NBS-7056A Strategic Operations And Supply Management Essay.

Supply chain management is an essential business approach which is broadly utilize at the production time. This procedure involves organization dealer, seller, client, in the process of manufacturing and supplying of products and services to the end users (Wisner, et al., 2014). As per the global supply chain forum (GSCF), SCM is the integral organization procedure that are derivative from the products, facilities, and info that add value for client and other included parties.

Johnson skin care Product Company is based in Kentucky which delivers for sales via the store in the market. This firm is the manufacturer of skin care products for men and women both (Turker, and Altuntas, 2014). The Johnson skin care product has manufactured, many new products for their customer as per their demands and delivered them via retails stores around U.S.

The Johnson Company has distributed their products into the international market globally. The regular customers who take the advantage of the products and services have the facility to collect the products from the spa and saloon, and brand retailers.

According to the case study, the procedure of the Johnson skin care is, they purchase the raw resources from the venders, directly send and develop the goods at two different company warehouses, which is situated in California and New Jersey, after that the product kept at 3 step warehouses and after that corporation distributes their items to 5 supply center (Thoo, et al., 2012). After that firm has send their products to recognize market as such spa and hair saloon, unisex saloon etc. so the customer of the spa and saloon will take interest in the Johnson baby skin care product. Recent research report of the company shows that there were slowly increasing $36 million and working revenue was more than $4.8 million. The company has three product that are famous among the customers, the most sold products are women’s foot care, men’s foot care, and body butter. And the effect of these three product were very good. After that company has an agreement with two companies for the mixing of the ingredients, bottle and packaging of the final product.

The total Price delivery of the Johnson skin care product are high. It is being noticed that the Johnson skin care company is facing various changes in the operation management, and further in the order of supply chain management the items are being delivered to customer on time and also get the high quality product. The main problem facing the company were “the extra cost of transportation”, there is no specific mode to carry the company products from one ware house to another house.The another problem was raised regarding to the warehouses for storing the products before delivering the services to the distributers.It is important that product quality should be maintained so that product will not get damaged before the delivery. So, because of these issues company is facing high cost inventory problem.

It is seen that Johnson baby care company believes in ethical responsibility also rather than focusing on maximizing the profitability to attain the sustainability. So, to decrease the operation cost and for worldwide market Johnson skin care product need an effective supply chain management. So for the development of an effective supply chain management, SCM have to be controlled up between assistants, traders, and suppliers (Surowiec, 2013).

It is being observed that firm is facing issues as such quality maintaining and high cost of transportation is occurred due to there is no specific mode of transportation. So it is being  recommended that every company should use the ERP (enterprise resource planning) in order maintain the product quality by giving the special care to the products. It will also help to reduce the transportation cost and it will provide a proper specific mode of product delivery. The usage of the ERP system provide the data framework in supply chain and benefits in business (Stank, et al., 2015).

It is being observed that firm is facing issues as such quality maintaining and high cost of transportation is occurred due to there is no specific mode of transportation (Thoo, et al., 2012). So it is being recommended that every company should use the ERP (enterprise resource planning) in order maintain the product quality by giving the special care to the products. It will also help to reduce the transportation cost and it will provide a proper specific mode of product delivery. The usage of the ERP system provide the data framework in supply chain and benefits in business. Moreover, company can use also the system to manage the quality system of total quality management. The approach which is used by the organization to improve the internal process this approach is known as total quality management. This system is help to improve the quality process of the company (Stadtler, 2015).

After applying the ERP and TQM system in Johnson skin company, the company will able to improve the issues which are being occurring in the organization. But apart from that company need to focus the on external process as well in order to stability the internal and external process. Moreover company also can Improve or can make a strong relationship through the process of good communication skills. Every company should always listen and record all the customers’ demands and feedback, and according to their demand make changes in their products (Srinivasan, and Tew, 2017).

Figure 1 Forecast Sales and Selling Prices

In Johnson skin care product case the cost the section of three products (WFC,BB, and MFC)  were the same. Those main sections are:

Bottle

Ocean mist scent

Shea butter

Mountain air scent

Fresh sky scent

Figure 2Manufacturing price of Johnson skincare products

Figure 3Transportation price per Truckload

Supply chain is a possible system management to bring vital savings in any organization. The task to reduce the cost of supply chain management as well keeping the more flexibility is the main target of nowadays organization. Cost allocation is one of the essential element in supply chain management for maintain the financial efficiency. However in supply chain allocation of the cost is bit tough to define. Particularly only in the dynamic business environment difficulty occurs in measuring financial results. There are three cost levels to be calculated in supply chain costing. Direct cost, activity-based cost, and transaction cost (Ross, 2013).

To reduce the additional cost of the unspecific mode of transport in the company, the Johnson skin care should use the single souring as the mode of conveyance. Moreover this should be possible by offering an offer to the transportation through the demand for products and the points of interest should be given to the careers about the products of the organization which are to be conveyed and the measured time which is being normal from the transporter with a specific center to transport the products to the focuses of appropriation by assuring that the items don't get damaged at any cost (Monczka, et al., 2015). Let’s take an example of WFC product of Johnson skin care:

Figure 4product distribution cost of Women’s Foot Care

By using the single sourcing system it will help the organization to decrease the extra cost charges of transportation and product will delivered to the customer without get damaged (Kugler, 2013).

The point where, maintaining the demand of product to continuously high is known as the price point of the product. The cosmetic makers in the U.S. gangs 62.5 billon of US dollar income in the time of 2016 (Kessler, 2015). Pricing is an essential l part of marketing technique that straightforwardly effects the calculated operations. There are two esteeming details t for business processes. The first will influence the business profit and the second is differentiating the thing and the competitors in the market location (Maloni, 2015).

Figure 5The manufacturing cost and selling prices data

Choosing the target pricing is the main thing to consider in an association to give the course of the whole pricing procedure of the belongings. There are different purposes of the pricing which the organization i.e. Johnson skin care should consider keeping in mind the target to accomplish the sustainability and the competitive objects for the more period of time fulfilling the clients as per their needs and prerequisites and keeping up to maintain quality in the meantime (Fawcett, et al., 2013).

• Quality Objectives:This specific target of pricing will help the organization in order to impact the clients to buy the product as they will offer high quality of the items which will be presented by becoming into a pioneer of quality in the market and this will help in increasing deals too.
• By scanning the cream from market:  the primary stage of the life series of the goods, organization can use this technique of costing by scanning the more produced item and incomes.
• Stability in price: further to take out the recurring and the cyclical variations, organization can constant the rewards, whenever they will get an estimated rank in the market. In the result, it will leave an impact on the buyers and the organization will be possible to invite them in good number and will also recollect them for a longer time (Fahimnia, et al.,  2015.).
• Increasing margin in benefit: By using the particular strategy of pricing, Johnson Company can increase the margin of benefit at per unit for each product. In this manner, the approximating preparation of the association is setting the cost expense in terms of the prices, demand, and contention while esteeming technique is getting the association's key objects by changing the price (Ellram, and Cooper, 2014).

After seeing the best objective of pricing, it is important to select the best plan of costing. This strategy mainly aim to have the company to get more revenue by refining the matters in building a  chain for the management purpose after introducing the new products in market.

• Value Pricing: the value of pricing mainly focus on setting the cost value of the clients which results from the consumer perception. In the Initial stage, Johnson Company tends to set the cost of the products by confirming readiness of the clients, in order to pay for the advanced goods.
• Cost based pricing:In order to notify of the decision of valuing, company can utilize the manufacture cost as the baseline.
• Competitive pricing: The competitive pricing is known as the set the cost related to the competitors (Dekker, et al., 2013).

In the today’s scenario the research is been made on, that there is no appropriate details in the vendor rating system and trading the collection procedure in Johnson skin care organization. Moreover, it is essential to have the vendor rating system in the organization which mainly helps to perform the analysis on the operations perform by the vendors. The company Johnson having issues in maintain the quality of products,  so by the help of the vendor rating system company can improve the quality of product, and also can maintain the quality to the best possible way (Coyle, et al.,  2016).

Moreover, it is being recommended that company can improve the quality and decrease the expenditure of source along with the extra price of product transportation by the implementation of system of enterprise resource planning. It can be integrated with vendor rating system at the minimum price. According to the vendor system, the company have the ease way of accessing and differentiate the vendors who are actively participating in the company, so that the organization lead to fulfil the major objectives in the market value. (Durga, et al.,  2014).

Figure 6Vendor Rating System

Policies based on Supplier Selection: Johnson skin care Company should conclude many factors in order to gauge the suppliers in terms of the rule of supplier selection policy which are described below:

• Superiority and consistency: In the selection of suppliers, it is being suggested that the level of quality in the product of procurement are important feature (Christopher, 2016). Moreover, the product quality should meet the expectation of the customers. And the product delivery by the suppliers should be on time without any delay to the customers.
• Cost: the owner ship cost include the cost per unit, terms of the income, cost of ordering, and many more cost from the quality aspects.
• Control and planning system: The control and planning include the schedule, release and the work-flow (Chopra, and Sodhi, 2014).

Nowadays business atmosphere is more challenging for all the manufacturing company and organization. The target of any company is increasing the quality and reduces the losses. To accomplish this there are many method. Those are ABC method:

• Two bin method: The strategy for two bin method is primarily utilized as a part of the affecting and the collecting of manufacturing where the segments are being added to the product or the item which are created. Two bin method has two reserves of items: one for usual operations and one for backup use (Brindley, 2017).

Figure 7Dilemma in Inventory Control

Just-in-time system:  in order to maintain the inventory price, it is recommended that the company should use the technique of just-in-time. JIT system is helpful to increase the employee efficiency and reducing the waste. This technique requires manufacturers to estimate the demand correctly. This method of inventory control will help the company in many ways like the resources which will be knotted up in the lists at other areas as well.

• Fixed Order Quantity Method: This method is used to handle the operations and supply chain efficiently in the company (Bowersox, et al., 2013).

• New distribution channel:  It can be recommended that Johnson Company should use the online channel distribution technique. Online channel delivery technique permits a seller to market the goods to not just a public community, but to a whole world of possible purchasers. Nowadays company (Johnson skin care) distributing the product through the physical stores. IT is being observed that by changing the time people are preferring online shipping more without going the store and in meanwhile buyer does not want to compromise with the quality of the product. It can be recommended that Johnson skin care company sell their products through the online distribution channel  by the implementation the system of total quality management along with system of enterprises resource planning (Bia?as, 2011).

Johnson skin Care Company should use the ERP system for to improve the quality and services of the company to achieve:

• Smaller inventories
• Better integration
• Product quality and services

By applying the ERP system Johnson skin Care Company will be able fulfill the demand of customers quickly and company will be able to adopt lean manufacturing tools and just-in-time manufacture (Beske, et al., 2014).

Johnson skincare company products need to apply ERP system technique in their supply chain in order to recover the facility level and to achieve minor inventories, better integration, and the product obtainability. After applying the Enterprise Resource planning, the company Johnson skincare goods will be able to accomplish the demand.

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