Major Facts of the Case Study
The case study is an analysis of Hunt Company, a supplier of office equipment consumed by different individuals globally. These consumers include educational institutions, businesses, professional photographers, and professional farmers. The source of the concerns of the case study is a decision by the company to change its manufacturing procedures by outsourcing it to ensure cheaper production. The switch was meant to make the company more productive as its goods would be more affordable. The switch, however, complicated the supply procedures of the company, causing the company to make changes that would make the supply chain more effective. The case study explores the various modifications made by the management of the company to this effect.
The case study offers a detailed analysis of the major problems encountered by the company and the proposed solutions. It offers a detailed analysis of the solutions and their impact on the company. The case study offers invaluable insights into the various partnerships by the company intended to solve supply problems and make the chain more effective for the company and the customers. The case study acknowledges that outsourcing production is a major means of ensuring competitiveness for many companies and the advantage of cheaper goods is lost. The modification to the case study is a way of ensuring longevity for the company and enhancing its ability to compete in the congested market.
Main Problems in the Company
Various problems are facing the Hunt Company owing to its business model and market situation. The company struggled with shrinking margins due to the distribution network that strangled the profits. The company suffered from long lead times that ensured that orders took long to arrive at the shipping dock that growing from days and weeks to months. The inventory costs and overnight shipping charges also rose and these two further shrunk the profit margins. Reliance on business partners for the satisfaction of their customer orders also destabilized the company. Previously, the company delivered its goods to its customers quickly due to the proximity to their production means.
The shift to outsourcing production was becoming popular and maintaining its competitive advantage was difficult for the company. Modifying the distribution network would make its goods more affordable, enabling the company to compete better. The company had to contend with accepting large lot sizes, which caused the company to carry excess inventory that amounts to losses. The company could effectively manage large spikes in demand due to the unreliable supply chain. This led to the loss of business, immense losses, and loss of customers. The retailers also shifted to a consignment model where they returned unsold inventory to Hunt, resulting in losses. The challenges of sharing inventory with the newfound partners were also a concern due to the geographical challenges and the communication barriers.
Possible Solutions for the Problems
Possible solutions to Hunt Company’s supply chain challenges include expanding the supply chain visibility. Modern technological advancements and the presence of sophisticated devices make it possible for the company to digitally procure inventory management software (Kaewchur et al., 2021). The software will ensure the effective tracking of inventory levels through various stages, from receiving to the warehouse to be packed, to being shipped, and shipped to customers. The inventory management software should be harmonized with the various partners to ensure plans for future supplies can be made and emergencies addressed effectively. A second solution to the supply chain problems lies in establishing a healthy business relationship with suppliers (Al-Homery et al., 2019). A healthy relationship can be cultivated through efficient communication and cooperation to ensure customer satisfaction.
A healthy relationship means that the suppliers learn to treat Hunt Company as a priority and primary customer when it comes to making supplies. A good relationship can be boosted by having representatives from either company representing the needs of each entity hence effective management. Regular communication from the company means that the suppliers are constantly aware of its needs and changes in priorities hence healthy business and profits. Automating the supply chain process is an efficient way of ensuring that human errors are eliminated and making the supply process seamless (Matwiejczuk, 2018). Automated shipping, warehouse automation, and logistics automation are essential in this regard.
The Rationale for the Solutions
The expansion of supply chain visibility using inventory management software has successfully managed supply chains globally. Various companies have benefited from this strategy and Hunt Company is likely to reap similar benefits. The time taken to deliver products to customers from the suppliers is likely to reduce, leading to more customers and better profits for the company. The effectiveness of the software lies in its ability to integrate complex human thought processes in an instant and improve service delivery. Efficient communication and relations with the suppliers have been proven strategies in ensuring many businesses can succeed despite sourcing production. Producers deal with multiple entities and they must regard Hunt Company well.
A good relationship implies improved communication of the needs and demands of the company to the suppliers. The communication is also required to be timely to ensure minimal delays and losses to both entities. Automating all the processes within Hunt Company means that the clients can order their goods automatically, the company can order the required goods efficiently, and deliveries are made faster. The distribution process automation eliminates the tedious paperwork and ensures the losses of files likely to occur are avoided. The company is also provided with records upon which it can conduct its market analysis and improve its service delivery to the customers. These solutions to the supply chain are likely to ensure lead times are reduced and inventory costs reduced hence greater profits.
Steps in Implementing the New Strategy
The first step in implementing the solutions to the supply chain problems is procuring a reliable software developer. The developer should engineer the inventory management software according to the operations of the company and the needs of the customers. Crucial to the operation of the software is the retraining of the company workforce to ensure they can manage the application. The change in the computer systems of the company to guarantee the software is installed and its safety guaranteed is also vital. Upon installation of the software in Hunt Company computers, the necessary aspects of this software must be shared with the suppliers. This ensures that the suppliers can meet the demand of the company without divulging company secrets.
Developing a good relationship with the suppliers will involve bettering communication by making it regular and incorporating technology. Video calls are a more effective way of ensuring the demonstration of company needs to the suppliers and developing a bond. Employee exchanges to ensure a representative presents the needs of the company in the supply company are also vital. Automation of all processes within the company should follow the development of a new application that is shared with the customers. The application should have a friendly customer interface and an efficient supplier interface that integrates operations and eliminates human errors.
Al-Homery, H., 1, H., Ashari, H., & Ahmad, A. (2019). Enhancing customer and supplier relationships through the iterative customer relationship management process. Int. J Sup. Chain. Mgt, 8(6). Web.
Kaewchur, P., Sritong, C., Sriard, B., & Nima, T. (2021). Role of inventory management on the competitive advantage of small and medium companies in Thailand. Turkish Journal of Computer and Mathematics Education, 12(8), 2753–2759. Web.
Matwiejczuk, R. (2018). The concept of key success factors in logistics and supply chain management in the context of creating competitive business advantage. Transport Economics and Logistics, 78, 19–27. Web.