1. What caused the difficulties that the JITD program was created to solve? The problems that JITD intended to solve: ● Demand fluctuation: Barilla suffered increasing operational efficiencies and cost penalties that resulted from large week to week variations in its distributors’ order patterns. According to the Exhibit 12 , the demand variability was huge so it was very difficult for the whole supply chain to forecast the demand and order accordingly. ● Furthermore, the production line of Barilla had a long setup/change process and was highly automated as well.
Analysis Sport Obermeyer is facing difficulties from its outdated supply chain. They suffer long lead times, due to supplier capacity constraints which places a heavy burden on forecasting. Forecasting in this ever-changing market is a significant challenge, which when is inaccurate costs the company in terms of below cost inventory disposal and lost sales revenues, which may also further reduce market share. . Their incapability to forecast accurately resulted in either excess inventory of
* Deadline: Initially the deadline was fixed, but due to the incorporation of extremely complex baggage handling system in the middle of the project, meeting the schedule became a significant risk. * Number of players: Due to the huge complexity of the project, the project was divided into mini projects and given to multiple sub contractors. This increased the risk tremendously, as failure to meet the schedule by one contractor can have a catastrophic effect on the schedules of other dependent projects. * Change in leadership: Leadership was changed in midst of the project. This also increases the risk of knowledge transfer and complete understanding of the project.
Case question 1 During the recent years, Robertson Tool has been underperforming. Poor profit and sales performance reflects potential profits to be achieved from an acquisition with Robertson. At Robertson, key line items such as sales income, cost of sales and administrative expenses are much likely to be improved. Despite the fact that Robertson’s distribution system has a great range with wholesalers selling to over 15,000 retailers in 137 countries, the company’s sales growth (2%) falls behind the industrial sales growth by 4 per cent (6%). Poor sales performance and relatively high cost of sales have contributed to the profit margins to slip to one third of other hand tool manufacturers.
Ergonomic office solutions can decrease human resource costs and increase health of employees. Running an office is expensive, consisting of personal expenses (80%), material and office technology expenses (4-5%), building expenses (14-15%) and furniture expenses (1-2%)(buero-forum,2006). Besides being the smallest of office expenses, furniture is the one many companies save on most, followed by building expenses. Maintaining old, unhealthy and system performance unfriendly furniture will skyrocket personal cost over time. So the above mentioned office furniture are not
P&G business operations are divided into three main units; Beauty Care, Household Care, and Health and Well-Being, which are all divided into even more segments. Maintaining the popularity of their existing brands, extending its brands to related products, and innovating and creating new brands from scratch are the three focuses as a business that each division focuses on. They employ more than 140,000 in 80 different countries across three continents. Procter and Gamble has been an industry leader in innovation and global business solutions for decades but “In the spring and summer of 2000, P&G experienced one of the most demanding challenges in its history. After missing earnings commitments, the Company's stock declined dramatically, resulting in a loss of nearly $50 billion in market capitalization.” (P&G Revolutionizes Collaboration with Cisco, 2008) Without this revolutionary approach Procter and Gamble’s growth would have become stagnant, allowing other consumer product companies to capitalize on the reduced competition, ultimately resulting in lost market share.
The company needs to invest in R & D to come up with innovative models to stay at consumer’s top choice. Generic Strategy is differentiation Swot Threats DaBest is exposed to the international nature of trade so it sells its product in different currencies which destabilizes the costs and margins for profits over long periods of time. This type of exposure may cause DaBest to be manufacturing and/or selling at a loss, although that is not the case for a giant as itself. Price Sensitivity Consumers are constantly shopping
Again, we are told about the variation in the cost of components, particularly of imported steel and IT. Steel, being a main commodity, will undergo rapid fluctuations in price which are not always predictable. Any imported items will be subject to fluctuations in price caused by exchange rate changes which are again difficult to predict. In addition, the rising reject rate will effectively increase the costs of production, which again will limit the usefulness of the break-even data. FIF produces lots of products and so it will be difficult to monitor them all using break-even analysis.
This interfacing can be difficult between legacy systems and an ERP system since they may use quite dissimilar technologies. Another consideration in adopting an ERP system is the cost. ERP systems are very expensive and require considerable consultant time to configure for your specific company, which also adds to the cost. There will also be significant training for your company staff to learn the new system. And there is a very good possibility that you will have to change your business process to conform to the ERP system.
But unfortunately, it also has brought a lot to the cost, especially inventory cost. The big ones always buy a lot of different products and the demand variation is high. Up to 80% of the products have the c.v. more than 0.5. Obviously, those big customers are really vital to the business. If the company ceases to manufacture some products required by those big customers in order to decrease the inventory and cut off the cost, the company may lose contract with those important customers.