Research on supply chain management

1. INTRODUCTION

This report will review the research conducted on supply chain management of furniture that is imported from China to United Kingdom. It will explain the main performance objectives of the supply chain and how these are supported. Finally, it will evaluate the alignment of performance objectives of different members in the supply chain.

According to Harrison and Hoek (2005, p. 7) supply chain management is “a group of partners who collectively convert a basic commodity (upstream) into a finished product (downstream) that is valued by end-customers and who manage returns at each stage”.

Shimu imports furniture from China to the United Kingdom. They deal with superior quality Chinese furniture. The Figure 1 shows the supply chain management of furniture.

2. PERFORMANCE OBJECTIVES OF SUPPLY CHAIN MANAGEMENT

There are 5 major performance objectives of supply chain management which are quality, speed, dependability, flexibility and cost.

• Quality

According to Slack et al (2003), quality is the most important of the performance objectives. Quality of a product can be defined as how a product or service is as it is meant or expected to be.

Shimu uses good quality wood like Northern Elm which was used in the Ming period in Shanghai and the north of China. They select the furniture for its beauty, form and functionality in a modern environment and are carefully restored to bring it a new lease of life without losing the rich shine that has formed over decades (Shimu [online] 2009).

• Speed

Speed or speed of response means the time required on attending to a customer - the time span between the order and the delivery (Slack et al, 2003)

Shimu delivers the product within 2-3 weeks once the customer places the order (Shimu [online] 2009). However, if we compare it with other companies they take 4-6 weeks to deliver the product (Furnituretoday [online] 2009).

• Dependability

Slack et al (2003) defines dependability as a trust a company is able to generate within itself and its customers. It shows a company's dedication towards the time factor.

Shimu gives the customer the expected time frame within which a customer can receive the product and they make sure to deliver it within the time given (Shimu [online] 2009).

• Flexibility

Flexibility is the ability to adapt or modify according to circumstances. It is a clear response of a dynamic environment to adapt by changing products, process or infrastructure (Noori et al, 1995 cited in Lau, 1999)

Shimu provides customers with options such as customers can make choices in terms of colour and alternative finishes. They also provide a service in which the customer can design or modify a product on their own. They give customers the facility to return the furniture within 7 working days, if they don't like the product (Shimu [online] 2009).

• Cost

According to Slack et al (2003), one major factor for competing companies is cost. Being able to produce items at lower cost and ability to sell at a lower price would work as a huge attraction towards customers.

Shimu gets furniture from suppliers in Beijing and Shanghai which indicates they have access to cheap labour which automatically reduces the cost of production and in turn the customers do not have to pay a higher price. (Shimu [online] 2009).

3. ALIGNMENT OF PERFORMANCE OBJECTIVES

For a company to achieve a common goal, that is to fulfill customer's needs and maximize profit there needs to be alignment between all the members of the supply chain. The roles of members that will be discussed are:

1. Manufacturer
2. Retailer
3. Customer

• Manufacturer

According to Gattorna (1994), the main role of manufacturer is to design the product according to the needs of the customers. The manufacturer should aim at getting good quality raw materials at a cheaper rate so that they can reduce production cost and as a result of which the customers can get products at an affordable price which would also be of good quality. This further would enhance the growth and profit of the company. They also try to get cheap labour.

The raw materials used by producers are of good quality as a result of which they get quality furniture which in turn helps them to get revenue as well as satisfy customers. This show there is an alignment between producers and suppliers because if suppliers do not provide good quality raw material then producers would not be able to produce quality furniture.

• Retailer

According to Levy et al (2004), a retailer is a person who sells products or services or both to customers directly in small quantities. They attempt to satisfy customer's needs by providing the goods that customers want at the right place and at the time. Retailers play an important role as they provide markets for manufacturers to sell their product.

There is an alignment between the company (retailer), supplier and manufacturer because the retailer informs the manufacturer regarding customer's expectation in terms of design and date of delivery. The manufacturer then instructs the supplier about the raw material required and then the make the furniture according to customers wants.

• Customer

A customer is a person who buys product for its personal or family use and not for manufacturing or reselling purpose. According to kotler et al (1996), consumer purchases are influenced by cultural, social, personal and psychological factors.

The customer are given many options in terms of placing the order they can place the order online, by post, fax etc. Also they are given choices on the types of furniture they want they can select the colour, finishing etc. This is possible because of the alignment between the retailer, supplier and manufacturer.

4. CONCLUSION

This report highlights the alignment between all the members of supply chain management because if there was no alignment between the members then the furniture made would not be according to the need of the customer which in return would not be able to satisfy customers need and would automatically affect sales.

5. REFERENCES

Furnituretoday (2009) Production information [online]. Available from: http://www.furnituretoday.co.uk/acatalog/Sirius_mahogany_four_drawer_and_shelf_coffee_table.html [Accessed 20th March 2009].

Gattorna, J L. (1996) Handbook of logistics and distribution management. 4th ed. Hants: Gower Publishing Company.

Harrison, A. and Hoek, R V. (2008) Logistics Management and Strategy.3rd ed. Essex: Pearson Education Limited.

Levy, M. and Weitz, B A. (2004) Retailing Management. 5th ed. New York: McGraw-Hills/Irwin.

Noori, H. and Radford R. (1995) Production and Operations Management: Total Quality and Responsiveness. New York: McGraw-Hills. Cited in Lau, R.S.M. (1999) International Journal of Operations & Production Management. South Dakota: Emerald Group Publishing Limited.

Shimu (2009) About Shimu [online]. Avaialble from: http://www.shimu.co.uk/about_shimu.cfm [Accessed 13th March 2009].

Slack, N. Chambers, S. and Johnston, R. (2003) Operations Management [online]. Available from: http://wps.pearsoned.co.uk/ema_uk_he_slack_opsman_4/0,8757,1144836-,00.html [Accessed 20th March]

Timberia.org (2009) Supply Chain Management Tools [online].Available from: http://www.timberia.org/articles/timber.cfm [Accessed 13th March 2009].