Supply Chain Management Is an Important Aspect in Organization

Question: What Supply chain management is an important aspect in the organization? Answer: Introduction Supply chain management is an important aspect in the organization that enables flow of raw material in the company and flow of finished goods to the final consumer (Cetinkaya, 2010). Supply chain management involve designing, planning, controlling and monitoring supply chain activities to ensure that they are timely, reliable and cost effectiveness. Supply chain strategic refers to execution tactics that enable alignment of the supply chain activities with the organizational strategy and objectives of the business. Proper supply chain strategy in supply chain management enables attainment of competitiveness through cost reduction. Products are able to be manufactured on low cost, working capital is minimized and time to market reduced creating a serviced perspective to customer (Bouchery, 2017). Therefore, supply chain strategy increases business performance hence meeting its predetermined goals. The following report will outline RAK Ceramics supply chain Strategy. The report also assesses the current situation and proposes strategic changes that will make the company more competitive. Company Background information RAV Ceramics is a world leading ceramic company. The company was founded in 1989 by Sheikh Saudi Bin Saqr al Qasimi and started it operation in 1991. The Company has its headquarters in Ras Al Khaimah in United Arab Emirates. The Company Chief Executicve Officer is Abdallah Massaad. The business is a public company with Sheikh Saud Saqr Al Qasimi being the main shareholder taking 39.88%, 4.98% by Ras Al Khaimah Government, Emirate Rock 8.11 and Omar Bin Saqr 5.28%. RAK Ceramics is listed in Abu Dhabi Security Exchange. The business recorded annual turnover of US$ 1Billion in 2016 financial year. RAK is also traded in Dhaka Stock Exchange, Bangladesh. The Companys products include; Ceramic tiles, interior ancillary products, tableware, tile adhesives, sanitary ware, taps and kitchen fittings (RAK, 2017). The company produces an average of 110milion square of tiles. The company also manufactures 5 million pieces of sanitary in a year. The company has three production plants in United Arabs Emirates, Bangladesh, India and Iran. The Company serves customers in more than 150 countries around the globe. The Company has employed 15000staff who are from different countries (Khan, Hussain, Ajmal, 2017). RAK Ceramics Business Strategy The business strategy is market focused. The aims to be a top ceramics players in the market, top five exporter of value market in the world (Bernon, 2010). The business also focuses of strengthening its presence in markets in order to increase and grow its market share. The strategy is based on the on a vision to be a leading innovator in the ceramic industry. The company strategy is close to clients, excellence in products, redefined designs, being accountable to stakeholders, integrity, committed and sustainable to the society that the business operates in. PESTLE Analysis Political factors: RAK operates in different countries around the globe. The supply chain is faced with different legislations that regulate and limit operations. Legislation influence how the business supply chain relates to environments, citizens and trading in the market. The company uses the local society to promote local labour. RAK requires suppliers to comply with the countrys regulations that involve health and safety, employment and equality. This ensures that the Companys suppliers operate within the set laws to avoid sanctions or operations terminated by the authorities (Belvedere Grando, 2017). Economic factors: RAV Ceramics performance is affected by the world economy. Global economic growth increases ability of costumers to buy RAK Ceramics products and vice versa. The World economics is predicted to grow by 2.7% more compared to 2016. This indicate that the there will be increased demand for RAK products around the globe. Morana (2017) Forecasts that there will be economic stability for 2017-2018 and global GDP will increase with Europe leading. Social Cultural factors: RAK Ceramics is involved in manufacturing products that are stylish and their demand is driven by peoples lifestyles. The companys products compliment stylish lifestyles. These products enable customers to live in buildings that have good design that are innovative and of high quality. The social culture factors facing the company is the lifestyle change in of the global community. Peoples preference and taste in the globe are converging with great demand for design and quality. This has been influenced by the current expansion of the economic middle class in all countries. This has increased their ability to purchase high quality and most innovative designs that suites their lifestyles Technological factors: The Company is a great consumer of technology and innovation. The company depends on technology to manufacture, monitor, control and communicate in the supply chain. The company success is based on how well it uses technology. RAK Ceramics has partnered with SAP solutions which is a technological firm that is in charge of installing and maint6ainign technology in the supply chain. SAP provides SAP Customer relationship management applications and ERP that are useful tools in supply chain management. The industry has adopted internet based supply chain management applications that are safer, flexible and backed up through cloud computing. Legal: The RAK supply chain requires different licenses from different authorities to operate. The company require permit license to operate in different countries. The Company also requires environmental permits from the government to transport mined resources. Environmental Factors: RAV Ceramics involves mining and manufacturing of ceramic products. These products have an impact in the environment through carbon emissions. The company has to observe the environmental laws of disclosing their carbon footprint. RAV requires the supply chain to meet companys requirements on environment that involve responsible and ethical toward the environments. Porters Five Forces New entrants: The ceramics industry has attracted several companies to venture in manufacturing of the ceramics products. Despite the high initial capital to the industry, companies are finding their way in the industry. For instance in Bangladesh, the ceramic industry has experienced four domestic entrants to the market. Supplier power: The supplier power of RAK Ceramics can be said to be moderate. The company raw material costs vary and there exist alternatives in the industry. The company can choose to use mosaic or manufacture it ceramics goods organically. Buyers power: Ceramic products have many customers and products are not differentiated. The products are made of the same materials and buyers make decisions based on designs and prices. Therefore the buyers of the ceramic products have low buyers power. Threats of substitute products: The ceramics alternatives are low priced and lack designs therefore there exist high switching cost. This indicates that the RAK products have low threats of substitute products. Competitor Rivalry: There exists rivalry in the market with each organization discriminating against each other. Companies in the Ceramics industry discriminate on prices and quality. Customer requirement The following are the customer requirements using order winners and order qualifiers of RAK Ceramics products. The RAK ceramics products are of high quality that gives customers crucial advantage of buying them. The products are all available in most countries and cities in the World giving customers important advantage of accessing them. The product design is of innovative design that gives useful advantage due to it appealing make. These objectives makes the product to be order winning. On the other side, the RAK products have at least good delivery speed that is up the industry standards. The products range of RAK Ceramics Company is around the industry median standards. The company produces several produces a range of products that range to around 15000. The company delivery dependency is of close to other players in the industry. These factors act as the RAK products qualifying to customers requirements. The products price is relatively high and though not considered by customer now, it will become a bother in the future. Increasing competition and innovative designs from other companies will necessitate RAK to reconsider it prices. The companys products brands are very rarely considered by customers. Lastly is after sale services of the ceramics are never considered by the customers. Customers overlook the after sale serviced due to the nature of the industry (Al-Odeh, 2016). Kohler Co supply Chain performance Kohler Co is an American based kitchen fitting, bathroom, carpets and engineering company that supplies it products to six continents. The company has a history that backs to 1873. The company was founded by John Michael Kohler. The company recently acquired Clarke Energy. The company supply chain is contracted to independent companies that meet companys supplier requirements. Kohler has standardized requirements for contracting suppliers in their supply chain. They sign contracts with local suppliers and dont control their actions. This reduces the company liability on the suppliers activities (Kashmanian, 2015). This leads to different suppliers activities in the supply chain management around the globe. Evaluation of RAK Supply Chain The RAK Ceramics supply chain will be evaluated on procurement activities, operations, distributions and services provided Procurement The company gets it raw material from Ras Al Khaimah. The company acquires some of its inputs from other places. The company also exports clay to other plants located in Bangladesh and India. The procurement activities involve buying inputs for the company to manufacture it wide range products. These products are transported to the manufacturing plant by road. This is the first phase of the RAK Ceramic supply chain. The materials are facilitated for custom clearance and delivered to the store. The raw materials are then submitted to a quality check and an issuance of certificate from the analysis sent to the supplier. Operations Raw materials are stored as factory inventory in the manufacturing plant. The raw materials are batched and slip prepared. Dry coloring is prepared in the factory and pressing operations carried out to design the products. The products in working process are dried and glaze line operations carried out. Lastly there is polishing and sorting of product. Products from the manufacturing process are moved to the packaging and warehousing. Finished goods are arranged on pallets and wrapped with plastic covers. From this phase products are transported to warehouses. Distribution Palletized boxes are transported and distributed to different RAK Ceramics showrooms, distributors and retailers around the globe. Transportation of the finished products is by sea, air and road. Services provided The company displays its products in showrooms for customers to view. These showrooms are located in different cities around the world. The company is not involved in aggressive advertisement. The company uses the supply chain information systems to communicate, monitor and manage data of inventory. The most used applications are SAP customer relationship Management and SAP ERP. These applications update customers about products delivery and stock will communicate to the company distribution centers about the demand. The SAP ERP is used to manage inventory and provides detailed information about the supply chain. This application is used for decision making in the supply chain in order to increase effectiveness. The key skills required in the supply chain are reliable and commitment. There is great need to reduce the lead time, increase dependability, avail products and offer after sale services where necessary. Customers need explanation of the variety of products that the company offers. This means that the company needs salespersons in the showroom to handle customers seeking information when making buying decisions. Recommendation Supply Strategy The following is the supply chain strategy recommendation is meant to improve the RAK Ceramics in order to increase efficiency and effectiveness. Procurement The company should implement the following strategies; Quality of the raw material should be assessed first: The quality of raw material that the company is looking forward to acquire should be submitted to a quality test before acquisition is the procurement process is started. This will help the company reduce the likelihood of acquiring raw materials that are of low quality. Vertical integration: The Company should invest in the mining and production of raw materials. This will by big margin reduce the cost of acquiring raw material for producing their products. The mining of raw material by the company can also increase delivery dependency (reliability) and improve the quality of materials need in the manufacturing plant. The company should enter into contract with suppliers: This strategy will require suppliers to sign contract for a specified period of that they will be supplying raw materials to the company. The recommended time is one year. The contract will ensure that suppliers are committed to make quality supplies for the company within the stated time. With a third party contract, the company will be able to control the supplier activities to ensure they engage in responsible and ethical activities when supplying to the company (Kausar, Garg and Luthra, 2017). The company will also be able to implement sustainability of the supply chain for a consistent and sustained growth of the company. Operations The following strategies will improve the operations of RAK Ceramic supply chain in the manufacturing plant; The company should record it carbon emission: This strategy will help the company disclose it carbon footprint and it performance toward sustainable business. This will enable the company make changes that can enhance carbon footprint reduction. The company should increase it inventory ratio: The Company should increase it inventory to avoid shortages during the manufacturing period. The raw materials should be stored in advance to avoid failure of manufacturing process. Distribution The following recommendation will enable increase effectiveness in the distribution channels of the RAK Ceramic supply chain; The company should invest in forward integration in all parts of the world to ensure the supply chain is well controlled and monitored. The company should adopt an urgent plan to deliver products for customers who need products quickly. This will increase delivery speed for those customers in hurry. The company should increase the number of outlets to increase product availability to more customers. Service provided The following strategies are recommended for improving RAK Ceramic supply chain: The supply chain should start making advertisements to promote sales. Advertisements create awareness of the products that the company is being involved with. Advertisement will increase the products demand and help the company establish a company brand that the customers will associate themselves with. The company should adopt internet based information system: The computing system used should be internet based and hosted. This will increase flexibility, accessibility and security of the data. Supply chain data will be automatically backed up ensuring not data is lost at any time. Internet based information system will increase the effectiveness of communication by allow data access from any point of the world provided there is internet connection (Pagell, Krause and Klassen, 2008). Conclusion From the supply chain strategy analysis in this report, RAK Ceramic supply chain is faced with several opportunities and major threats. The Company can utilize the opportunities that exist by implementing a sustainable supply chain strategy to enable reduce cost, reduce lead time and support customer differentiation in over 1500 products that the company produces. The threats facing the business should be minimized to ensure the business engages in sustainable activities that will enhance survival and sustained growth in the future. Therefore, it can be concluded that formulating strategic supply chain strategy requires understanding of the business supply chain by undertaking PESTKLE and Porters Five Forces analysis in order to establish opportunities and threats. These strategic supply chain tactics helps the business increase effectiveness and efficiency in the supply chain thereby supporting the companys business strategy. References Al-Odeh, M. (2016). 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