V. Communication, Organization and Management
Management of supply chain and innovation ;
Supply chain management is the process which helps to improve the organization’s efficiency and to achieve the competitive advantages. First of all, Newline should define their purpose in order to reach the competitive advantage for all participants. The first competitive advantage is that Newline has their own factory in Poland and subcontractors in low-wage countries. Because of this reason, the company can save money on labour force. This leads that they have already minimized the costs. In addition, the costs are also reduced by using the agile strategy (focus on ability to match the supply with a demand). This is done by using postponement management, meaning the company has semi-finished products which can be ended by users. The costumers can change colours and shapes. This management could help to have less stock because the production is in the working process. However, Newline has a mission to develop their production for sportsmen and ensure that the clothes can be worn under all weather conditions. Also, their vision is to improve design and quality of the production and fabrics. The concept of mission and vision shows that Newline wants not only reduce their costs but also to improve their production what means that they should develop their organizational structure and work flow as well. In order to reach the competitive advantage in the production Newline should consider the possibilities about mixing the existing agile strategy with lean strategy (focus on trimming the organization). By using these strategies Newline could reach company’s purposes. Our advice for Newline is that they should make a list of how exactly to improve their production (design, colour, techniques, fabric and etc.) in order to fulfil unique customers’ needs (the products not for mass, narrowed and specified).
Furthermore, the company’s contribution for supply chain should be bigger or equal than the contribution. In order to reach that, Newline has to decide who exactly should participate in the cooperation. First of all, the roots of achievement are hidden in the supplier’s value chain. In other words, the fabrics, sewing technique, components and design should satisfy customers’ values. We assume that expectations of Newline’s customers are high quality, convenient and fashionable clothes. So the company should focus on how to implement the relationship with suppliers in order to satisfy customers. Another participants in this process are sales and purchasing departments. We assume that Newline has these departments. They should decide where, how and what to sell and buy.
In addition, the company should decide how the process has to be integrated in order to reach the efficiency. Firstly, Newline should have good relationships with their suppliers, because it is important to get raw materials at right time, in a right condition, at a right place, at a right product and at a right cost. One of solutions how to realize it could be the establishment of the connection to the intranet (CRM system could be positive and helpful). The system might help to see the inventory, production plans, delays and other important information. Secondly, to understand how to integrate the process efficiency it is helpful to use the Kraljic model. This model can be used to analyze the buying and ordering portfolio. Newline is highly orientated to good quality; so it is not easy for them to find suitable and reliable suppliers. Because of this reason, the company does not have many subsidiaries of suppliers and they have high-level of independency between each other. By the way, every component and material is crucial for the production. So according to the Kraljlic model Newline’s components and materials belong to strategic items (high supplier risk and high profit impact). The recommendations for Newline can be that the company should keep close relationship with suppliers, to have the involvement with them earlier and focus on long-term values.
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