Overview of the Case Study
The discussions of the study relate to improve the competitive position of Carparts Ltd. Based on the initial interviews there has been several information collected from the Managing Director shows that despite of turnover of approximately £15 million per annum, in the last two years it has made losses totalling over £3 million. In addition to this, the present managing director has been discerned to be taking charge of the business nine months ago. Furthermore, the target provided to the MD by the parent company was able to regain the profitability and total market share by 20% within two years. However, in the last nine months it is seen that the workforce produced by 20% with current employee strength reduced to 160 employees. In most situations, daughter fulfillment process is done across four departments namely “Sales, Production (especially Production Control), Warehousing and the Export Office”. It has been further seen that the sales department is the first point of contact for customer is responsible for receiving the order. The department consists of seven members on site and having full-time representative covering various regions across the UK. As per the given case it has been depicted that on receiving the order “the sales clerk finds the customer’s details using a spreadsheet and adds them to the order”. The export manager is seen to carry an active role in every department for ensuring that there is minimum delay in export orders “reaching their customers and to ensure that the warehouse uses the correct packaging”. The production control department is responsible for controlling the production and purchasing of raw materials. The production control department makes use of various types of the items which are to be manufactured. The warehouse manager leads the staff of eight individuals who are responsible for “storage of finished products to the picking and packaging of customer orders”. The members assigned in the warehouse collect the picking list at highest priority and depict the various types of locations of items on the list and which are to be packaged (Dobrzykowski et al. 2014).
As per the information available Carparts is having an employee strength of 160 people manufacturing automotive spares for various distributors, retailers and vehicle manufacturers. The company is depicted to be the owner of more than 200 subsidiaries. The present business position is for the depicted with dealing into more than 300 variants of products with specific radiations of more than 3000 types of vehicles. In addition to this, the on-site warehouse has the capacity of holding more than 2 million units of productivity than average stock level of 1.4 million units.
Evaluation of Competitive Position and Improvement Ideas
The competitive advantage taken by the other companies is depicted with delivering the goods within 24 hours of the order being placed. On the contrary, Carparts takes on average of 48 hours. To bridge this gap of delivery time the company should focus on establishing new plants and thereby building new networks in the Midlands and the North of England. In addition to the theories the company is having a significant scope in terms of increasing the sales to mainland Europe and compensating for the loss totalling over £3 million (Wilke, Majumdar and Ochieng 2014).
Based on the depictions given in the case study, the master plan is reviewed daily by the “Production Control Manager”. The individual type of the items is shown in the forthcoming week and a “single work book is produced by the senior production controller”. One workbook is a good representative manufacturing order for several thousands of units of similar type. It has been further observed that in generating the work books, significant amount of raw materials stocks is assigned to the production of those items as and when they are available. The workbooks having insufficient raw materials are carried forward to the production controller for maintaining the ordering of more raw materials. This is taken into consideration with the issues of purchase order and agreed date of delivery with the supplier. The most noted materials purchased are identified in form of “thin sheet metal for pressings (some already painted), metal gauze, foam, filter materials, rubber seals, packaging materials, paint” (Rajapakshe et al. 2017).
As per the present working the shop floor supervisor have the complete control of the work books and allocation of resources for getting the specified items on the required date. The production is maintained by a series of flowlines we should be able to produce an” order of a thousand items in a few hours, according to the type of item”. The main changes by which the company can improve is the way purchasing is carried out. This can be done by understanding the way in which company organizes buying functions and maintains the common recognition channels between several functions (Hübner, Holzapfel and Kuhn 2015). Clear idea of organizational buying process for Carparts needs to be done by mapping job roles within each of the product category of the company and holding off in-depth interviews with “selected subset of every job roles within each category”. Some of the key considerations needs to be included with job roles which are assigned to the individual category within each department namely the production department, the export department, the sales department and warehousing department. The company needs to also focus on maintaining a communication link among the different job functions and in “particular where there are the key communication gaps as seen from the different roles” (Zhao 2014).
Assessment of Supplier and Purchasing System
The present manufacturing operations involves production of automotive spares for vehicle manufacturers, retailers and distributors. Six years ago, the company shifted its focus by building a new factory in the southwest of England which covers the production, research and administrative resources. The sales manager and the representative acts as the main distributing agent of the company. The orders are received in variety of formats including by “telephone from either a sales representative or the customer, e-mail on either a standard order form which is given to customers or the customer’s own order format”. Once items are placed in the picking list (the items which needs to be picked by the warehouse) the complete picking list is reverted to the sales department along with an electronic invoice. It is also discerned that on each afternoon the invoices are printed in a daily print run by a special form which are added to the shipment for delivery to the customer.
The manufacturing of the items is managed by the “Production Control Department” by using master plan for calculating the quantities of each are needed to replenish stocks having present date “plus product lead time, and item quantities that are required for back orders have the current date”.
Some of the main initiatives which the company may take to improve the strategy aims includes core set of capabilities such as deeper investigations into the supply-chain target in specific areas of improvement. For instance, the modelling and analytics techniques used by the company can identify the constraints which prevents performance improvements. In addition to this, the capacity nationalization may be exposed to the various types of opportunities to divest operational assets (Bromiley and Rau 2016). “Demand planning and inventory management can develop tactics to compensate for volatility”. The manufacturing activities can be enhanced by the application of lean manufacturing techniques, customer integration, flexible manufacturing techniques and continuous improvement. The distribution strategy can be improved by improving the warehouse design and layout, enhanced transportation planning, performing modal/lane analysis, better fleet management, varicose process improvement, inventory control and transportation bidding (Hazen et al. 2016).
As per the information given in case study, the sales department is designed as the first point of contact for the customer there all the orders are received. This department is seen to be consisting of seven members “on site and five full-time representatives covering separate regions of the UK”. The performance of this department is measured on the value of orders being placed during the cycle of four weeks. The various types of information of the sales department is supplied by warehouse function with the help of “computer system”. It has been further discerned that “customer credit information” is supplied by the accounts department on request; promotions on products and “discounts to customers must be authorised by the senior management team”. The relationship of the sales department is discerned with both export department and warehousing department.
Improving Manufacturing and Distribution Operations
Export department is determined to be consisting of three staffs-two clerks and a manager. The first area is identified to ensure the smooth export of the orders which needs to go through taking of import regulations of the country and ensure that appropriate method of packaging and transportation is used which is acceptable by the customer. The export manager is seen to be having an active role in every activity in the department. The relationship of the export department with the warehouse department is depicted with ensuring that users got it packaging and sending a packing note along with picking list.
The assessment on the production control department is seen with a month by month demand forecast generated by the “production control manager” along with close consolidation of “sales manager and the managing director”. The master plan of the department is “reviewed daily by the Production Control Manager. For each individual item type that is shown for the forthcoming week, a single work book is produced by the senior production controller”.
The different types of relationships with the warehouse department is seen with the export department as it manages from storage of finished goods to picking and packaging of customer orders. In terms of the production department it is able to prioritize the items as per special requirements such as “special packaging or courier delivery and place the lists in order of priority”.
The focus of the company should be based on integrating the operations of various types of departments into a single comprehensive database by maintaining an ERP system, which will be able to share the information across the enterprise. This integration on the internal side needs to be based on covering all aspects of management information needs such that there are no external systems or applications planned or in place. That adoption of ERP software but also allow the company to easily exchange the information and documents with the trading partners across various locations in the UK in a very short span of time (Guide and Ketokivi 2015).
The main priority for bringing about the necessary changes should be based on first increasing the sales revenue of the company by getting on with the expansion initiatives to mainland Europe and compensating for the loss totalling over £3 million. The second priority needs to be given on taking strategies such as “Demand planning and inventory management which can develop the overall tactics to compensate for volatility”. The third priority needs to be given by defining the appropriate job roles to the present staff in each department. The final priority needs to be given by integrating the various types of activities of the department and enhancing the information flow with ERP (Slack, Brandon-Jones and Johnston 2016).
Conclusion
The several types of findings on company’s competitive position and the MD’s improvement idea is suggested with concentrating on the expansion initiatives in mainland Europe. Application of appropriate theories on framework to the position of the company needs to be done by understanding the way in which company organizes buying functions and maintains the common recognition channels between several functions. Clear idea of organizational buying process for Carparts needs to be done by mapping job roles within each of the product category of the company and holding off in-depth interviews with “selected subset of every job roles within each category”.
References
Bromiley, P. and Rau, D. (2016) ‘Operations management and the resource based view: Another view’, Journal of Operations Management, pp. 95–106. doi: 10.1016/j.jom.2015.11.003.
Dobrzykowski, D., Saboori Deilami, V., Hong, P. and Kim, S. C. (2014) ‘A structured analysis of operations and supply chain management research in healthcare (1982-2011)’, International Journal of Production Economics, 147(PART B), pp. 514–530. doi: 10.1016/j.ijpe.2013.04.055.
Guide, V. D. R. and Ketokivi, M. (2015) ‘Notes from the Editors: Restructuring the Journal of Operations Management’, Journal of Operations Management, pp. v–x. doi: 10.1016/S0272-6963(15)00073-X.
Hazen, B. T., Skipper, J. B., Boone, C. A. and Hill, R. R. (2016) ‘Back in business: operations research in support of big data analytics for operations and supply chain management’, Annals of Operations Research, pp. 1–11. doi: 10.1007/s10479-016-2226-0.
Hübner, A., Holzapfel, A. and Kuhn, H. (2015) ‘Operations management in multi-channel retailing: an exploratory study’, Operations Management Research, 8(3–4), pp. 84–100. doi: 10.1007/s12063-015-0101-9.
Rajapakshe, T. K., Vakharia, A. J., Wang, L. and Yenipazarli, A. (2017) ‘Sustainable operations’, in The Routledge Companion to Production and Operations Management, pp. 276–290. doi: 10.4324/9781315687803.
Slack, N., Brandon-Jones, A. and Johnston, R. (2016) Operations Management, Operations Management. doi: 10.1007/978-3-658-00183-4.
Wilke, S., Majumdar, A. and Ochieng, W. Y. (2014) ‘Airport surface operations: A holistic framework for operations modeling and risk management’, Safety Science, 63, pp. 18–33. doi: 10.1016/j.ssci.2013.10.015.
Zhao, S. (2014) ‘Analyzing and Evaluating Critically Tesco’s Current Operations Management’, Journal of Management and Sustainability, 4(4). doi: 10.5539/jms.v4n4p184.
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