Table of Contentss
- Introduction… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … ..1
2.1. Problem statement 1… … … … … … … … … … … … … … … … … … … … … … … … … … 2
2.2. Recommended Solution/s to Problem 1… … … … … … … … … … … … … … … … 2
3.1. Problem statement 2… … … … … … … … … … … … … … … … … … … … … … … … … … 4
3.2. Recommended Solution/s to Problem 2… … … … … … … … … … … … … … … … 4
4.1. Problem statement 3… … … … … … … … … … … … … … … … … … … … … … … … … … 5
4.2. Recommended Solution/s to Problem 3… … … … … … … … … … … … … … … … .5
5. Decision… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … .6
6. Reference list… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 7
Established in the early 1900’s as a spice trading company, Shiv Group of Companies ( India ) has expanded to other concern chances like car parts, electronics, finance, pharmaceuticals, tea, etc. It is one of the largest industrial pudding stones in India with approximately 20 subordinates and using over 37,000 forces and exporting its merchandises to the US, UK and Germany ( Banerjee, Jamal & A ; Awasthy, 2005 ) . Piggy-backing on the image of its female parent company, Shiv Industries’ operation in the moulded gum elastic industry should be taken into consideration by top direction.
Shiv Industries’ operations largely focused on bring forthing gum elastic merchandises for the automotive industry. The globalisation of the automotive industry resulted to take down costs of production and assembly. For car makers to go on concern, they looked to providers to take down costs but besides maintain high quality. In the terminal, car makers relied on constituent parts providers and outsourced some of their non-critical constituent parts. This led to the rise of the automotive provider industry in states worldwide including India ( Banerjee et al, 2005 ) .
Locally, the Indian auto-industry was besides developed through a series of statute laws by the Indian authorities. The entry of Suzuki Motor Corporation into India during the 1980’s to organize Maruti Udyog Limited and the government’s Industry Policy of 1991 liberated ordinances for industrial enlargement and foreign investing ( Banerjee et al, 2005 ) . This liberalisation resulted to the transmutation of the Indian auto-industry, conveying new engineerings and higher criterions of quality. The automotive provider industry, where Shiv Industries operates, is comprised of 100s of big to medium-scale companies and 1000s more of small-scale operations ( Banerjee et al, 2005 ) .
Consequently, Shiv Industries faced different challenges that it needs to decide. Its primary focal point was the automotive industry but it besides has non-automotive merchandises providing to assorted industries like defense mechanism public-service corporations and rinsing machines. The automotive replacing market is another chance that Shiv Industries should look into for possible growing. Therefore, the company should besides look profoundly into their distribution web to spread out their concern, instead than merely depending on the web of its female parent company.
Shiv Industries should besides face quality issues. As foreign makers have stricter quality criterions, they normally favour their ain pick of component portion providers or offered outsourcing contracts to local providers who could make their quality criterions. So Shiv Industries must besides better their merchandise design and engineering in order to win those outsourcing contracts. Strategic partnerships were besides common in the industry to accomplish technological promotions.
The company was besides confused on their pricing schemes given that they produce a broad assortment of merchandises but can non take down their monetary values due to high operating expense costs. Lowering this operating expense costs mean that the company should reexamine its operations by perchance outsourcing low-technology merchandises while bettering high- to medium-technology merchandises through affiliations or joint ventures.
Overall, Shiv Industries needs to measure its current place in the automotive parts industry and reappraisal possible chances outside it and make up one’s mind whether to travel frontward by itself or with the aid of a foreign company.
2.1. Problem Statement 1
Shiv Industries’ distribution web is non extended plenty to present their merchandises to their clients as it merely relies on its parent group’s distribution system. As a effect, it limits the client range of Shiv Industries chiefly in Central India merely that gives a minimum market portion. This job was chiefly caused by Shiv Industries’ disadvantageous location in Raipur, which is a long distance off from the automotive hub of India, Gurgaon City.
2.2. Recommended Solution/s to Problem 1
In every company, distribution web issues is one of the most of import that has to be addressed. Initially, Shiv Industires’ direction should cognize the company’s distribution web composing and decide on which distribution scheme to utilize. By distribution web composing, it meant the overall inside informations of the whole supply concatenation web ; for illustration, the figure of providers, location of fabrication installations, warehouses, etc. Distribution scheme includes direction determination of operations control, bringing system, transit methods and control, and refilling scheme ( Nair, Raju & A ; Anbudayashankar, n.d. ) .
As the company uses its parent group’s distribution web, it seems that the company wants to retain a centralised control of operations. However, it is imperative for Shiv Industries to widen and travel outside its parent group’s web in order to derive more market portion. The company could run from two bringing beginnings ; Single-product locations and Distribution Centres.
Harmonizing to Hugos ( 2011 ) , a single-product location is a company mill or warehouse “where a individual merchandise or a narrow scope of related points are available for shipment” ( p. 92 ) . This means that Shiv should denominate and set up a installation that produces merchandises that are predictable and has a high degree of demand. It is besides advisable for Shiv to utilize this scheme for big and bulk orders of clients so that the company could make economic systems of graduated table. For illustration, if there is a high demand for gum elastic shrubs and cringles in Gurgaon City, so Shiv should set up a satellite-manufacturing works or set up a warehouse at that place to do certain that clients are sufficiently served.
On the other manus, distribution Centres were defined by Hugos ( 2011 ) as installations or warehouses “where bulk cargos of merchandises arrive from single-product locations” ( p.93 ) . This scheme could be more efficient and applicable for Shiv Industries because it provides nest eggs in transporting big sums of a broad scope of merchandises to a location that is near to the clients. This is largely better for companies who manufactures far off from their clients like Shiv Industries. The company’s chief fabrication works is located in Raipur, approximately 1,000 kilometers off from Gurgaon City that creates a longer bringing clip of ordered merchandises. As such, clients who need merchandises rapidly and on a regular basis would merely stop up telling from Shiv’s rivals who are located in Gurgaon City. Therefore, if Shiv Industries would utilize distribution Centres, they could go on fabricating in their chief works and merely direct stock list stock of merchandises to its distribution Centre in Gurgaon City.
However, they should besides do certain that sufficient measures of their merchandises are stored in the distribution Centre. To make this, Shiv Industries could use a distribution demands planning ( DRP ) to incorporate their stock list information in their distribution Centres with the company’s fabrication planning and control ( MPC ) system in Raipur. In add-on to stock list information, demand prognosiss and resupply programs could be besides linked with the company’s fabrication programs under a DRP System ( Jacobs, Berry, Whybark & A ; Vollmann, 2011 ) .
3.1. Problem Statement 2
The globalisation of the Indian automotive industry increased non merely the competition in the market but besides the quality criterions of cars that besides affected the automotive parts provider industry. As such, inquiries of quality criterions should be addressed by Shiv Industries in order for them to acquire supply contracts from both local and foreign car makers, every bit good as other non-automotive clients. This was evidenced by Banerjee et Al ( 2005 ) that Hyundai Motors Company had uncertainnesss about Shiv Industries’ “ability to develop and present high terminal merchandises to run into their bing standards” ( p. 45 ) .
3.2. Recommended Solution/s to Problem 2
Given its association with its parent group company, Shiv Industries had a nice figure of clients. But the company should non trust on that for long as globalisation created a displacement of buying influence to the clients. Customers require lower costs but high quality, which are both difficult to accomplish at the same clip. However, recent developments in engineering are now conceived and could perchance accomplish these two concern aims at the same clip.
Research and development in engineering is one thing that Shiv Industries’ should concentrate on to better their quality criterions. And to make this, it should extensively reexamine its current affiliation with a multi-national company specialising in advanced gum elastic engineering. If current state of affairss require the two companies to promote their relationship to a joint venture or amalgamation, so it should be considered jointly to profit both sides. With a joint-venture, Shiv Industries would be able to derive technological promotions to plan and bring forth high quality merchandises for both the local and international markets ( Banerjee et al, 2005 ) .
In add-on to technological promotions, Shiv Industries could besides concentrate on quality control of their merchandises. Juran ( as cited in Gardiner, 2010 ) wrote that quality control proves that “the procedure can bring forth the merchandise under operating conditions with minimum inspection” ( p. 247 ) . Three frequently used attacks for quality control utilizing squads are choice circles, special-purpose squads and self-managed squads. Harmonizing to Krajewski, Ritzman and Malhotra ( 2007 ) , quality circles or problem-solving squads are comprised of little groups of supervisors and employees who identify, evaluate and solve quality jobs. Special-purpose squads are ad-hoc groups that solve issues sing direction, labour or both. Self-managed squads are composed certain employees that work together to make a merchandise or service ( Krajewski et al, 2007 ) .
Using quality direction package plans under a fabrication planning and control ( MPC ) system is another solution that Shiv Industries could implement to do certain that regulations and procedural actions for quality control and confidence are followed ( Jacobs et al, 2011 ) . Examples of MPC systems can be included in extremely advanced Enterprise Resource Planning ( ERP ) systems that are developed and sold by Baan, SAP and People Soft. These systems would non merely work out out quality issues but besides provide an enterprise-wide information system issues ( Nair et al, n.d. ) .
Additionally, Shiv Industries could besides implement what automotive makers use for their quality controls to accomplish an ISO 9001:2000 criterions in the car production industry ( Goicoechea & A ; Fenollera, 2012 ) . One illustration is the DEMING or PDCA rhythm in which four stairss are followed to set about any betterment. The first measure is PLAN in which analytical tools are used to cognize the cause and supply the solutions to work out the issues. Next is DO which puts concrete actions to work out the jobs and followed by CHECK which measures the consequences of the actions. Last, ACT is a uninterrupted or cyclical scheme to better the actions further or widen the solutions to other issues.
4.1. Problem Statement 3
Having a broad scope of merchandises, Shiv Industries imposes a premium monetary value on all its merchandises which makes it disadvantageous and uncompetitive to their clients. Their pricing scheme is compounded with high operating expense costs due to investings on high- to medium-technology merchandises which besides increases the monetary values of their low-technology merchandises. Therefore, this renders them a low market portion in both automotive and replacement market industry and a few clients in the non-automotive sectors.
4.2. Recommended Solution/s to Problem 3
To cut down operating expense costs, Shiv Industries’ could besides strategically outsource some of its fabrication demands to other companies. By strategic outsourcing, the company could cut down capital investing by reselling some machinery and equipment to other companies. As low-technology merchandises are easy manufactured and replicated, cost nest eggs could be realized if Shiv Industries would merely outsource production of these merchandises from another company every bit aggregative orders consequences to economic systems of graduated table. Outsourcing the low-technology merchandises could ensue to lower monetary values and improved market portion ( Simchi-Levi, Kaminsky & A ; Simchi-Levi, 2003 ) .
Strategic outsourcing would besides assist Shiv Industries’ to concentrate on their nucleus competences and strengths. With their current affiliation with a transnational company, Shiv Industries’ could concentrate on developing and bettering their high- to medium-technology merchandises and perchance outsource production every bit good. However, the company would besides put on the line of losing competitory and technological cognition of these high- to medium-technology merchandises if they outsource its production. This is because outsourcing of fabrication may besides forestall the development of inventions and solutions that require cross-functional teamwork ( Simchi-Levi et al 2003 ) . Therefore, Shiv Industries’ should retain the development and production of these high- to medium-technology merchandises that would besides ensue to better quality control. Maintaining quality control of these merchandises is of import because these are required component parts of car makers which have high criterions of quality. By making these, the company would be able to retain their premium pricing scheme due to the forte and exclusivity of these high- to medium-technology merchandises.
Every company faces different challenges that it need to understand and decide. Shiv Industries’ is one illustration that needs to measure its current state of affairs in order to go on or better its standing in its industry. Limited by its dependance on the distribution web of its parent company, it is non capable of presenting its merchandises to its primary clients particularly in the automotive hub of India. To decide this issue, Shiv Industries should make a distribution Centre near Gurgaon City so that car makers every bit good as replacing market clients would be able to regularly bargain merchandises from them. Distribution demands be aftering system would besides assist the company to associate stock list ( including demand and supply ) information from the distribution Centre to their fabrication programs in their mill in Raipur.
Quality issues in the scope of merchandises of Shiv Industries should besides be answered by the company. Continuing their affiliation with a planetary company or even progressing it into a joint venture or amalgamation could convey technological promotions to Shiv Industries. Quality control plans like quality circles, special-purpose squads and self-managed squads would besides cut down the quality jobs blighting the company. Quality direction package plans could be besides included in the company’s fabricating be aftering control systems every bit good as implementing quality control criterions to accomplish an ISO 9001:2000 criterion in the car production industry.
Last, overhead production costs should be resolved by Shiv Industries by looking at alternate companies to provide them with their low-technology merchandises. However, Shiv Industries should retain the development and production control of their high- to medium-technology merchandises to do certain that these merchandises have high criterions of quality. As such, they could perchance continuously offer these high-quality merchandises at a premium monetary value to automotive and non-automotive clients.
- Reference List
Banerjee, A. , Jamal, M. & A ; Awasthy, D. ( 2005 ) . Shiv industries: confronting the challenge of planetary competition.Asiatic Journal of Management Cases.2 ( 1 ) , 37-67.
Gardiner, D. ( 2010 ) .Operationss direction for concern excellence ( 2neodymiumed. ) .Auckland, New Zealand: Pearson
Goicoechea, I. & A ; Fenollera, M. ( 2012 ) . Quality direction in the automotive industry.DAAAM international scientific book.Chapter 51, 619-632.
Hugos, M. ( 2011 ) .Necessities of supply concatenation direction ( 3rded. ). Hoboken, NJ: John Wiley & A ; Sons
Jacobs, F. , Berry, W. , Whybark, D. , & A ; Vollmann, T. ( 2011 ) .Manufacturing planning and control for supply concatenation direction. New York, NY: McGraw-Hill Irwin
Krajewski, L. , Ritzman, L. & A ; Malhotra, M. ( 2007 ) .Operations direction procedures and value ironss ( 8Thursdayed. ) .Upper Saddle River, New Jersey: Pearson Education
Nair, P. , Raju, V. & A ; Anbudayashankar, S. ( n.d. ) . Overview of information engineering tools for supply concatenation direction. Retrieved from hypertext transfer protocol: //www.csi-india.org/document_library/Overview on Information Technology Tolls for Supply Chain Management3963.pdf
Simchi-Levi, D. , Kaminsky, P. & A ; Simchi-Levi, E. ( 2003 ) .Planing and pull offing the supply concatenation ( 2neodymiumed. ). New York, NY: McGraw-Hill Irwin