Casual Togs - Supply Chain Management - Case Study Example

Casual togs, inc al Affiliation) Key words: INTRODUCTION As a wholesale incorporation for women’s apparel, Casual Togs has an upper hand in this industry. Besides producing moderately priced women’s apparel, it has been in existence for 20 years. This means that it has a competitive advantage over other similar firms in the industry. This firm sells approximately 80% of its production to department stores all over the country. With these statistics, it is evident that it has a going concern advantage over similar upcoming firms. With a predictable future and a competitive advantage, Casual Togs, Inc has a wide market base for its production. The remaining 20% of its production is disposed off to small women’s specialty shops (Calderin, 2011). This firm has 100% turnover and is not discriminatory over different income groups. Its productions carry a well recognized brand label that makes it unique and genuine. CyGeldmark, the firm’s owner and principal stakeholder, has been in the New York garment district for a long period of time. He is equipped with the necessary entrepreneurial skills; meaning that the management of the firm is at a professional level. As with all firms worldwide, challenges are inherent in the management structure and the whole organization (Daniels, Radebaugh, Erwee, Hough, & Neuland, 2000). CyGeldmark’s management had its own pros and cons. The purpose of this report is; To investigate the major problems that this firm is encountered with; To analyze the causes of such shortcomings; To advice Cy on the necessary solutions to these shortcomings; and To suggest preventive measures to the future occurrence of such shortcomings The above objectives are suitable to ensure that the firm is able to produce efficiently and effectively. It is well known that all problems in a firm stem from the management level. This report will give advice to Cy on suitable management practices and the relevant structural change that enhances efficiency in production. The business market is dynamic in nature. Businesses have different ways of responding to changes in the environment. Cy should have the knowledge of how to respond to such changes, and recommendations on how to prevent the identified problems from recurring. DISCUSSION There are many shortcomings inherent in the firm’s production activities. It is faced with major fashion competition from larger and new smaller companies with fresh fashion ideas (Vescia, 2011). Cy conforms to the idea that price competition can have counter-productive effects on a firm. Price competition can have two effects on Casual Togs; Larger firms may reduce its prices to capture its market base; New smaller firms may opt to operate at losses, by charging very low prices, in the short-term to capture market demand. Casual Togs has exhibited numerous inefficiencies in production. Many quality checks are necessary before a garment is finished. These checks are time consuming and costly, meaning that a lot of resources are wasted at this stage of production. The firm does not withstand the use of sophisticated machinery which increases the personal effort by the individual workers. These numerous quality checks and the basic machinery paces stress on the workers as they have to physically assess the quality of garments. When workers are burdened with loads of physical work, their effectiveness to production is greatly inhibited (Würll, 2007). Incompetence of workers in the quality checks stage of production led to the production of sub-standard merchandise. Poor quality garments increased the rate of returns from customers. The firm faces a familiarity threat from the employees. Familiarity threat is a risk in all businesses and audit activities. Cy would tend to be lenient towards the employees. On their part, employees would tend to be reluctant as they assume ownership of the firm. Cy would not be able to impose stern actions on incompetent employees. Familiarity threat would greatly compromise the operations of the firm, which is a major shortcoming (Wetherly, & Otter, 2011). Familiarity threat is depicted in various scenarios: The president’s sister, Judy, was the vice president in charge of administration. Cy always backed Judy’s decisions once they were made. Judy initiated changes everywhere and often counter commanded a department manager’s instructions. Andy Johnson, sales forecast/budget manager attributed his lack of success to the fact that he was not related to Cy or of the same nationality as other managers. A supplier would be assured of at least some orders, if he had some previous ties or was remotely related to Cy, despite the fact that his prices were higher than those of some competing suppliers. The firm experienced massive returns on deliveries. On average, 40% of all shipments were being returned. Production was greatly inhibited since the firm was saddled with stock that can only be disposed through ‘off-price’ outlets, usually at a loss. These returns indicated that customers lost confidence with the firm. This led to a causal-effect cycle whereby; returns were due to late deliveries, which made customers to stop ordering saying that late deliveries made the firm too undependable. Decision sessions were market with emotional outbursts by various management personnel. Groups were always at logger-heads with each other. If one individual felt that a daily printout indicated a certain change regardless of whether it affected his department, he would approach Cy asking that the change be effected. A shouting match always developed in Cy’s office if two department managers met. These emotional outbursts made some management personnel to view the president as ‘too lenient.’ These outbursts were disruptive and led to erroneous decisions. The firm was faced with an acute management problem. In addition to the familiarity threat, there were wrangles and conflicts amongst the employees. Cy always argued with Judy, Andy and Bill did not have a consensus on everything, Cy backed all decisions made by Judy, et al. Problems are attributed to certain causes. The problems stated above had their respective causes in the firm. As an innovator and entrepreneur, Cy pioneered in the ‘mix and/or match’ coordinate idea of fashion. This is a system whereby a customer of moderate means builds a complete wardrobe of work and casual clothes. Although the idea was the best thing that Cy would have brought into the firm, its implementation was not effectively parented. This led to intense fashion competition from firms with fresh fashion ideas. Numerous quality checks on garments are attributable to the lack of sophisticated technology in the firm. The firm employed semi-mass production methods. Advanced in large-capacity cutters and high speed sewing machines influenced production to hinge on a great expenditure of careful, personal effort by the individual worker. The problem of familiarity can be attributed to the fact that the firm is primarily staffed with relatives and friends. Familiarity threat brought about the problem of leniency by the president. It is this threat that influenced Judy to be abrasive towards other employees. She even termed them as ‘imbeciles’ due to the fact that they were not her relatives. This threat brought about inefficiencies in management, hence a problem for the firm as a whole. Return inwards is a major business problem. In this firm, management personnel attributed different reasons for customer returns. The general consensus was that returns were due to late deliveries. Additionally, some managers argued that the forecasting style was inaccurate and resulted in erroneous production scheduling, while others argued that there was poor coordination between production and shipping. The sales manager attributed this problem to poor quality of goods since customers did not want to become embroiled in arguments with home office personnel over quality questions. These customers ended up writing ‘late delivery’ on sub-standard merchandise since it was an easier way out. Emotional outburst that marked the daily decision sessions were attributed to various causes. Firstly, the meetings were informal and non-scheduled. This meant that different groups met the president at different times. Secondly, the groups were not based on any functional problem lines; hence informal. Two department managers or vice-presidents would disagree, leading to a shouting match between them. Cy was very lenient as he remained impassive during such interchanges and gave his decision after the two had finished. Poor management structure is the root cause of internal conflicts within the firm. Cy relied greatly on his ‘feel of the situation’ for making decisions. He gave all department heads the discretion to act they see fit. He said that he would back any decisions made without consultation with him. This is a poor management practice that can be termed as the root cause of all internal conflicts within Casual Togs Inc. Managers are the head of an organization’s activities. Their attitudes influence how an organization is run. Cy, as the firm’s manager, should change his attitude and method of management. The ‘act as you see fit’ attitude is dangerous for the firm. He should try delegating duties and setting out clear guidelines as to how every department should be run. All department heads report to the overall manager; therefore, it would not be prudent for him to grant them the discretion to act as they wish. This attitude may encourage department heads to be biased and perform activities to their own interest. Delegation of duties would be a wise substitute to his attitude; which would stipulate the responsibilities and obligations of each employee. He should also change his soft spoken nature that leads to leniency. A manager does not have to be harsh so as to get things done. All he should do is to hold every department head accountable for his/her actions. This would mean that Judy would not have to interfere with decisions made in other departments. All employees would work on their own line of duty to ensure that they are accountable in their respective departments. Inefficiencies would be mitigated since accountability is the main reason for effective production. In an effort to make him change, I would advise Cy to compare his firm with other similar firms. Managers can get valuable ideas from other competitive firms in a similar industry. Cy would visit other firms and have talks, and/or hold forums so as to generate new ideas and evaluate his firm with others. Cy would also find it necessary to attend management programs and training workshops. Being an innovator and entrepreneur does not mean that a person qualifies to be a manager. He should add managerial skills to his portfolio to ensure that his entrepreneurship skills are not inhibited by poor managerial skills. Cy relied greatly on his ‘feel of the situation’ for making decisions. A situation may be misleading and may not foster a reaction from the manager. Any error in misinterpreting a situation can have adverse effects on activities. The firm encountered numerous situations that sometimes were difficult to interpret. As a manager, Cy should make prudent decisions based on managerial knowledge, rather than relying on the ‘feel the situation’ tactic. I would encourage him to participate in decision making, which would help to mitigate the occurrence of any situation. Cy fails in his management activities since he runs the company as a business empire. The whole company requires an overhaul in all departments. I would persuade him to view the firm as a corporate entity. Besides, being in operation for twenty years does not mean that a business cannot collapse. He should work relentlessly to ensure that the firm is operating and producing at the acceptable efficiency levels rather than assuming that relatives and friends would help him achieve his objectives (Mohan, Bernstein, & Whitsett, 2002). Problems are recurrent in nature. A firm has to adopt strict management practices and have a structural change so as to avoid the chances of a problem from recurring. In terms of management practice, the firm should evaluate the effectiveness of the current structure and employ the necessary measures to ‘seal of’ any loopholes. Senior leadership in the firm should model behavior so as to make the rank-and-file proud to be part of the team. In this firm, employees are demoralized by the fact that seniors, such as; Judy and Andy, do not respect individual efforts. Cy should know that employees have keen eyes and are data sharers. Management should “walk the talk” so as to model the behavior of employees. This would reduce internal conflicts in the firm (Paulins, & Hillery, 2009). Management should not be emotionally stingy. It is evident from Andy’s case that he does not acknowledge anything that Bill tries to do. Bill came up with new methods of collating and analyzing the daily printout, which were abruptly rejected by Andy. Management would not gain by withholding praise when it is warranted (Lipman, 2013). Management should motivate employees to work. In this firm, there was no motivation that employees received. There was lack of job satisfaction, as evident with Andy’s case. Managers should extrinsically motivate employees to work so that they can be intrinsically motivated within themselves. Andy sought for a promotion but never got one despite working in the firm for 15 years. Judy would demean other employees while quality checks would overburden them. Management should come up with strategies that motivate employees to work. Extrinsic motivation would include, praise and recognition, rewards, promotions, et al. with this, employees would achieve job satisfaction. Management should design economic incentives for employees to benefit from them. It is natural for a firm to focus on senior-level economic incentives while ignoring substantive incentives for lower-level employees. It should be the duty of management to ensure that the firm’s lower-level employees are not neglected (Bloom, 2005). Management should provide meaningful feedback on a regular basis. As a foundation for management skill, constructive feedback is a cornerstone of effective management (Blanchard, 2010). I would also suggest that management should respect employees as individuals. Respect is a simple, basic, and powerful motivator. If employees feel adequately respected, they are likely “to go the extra mile” to ensure that the firm succeeds. In terms of structural change, an overhaul of the whole system is required in the case of Casual Togs (Handfield, 2012). The firm should retrench all incompetent employees who are taking advantage of the level of familiarity within the firm, which includes the supplier. This would end the risk of familiarity threat. The firm should create employment opportunities for professional and skilled people who would ensure that all operations are based on knowledge. The firm should adopt advanced in large-capacity cutters and high-speed sewing machines. This would save on time and cost of physically checking the quality of garments. The company should automate the delivery process. In an attempt to coordinate production and delivery, modern systems should be acquired. The computer-programmed delivery-inventory schedule method should be operated by a competent employee. This would ensure that the process of delivery is smooth and timely, thus, reducing returns inward. The firm should be away of the five distinct selling seasons. This would assist in reducing forecast misinterpretations and the respective errors (Demeester, 2012). A competent market analyst should be employed to ensure that the firm is updated with the latest fashion trends and the respective selling season. A market analyst would also ensure that the firm has the right stock per season. This would serve to ensure that it is not saddled with excess stock from previous seasons, which are sold to off-price outlets at a loss. Cy should ensure that all meetings are formal. All informal groupings of employees should be split. Department heads should attend all meetings in an orderly manner and display a report on all activities undertaken in the respective period. The firm’s management should be restructured. A management hierarchy is necessary to ensure that all managers know their stipulated roles (Moon, 2001). This would reduce situations as exhibited by Judy. In the fashion industry, the environment is very dynamic. Fashion trends are seasonal and short lived. A firm may experience difficulties adjusting to these changes. We live in a world where only the best survive. Responding to environmental changes can determine whether a firm is a going concern or will have a short lifespan (Kim, & Fiore, 2011). Casual Togs should be able to respond quickly to environmental changes and capitalize on them. Management should have the tactics that are adaptive and responsive. The best response would that the firm would adopt is to change the marketing mix. In terms of the different seasons, management should ensure that there is a buffer stock for all seasons. This would ensure that the firm is able to supply any type of apparel in any season. In terms of changes in technology, the firm should be able to acquire the latest machinery that would ensure efficiency in production. Technology serves as a major determinant of competition. Cy, in order to maintain the firm’s competitive advantage, should ensure that the firm is in a position to acquire and adapt to modern equipments. The best employees always produce the best results. Employing relatives and friends would ‘knock out’ the firm from the industry. Cy should ensure that modern technology is matched with professional employees. With such a powerful combination, the firm would have an ‘upper-hand’ in the competitive environment (Kolb & Publications, 2008). CONCLUSIONS AND RECOMMENDATIONS Casual and Togs is a major player in the fashion industry. Being in existence for 20 years, it has embedded its brand deep into the market place. A period of errors and uncertainty should not spell doom on its operations. With a large market base and experienced staff, Cy can bring back the firm to its stable condition. I would recommend Cy to; brainstorm on the major problems facing the company, examine the causes to these problems, and formulate solutions to the problems. He can attend forums with other managers, who would impart the necessary knowledge and skills for his course. He should evaluate his ‘mix-and-match’ idea and find out where it all went wrong. He should also identify a supplier who would minimize the cost of inputs. Cy would also find it profitable to employ a fashion analyst who would provide the firm with information on the current trends. He should overlook the additional cost of employing a fashion analyst, and focus on the future benefits. The firm should have the capacity to train its own staff and equip them with skills that are compatible to the current times. Cy relied heavily on employing a qualified individual to supervise the nine plant centers. If the company was in a position to train its own staff for such roles, the plant centers would not have failed. Lack of professionalism in the firm was the root cause of internal conflicts. At some point, Andy, Sol, and Stan did not speak to each other. In every organization, communication is critical for activities to be accomplished (Damrosch, 2009). I would recommend that all employees be taught on how to conduct themselves in an ethical and professional manner. Judy and Andy use harsh words to refer to other employees. This is not a good code of conduct (Frank, 2004). The firm should set out a code of conduct. Every employee will be bound to the code and punishment would result in case of any breach (Carroll, & Buchholtz, 2006). References Blanchard, D. 2010. Supply chain management best practices 2nd ed.. Hoboken, N.J.: John Wiley & Sons. Bloom, N. 2005. the impact on company performance. MANAGEMENT PRACTICES, 1, 2-5. Calderin, J. 2011. Fashion design essentials: 100 principles of fashion design. Beverly, Mass.: Rockport Publishers. Carroll, A. B., & Buchholtz, A. K. 2006. Business & society: ethics and stakeholder management 6th ed.. Mason, Ohio: Thomson/South-Western. Damrosch, L. F. 2009. Enforcing restraint: collective intervention in internal conflicts. New York: Council on Foreign Relations Press. Daniels, J. D., Radebaugh, T., Erwee, R., Hough, J., & Neuland, E. W. 2000. 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Optimization of quality checks in a fully automated production process. Cottbus: Brandenburgische Techn. Univ., Fak. für Mathematik, Naturwiss. und Informatik. Read More