Challenges and proposed solutions
ULMS Bike is a manufacturing firm which deals with assembling various bikes such as mountain, racing and children’s bikes. In its operation, the firm markets its products through retail in the UK and international markets. ULMS Bike Shop sources its supplies from domestic and foreign markets. In its operation, the firm has managed to develop superior performance both in it’s its local and international markets.
However, over the past five years, the bike market has undergone a rampant transformation. This is evident from an increment in the intensity of competition within the industry. In addition, the firm faces competition from both local and foreign firms operating within the market. A high level of competition mainly comes from Asia. This arises from the fact that Asia is associated with a low production cost in the bike industry. In addition to the low cost of production, Asian firms have managed to integrate high quality in the production of the bikes.
Over the past few years, there has been a shift in consumer tastes and preferences for bikes. A large number of consumers are demanding highly customized products with a short lead time. In addition, consumers are becoming more quality-conscious in their purchasing patterns. This has presented a challenge to ULMS in its operation over the past decade. The ultimate result has been a reduction in the firm’s profitability with a margin of 10%. In addition, the cost of producing bikes in the UK has been on an upward trend compared to other countries. This has given firms located in Asia a high competitive advantage in the global market.
In an effort to improve its performance, the ULMS management team is considering formulating and implementing effective business strategies. One of the strategies that the firm has considered is the incorporation of electronic business. Incorporating an electronic business strategy is in line with the firm’s need to improve the quality of its products. This arises from the fact that it will be possible for the firm to customize its bikes.
The ultimate result is that ULMS will be able to meet customers’ demands. In an effort to ensure that the firm attains consumers’ product demand, the firm’s management team has considered integrating the use of extranets. This will enable the firm to collaborate with other partners within the supply chain. Some of these include retailers, manufacturers and customers. Integrating the use of extranet will enhance the firm’s effort to customize its products. This arises from the fact that the firm’s management team will be able to understand the demands of the customers. The ultimate result is that the firm will be effective in the process of developing its products.
Current business and information flow
ULMS Bike has integrated a comprehensive business process in its supply chain. Currently, the firm receives orders from its clients such as the retailers through fax, email or telephone. Price negotiations are conducted between the firm and its clients before final orders can be placed. The next stage entails the customers sending the orders to the firm’s operation department. Verification of the orders for approval is conducted by evaluating all the purchasing requirements such as the price, lead-time and product specification. This is conducted by both sales and operational managers.
However, the operational manager has to validate the orders by checking the key specifications. It is the responsibility of the purchasing manager to determine what is to be ordered depending on the stock level. In addition, the purchasing manager selects the supplier from whom the firm will source its bike products. In order to be effective and efficient in its supply chain, the firm ensures that its maximum stock reordering point lasts for 3 days. In addition, efficiency in its supply chain is ensured by keeping its lead time to be 2 days. However, for the customized products, the firm ensures that the led time does not exceed 1 month.
Currently, the firm utilizes a traditional information system that was built on MS Windows by utilizing the MS access DBMS. ULMS Bike has been utilizing the database in enhancing information flow thus supporting the firm’s decision-making process. The firm has a number of databases in various departments. In addition, these databases are controlled independently. The databases have wide range o information relating to customers, bike parts, employees and suppliers. Various departments maintain different information depending on its category. For example, the operation department maintains information related to production while the purchasing department maintains supplier information. Updating the database is done manually on all the completed orders.
According to Executive Guides (1), e-business entails the use connection of a firm and its business parties through the use of the internet. The emergence of electronic business technology has culminated in numerous transformations within the business environment. As a result, firms in different economic sectors are considering integrating the concept in their operation. Sulzle (1) asserts that the adoption of emerging technologies is a fundamental issue that management teams of firms should consider.
The resultant effect is that firms are able to improve their business performance. Over the past decade, increased integration of e-business has enabled firms to improve relationships with other firms in the supply chain. For example, the automotive industry is one of the industries which have integrated e-business technologies in their operation. As a result, automotive firms are able to collaborate in the process of product development. This has been achieved through the utilization of tools such as Computer-Aided Design or CAD (Sulzle 3).
The ultimate result is that firms in the bike industry are able to design bikes according to the customer’s specifications. For example, in an effort to improve the quality of its bikes, Santa Cruz Bicycles which deals with the production of mountain bikes has incorporated electronic business technology in designing its bikes. This has been achieved through the incorporation of FEA technology in the process of analyzing and designing the bikes frames. This reduces the probability of the frames breaking during intense competitive stresses (Graney para. 1). On the other hand, bikes from Taiwan and China are designed using e-business technologies such as 5 PTC CAD and Pro-E Mechanica.
This technology enhances the analysis and storage of data in form of model files. The ultimate result is that data management in the firms becomes streamlined. To enhance the efficiency of collaboration between firms dealing with the production of bikes, Enterprise Resource Planning technologies are also integrated. This is software that enhances the collaboration of business parties such as customers and suppliers.
The ultimate result is that firms can be able to track their inventory level thus increasing the efficiency of their performance. According to Sulzle (3), the decision to incorporate electronic business can be perceived as a paramount investment decision whose returns are expected to be received in the future. According to Wall (1), firms considering integrating e-business should consider system development. This entails the development of a system that will contribute towards the firm solving its problem thus improving its performance.
Critical discussion: system development
In an effort to improve its competitive advantage in the global market, the ULMS Bike management team has considered integrating electronic business technology. In order to incorporate a particular e-business technology, a comprehensive system development should be undertaken. The key phrases that the ULMS Bike management team will consider in its system development approach include conduction of a feasibility study, analysis, design, implementation, testing and maintenance. A feasibility study entails an evaluation of the proposed system. Some of the factors considered include the ability to solve a particular problem and the conduction of a cost-benefit analysis.
The next phase entails gathering information on the necessary requirements to implement the system. On the other hand, designing entails the preparation of a plan of the desired system outcome. The design also includes an illustration of the functionality of the system. After completion of the designing phase, the system should be implemented and coded. To eliminate errors, the system is tested to ensure that the system can function appropriately. On-going maintenance should be conducted since errors are bound to occur. Maintenance also includes updating some parts of the entire system.
ULMS management team has considered a number of technologies in the process of integrating electronic business systems. These include the incorporation of an intranet which will be developed through the designing of a website. This will enable the firm to collaborate with the customers and suppliers. By interacting with customers through the intranet, the firm will be able to customize the bikes according to customers’ demands. In addition, it will be possible for customers to place orders online. This will contribute towards a reduction in the lead time. Suppliers will also be able to access information related to the firms’ stock levels, sales and work-in-progress.
This will enable the firm’s suppliers to be effective in their production. The Intranet system will also improve and control the firm’s ordering process. E-business technology will also enable the firm to attain efficiency in its inventory control and marketing process.
The firm will develop a code for each product to improve the effectiveness of its operation. ULMS will also develop a database in which it will keep information related to suppliers and customers. In order to ensure that the intranet technology works, the firm will utilize ASP technologies which will be connected to the server. In addition, the firm will also use the Access Database Management (ADM) system in its intranet system.
By incorporating the internet and intranet as e-business technologies, ULMS Bike will enhance its competitive advantage compared to other competitors. This arises from the improvement of the performance of its parties in the supply chain. Integration of internet and intranet e-business technologies will culminate into the creation of a good relationship with the parties involved due to the effective flow of information. Considering the volatility of electronic commerce technologies, the firm will be required to continuously improve its system. This means that the firm will incur significant costs in an effort to maintain its technology.
Executive Guides. Business to consumer. N.d. Web.
Graney, Joe. Mountain bike company uses FEA to design fast bikes faster. 2009. Web.
Sulzle, Kai. Innovation and adoption of electronic business technology. Munich: Ifo Institute for Economic Research. 2007. Web.
Wall, P. N.d. Different approaches to system development. Waterford, Ireland: Waterford Institute of Technology. N. d. Web.