens Company just like any other global company possesses an online marketing center and it is unique in its own sense. However, Haier has ensured that it incorporates BBP into its online business that makes it more different and unique from other competitors. Additionally, BBP offers a global information platform for Haier group companies as well as a collaborative business with its suppliers online (Meng & Xu 2016, 196). Additionally, some of its competitors such as Siemens possess official websites that ensures that its customers can be able to order their products online. Haier group companies ‘has gone a step further to incorporate, BBP machine that has the capability of managing orders online and ensures that the corporation requests its purchases with feasibility and accuracy. Moreover, BBP increases the chances of bidding and paying online hence in the process helps the company to reduce the cost incurred in supply channels as well as increasing the working efficiency of Haier Company to its suppliers and customers (Meng & Xu 2016, 196). Compared with other technologies Touchscreen Food Vendors are a new technology that is employed in restaurants and food industry to help in the reduction of labor costs (Meng & Xu 2016, 196). However, JIT ensures that there is a reduced level of inventories obsolesces because the increasing level of inventory turnover that is realized makes any other items from remaining in the company stock and maybe later become obsolete. Additionally, as much as Touchscreen Food vendors can deliver over one hundred beverages from one device it cannot help much in cases of minimal production (Sun & Bao 2010 416). Apparently, JIT makes it easier to stop production activities of one production line so as to switch to another type of production so as to ensure that the customers’ demands and needs are met. Furthermore, since JIT offers a lower level of inventory, it means that the costs incurred in holding up inventory are cut. Nitrogen Cat Pet Food Packaging Machine is a new technology that is used in improving the packaging service of food products. As compared to BPR, BBP offers more value to a company since apart from developing packaging services; it also helps in realizing improvements in its primary areas such as speed, quality, and cost (LI 2012, 582). Additionally, BPR enables a company to analyze and identify any innovative projects so as to add value or rationalize by aiming at reassembling existing processes to operate more efficiently and effectively as possible. Tablet Restaurant Management that handles sales, ticket delivery, sends orders to the restaurant kitchen, and catalogs the restaurant menus is another technology that is employed in companies most notably food industry (Steven Chang & Ping Li 2003 34). However, as compared to ERP or Enterprise Resource Planning system, ERP enables companies to manage the acquisition of its information as well as the infrastructure that is needed for processing. Additionally, since all the functions of the business are shared and viewed by all the parties involved with the company of operation, ERP ensures that the information delivery within members of the organization is more efficient and time-bound. In other words, Apart from delivering, orders, catalog and menu information, it also helps in the management of the infrastructure needed to provide the information within the company (Huang, 2012, 291). Fast Food Packaging machine and LED alert systems are some of the technologies that are employed for detecting the sensitivity of the packaging material (Chen Ouyang & Pan 2013 971). In other words, they alert the workers of the packaging condition of the product. However, apart from informing employees about any potential leakage, BBP offers the company chance of exchanging information with the company’s Customer Relationship Management System, which ensures that information revolving around packaging orders, sell, inventory and products is made aware of its suppliers hence making them see to it that the goods supplied are according to the customers demand and the company’s needs (Bei Wang & Hu 2006, 35). In doing this, ensures that the enterprise in which it operates is an organization that meets its zero objectives that fundamentally revolve around zero capital of operation, zero product defects, and zero client distance. Limitations of these technologies As much as Just-In-Time technology benefits the company a lot, it is believed that if the supplier fails to deliver goods at the precisely stipulated time as well as the correct amounts, this could cause devastating implications to the company operations. When it comes to this technology such as the BBP, BPR, and ERP, a natural disaster may disrupt the flow of goods from the suppliers which in the process, will stop the production process within the company at once (Chen Ouyang & Pan 2013 973). Additionally, a real investment need to be pumped into information technology so as it may be able to connect the company computer systems with the loyal suppliers and in so doing; it may make it possible to facilitate the coordination of materials and parts delivery actually (Steven Chang & Ping Li 2003 34). Furthermore, it is no guarantee that the employment of this new technology may warrant the immediate demands of an unexpected and massive order because it may have limited or nor stocks of goods that are finished. In other words, implementation of a technology takes time before realizing its benefits; its fruits are no immediate because of the awareness and training need to make the staff and other related members of the company acquire needed skills to operate the new technology (Bei Wang & Hu 2006, 37). Apparently, with increased level of technology, the cost of suppliers rise because of the training, they undergo to create awareness of the newly developed technology. In other words, most of the suppliers over price their materials and parts in the name of improved technology. In other words, unexpected failures in technology may lead to imprecise time as well as reduced quality of delivery. Reference list Bei, W, Wang, S & Hu, J 2006, ‘An analysis of supplier selection in manufacturing supply chain management’, In Service Systems and Service Management, 2006 International Conference on vol. 2, pp. 1439-1444, IEEE. Chen, J. E, Ouyang, T. H & Pan, S. L 2013, ‘The role of feedback in changing organizational routine: A case study of Haier, China’, International Journal of Information Management, vol. 33(6), pp. 971-974. Chen, Z. X & Sarker, B. R 2010, ‘Multi-vendor integrated procurement-production system under shared transportation and just-in-time delivery system’, Journal of the Operational Research Society, vol. 61(11), pp. 1654-1666. Huang, P. Y, Ouyang, T. H, Pan, S. L & Chou, T. C 2012, ‘The role of IT in achieving operational agility: A case study of Haier, China’, International Journal of Information Management, vol. 32(3), pp. 294-298. Li, L 2012, ‘How to Succeed in E-business: A Case Study of Haier’, In Future Computer, Communication, Control and Automation). Springer Berlin Heidelberg, pp. 587-596. Meng, Q & Xu, Y 2016, ‘Research of the Technology‒Organization‒Service Synergetic Evolution Model in the Process of Service-Enhancement—A Case Study of the Haier Group’, In Proceedings of 2015 2nd International Conference on Industrial Economics System and Industrial Security Engineering, Springer Singapore, pp. 195-200. Series, A. I. C. The Haier Group: An Evolving IT Organizational Identity. Sun, X & Bao, J 2010, ‘Research on the innovation and development of the third-party B2B e-commerce model of China’, In Advanced Computer Theory and Engineering (ICACTE), 2010 3rd International Conference on vol. 4, pp. V4-317, IEEE. Steven Chang, T. L & Ping Li, P 2003, ‘How to succeed in E-business by taking the Haier Road: Formulating E-business Strategy through Network Building’, Competitiveness Review: An International Business Journal, vol. 13(2), pp. 34-45. Read More