Supplier Selection and Cost Optimization

The purpose of this following report is to measure the importance of the supply chain network in the global business context. The supply chain management is considered to be one of the most important issues for the firm performance. The chosen organization for this report is the Clarks Footwear that is based in the United Kingdom. They are considered to be one of the oldest and most trusted international shoe manufacturers in the country. The headquarters of this organization is situated at Somerset in England (Clarks.co.uk 2018). The company operates in the retail industry and it is a heritage company indeed.

The company was begun by the two brothers, Cyrus and James Clark. The ownership of the company is private and the Clark family holds around 84% of the shares where the rest 16% is owned by the employees and other stakeholders (Clarks.co.uk 2018). According to the case, the company is planning to produce the Desert Boot (Clarks.co.uk 2018). This has been one of their iconic products over the years and they want to produce it by redesigning. The company has declared that they will continue with their effort to manufacture the Desert Boot from its source of Vietnam and India. However, this facility in UK will be assisted by robots and it will be able to produce around 300,000 pairs of Desert Boots per year (Clarks.co.uk 2018). The distribution of the products will depend largely on the proper sales and distribution through the proper logistics and supply chain management (Elliott 2012). The different issues related to this will be discussed in this report.

A significant part of the production process of Clarks is their supplier selection. Supplier selection is also an integral plan of the cost optimisation plan of the production team of the company. Clarks shoes maintains a typically complex supply chain. The supply chain of the company sprawls across continents, thereby making overseas sourcing or making optimised inventory management. In the words of the chief executive of the company, Mike Shearwood, there is an acute need to substantiate and supplement the supply chain of the organisation. They have decide to manufacture one of their signature product that is desert shoe of Clarks, by 300000 units per annum from an automated production unit in the Somerset factory at UK. The approximate expected demand from the leading shoe manufacturing brand of UK is 50 million pairs every year. As opined by Brandenburg et al. (2014), in order to tackle the tremendous pressure in the brown shoe industry in UK and elsewhere the company is projected at making mass production and engage more and potential suppliers in the production line. The company uses exquisite brown untanned leather from Egypt, Cambodia and other African and Asian nation states.

Supplier Collaboration for Centralization of Supply Line

However, the organization has planned to centralise the supply line of the Dent Leather that is used for the Desert shoes that is the premium product of Clarks’s shoes in UK.

Supplier collaboration is an important factor for the company also. The organisation previously followed the policy of acquiring products form the local producing franchises of Vietnam, and India mainly. The hide collection and processing as well as a significant part of the R&D activities of the company took pace in China. The company is now destined to ensure supplier collaboration with local suppliers of Italy and Romania, which are supposed to be biggest suppliers of Dent skin for the company’s production unit in Somerset. At present the automated facilities have been so designed that it will concentrate in the manufacture of desert boot for the supply market of UK and US, so that the number of units of production can be increased also (Brunninge & Fridriksson, 2017). The hide would be imported from the local supplies of India and Vietnam also.

Quality management is also an important part of the supply chain management of the organisation. The technological innovations that the new supply partners of the company are bringing with them are going to reduce the operational cost of the company also. The new facility of the company in Somerset will include an automated stitching facility also that would be called the Track line. According to Busse, Kach and Bode(2016), many of the high profile companies like Adidas also use automated stitching facility in their production process. Sportswear companies bring precision and calibre to their products by means of this automated stitching facility (Wang & Cullinane, 2015).

Besides skills retention is another step towards the quality management of the company. The new auto-stitching facility have been designed by the internal R&D experts of the company. The CEO have emphasised that the traditional production line comprising of the expert crafters from all the production hubs of the company. The global supply line of the company have been disrupted and subsequently devaluated as an impact of Brexit and the ecp0nomic downgrade of China. As an impact of all these, the company’s annual revenue form the Asian market has fallen by 50%. Home production have given the production a stable boost (Christopher, 2016). The supply market in UK is quite expensive. However mature customers favour Clarks as a brand for the school shoes for the children and the comfortable slipper shoes only. This is why the company is going to internalise the productions so that the premium products of the company gets popularized in the domestic markets as well.

Quality Management and Technological Innovations

The intense industry collaboration of Clarks in the leather supply market of entire UK, have enables them to make this big corporate decision. The capability of the leather sector, according to the corporate head of Clarks, Anthea Carter, to leverage as a by-product has been reduced traditionally. As opined by Conlon and Taylor(2016), in the past, there was observed a possibility among the supply sector to ignore the aspects of their supply chain. However, now the company is working hard for establishing raw material suppliers. This is what enables them to open a new production unit for the desert shoes of the company. The supply risk that the company faced has also been reduced as an impact of their new decision. The management did not have complete control over the production lime of the company owing to the handling of their major part of the production in the foreign countries by the franchises. The management were forced to negotiate with the quality of production. However the production unit set up by the company in UK, the company will be able to set an ideal for the franchises.

At the end of the useful lives of the foot wears of UK. The products are disposed. As opiend by Fahimnia, Sarkis and Davarzani (2015), this disposal causes a big source of environmental pollution from the harmful chemicals that are used in tanning of leather. The organization has a policy for collecting various used shoes of their brand and utilizing these for manufacturing of other products as cork bases or other padding covers. Besides the company is now using bio-plastic for making the shoe bases, a material that goes in as an successful replacement of the petrochemical plastic that have been used in the products of the company for so many days.

Along with waste elimination. The company is also looking forward to maximise their production floe by enhancing production of their desert shoes in their new production line at Somerset. The company has also been successful in pulling production over the customer demands. The shoe brand was widely reputed as a school shoe and informal and casual shoe manufacturing agency. However, as Ramachandran, Hora and Gaimon(2017) opines, the demand for the premium product that is the increasing day by day in UK, have been addressed by the new production line in Somerset. The products manufactured in the Somerset factory are going to set standards for the franchise productions in India, Vietnam, and in China.

Waste Elimination and Maximizing Production Flow

It is very important to denote the fact that supply chain management will be very important for the company to distribute their Desert Boots among the people within the UK since their flagship Desert Boots will be manufactured in India and Vietnam. It is a great challenge for the logistics and supply chain experts to carry out this strenuous job of distributing the shoes across their physical stores and delivering them through online orders as well. They must look to build a sustainable supply chain management for the company so they can build a proper supply chain across their customer networks (Elliott 2012).

Their primary purpose is to go global and spread their business across the many countries indeed. The retail planning of the Clarks group will be discussed and redesigned by the JDA Software Group Inc. They are very sure that their orders will begin to grow as they begin to sell the Desert Boots from their headquarters from Somerset. The fulfillment solutions require a proper planning for them in the retail field (Dincer and Rosen 2012). The main purpose of the company os to increase their profits and they want to take the measures for getting it. Some of the major issues related to the successful sustainable supply chain management are the society, economy and the environment (Christopher 2016). The economy is a very important factor in this condition since the event of Brexit has laid a huge impact on the economic downfall of United Kingdom. It is very crucial from the social perspectives that the customers should always get the best products at the right time. This is indeed instrumental for the customer satisfaction for the competitive business environment (Christopher 2016).

The amount or quantity of the products should be maintained properly as well. As their flagship manufacturing sources are situated in the Asian countries like Vietnam and India, they would surely like to transform and develop their business all across the world (Monczka et al. 2015). This will surely popularize the brand as well. The products will have to be delivered as per the quantity and quality across all the channels indeed. It is indeed very important to maintain the environmental safety as well. They should build up their supply chain in a way that they should abide by all the environmental guidelines within the United Kingdom. Clarks has always wanted to ensure the environmental safety (Monczka et al. 2015). The manufacturing of the Desert Shoes through the Robot assisted process can save much money because a huge workforce would not have to be employed (Hugos 2018). The contrasting fact in this issue is the unemployment of the youth that will lower down the GDP of the United Kingdom. This is why seeking the help from the robot assisted process might endanger the skilled workforce that is very abundant in the country.

Challenges and Recommendations for a Sustainable Supply Chain Network

The stock of the shoes has to be available all the time according to the demographic of the region. A big part of the sustainability of the global success of Clarks is its innovative power and bringing new products into the market. This is the reason why the organization has to sustain the need of the eco-friendly products in the market. They want to keep the operation costs and labor costs so they can distribute the products through different channels The use of the technology will be very essential in retaining the sustainability of the company. The business services will have to be more agile and the better performance will help the company to boost up their confidence in the supply chain network. The logistics network should always function to meet the demands of the customers and delivering them within the time.

Another very important aspect of the better profits and sustainable supply chain management of Clarks Footwear will be building the good customer relationship management that will be effective for the development of the brand reputation for the company (Stone 2012). They must provide the better connection with the customers so the customers can be able to provide the feedback to them. Clarks Footwear has always built up a proper global platform so they can be able to provide the best customer relations and ask to the customers for the improvement process of the company (Kumar and Reinartz 2018.).

If they have to begin their production of the Desert shoes in United Kingdom, they have to make the customers aware of this (Nguyen and Mutum 2012). The impact of the social media platforms on the marketing strategies will surely improve the condition of the company in many ways. The collection of the feedback and transferring it to the headquarters for the annual audit will be an essential factor in this case. The quality of the shoes will be important to measure the success or failure of the product indeed (Nguyen and Mutum 2012). The feedback from the customers should be collected via their official website or the official software application. The official social media platform pages should be used in this case as well. The stakeholders should build up a good rapport with the managers to understand the customers’ desire (Morana 2013).

Thus they will be able to understand what sort of things will be needed to please the target customers. Clarks Shoes can choose to promote their Desert Shoes through the physical retail stores. This is why the organization should also focus on the customer education as well. It is an exclusive part of building proper relationship with the customers (Seuring 2013). Once the Clarks Footwear succeeds in convincing the customers about the heritage they possess and the quality of the products they can produce in the competitive business environment of the present. They can also opt for arranging programs or providing advertisements in which they can feature the famous celebrities from sports, films and other fields (Walker and Jones 2012). This will definitely attract the customers to buy their products. The high quality of these shoes will definitely attract the customers. As the target audiences are the working professionals, they can approach them through advertising in the business magazines as well.

There are many opportunities for the further improvement in the customer relationship. The customers are the best judges of the products like Desert shoes so they can give the best verdict on the quality of the product. Another issue is the robot assisted manufacturing of the shoes; it is very evident that the company must look for the physical stores to meet the requirements of the customers and provide them with the orders on time (Seuring 2013). It would be very costly to bring the products from India and Vietnam to UK and distribute them among the customers. This is why they have planned to manufacture the desert shoes in UK itself for the benefit of the customers with an efficient logistics and supply chain network.

Conclusion

This paper can be concluded by saying that the Desert Shoes are the iconic products of the company and they would like to produce the things in United Kingdom at their headquarters at their headquarters. Eventually it would require the proper supply chain network across the globe. This would help the company to achieve the sustainability indeed. The company would look to build up a strong customer relationship that would be the key thing for increasing the profits. The organization should always build a proper strategy in this context so they fulfill the orders of the customers. The manufacturing of the products through the robot assisted mechanism can increase the unemployment in the country and affect the social balance as well. It will be highly important for the company to capitalize on their heritage and take proper steps to gain the interest of the customers. 

References

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