The Efficiency of the Supply Chain - Coursework Example

Topic: Supply Chain Management: Individual Research Report Name: ID no: Unit code and name: Lecturer name: Assignment No: Due Date: Contents Contents 2 The Supply Chain in which the store operates 3 Stores interactions 3 Store interaction with head office 3 The competitive priorities that the company is trying to achieve 4 Cost 4 Quality 4 Delivery 5 The efficiency of the Supply Chain 5 Production efficiency 5 Speed in supply chain 6 Process Efficiency 6 The Company reliance on Supply Chain Partners for continuously renewing their offering to customers 6 Areas of improvements in the Supply Chain operation 7 Supply Chain Flexibility 7 Sales 8 Supply chain focus 8 Computerised process map of the company’s internal Supply Chain operation 9 References 10 The Supply Chain in which the store operates Stores interactions Toys “R” Us has been able to keep its operational standards in which all its stores and office departments works according to common rules and regulations. The stores are categorized into departments. Analyzing a Toy “R”Us store in New York, departments inside include; customer care department, toy department, clothes sales, front office, parcel pick-up department and games department. These sections work in collaboration with each other for efficient service delivery. The customer care department acts as the gate to all other departments. The toy department has to rely on the customer care for customer guidance. For effective sales to be accounted in the store, all departments have to give customer information to each other and assist in marketing. The marketing is done in collaboration by all these department through effective communication (Cousin, Lawson & Squire 2006). Store interaction with head office Three head office departments that were looked at are; Finance department, Human resource department and Procurement department (Toys”R”Us 2013). In the company’s store, the first department a customer meets is the customer care department. This welcomes the customer to store by giving the guidance into several places. This department keeps in close contact with the all sections of sales department to know what is in the store for sale.Through the advice shared between the two departments, the materials that are bought by purchasing department are determined (Gilmour, 1999). All departments have to interact with the procurement department for purchase of their materials. The department approves all the expenditure in the department hence there is constant communication. The finance department takes care of the products raw materials cost. The toys department, games, front office and parcel pick-up departments have to give feedback to finance department regarding the products profitability. This helps in improving and eliminating flaws in the final products. From this, all departments are related through communication. The final communication is to the production department which manages production. The information may lead to the company increasing the output or decreasing according to sales demands (Schroeder & Roger, 2000). The production may also change the product as directed by the quality control department. The stores departments keep in close interaction with head office departments in all their operations. This interaction leads to quality products which have been brought by outputs from all departments (Kaplan, Robert and David 2000). The competitive priorities that the company is trying to achieve Cost Toys “R” US has several competitive priorities that the company has tried to achieve. Cost is one of the competitive priorities set. Toys “R” Us has tried to achieve low cost compared to their competitors. Efforts to achieve this have been centered in investing in low wage countries where the company has achieved low production costs. These countries include China and Malaysia which also offers low production costs. Low cost initiative has also been facilitated by having a large shelf space. The space helps the company to have good bargaining power hence low prices. Though this has adverse effects such as reduced profits, the company has embarked on measures to make sure they remain at profit margin (Lambert, Douglas and Martha, 2000). Quality Another competitive priority that has been set is quality (Lee, Hau, 2000). The company has strived in making and improving baby products in all their branches. The company baby’s products have been rated higher to what their competitors’ offers. The quality is consistent as seen in the toys made. Despite facing competitors such as Wal-Mart, the company Toys are preferable as seen by dominance in the market. The company has more than 1500 superstores around United States making it a successful brand (Lambert, Douglas and Martha, 2000). Delivery The company has also been able to meet time delivery. Through its online shopping, the customers have been offered fast and efficient shopping services in which they can buy and receive their purchase in time. Though the company has not achieved delivery speed compared to competitors such as Wal-Mart, on-time delivery has been utilized. The production chain has been able to achieve excellent development speed. The toys and gaming divisions have been able to develop their product in a timely manner. Toys “R” US has been able to flexible in their products. The company has produced variety of products ranging from toys, children clothes, games to family movies. All these have been achieved with undue costs (Lambert, Douglas and Martha, 2000). The efficiency of the Supply Chain Production efficiency The company has excelled in its production due to the improved efficiency in the supply chain. The products are made using quality materials and in compliant to common standards. The company several branches which makes their products are accessed regularly for compliant. The outlets have to confirm that the products that they receive are packaged and manufactured using the accepted standards (Lee & Hau, 2000). Speed in supply chain The products made reach the market destination at the right time. Having the right product for the customer at the right time has been done by the company in all their stores. This efficiency has made the company have increased volume of products in all their stores. In the recent past, the company opened mini departments inside the Macy’s Stores in United States; this was a step forward in providing customer with products efficiently. The opening of these department coincided with the holidays making it efficient for the parents to make purchases (Lee, Hau, 2000). Process Efficiency Process efficiency is also evident in the supply chain of Toys “R” Us. This efficiency has been supported by support from suppliers and also increased volume. The company has managed a production system that is efficient and in line with their demands. The speed of the products from the production lines to market is also seen in the company’s supply chain. The vast market which has been expanding globally receives the supplies in time. The web market enhances speed in market delivery by offering sales using the latest e-commerce capabilities. This makes the market even more accessible to other destinations without a physical branch (Toys”R”Us 2013). The Company reliance on Supply Chain Partners for continuously renewing their offering to customers The company has managed to work with different internal supply partners to make and deliver new products and meet the customers’ expectations. These partners include; procurement, human resource, front office, finance and sales. The procurement department has to buy the materials for production in time for the production department to meet the deadline. This applies to the other departments which have to make appropriate advertising for the products to make sales. The company departments have made all partners work together as shown by customers retained. The internal process integration has worked in a manner to allow the increased collaboration within the internal partners (Pickett, 2003). Through collaboration, the customer feedback is got from the customer care department to the production department. Looking at the interactions between the Toy “R” Us departments, the purchasing department relies on the finance department to get the appropriate funding to purchase the raw materials. For these purchases to be made, the procurement department has to approve the finance department. Once the supplies have been bought by the purchasing department, the manufacturing department has to request for the supplies from the central stores department. The interaction has to be there between the manufacturing department and other relevant departments through the warehouse. This is to facilitate the front office department in making sales from customers (The Supply Chain Council Inc. 2001). The marketing departments have to get all the information concerning a product before they embark on its marketing. All these interactions are accomplished inside the firms department as in the Toys “R” Us (Mentzer et al. 2001). Areas of improvements in the Supply Chain operation Despite being the largest toys retailer, Toys “R” Us have several areas in its supply chain that need to be improved. The company can increase its competitive advantages, improve marketing during seasonal periods and increase focus on the global market. Supply Chain Flexibility The ability of theupply chain to adapt to changes in business is vital in any business (Narasimham & Das, 2001). Toys “R” US needs to be able to adapt and adjust as the market forces keeps on transforming. The rise in the competition requires the company to start making changes in the supply chain to cater for the market demands. This involves reduced pricing as well as differentiation. The company has not adjusted the children product prices despite the challenges of competitors who offers substute goods at a lower price. Wal Mart has entered into the market with new products which are offered at a lower price. This means that the supply chain of Toys “R” US needs to be more flexible. Sales Another supply chain operation that needs improvement is sales. Toys are seasonal products and experiences fluctuating sales. The sales rises during festive seasons such as Christmas where they are bought as presents. The company has to increase the amount of their toys and other kids’ products during this period. In the eve of Christmas, the company has to look into ways in which the sales can be increased and take advantage. This coupled with timely delivery to cater for all customers would lead to high sales (DeMarrias & Kevin 2009). Supply chain focus The company being a multinational has a local and global market. Despite this, most of the company marketing is done on the United States where the company originates. This is seen especially in the advertising and opening of new stores. Most of the company stores are based in the United States. This has left unexplored potential in other markets overseas. By increasing focus on the global marketing arena, the company can be able to survive and maintain the profit. There is need for the company marketing partners to collaborate and strategize on uniform marketing across all supply chains (Sabovic & Miletic, 2010). Computerised process map of the company’s internal Supply Chain operation Internal Downstream - Internal Supply process map (Elmasri et al. 2000) References Cousins, P. D., Lawson, B., & Squire, B. 2006. Supply chain management: theory and practice – the emergence of an aca­demic discipline? International Journal of Operations & Produc­tion Management, Vol.26 no. 2: p. 697-702. DeMarrias, Kevin G. 2009, ‘Toys R Us will keep selected Holiday Express stores open’ The Record, Retrieved September 28, 2013 http://www.northjersey.com/news/business/123009_Toys_R_Us_will_keep_selected_Holiday_Express_stores_open.html/ Elmasri, R and Shamkant B 2000, Fundamentals of Database Systems, Reading, MA:Addison Wesley. Gilmour, P1999, ‘A Strategic Audit Framework to Improve Supply Chain Performance,’ Journal of Business and Industrial Marketing, Vol. 14, No. 5, pp. 355-363. Kaplan, R and David P 2000, ‘Having Trouble with Your Strategy? Then Map it,’ Harvard Business Review, Vol. 78, No. 5, pp. 167-176. Lambert, Douglas M. and Martha C. 2000, ‘Issues in Supply Chain Management,’ Industrial Marketing Management, Vol. 29, No.1, pp. 65-83. Lee, Hau L.2000, ‘Creating Value through Supply Chain Integration,’ Supply Chain Management Review, Vol. 4, No. 4, pp.30-40 Mentzer, John T., William D., James S. K., Soonhong M., Nancy W. Nix, Carlo D.Smith, and Zach G. Z.2001, ‘Defining Supply Chain Management,’ Journal of Business Logistics, Vol. 22, No. 2, pp. 1- 25. Narasimham, R., & Das, A. 2001. ‘The impact of purchasing in­tegration and practices on manufacturing performance’. Jour­nal of Operations Management, vol.19 no.3 :p. 593-609. Pickett, S. K. H. 2003, The Internal Auditing Handbook (2 ed.). York, Chichester, etc: John Wiley & Sons. 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