This study analyzes the challenges experienced by Texas Company, a food distribution organization, in improving its marketing and supply chain. This is necessitated by inconsistencies in its ordering process. The incorporation of CPRF brings with it a number of challenges including heavy financial investments (hindering the adoption of the technique because it is not cost effective) and ideological differences that create a rift in operational logistics between Texas company and its partner Valley bakery. These challenges can however be tackled through adopting negotiation and seeking cost effective measures to reduce cost
Other challenges experienced by Texas Company include low employee motivation and a lack of standardization in operations, brought about by the existence of different operation systems. The organization can however tackle these challenges by making the employees proactive in the entire process and standardizing the operation systems by adopting a new one, acceptable to both parties.
1.One of the major challenges to ensuring proper working of Texas Food Company supply chain was the exorbitant costs related to the implementation of the Collaborative Planning and Forecasting Replenishment Process (CPRF). This program was deemed to be the best compromise to curb supply outages experienced by the company while at the same time, forecasting future demand, including the replenishment of inventory. After undertaking the pilot project to evaluate the practicability of this process, both Texas food company and valley bakery were surprised by the high investment costs of the project. In addition, the project was not cost-effective because sale increases were minimal (0.06%). Distribution costs were also lowered by a very minimal margin of 2.7%.
The costs therefore become the primary problem for Texas Company because without a control on the sky-rocketing costs of the project, the overall effectiveness of the entire supply strategy would be affected. If the two companies involved in the logistical supplies of the company were unable to cover the costs of the project, it would therefore mean that they would be back to where they started off because CPRF was the only solution they got.
Another major challenge experienced by Texas Company in establishing a supplies channel through CPRF existed in sourcing a common software that would be used in CPRF implementation. The lack of a common software is seen to affect the synchrony of activities between the company and its supplier (valley bakery) ultimately influencing the connectivity between the two parties. It is however important to note that without synchrony of services between the two companies, an overall halt of supply activities would be experienced. Moreover, the CPRF would be rendered useless because it was intended to be a medium through which Texas could improve its inventory and general supply network.
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It was further noted that the two companies used separate operating base systems that led to incompatibility between the companies in the use of CPRF. Texas was using the off-shelf solution whereas Valley bakery incorporated the internally developed legacy system. As a result, the data shared between the two organizations missed selected data points while at the same time used terminologies incomprehensible for both companies. It shoul therefore be noted that without a common operating system between the two companies, the supply chain will be highly affected due to a lack of synchrony of activities.
Another fundamental challenge existing in the management of supply and logistical activities is in the management and structure of the existing supplier relationship. This was depicted through ideological differences that existed between Texas and Valley bakery. As the pilot project kicked off, Texas preferred to undertake the process cautiously as opposed to Valley’s quest to fully fledge the operations. This involved sharing of important sales information to both parties.
It therefore implied that Texas was to supply Valley with important sales forecasts for past and future periods and avail all other facts in its supply and logistic activities. Texas Company was however not for the idea and opted to share on a selected detail of sales information including pricing data. The onset of such challenges strains the supply relationship between the two organizations and noted to further create more ideological differences in the analysis of the pilot project.
Valley bakery advocated for the project to be handled by Texas Company almost single handedly because it wasn’t contented with the pilot study relating to the CPRF. In addition, both companies disagreed on the number of SKUs to be incorporated in the entire project. Valley bakery wanted more than the agreed number of products to be incorporated in the SKUs but Texas wanted a fewer number. They however resorted to settle for 34 SKUs. These ideological differences are therefore bound to affect logistical operations and create an unfavorable supplier relationship that could be detrimental to both parties.
It is important that for any organization intending to undertake a sound supplies management plan, it ought to bring every employee on board (Mashari, 2009). Texas Company has been experiencing this challenge in trying to establish a good supplier relationship with Valley bakery through CPRF incorporation. It is documented that Angela was undertaking the pilot project almost single handedly because the rest of the team seemed disinterested in the project. This trend was even noted among employees who initially supported the project.
Without the support of the rest of the team, it would be difficult for Texas to realize a successful supply management program. The team is important in ensuring basic services are maintained such as inventory management and marketing activities like sorting, branding or advertising the products. Angel also noted that the job was overwhelming for her and physical support from the rest of the team would have gone a long way in ensuring the success of the pilot plan.
Exorbitant costs can be effectively managed through the pooling of costs among the two companies. Valley bakery and Texas Company could effectively reduce the costs associated with the implementation of CPRF if they decided to share the cost on equal basis. However, both parties need to be committed enough to the overall cause of the project for this to be realized otherwise one party would not come through in ensuring its part of the compromise is observed.
Another strategy both companies could use is seeking cheaper cost reduction methoods like shopping for cheaper prices or adopt lenient payment schemes like hire purchase in obtaining software or hardware. High IT skilled labor could also be reduced through outsourcing such services as opposed to maintaining personnel in the organization and remunerating them on monthly basis (Mashari, 2009).
Obtaining a common operating system to standardize supplies activities between the two companies will go along way in synchronizing the activities between the two companies. A common operating system can however be adopted through effective negotiation though Texas needs to petition Valley bakery to abandon its Internally developed Legal system for a new operating system that would be in tandem to the comprehensive supplies plan (CPRF) (Smock, 2007).
To come up with an operating system efficient enough, such a system should cater for the need of both companies; the best way to come up with such a system will be to consult an IT specialist who would design a customized software that takes care of the unique relations between the two companies. It should however be designed to be as simple as possible. In this manner, operations between the two companies will be standardized and at the same time, enforced from both sides of the supply chain.
The existing problem affecting operations management brought about by ideological differences can only be solved through the art of compromise and negotiation. Since Valley bakery intended to undertake a fully-fledged operation of CPRF, Texas Food Co. should explain why it thinks withholding certain relevant information would be beneficial. Compromising on ideological differences can only be done through arbitrary measures and Texas is at the best position to do so because of its strategic position in the supply chain. Important facts regarding operational logistics should therefore be investigated and the findings presented to both organizations. Texas would be in a better position if it delegated this role to a third body such that it seems impartial. Important facts should therefore be conveyed to both parties and a common ideological framework adopted through consensus.
Employees in the supply chain were noted to be disinterested in the CPRF project four months after it kicked off. Texas Co. should therefore undertake contemporary ways to encourage the employees to be more engaged in the supplies process. This can be done through educating the employees on how beneficial the system would be to them; for instance in the decrease of workload or overall improvement of efficiency (Mentzer, 2001). The Texas management team should also ensure employees are proactive in the adoption of CPRF technique, a mistake they did because most of the work was dedicated to Angela.
Marketing logistics and supply management may prove to be a problematic task as can be evidenced through the attempt to improve supplies relations in Texas Company. Differences in ideology, lack of employee involvement, financial differences and operational logistics are just some of the ways through which the company experienced challenges in adopting CPRF technique. However, these challenges can be curbed through negotiation, adopting cost effective measures, consultancy and improving employee participation. It is however no guarantee that with the adoption of these methods, the marketing and supplies process will be a success.