Supply Chain Management of Coco-Mat - Essay Example

Supply Chain Management of Coco-Mat Case due The Current Reality of Supply Chain Management of Coco-Mat The Coco-mat company is a group of companies that originates from Greece. It is recognized worldwide for its natural linen and bed products. The company has several distribution points and retail outlets in various continents including U.A.E., USA, China and the Netherlands. The company aims at social responsibility, sustainability, innovative use of natural materials, environmentally-friendly manufacturing techniques and employee and customer satisfaction. The company has also integrated Total Quality Management tools to help it achieve its aims and objectives. The Coco-Mat company has several processes and stakeholders associated with the company and contribute to the success or failure of the business (Nagopoulos, Rontos & Pantazidou, 2013). The company relies on type and quality of raw materials obtained from various small and medium international suppliers which affect the sustainability of products and manufacturing. These suppliers lack knowledge on keeping and maintenance of supplies and about sustainable agriculture. This may lead to substandard raw materials and in turn create shortage of the required number of materials to sustain manufacturing. The company comprises of franchisors that run its retail stores. The franchisors have direct contact with the clients and are obligated to listen and respond to customers’ feedback and demands. If the franchisor is not able to deal with the customers well it may result to the company losing clientele which is against their objective of customer satisfaction. As the company loses the customer then, it means that the company is losing sales; therefore, the business may lack enough money to be invested in employees to motivate them. The company also has logistics partners who contribute to mismanagement and delays of its products. This result to low performance of TQM implemented (Nagopoulos, Rontos & Pantazidou, 2013). Currently, the company if facing challenges in persuading supply chain partners to participate in TQM implementation. Mr. Chatzimichalis visualises a more responsible supply chain that will employ modern information and communication technologies. The C.E.O is searching for technologies that will enable Coco-Mat integrate marketing, logistics and production that will improve the company’s effectiveness and efficiency. Mr. Chatzimichalis also hopes to improve the role of clients in supply chain operations through technology application (Nagopoulos, Rontos & Pantazidou, 2013). 2. Debate the arguments of Mr. Chatzimichalis to make a more responsive supply chain and expand TQM implementation all along the supply chain by identifying and analysing the business benefits that these can generate for Coco-Mat. By implementing TQM along, the supply chain will generate a new focus on costs and how they occur. The Coco-Mat Company will increase its services and products quality through incurring preventive costs for activities that inhibit products defects occurring as a result of a process that does not operate properly. Examples of preventive activities are product modelling, improved production equipment and worker training and engineering. The company could also incur appraisal costs that observe and reimburse for mistakes not got rid of by preventive activities. When the company invests in preventive and appraisal activities, it will minimise failure costs (Kinney & Raiborn, 2011). There are two kinds of failure costs: - Internal failure costs. These are expenses such as rework brought about to rectify defective products before they are transported to customers. - External failure costs. These are expenses for things such as customer complaints, litigation, warranty work and defective items recall that happen after a defective unit of product has been transported to the client. The Coco-Mat company could also benefit by implementing TQM to enable it produce goods of the right quality, when and where they are required. The TQM is a concept that consists of a collection of procedures that seek to examine and enhance the quality continuously to satisfy consumers, reduce costs and eventually enhance competitive advantage to the company. The implementation of TQM required coordinated efforts by the company and its supply chain partners because quality and incoming supply costs have an effect on services and products manufactured by the organisation and this is transferred to the final customer (Wisner & Stanley, 2008). 3. The (internal and external) organisational changes that Coco-Mat has to undertake for successfully implementing a more responsive and TQM oriented supply chain management. The TQM is based on the entire company quality improvement. It is a complete approach to improving the company’s effectiveness, flexibility and competitiveness through organising, understanding and planning all duties and activities carried out by people within and outside the company. The foundation of TQM is to upgrade supplier and customer relationships. The main aim of TQM is suppliers to improve the way they handle their customers. This would result to a positive impact on overall company performance because all the staff will be engaged in the change process (Hlupic, 2003). For Coco-Mat Company to successfully implement a more responsive TQM oriented supply chain management, the company must comprehend how quality processes are connected to performance measures. TQM is a developmental process, and the adoption of its complex methods occurs with time and experience (Mohanty, 2008). I propose the following recommendation to Coco-Mat Company to increase its effectiveness of TQM: - The company should invest more in people because innovation is the key to becoming a world leader. - The company should concentrate more on development and retention of people’s assets. - The company should encourage a culture of cooperation and interdependence and examine the issue of empowerment. - The company should initiate a culture of giving awards as an acknowledgement of initiatives but not confirmation of client delight. The company must also benchmark its operations with the managers. For the Coco-Mat Company to achieve its goals and implement TQM successfully it has to invest in training of its staff, suppliers and partners. Although training and convincing supply chain partners to engage in TQM is difficult, the company should engage the partners in a forum where they are made to understand that through co-operation they all benefit by learning from each other to stand competition from other businesses in the field. The company should also initiate workshops whereby suppliers are invited and given a chance to discuss the problems they encounter. As a result, the company and suppliers will implement the concepts arrived at after deliberations in their respective organisations. The introduction of regular workshops will lead to continuous improvement. In addition, the company should engage employees from various franchisors to participate in trainings and qualify together. This would create an environment where common team rules could be created to focus on pertinent problems and solutions. To guarantee the integration of TQM into the Coco-Mat Company the staff need to understand how to recognize and solve problems, how to think analytically and how to implement measurement as a tool for improvement. The employees also have a chance of being informed and involved in the company’s activities which give the business a competitive edge (Jurow, 2013). 4. The work of information and communication technologies and major technologies applications that Coco-Mat can exploit to make its supply chain more responsive and allow customers to participate and engage. The duty of information and communication technologies in integrating and coordinating supply chain operations is that it improves effectiveness and responses which are the main objectives of a supply chain management. In order for the supply chain management to achieve, the two objectives, successful communication and real-time information sharing are important. Therefore, information and communication plays an important role in managing today’s complicated supply chains. It allows powerful coordination of daily supply of new stock, and delivery activities hence reduce waste and delay. In addition, ICT gives visibility to enable tracking and tracing of inventory, therefore, permits good control and higher flexibility in matching demand and supply (Wang, 2014). The Coco-Mat Company can exploit electronic communication, e-business and information technology to make its supply chain to be more responsive and allow customers to engage and participate more in supply chain processes. According to Surviving supply chain integration (2000), the development of internet and e-business multiply competition by making it easier to provide available prepared products with expanded features, raising customers’ expectations, comparison shopping and reducing costs. The internet is an effective and efficient device that can promote significant improvements in the supply chains. Internet gives SMEs through which the manufacturers, customers, as well as suppliers, could exchange information securely and easily with the supply chain participants. According to the report by Surviving supply chain integration (2000), the internet saves all participants between 18 percent and 45 percent in logistics costs. This is achieved through fast delivery of products, few transaction errors, more accurate pricing, and quick order placements (p.73). Moreover, internet can be used to eliminate established obstacles to integration and collaboration of the supply chain. By employing the internet as an integration tool it can help: - Enhance response to dynamic markets and demands. - Make the best use of resources throughout the supply chain. - More systematically source for cheap materials. - Attain better due date performance and shorter lead times. In modern world, use of telephone, face to face contacts, surface mail and fax are not sufficient to safeguard competitiveness although they are still important. For effective communication, it needs additional potential such as electronic data transfer and e-mail. Today communication technologies provide considerable advantages to the supply chain members. For example the OEM collects a customer’s order, feeds it into material requirement planning system (MRP), registers its own purchase order in reaction to component prediction from MRP system, and sends them to suppliers. When the suppliers receive the orders they perform a similar procedure, and this goes on throughout the supply chain. When a company invests in these electronic systems they minimise the administrative costs of placing orders and refine responsiveness and lead times (Surviving supply chain integration, 2000). References Hlupic, V. (2003). Knowledge and business process management. Hershey, Pa: Idea Group. Jurow, S. (2013). Integrating total quality management in a library setting. Binghamton: The Harwoth Press. Kinney, M. R., & Raiborn, C. A. (2011). Cost accounting: Foundations and evolutions. Mason, Ohio: South-Western Cengage Learning. Mohanty, R. P. (2008). Quality management practices. New Delhi: Excel Books. Nagopoulos, N., Rontos, K., & Pantazidou, C. (2013). Corporate Social Responsibility in Greece: The COCO-MAT SA Case Study. International Journal of Latest Trends in Finance and Economic Sciences, 3(2), 8. Surviving supply chain integration: Strategies for small manufacturers. (2000). Washington, DC: National Acad.Press. Wang, J. (2014). Management science, logistics, and operations research. Wisner, J. D., & Stanley, L. L. (2008). Process management: creating value along the supply chain : text & cases. Mason, OH: Thomson South-Western. Read More