SUPPLY CHAIN MANAGEMENT AND CONCEPT - Case Study Example

Download file to see previous pages The company has a number of options for solving its problem including resourcing the bottles from a different supplier, or inviting Deerfield to set up a small plant nearby, most of which do not meet the selection criteria set. On this regard, the most feasible option is establishing its own moulding machinery and to hire the appropriate expertise, to integrate bottle production with their filling line because it would yield higher returns on investment in the long-term. Defining the problem or issue Crowning Glory Limited, a private company that has grown in leaps and bounds over the past 20 becoming a major supplier of hair-care products to the dressing table has recently contemplated the supply of products to the retail market. Therefore, the company has struck a partnership deal to supply their Crowning Glory Shampoo to a retailer, which involves shipping large quantities of their product to the retailer’s regional distribution centres. To expand their production and sales, the company will need large quantities of blow-moulded bottles, which its current supplier Deerfield, whose plant is located 200 kilometres away, would be willing to supply. However, Crowning Glory Limited will incur higher packaging costs in shipping large volumes of fresh air, which is a large proportion of the cost of producing small bottles of shampoo. In this regard, for the company to diversify its product base cost effectively, it needs to get the blow-moulded bottles at a lower and feasible cost. Analysis of the case data with focus on causes and effects A rapidly growing company like Crowning Glory Limited has to think about expanding its customer base and diversifying its product market in the most efficient way, to achieve optimum benefits while limiting costs because as global markets expand, so does competition. This makes supply chain management, which is the management of information and material flows both in and between facilities (Douglas and Griffin, 1996), an issue of concern to companies today (Wisner, Tan, and Leong, 2012). This company has achieved massive recognition due to its high-end product that has become popular with users leading to a serious need to expand its distribution, to meet the rising demand for its product, and to take market leadership. The company is anticipating to launch Crowning Glory brand through retail trade, in addition to contracting other major retailers for own brand products; this will call for the establishment of a supply chain that will be both responsive and cost effective. The company needs to ensure that their product reaches a wider market on time and cost effectively, to take advantage of short lead times over its competitors in the industry. In this regard, the company needs to rethink its supply chain strategy, which involves restructuring its distribution lines to get rid of unnecessary steps that could potentially lead to disruptions in the supply chain (Sodhi, and Tang, 2012). It is no longer feasible for the company to acquire moulded-bottles from its current supplier due to cost implications, and possible delays in packaging, which could stall the supply chain. Current Supply Chain and Product range Characteristics Future Supply Chain and Product range Characteristics A fully flexible product focus production with an emphasis on a specific line as opposed to different lines of product An agile cycle Inventory strategy, enough to satisfy demand for the product A continuous replenishment location strategy, with facilities in fewer ...Download file to see next pagesRead More