Week 6
Project Management
Agenda
Introduction
Problem Definition
Customer surveys
Data Gathering
Plant tours/audits
Data Analysis and Solution Development
Statistical tools
Cost Impact and Payoff Analysis
Decision trees
Implementation
Responsibility charts
References
Ralph Lauren Corporation
A global leader in the apparel
Also in designing, marketing and distributing premium lifestyle products
The company has experienced challenges with regard to its operating model and therefore experiencing poor performance levels.
Introduction
Ralph Lauren Corporation was started in 1967 with just men’s ties. Now it’s a global leader in the apparel especially in designing, marketing and distributing premium lifestyle products. The company has experienced challenges with regard to its operating model and therefore experiencing poor performance levels.
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Problem Definition
Excess Inventory Problems
The lead-time for production and delivery of products
Approximately 15 months
Problematic
leads to mismatch between supply and demand
Lacks a centralized system of controlling inventory and optimization
Led to an inventory growth of 26% against a 7% growth in sales
Discounting and transfers to outlets have resulted in extra costs and lower profit margins
The lead-time for production and delivery of products is approximately 15 months which is very long. This is problematic because it leads to a mismatch between supply and demand at the time the products are available for consumption. In addition, the company lacks a centralized system of controlling inventory and optimization. This has led to an inventory growth of 26% against a 7% growth in sales for the past three years. Moreover, discounting and transfers to outlets have resulted in extra costs and lower profit margins.
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Reduced focus on core brand strength
Ralph Lauren, Polo, and Lauren
account for a vast majority of the brand strength and performance
30% of the styles make up 70% of the business while 65% of the styles are considered unproductive
Developing a transformational plan, to
Streamline operations and raise the operations margins
Problem Definition (cont)
The company’s three core brands are Ralph Lauren, Polo, and Lauren. They account for a vast majority of the brand strength and performance. However, 30% of the styles make up 70% of the business while 65% of the styles are considered unproductive. The company is therefore in the process of developing a transformational plan to streamline operations and raise the operations margins by end of the financial year 2019. For the plan to succeed the company needs to adopt important items from the operations toolkit for supply chain management.
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Customer survey
Customers form the bedrock of the business
Conduct an extensive customer survey to understand several things
First, understand who its customers are
How and where to reach them effectively
Secondly, provide insight on changing demand patterns
Explain reasons for low sales and identify potential gaps within the market
Finally, identify idle products
Channel resources to more in demand products.
Since customers form the bedrock of the business or rather determine the success of the business. Ralph Lauren needs to conduct an extensive customer survey to understand several things. First, the company needs to understand who its customers are and how and where to reach them effectively. Secondly, a customer survey will provide insight on changing demand patterns, explain reasons for low sales and identify potential gaps within the market. Finally, a customer survey will help the company identify idle products and channel resources to more in demand products.
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Gathering Data
To effectively understand the extent of the problems
Plan or make decisions on the most needed transformations
Collect data on all its processes, employees, inventory, costs and organizational structure
Data collection is very important and serves various purposes
Provides a basis for decision making
Identify the exact value of its problems and their underlying causes
Gathering data is to effectively understand the extent of the problems facing the company and plan or make decisions on the most needed transformations.The company needs to collect data on all its processes, employees, inventory, costs and organizational structure. Data provides a basis for decision making. It also enables the company identify the exact value of its problems and their underlying causes.
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Plant tours/Audits
Conduct an extensive audit of all its warehouses and stores
Identify all inventories held
Analysis actual costs associated with holding the inventory
Enables the company to segment or categorize inventory stocks
Idle inventory, fast moving and moderately moving inventory
Focus on reducing or doing away with some of its inventory lines
Low demand or even the costly inventory lines in terms of storage and cost.
The company needs to conduct an extensive audit of all its warehouses and stores to identify all inventories held and the actual costs associated with holding the inventory.This is a very useful exercise as it enables the company to segment or categorize inventory stocks into idle inventory, fast moving and moderately moving inventory. Once this is done the company can now focus on reducing or doing away with some of its inventory lines especially those that have low demand or even the costly inventory lines in terms of storage and cost.
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Data Analysis and Solutions Development
The nature of data collected can be very difficult to analyze, draw conclusions and ultimately use the data in decision making
Data can make the supply chain more efficient and seamless
Increases in sales, brand strategy, marketing
Data can only be useful in a supply chain if correctly extracted and analyzed and may require the services of data analytic professional. The nature of data collected from a supply chain process tends to be cumbersome and at times non-quantifiable hence very difficult to analyze, draw conclusions and ultimately use the data in decision making. However, if properly analyzed, data make the supply chain more efficient and seamless. In addition, data analysis can lead to increases in sales, brand strategy, marketing despite the additional costs that come with the data analysis process.
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Statistical Tools
Play a significant role
Data collection, cleaning analysis and reporting.
Used to predict and identify patterns for use in decision making
Delay or speed up production
Can benefit greatly
Statistical tools play a significant role in the data analysis step of the supply chain all the way from data collection, cleaning analysis and reporting. In addition, statistical tools can be used to predict and identify patterns for use in decision making. For instance, the decision to delay or speed up production of a certain product can be made based on insights obtained from data analysis using statistical tools. The company can benefit greatly from the use of statistical tools for data analysis
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Cost Impact and Payoff analysis
The cost-benefit analysis involves a comparison of the costs and benefits
Enables a firm to understand its production and storage costs
Benefits associated with handling different inventory types and levels.
Helps to improve the control and coordination of activities
Provides a basis for planning and making adjustments to production
The cost-benefit analysis involves a comparison of the costs and benefits of running a supply chain. It is a very important item in supply chain management as it enables a firm to understand its production and storage costs as well as the benefits associated with handling different inventory types and levels. In addition, a cost-benefit analysis helps to improve the control and coordination of activities in a supply chain as it provides a basis for planning and making adjustments to production decisions by linking them with their associated costs.
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Decision Trees
Measures the cost, impact and payoffs for projects
Identifies the projects with the highest pay offs
Another important assessment is a stakeholder analysis
Identify its key partners and clients
Focus its energies more on the identified groups
Decision trees are one way in which to measure the cost, impact and payoffs for projects or in this case activities under a supply chain process. Once the different costs, impacts and payoffs are identified, they are then transferred to the decision tree to identify projects with the highest pay offs when substituted against costs and impact. The company adopts that decision. In addition to the decision tree, another important assessment is a stakeholder analysis. By performing a stakeholder analysis, the company will be able to identify its key partners and clients and consequently focus its energies more on the identified groups
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Implementation
The company actually undertakes all activities identified to make the supply chain more efficient
Involves actual decision making and actually hold people responsible
The final step to the operations in a supply chain management is implementation. This step requires that the company actually undertakes all activities identified to make the supply chain more efficient and responsive to changing environments. In addition, this steps involves actual decision making and actually hold people responsible and accountable for the decisions made.
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Responsibilities
Requires that tasks be assigned for all processes
Needs to have a clear responsibility duty allocations in order to reduce unnecessary staff costs
To actually perform activities in a supply chain, the responsibility item in the operations toolkit requires that tasks be assigned for all processes. For instance, different persons will conduct data management activities while others will be in charge of inventory control. The company therefore needs to have a clear responsibility duty allocations in order to reduce unnecessary staff costs but to also ensure smooth running of the system led by the most appropriate talent.
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References
Brown, R. G. (1959). Statistical forecasting for inventory control. McGraw/Hill.
Schönsleben, P. (2018). Integral logistics management: operations and supply chain management within and across companies. CRC Press.
Hugos, M. H. (2018). Essentials of supply chain management. John Wiley & Sons.