Cuero Company Production and Supply Chain Report

Introduction

The Cuero Company produces shoes for the United Kingdom market. The report focuses on the company uses local raw materials in the production of the shoes. The report focuses on the company currently uses the company –centered supply chain policy in its production (Weele 2005).

Catesby Factory

Details of key problem areas.

1. The Catesby Factory has several key problem areas as follows:
2. All shoes were crafted in the United Kingdom
3. The shoes’ raw materials, including nails, were purchased locally.
4. The expert craftsmen, normally “old” persons, made the high quality shoes
5. The experts were paid minimum wage salaries.
6. The shoe styles were limited.
7. The wastage of raw materials was rampant in the Catesby Factory.
8. The production equipments were expired and too expensive to retain.
9. The deliveries of goods are done internally (use of company vehicles).

What Needs to be Changed

There are several changes needed to improve the company’s supply and purchase performance.

For problem A, the company can outsource the production of the shoes to China. The company will set up a manufacturing plant in China. The move reduces labor cost; the Chinese shoe makers are happy to be paid ten percent of the London shoe makers because their living standard is lower than the United Kingdom living standard. The cost of electricity, water, telephone, and other shoe manufacturing expenses are lower than the utilities costs of producing the same quality shoes within the United Kingdom Territory.

For problem B, the shifting production to the China locality translates to lower raw materials cost. The cost of Chinese cow hide and nails are lower than the cost of similar raw materials purchased within the United Kingdom Territory.

For problem C, the company can replace the redundant “old” men with younger ones. The old workers generally cling to their old ways of crafting shoes. The older workers will prefer to manufacture the same old styles over innovatively producing the new shoe styles.

For problem D, the workers are paid minimum wage salaries. The company can add bonuses, commissions, salary increases, promotions, or other perks to spice up the worker’s work life. The workers are enthusiastically challenged to achieve the minimum job output to win the coveted fringe benefits, awards, citations, promotions, and other perks.

For problem E, the company can venture into making a feasibility study. The feasibility study focuses on surveying the current and prospective clients’ shoe styles. The survey will persuade the Cuero Company’s officers to focus on popular shoe brands; popular shoe brands generate more shoe revenues over the unpopular shoe brands.

For problem F, the company can reduce wastage by hiring experts in the shoe industry. The greenhorn worker normally generates more wastes as compared to the expert shoe workers. The new or greenhorn workers learn to be an expert by aiming to reduce their current production waste data.

For problem G, the company can replace the outmoded shoe manufacturing equipment with the latest state of the art shoe machines. The new machine can repair damaged or worn out shoes faster than the human hand can sew the damaged shoes back into perfect condition.

For problem H, the company can hire local haulers or truckers to deliver the shoes to their destination within the United Kingdom The company’s use of its own trucks to deliver the finished goods, shoes, to the clients may be more costly when compared to hiring haulers or truckers.

The truckers normally charge on a per space or a per weight basis. On the other hand, using the company’s ten wheel truck to deliver a 2 feet by 2 feet box is financially better than to use the Cuero company’s own truck to pick up a box of grocery items. The delivery of goods and service is done using company vehicles (Hughes 1998).

Measures for Improving the Performance

Several measures for improving the Performance can improve the company’s image . First, the company can use the average production workers’ output as one of the state criteria. A higher production output translates to a higher aptitude or eagerness to produce the current work output. Optimum production and raw materials inventory are good benchmarks (Weihrich, 2009).

Buckhorn Weston Factory

Details of key problem areas.

1. Production schedule too complex: a schedule delay would be financially distressful.
2. Raw materials inventory was high.
3. The sudden change in shoe styles precipitated to the high raw materials inventory (obsolete inventory).
4. The marketing manager hated the continuing change in the shoe production styles and designs.
5. The shoe sellers emphasized that some current and prospective clients are too passive.

What Needs to be Changed

There are several processes to change unnecessary head.

For problem 1, the company can rearrange the production facility process to ensure the reduction in the shoe making activity.

For problem 2, the company can use the economic order quantity formula to determine the optimum number of raw materials needed to prevent stock outs. The economic order quantity saves on storage costs and ordering costs.

For problem 3, the company must conduct a survey to determine the most popular shoe styles in the market. The company will increase production to keep up with the shoe product demands of the market.

For problem 4, the company can use the economic order quantity formula to determine the optimum amount of raw materials needed to supply the raw material needs of the shoe company.

For problem 5, the Cuero Company can conduct a survey to determine the current and prospective clients’ needs, wants, and caprices. The company will produce the optimum amount of goods needed to supply the needs, wants, and caprices of the clients (Genus 1998).

Measures for Improving the Performance.

There are measures for improving the performance. First, the company can use the quantity output as guide in the passing or failing performance evaluation. Next, the company can use waste output as a guide for determining the client with most number of wastes; prizes, awards, promotions can be given to the winning employee.

The workers’ speed in making the products is one performance evaluation tool. The company can use product quality as one of the company’s standards. The company can use other similar performance standards as tools in determining if the workers have excellent or very satisfactory performances (Holmes, 1998).

Kilsby Factory

Details of key problem areas.

The company has several key problem areas.

1. One problem is the lack of investment.
2. Another problem is the high production cost.
3. The company use company vehicles to transport the raw materials and finished goods to their respective destinations such as suppliers, display centers, and other destinations.

What Needs to be Changed

For problem 1, the company can offer the company’s stocks to interested investors. The additional investments can be used for delivering the finished goods and raw materials to and from different destinations.

For problem 2, the company can reduce production cost to allowable levels. All avoidable costs and expenses can be eliminated.

For problem 3, the company can hire local haulers or truckers to deliver the shoes to their destination within the United Kingdom. The truckers normally charge lower fees when compared to using company vehicles (Campbell, 1998).

Measures for Improving the Performance

The company can use several measures for improving performance. The company and use the amount of additional investment as the benchmark. Next, the company can use the sales as a benchmark for determining the allowable production costs. The company can use the number of trucks entering and leaving the company’s basis for determining a passing or failing transportation grade.

In terms of the three factories, the roof collapse is a warning signal to the company’s production facilities that the company must invest enough funds to ensure the smooth flow of raw materials from the suppliers as well as the speedy delivery of the company’s products to the current and prospective clients (Rix 2007).

Conclusions

Based on the above discussions, the company has several key problem areas. The key problems include the focus on the optimum arrival time of the raw materials billed by suppliers. Another focus is the optimum time of the delivery of the finished goods to the clients or store display shelves. The focus includes a study on the use of third party vehicles to deliver the company’s goods. The above discussion boils down to implementing a new company policy. The new policy should be customer –centered.

Recommendations

1. Make an economic order quantity study to reduce inventory storage costs and expenses.
2. Conduct a survey, feasibility study, to determine the shoe styles to be manufactured. The company must produce popular shoe styles to increase the delivery of products and raw materials at profitable levels.
3. The company should implement the customer –centered policy. The company will produce shoes that will fill the prospective and current clients’ show needs. The surveys will indicate the clients’ needs.

Reflection

The above discussion clearly shows that the company has to revise its current supply chain and purchasing strategy. The company must change in terms of reducing supply chain costs and expenses. The change focuses on supplying what client needs, not what the company wants to sell.

References

Hughes, E. (1998) Transform Your Supply Chain. London, Thompson Press.

Genus, A., (1998) The Management of Change: Perspectives and Practice. London, Thompson Press.

Holmes, P., (1998) Investment Appraisal. London, Thompson Press.

Campbell, A., (1998) Strategic Synergy. London , Thompson Press.

Rix, P. (2007) Marketing: A Practical Approach. London, McGraw Hill Press.

Weele, A. (2005) Purchasing & Supply Chain Management: Analysis, Strategy, Planning and Practice. London, Cengage Learning Press.

Weihrich, H. (2009) Management. London, McGraw Hill.