LIP Executive summary

Logistics Improvement Plan for Kantara Fashion Line

Name

Institution

Problem Statement

The ordering channels used by the Kantara Clothing Line should aim to get the products to clients across the globe as efficiently as possible. The whole process should be optimized for efficiently maximizing time and it should also be easily comprehensible to the customer base of the clothing line. Nevertheless, the current system as employed by the company is inefficient. It has only succeeded in wasting the company’s financial resources as well as time. People are expected to make orders using methods that are outdated, hence resulting to a cumbersome ordering process, which also goes to affect the level of customer satisfaction.

The inefficiency of the present ordering system by the company has resulted to significant loses to the company (Peck & Juttner, 2002). The current system wastes roughly 1 day per order placed, leading to substantial loses over a financial year. In total, the inefficiency represents a loss of $156, 000 per financial year. The company’s internal system has established that the current order system is responsible for wasting, on average, a whole day per ordering session. The ordering personnel are remunerated $80 per day, translating to an estimated waste of $420 per day. In a year, this would add up to $156, 000.

Using the online ordering system as proposed by various players in the technology sector, the company can significantly reduce the inefficiencies of its ordering system. This will significantly cut the costs of ordering items from the company, and also reduce the costs that the company and the clients were incurring. The implementation of such a system will lead to substantial gains by the company. The company may use the money that it will recoup from this new system to further expand its global presence. It will also get a global recognition as being technology savvy, a phenomenon that will serve to further enhance its clientele base.

Data& Measurement

The BCG model can be employed in order to illustrate the problem’s forecasting (Peck & Jüttner, 2002).

The above problem can be illustrated via the use of a fishbone diagram as indicated below.

Equipment Process Customers

Kantara Fashion Line

Material Environment Management

The above tool will be used to examine the situation and establish why the problem exists. The principal problem suffered by this company is its inability to satisfy the customers. This has been caused by problems at its supply chain, the management and failure to meet environmental targets. Since the company has inefficient systems to conduct its operations, meeting revenue expectations becomes problematic.

Flow Chat

The flow chart below indicates the manner in which the company should arrest the situation by streamlining its processes.

Technological Application

Proper Supply Chain Planning

Supply Chain Management

Causes and Effects

Kantara Fashion Line undertook to expand its operations in order to have a global presence.However, the management of this organization did not change the material operation of this company to reflect the new status. The company persisted with the existing models of operations. For instance, the company failed to realize that the ordering process had to be altered in a manner that reflected the current dynamics in the industry. Instead, they persisted with their outdated ordering methods. They also did not establish an online presence in social media. The company did not also fashion a website, where they would get feedback and inquiries from their customers.

As a consequence of the above mentioned causes, the company has registered substantial loses in the past financial year. The clientele base has not increased to reflect the company’s current status-a global company. Furthermore, the customers have registered dissatisfaction of the company’s ordering and supply systems. This has further led to the existence of imbalances in the company’s operational costs and profit margins. Moreover, Kantara Fashion Line has been unable to supply appropriate clothes in some countries with regards to the existing weather conditions.

Cost-Benefits Summary

Since the company is going to overhaul its supply-chain modes of operation, it is going to incur some costs (Adler & Posner, 2006). These costs will include the costs that the company will pay the web designer, the cost that the company will incur to buy the website’s domain name, the payments for the hosting services, the web maintenance costs, and the web marketing costs as indicated below. The company is also going to create a database of its customers and its first and second class suppliers, something that is going to be expensive (Sheffi, 2002) .However, these costs will be offset by the revenues that are going to be generated through these methods. Since the supply chain is going to be made efficient, and customer satisfaction is going to be guaranteed, the revenues are going to substantially increase for the company.

The change of the supply chain to one with a technological edge will bring unprecedented benefits to the company. As a consequence of digital marketing through social media platforms, the clientele base of the company is going to expand. Furthermore, the efficient and less cumbersome online ordering system is going to reduce the amount of wasted ordering time. This is going to lead to improved customer satisfaction, which guarantees more sales by customers. The customers and the company are also going to have a platform upon which they can interact, further making the company to tailor its operations to reflect customers’ needs. The streamlining of the supply chain will also lead to significant reductions in the operational costs of the company. This will free up resources for the company to undertake its expansion endeavors without hindrance.

Conclusion

The company will continue making losses should the situation continue unchecked. As a matter of fact, there is a real possibility that the company might go under since the operational costs are going to be higher than the margins. This is a situation that is not sustainable for the company in the long-run. However, the company can arrest the situation through implementation of technologically inspired processes. They can establish an online presence through social media. They should also create a website that will outline their products, and permit customers to make orders online. The company should also vigorously market itself through email marketing. As a consequence of the implementation of the aforementioned, Kantara Clothing Line is going to expand its customer base, hence sales. The operational costs are also going to be reduced, leading to profit margins for the company. Therefore, utilizing technological means is the only means that the company can use to turn around the existing situation.

References

Adler, M. D., & Posner, E. A. (2006). New foundations of Cost-benefit analysis. Cambridge, : Harvard University Press.

Peck, H. & Jüttner, U. (2002). Risk Management in the Supply Chain, Focus, December, pp 17 22

Sheffi, Y. (2002). Supply Chain Management under Threat of International Terrorism, International Journal of Logistics Management