UK DIY Market Decline & Supply Chain Conflicts: TORC Case Study - Essay Sample

Introduction

The central challenge from the TORC case study as relates to market place positioning concerns the dwindling demand for DIY (Do It Yourself) products in the UK market owing to the dismal performance of the economy. On the other hand, supply chain integration challenges are brought about by the discordant relationship between the Purchases Department and the Finance Department both of which play a critical role in the procurement processes. The case records that the constant arguments over the right department to be authorized to enter suppliers into the computer systems. Purchases and Finance departments are at loggerheads on this matter. According to Li (2014), one of the logistical challenges that are associated with supply chain management is concerned about who issues directions that get the supply chain belt in motion.

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To this end, streamlining the chain of command in the supply chain network will serve to rest procurement responsibilities to a single body or department. In the end, the department that is selected to execute the role of procurement should be the only department allowed to make entries of supplier companies to avoid confusion and duplication by Purchases and Finance departments. To this end, it is imperative to recognize and appreciate the roles played by separate and individual departments in the supply chain process. The recommendation of the analysis suggests that the Purchases department should be solely responsible for making entries of companies contracted as suppliers of TORC. In this regard, the Purchases department is better suited to this role as compared to the finance department whose core responsibility lies in the management of financial books with the authority of releasing monies meant for procurement. Moreover, the Finance department can be left to focus on managing inflow and outflow of cash guided by the mission of securing the company's profits.

Other than the efficacy of the supply chain, the company's profitability is dependent on its ability to take a frontline position in the DIY market segment. Owing to the declining demand for DIY products, it is imperative that the company develops creative ideas that will position its products competitively in the market. Positioning primarily focusses on the company's capabilities in shaping the mindset of the consumer regarding the product. To this end, TORC must aggressively change the perceptions of the consumer regarding its products, especially when comparing them to competitors (Prasad, 2013). Prasad (2013) advises that aggressive advertising campaigns are an effective tool for gripping the attention of customers towards the brand. However, considerations have to be brought forward by the management of TORC as pertains to the cost implications associated with the establishment of aggressive ad campaigns towards popularising the brand among its customer base.

Another point to consider as pertains to aggressive positioning in the market concerns diversification of its product offerings. At current, the company has four major products namely: DIY power tools, cordless electric screwdrivers, electric motors for household appliances, and garden pumps. Sentiments by Baptista, Karaoz, & Leitao (2019) in a study that evaluated tendencies of young and medium-sized firm's product diversification trends, suggest that skilled managers and staff are likely to gravitate towards diversification early on entry into a volatile market. Further, that resource-based view of diversification stems from the urgency that more streams of revenue are likely to be realized from a wide range of products than depending on a single product line (Batista et al., 2019). In this regard, it is imperative that TORC should be versatile in its product offerings by considering diversification into agricultural tools as well as the development of accessories that go along with its five main product lines.

The lifeblood of the supply chain depends greatly on the ability of the organization to predict sales volumes at the production stage. The aim of such a prediction is to enable the management of the organization to match the resources that are at the disposal of the organization with the aim of meeting the demand predicted. One way through which the company can forecast demand is through the use of big data and social media marketing. Big data analytics is described as the use of complex and varied data sets in uncovering information that is useful to a company's interests in marketing its products and services that it responds to customer preferences, current trends, and target marketing (Sharma, Shandilya, & Patnaik, 2016). Social media marketing, on its part, is determined to be the use of social media platforms in connecting with audiences for the purpose of building a brand's image, enhancing sales, and driving traffic to a company's website (Luo, Zhang, & Duan, 2013).

The importance of big data is in its relevance as a tool for the development and deployment of strategic plans meant to focus on customer needs. Ultimately, big data analytics enhances the cost efficiency of marketing initiatives since the company is in a position to cater for promotional initiatives that have a greater possibility of resulting in sales as compared to when big data analytics are not utilized (Sharma et al., 2016). In taking advantage of the capabilities available in big data analytics TORC UK Ltd., will work towards establishing the level of demand for its commodities and be in a position to adequately plan for production volumes in line with projected demand levels. Equally, social media platforms such as Facebook, Instagram, WhatsApp, Twitter, YouTube, and Snapchat among others are a myriad of connections where the company can engage with its customers as well as potential clients. Through these social media avenues, TORC can tailor its services and products to the needs of customers while also gathering feedback that can lead to improvements in service delivery. Both big data analytics and social media marketing prove to be priceless and necessary tools that TORC can utilize in improving its market position and at the same time enhance the efficiency of its supply chain systems.

Finally, a major flaw that hinders the smooth operation of the firm's supply chain network that also serves to negatively impact the efficacy of the company as it positions itself in the market place pertains to the management of its inventory. From the case study, TORC is noted to have attained ISO 9000 certification for quality standards in its products. The implication is, therefore, that the firm is approved for having produced products of high quality for its customers. However, a major weakness lies in developing an understanding of how such products move from production to the customer at the point of sale. The state of the current IT (Information Technology) systems in the organization are deplorable with some hardware and software being out of date. Moreover, the systems are not harmonized to work continuously together from the production stage to the sales stage. Notably, the supply chain system has inherited flaws from the dilapidated state of hardware and software used to process goods from the production stage to the distribution process that finally ends in the purchase of the product by the customer. It is the recommendation of the report, that TORC must invest in modern IT that brings forth sophisticated hardware and software that can streamline the process of handling inventory. With respect to this suggestion, the company can serialize all its products and encode the serials in the systems. As such, order and product tracking can be computerised where the supply chain can be monitored to know how long the product takes from the production stage to the consumption stage. Moreover, the data will be priceless in contributing big data that can be further analysed to enhance the firm's operations.

Fundamentally, TORC's supply chain efficacy and positioning in the market will require that the challenges spotted are hitherto adequately handled based on the recommendations presented in this first section of the report. To recap, the company must invest in social media marketing and big data analytics to effectively position itself in the market. It should also modernize its IT software and hardware to streamline the supply chain system's efficacy. Further, product diversification will facilitate the company's growth by exploring more products that can earn sales revenue while at the same time exploring aggressive advertising techniques to boost sales. Finally, developing a centre of authority can enhance accountability and harmonize departmental functions ensuring no duplication of duties. Hence, enhancing decision making and improving the efficacy of the system as pertains to the position of the product in the market as well as improving the chain of command in adequately providing support to the components of the supply chain network.

Lean and Agile Manufacturing Operational Changes

TORC faces a significant challenge as pertains to determining how the company can effectively improve its manufacturing output with implications of reducing waste. Equally, it is necessary for the company to effectively enhance quality and service reliability as well as reduce the inventory and manufacturing costs. Similarly, it is adequate for the organization to increase overall efficacy and levels of the economy with the implication of enhancing operations management effectiveness outcomes. To this end, the report finds that the TORC case study reveals major challenges that exist in the delegation of duties and responsibilities between the departments of Finance and Purchases where responsibilities of each department have been found to interfere with those of the overall organizational supply chain efficacy. Consequently, duplication of functions has resulted in the slow pace of operations where decision-making has led, not only to conflicts but has also brought about redundancies leading to the ineffectiveness of the supply chain management process.

Another challenge identified concerns the fact that the operations of the supply chain depend on the software that is either incompatible or out-of-date. In this regard, it is imperative that the company looks into ways of improving supply chain efficacy by improving the processes associated with the streamlining of the supply chain to make it not only cost-effective but also efficient in meeting clientele needs. The implications of identifying the challenges associated with the functions of the supply chain at TORC, with particular consideration for the operations of the firm, it is apparent that five principles are needed for streamlining the operations of the organization. These are namely: Defining value, mapping value stream., creating flow. Establishing pull, and finally Pursuing perfection.

Defining Value

According to Arfmann and Federico (2014), defining customer value is the process of discovery where the intention is to determine what the client finds to be beneficial or profitable in a product. Furthermore, value to a customer is defined as the reason behind the customer's willingness to pay for the product. Arfmann and Federico (2014) add that sometimes value to the customer may be obscure and it is imperative that the company or the organization purposely defines what constitutes value to the customer. In other words, the customer needs the firm to articulate what value is and, therefore, it is the onus of the firm to define value on behalf of the client. TORC obviously faces the challenge of relevance where the DIY devices are increasingly becoming an unnecessary expenditure. For this reason, it is...