Supply Chain Management - Essay Example

? Supply Chain Management Supply chain management is founded on two principal concepts. The firstconcept is that, any product that reaches the final consumer represents multiple organizational cumulative efforts. Therefore, the two organizations are collectively referred to as supply chain. According to Case 3 analysis, the two organizations are the Japan X Ltd and the Success Inc. Companies. The second principle is that, despite the existence of supply chain for quite some time, majority of companies have diverted their attention to what was happening within their business boundaries. For instance, a small number of businesses were understood, less managed, and the outcomes were supply chains that were ineffective and disjointed. Supply chain management is the management of activities in the supply chain for purposes of maximizing the value of customers and achieving a sustainable competitive advantage. Therefore, supply chain companies should make efforts of developing and running supply chains in ways that are efficient and effective. Supply chain often covers a wide area ranging from development of products, logistics, sourcing and production. In addition, information systems are vital in coordinating supply chain activities. Companies or firms engaging in supply chain are connected via information and physical flows. In the physical flow, we have goods and materials transformation, movement, and storage. Through information flows, partners in the supply chain have the capability of coordinating their long-term business plans in controlling the up and down flow of material and goods in the supply chain (“What Is Supply Chain Management”). Time Context From the annual report written by the President of Japan X Ltd Company, Mr. Suzuki, the company’s problem started when it recorded a net loss of ten million yen(10m Yen) and an operating profit of four thousand million Yen (4,000M Yen). The main reason for the recorded loss was the company’s inability to react immediately to the inadequate market for their semiconductors, the main product of the company (Ostring 109). View Point Jill’s viewpoint over the company is that the company’s culture is different from the culture in Europe and the United States. This is expressed through her reactions to experiences within Japan X. She for instance noted that observation of sitting arrangement was different in the two cultures. Similarly, her experiences were often odd. When they arrived at the company for a meeting, Jill wished that her team, as she had learnt from research, were aware of sitting arrangement in the meeting. Her research must have been instigated by the opinion that Japan and her country had different cultures. Jill was the head of an audit team that was on a mission from the United States to Japan. As the head of the team, Jill’s responsibilities included guiding the audit team and being the team’s representative. As part of the team, she was also an auditor to the host company. Central Problem The core problem in the case is review of the question, ‘how different are the cultural environments in the United States’ and in Japanese corporate sectors?’ This is because the trip is centered on the Japanese culture rather that the functions of the audit team. Jill was for instance puzzled as they approached the company’s gate. She doubted her composure as she approached her host environment that she expected to be different from her native environment. A friend had for instance told her that women in this new environment faced many problems in their workplaces. Cultural difference is also illustrated in Jill’s initial encounter in the company. She does a seemingly odd thing when she smiled at ‘office ladies’. The women’s response, bursting into giggles, indicated that Jill’s action was not a common practice in the environment. Cultural difference is similarly observed through Jill’s interpretation of their sitting arrangement during their first meeting. She particularly observed that the arrangement would have been ok in the European culture, but not in the Japanese culture. Similarly, the Japanese culture enforces stringent measures on duty of care. This particularly identified in controlling contagious diseases such as flue. If the same measures were enforced in their culture, then Jill would not have wondered why one of the service women was wearing a mask. Statement of Objective Objective statement is an essential component of any business plan. Statement of objectives should therefore, be clear, relevant and to the point. This helps a company to base its focus on matters that are vital and determines their life and success attaining levels. Japan X Ltd Company objectives are as follows: Must objective To identify cultural practices in the Japanese corporate sector To compare and contrast corporate cultural practices in Japan and in the United States Want objectives To interact with top officials of a Japanese company To audit financial statements of a Japanese company Areas of consideration The environment of an organization comprises factors that are both internal and external. Therefore, Japan X Ltd Company should scan its environment in order to develop factors that will influence on its success as an organization. The company should ensure that it possesses and utilizes information within its external and internal environments. The information is valued as it focuses on issues such as patterns, trends, and existing relationship within the organization. Environment scanning helps in identification of opportunities and threats available in the environment. External Environment The organization’s cultural practice as witnessed through communication behavior is an example of features of its external environment. The kind of treatment that the visitors were accorded could for example be used as an indicator of how the company communicates with outsiders. The office women for instance giggled as Jill and her team arrived. This increased when Jill communicated with them through a smile. Viewed as an element of poor communication, the company could be faced lost opportunity through displeased customers and potential financiers. Similarly, existing stakeholders may withdraw their commitment if they are not satisfied with the treatment that they are accorded by the company’s staff. Similarly, the external environment examines the organization competitive position concerning key rivals. The company has to check on its threats and opportunities. Japan X Ltd Company has potential opportunities that can be used to expand its market share. The company cooperates with Japanese Companies that are well recognized in the market. The utilization of such an opportunity will enhance the promotion of their products in the market. People always wish to identify themselves with products of a recognized company. However, it has competition as the main threat in the market. This is from industries producing semi conductors the principal product of Japan X Ltd Company. Mr. Cita points out that, they experienced a 20% decline in the sales of the semiconductors. This is a clear indication of the existing stiff competition in the market. Hence, Japan X Ltd has to improve on its product quality in order to survive in the competitive market. Internal Environment Japan X Ltd should be keen on its organizational internal environment. The internal environment consists of the interaction between and among employees, interaction of employees and management, interaction between managers, shareholder interaction with the management, brand awareness, structure of the organization and the potential of operation. The internal environment of Japan X Ltd has its own strengths and weaknesses. Its strength are such as, it’s outstanding reputation in the market thus making customers associate with its product brands. The company gets support from insurance companies and Japanese banks thus making it to be stable financially. They are not worried of going into bankruptcy. Despite the strengths, it has its own weaknesses. For instance, the company is unable to invest in new machinery required for the success of the company. This is because of low equity ratio of stakeholders and high liability levels. In addition to that, the employee interaction is exceptionally poor. For example, Japanese men do not acknowledge the presence of women. Language barrier existed between the managers. Jill’s questions needed translation into a language understood by Mr.Cita, the finance department vice president. Poor communication habits are also part of an organization’s internal environment. This is because it is a factor to preventing and managing conflicts within an organization’s structure. Poor communication styles are therefore a source of weakness in Japan X. Alternative Course of Action Japan X Company should start reviewing its financial statements accuracy. Usefulness of financial statements depends on the reliability and accuracy of recorded transactions. For purposes of ensuring accuracy and improved interpersonal relations, the company should consider the following alternatives Alternatives Advantages Disadvantages Japan XLtd Company should hire an external accounting company to review their financial statements Auditing allows the testing of accounting balances for accuracy. It aids in safeguarding against inaccurate and fraudulent financial reporting. Outsourcing of auditors is quite expensive. Therefore, a company should be financially stable to hire outside auditors. The company should develop internal controls that are adequate to monitor internal activities of the organization Development of policies and procedures assists a firm in safeguarding its assets, financial reporting’s that are accurate and fraud prevention. Policies and procedure development need cash and can be an expensive agenda for the company Japan XLtd company should build a fundamental work skills and an essential quality management understanding. It should review its methodologies, maximize its productivity and reduce products corrective actions Through these techniques product life cycle will be improved as well as improved skills on product quality. Achieving desirable results needs a lot of money The company should put in measures to improve communication skills among its employees. This can be achieved through organized seminars within the organization’s premises or through sending employees for educative fora. Improved skills for handling outsiders Improved corporate image Enhanced corporation among employees due to good interpersonal relations The process may prove to be costly to the organization Final decision The final decision is to adopt an approach to changing the organizational communication culture. This is because poor communication skills are a possible cause of the organizations poor profitability performance. This could be leading to loss of customers to competitors who have better approach to customer relations. Poor communication can also be identified in the management’s inability to understand the main cause of the company’s declined profitability. In a briefing to Jill’s team, for example, the company failed to identify and explain the cause of its incurred losses. These isolate communication skills as a significant problem in the organization. Improving communication will therefore ensure efficient steps for identification of further problems in the organization and further communicating identified solutions. Detailed Action Plan An action plan helps a company to ensure that it has focused plans that are considered fully, practical, resilient, and cost effective. The plan enables a company to learn from its previous mistakes and use them to make decisions and plan in the future. Planning cycle tool is important in developing a detailed action plan. After devising the plan, evaluation is necessary to determine whether it would yield results. Evaluation determines unwanted consequences, whether the project will cost the company a good fortune or may not yield anticipated results. The proposed action plan is to create awareness of good communication skills and the benefits of such skills. The plan involves the following strategy. Illustration of a planning cycle Initiation Plan Execute Control Close Detailed Analysis of the planning cycle Principal Points Planning cycle helps a company to make plans that are excellent, robust and well considered. The initial step is to analyze existing opportunities in the company. This aids the company to develop a reality plan. Aim identification gives a company’s plan focus. Thirdly, the company has to come up with various ways of achieving the identified aims. These can be through, assessing and improving on obvious solutions. Next stage is the selection of the best solutions for implementation. In case the solutions are not valid, the management team has to reassess the previous options and improve on them or come up with a new plan. After the selection of a better course of action, implement it. After the implementation period, evaluate it and identify lessons learnt from it. Use the lesson learned into planning in the future (“Planning Cycle”). Detailed action plan of company's activities Activity Officer in charge Time frame Budget Initiation Relations manager Two days 1 million yen Plan Human resource manager -one week 2 million yen Execute Managing director Four weeks 5 million yen Control Quality control manager Four weeks 1 million yen Close Chief executive officer One day 0.5 million yen Works Cited Ostring, Spirkko. Profit Focused Supplier Management: How to Identify Risks and Recognize Opportunities. New York, NY: American Management Association, 2004. Planning Cycle. Web.20Feb.2012.< http://www.mindtools.com/pages/article/newPPM_05.htm> What is Supply Chain Management? Web. 20 Feb. 2012. < http://scm.ncsu.edu/scm-articles/article/what-is-supply-chain-management>. Read More