Currently, businesses in Hong Kong diligently pursue means of becoming competitive in the market (Zarrella, et al. 2016, p. 2). Since many parts of Hong Kong market is electronically connected, companies normally enhance their agility of commerce by becoming flexible and effectively responding to technological market requirements. Some companies implement the use of Electronic Data Interchange (EDI) to help with Supply Chain Management (SCM). Nonetheless, other businesses adequately adapt the use of Vendor Management Inventory (VMI) for efficiency in entrenching SCM within their businesses. Since SCM result in the integration of business process from suppliers to end users, P&G entrenches the concept in its operations for allocating more value to consumers and hence increase profitability in goods and services offered in the company.
Numerous businesses in Hong Kong intensified their entrepreneurial operations by using EDI for communication and information technology (Swatman, and Parker, 2002, p. 1). Nonetheless, such Companies normally use EDI system as a means of ensuring customers satisfaction, through the provision of dependable and fast products and services at reasonable prices. Nonetheless, the use of EDI is not well entrenched when compared to VMI (CSCIB, 2000, p. 15). Several challenges involved in creating EDI-integrated SCM depict inadequate strategic providing solutions. Additionally, the system lacks integrative mechanisms in accomplishing business models and IT. Hence, there is a lack of similar application of EDI for enterprise operations.
Strategically, companies need to use VMI in order to enhance delivery from manufactures through retailers and to consumers. Since the employment of VMI is enterprise-friendly, the process ensures that companies first understand the existing system when undertaking their businesses. Additionally, when using VMI, retailers, and manufacturers are involved in determining their interests in the employment of VMI. These requirements involve improving vehicle or case fill rates or reduction in inventory within the supply chain. Also, employment of VMI impacts organization's associated with the process, thereby making it difficult to establish the work processes.
Procter and Gamble (P&G) are one of the leading FCGM Industry in Hong Kong because of supplying goods and services of higher value and quality to its customers. P&G's mainly supply goods that include tide, pampers, Olay, faceguard, powder, skin care, detergents, hair care and personal cleansing products. P&G in Hong Kong always aims to provide to its consumer's quality products with the aim of improving their lives both presently and in the future. In return, the company obtains loyal customers that provide for the company value reaction, leadership sales, and profit.
P&G normally synchronize supply chains and VMI, as part of their commitments aimed at increasing value of their goods and services to their customers. VMI is a renowned strategy for FMCG in inventory management, through which manufacturers manage retailers and distributors (Christopher, 2016, p. 3). VMI usually operate through the production standards for appropriate replenishment, which is normally based on purchase orders. Traditionally, many trading partners use VMI as an automated way of running their companies. Nonetheless, with the advent of technology, there are new developments for interchanging modes of operations from auto-pilot to new technology-based insights (Stadtlere, and Kilger, 2008, p. 21).
Generally, VMI always proves to be beneficial throughout the supply chain both for the manufacturers and retailers (CGT Whitepaper, 2015, p. 1). When using VMI, retailers have increased on-shelf availability, which is higher than the use of EDI in their businesses. Besides, VMI has lower inventories and result in improved on-time deliveries. Moreover, there are lower returns and rejection in sales since VMI facilitates operations that result in customers' satisfaction.
P&G has the advantage of increasing their sales since an increase in on-shelf availability by the use of VMI means more sales for manufactured products. Additionally, the company acquires better control of inventories and shipment of its products, which results in better decisions regarding short-stock products distribution. Moreover, the company strategizes to capitalize on a single delivery as part of the initiative resulting in new or varying products per delivery. Therefore, the use of VMI causes companies to capitalize on the advantage of mixing products with different weights in one single track and optimize its replenishment agenda to retail stores. Generally, VMI is usually beneficial by entrenching customer specific requirements through the flexibility in its system. Different deliveries vary in requirements with regards to self-presentation in different retail stores. Hence, VMI enhances the needs for companies to deliver customer-based requirements in an amicable manner.
Additionally, P&G normally optimize time taken for generating VMI orders and improving vehicle fill capabilities by implementing Datalliance software. While using the software, analysts do not spend a lot of time searching for information regarding the delivery requirements (CGT Whitepaper, 2015, p. 2). Therefore, idling time involved in determining appropriate loading products is adequately minimized. Implementation of Datalliance causes an automated consolidation of orders, which increases efficiency resulting in overall productivity improvements for VMI analysts. Additionally, the use of technology enhances delivery operations since P&G has a portfolio of VMI best practices. Availability of the portfolio normally results in the quick implementation of VMI, which in-turn results in enhanced productivity and results.
For more than a decade, P&G managed to leverage its organizational structure with the intentions of reducing invention investments. Strategically, reduction of inventory investments causes the company to increase its savings (Farasyn, et al. 2018, p. 2). Inventories normally tie down company investment and thus barring resources from enhancing business operations. Adequate management of inventories is done in two folds. Firstly, inventory models are presented in spreadsheets to determine ways of enhancing operations through optimizing the numerous stages involved in the supply chain. Using this initial process, inventory tools are initially installed for appropriate considerations. Then, strategies are employed to ensure that the outlined inventories management operations result in significant savings.
Secondly, the company has complex supply chains, which is mainly based on software referred to as multi-echelon invention optimizer. This essentially minimizes the costs involved in its inventories supply chains from end to end. There are needs for an adequate planning process, which amicably support decision tree and inventory management to march the business saving requirements. Most supply chains operations of Hong Kong like P&G uses multi-echelon tool for inventory management.
Theoretically, supply chain refers to a network of distributions and facilities options. The appropriate operations and supply chain management involve shrinkage of product cycle time, reduction of delivery window and none-shrinking lead time while improving on products variability. Supply chain cuts across numerous enterprises and the later distribution involves numerous mechanisms aimed at servicing many customers. Since supply chain involves several organizations, it is usually a broad-based system that involves networked suppliers.
With respect to the holistic approach of supply chain management, persons easily understand that the system does not operate by performance and improvement of a particular unit or one given organizations. The traditional methods of chain supply, products' life cycle were longer since when items got into the market, they had to survive for longer periods of time in form of inventories. Hence, products adequately moved from one supplier to one manufacturer. Later, distribution used slower processes to supply goods to consumers.
However, advent in electronic goods and technology causes new products to have shorter life cycles and hence the necessity in supplying goods in time. Current products' life cycles tend to shrink and thus the needs for bringing new products to the market quickly. Hence there exists market pressure for introducing new goods before the existent ones become obsolete. Alternatively, there is room for introducing new products in the market that may adequately cause the pre-existent goods to become obsolete. However, in order to effectively introduce new products to the markets, there are needs for manufacturers to adequately coordinate for the supplier of such products to the market. There are needs for numerous suppliers who will ultimately bridge the gap between manufacturers and their intended customers.
In order for suppliers to be efficient in their distribution operations, there ought to be integrated and coordinated communications with manufacturers. Therefore, through such integrations, once products become manufactured, they are easily dispatched to customers. Because of the dynamics involved in shorter shelf life for precuts, distribution channels need to be fast and efficient in their operations. Consequently, there are needs for bringing numerous organizations together with the intentions of collectively planning and executing SCM. Since projections form such deliberations will eventually profit all organizations involved. Additionally, collective deliberation will enhance and maximize operations contribution of each company.
Furthermore, there are needs for shrinking delivery time window for products ordered. Recently, once customers make orders with expectations, companies have the obligation of resulting in timely deliveries. Customers usually expect that once they make any order, SCM will promptly follow up with quick deliveries. Since there are needs for an organization to avoid taking additional time in fulfilling their obligations, there are also needs for suppliers to also meet with their customers.
Additionally, no shrinkage in lead time concept explains that the processing or manufacturing time reduction is not proportional to products' life cycle changes. Therefore businesses have no-shrinking lead time even though they have a shrinking delivery window. Since the rates of shrinkage are different, there are needs to make holistic decisions that will incorporate for both needs.
Finally, there are needs for increasing products variety that entail new customers and people. Additionally, final consumers also change with an increase in products variety and volumes. Hence, there are crucial needs for integrating every single entity within the supply chain. Additionally, there are needs for engaging in coordinated and planned decisions. Therefore, the overall profit enjoyed by each member of the chain will result in increased and better performance.
During decision-making processes, there are needs for determining the uncertainty in demand increases with variety. Segregation by variation in a given product needs to also generate data regarding demand in the numerous variety of a given product. There are possibilities in obtaining total demands for products with fewer variations while reducing forecast error. Nonetheless, increase in more products within the market result in the availability of numerous varieties, which result in demand uncertainties. The aspect of uncertainty may only get adequate addressing when organizations have close ties. Additionally, as lea...
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