Case Summary
The case study on synchronizing the supply chain and working with international partners demonstrates how the Hunt Company must take the necessary steps to overcome the obstacles it is currently facing. Hunt offers office supplies to consumers, businesses, schools, farmers, and photographers worldwide. However, as a result of the decision to transition to offshore sourcing and manufacturing, the company is facing challenges with a limited supply chain and logistics network (Hugos, 2006). The leadership is considering workable strategies to deploy and improve business efficiency, combating the tightening profit margins and fierce competition brought on by the new challenge.
Main Problems or Issues Facing the Hunt Company
Bill Bracey, Hunt’s material manager, contends that the corporation must alter its distribution approach and rely on forging commercial alliances. The company needs a stronger supply chain and logistics network as it outsourced its manufacturing function to China. Hugos (2006) indicates that Hunt would have less inventory to manage if the suppliers handled the materials and part inventories rather than the company. The corporation must improve the management of large lot sizes and work with lengthy lead times to enhance and strengthen its product supply forecasts.
Another problem is the requirement to consider the price of moving to a new outsourced volume and managing the lead times. Notably, it was observed that the lead time, or the duration required for orders to reach the shipping pier, increased by as much as 95 days (Hugos, 2006). Due to difficulties getting assistance on time and ineffective return handling, this had an impact on the customers. The price of carrying inventory and overnight shipment increased as well.
The company employed several different techniques to address the problem, but more efficiency is needed in terms of having standardized parts. Bracey supports the new change and thinks a prompt response is required to save the business from losing its value and competitiveness. The standardization would improve the management of safety stocks, risks, and inventories.
The team needs to reassess its methods to overcome the obstacle and respond more quickly to client requests for specific supplies, such as X-ACTO brand products, pencils, and paper clips (Hugos, 2006). Bracey and his supporters believe it is not a good idea to put off changes until it is too late. He believes the time has come to improve processes that will set the company apart from its competitors, and he is committed to implementing the changes.
Possible Solution to the Problem
If Bracey and his staff are to guide the business in the proper direction, they must consider alternative options. Hunt requires a marketing and promotion plan to demonstrate the efficiencies that have been realized. An effective marketing model will enable the company to demonstrate that it remains competitive and is continually improving supply network efficiency (Deng & Xu, 2022). Despite the lengthy delivery times, the corporation can retain its customers by developing an effective promotional program.
The business can suggest a more competitive pricing structure that enables clients to purchase goods at the best price while still receiving top-quality products. Due to the longer lead times, retailers must also find novel ways to make customers feel more attached to their goods. Effective marketing strategies would motivate customers to wait patiently for their deliveries, thereby preventing the company from suffering a huge loss.
While implementing the new plan, a robust marketing campaign will boost product sales. Hunt should be able to cover costs and make a sufficient profit, given that it will need to raise prices to offset the increased expenses. The promotional strategy must be appealing to all consumers and other stakeholders, especially when explaining to purchasers the advantages of the products and how the company prioritizes high-quality manufacturing.
Furthermore, if suppliers transport the products to the appropriate location and ensure that customers can easily access them, lead time is unlikely to be a significant issue. Jones (2019) suggests that producers must ensure their goods are both attractive and of high quality to compensate for the extended wait times customers experience when ordering. The goods must meet the customers’ requirements and align with their wants and expectations. While employing efficient marketing techniques is essential, business executives should not abandon their ambitions to collaborate closely with suppliers to find practical ways to improve the supply chain.
The Rationale for the Solution
Many businesses worldwide have experienced significant growth as a result of the effective implementation of marketing strategies. For instance, Nike faces challenges both within and externally the company, but uses persuasive marketing strategies to try to win over its customers (Niu et al., 2019. Surprisingly, while being well-known for its shoe brand, the corporation does not own any factories.
The company primarily deals with design and marketing, outsourcing its production function to a global network of manufacturers, with a significant presence in Asia, particularly in China, Vietnam, and Indonesia. Shoes and other Nike products are cut, sewn, assembled, and subject to quality control by the contracted manufacturers. Nike establishes high-quality standards and performs audits to ensure that the manufacturers adhere to ethical labor and sustainable business practices.
Nike focuses on brand promotion and employs tactics designed to offer clients the best possible deals. The business also ensures that the products it promotes meet the requirements and expectations of customers (Niu et al., 2019). The American multinational corporation advertises the items through numerous channels, including print and electronic platforms. The company’s management is aware that providing customers with exceptional experiences and engaging products will set it apart from the competition, without drawing attention to the manufacturer’s flaws. The strategy supports Hunt’s decision to outsource to other nations due to the advantages of lower manufacturing costs in production and a global supply of goods.
Steps to Implement the New Strategy/Plan
The team must apply it according to the proper rules to get the best outcomes from the new plan. For the change to receive the necessary support and resources to move forward, team leaders should prioritize it. Before moving forward with any effort, the leadership should consult with all stakeholders regarding the anticipated changes and obtain their consent.
Deng and Xu (2022) state that without engaging with people and devising potential solutions to make the plan work, it would be challenging to tackle the problem, emphasizing the importance of communication. After that, the company should strengthen its marketing division by providing it with all the necessary tools to ensure the promotion’s success. As they will have a significant impact on organizational performance, the marketing team can use a variety of marketing strategies. The planners should communicate via a variety of methods, including memoranda, phone calls, and digital marketing strategies such as social media and influencer marketing.
References
Deng, S., & Xu, J. (2022). Manufacturing and procurement outsourcing strategies of competing original equipment manufacturers. European Journal of Operational Research.308(2), 884-896.
Hugos, M. H. (2006). Essentials of supply chain management. John Wiley & Sons.
Jones, E. C. (2019). Supply chain engineering and logistics handbook. CRC Press.
Niu, B., Mu, Z., Chen, L., & Lee, C. K. M. (2019). Coordinate the economic and environmental sustainability via procurement outsourcing in a competitive supply chain. Resources, Conservation and Recycling, 146, 17–27.