Contents
- VII. Appendixs
Executive Summary
The proprietor, Michael King, was asked of the current job faced by the company, and he answered Sales/Marketing. Almost every fabrication house ‘ s nucleus job is at its gross revenues. It does non vouch that all merchandises produced would be sold instantly that is why the company at times incurs extra production or excess stock list. The possible ground behind low gross revenues might be low demand of merchandise, high pricing, low quality end product, tough competition, or merely the salesmen are non making their portion.
Hypothesis
Low gross revenues and excess stock list may be solved through concentrating more on current clients and happening new 1s, take downing of monetary values to least possible, supervising the workers in treating the end product to bring forth high quality merchandises and look intoing on the salesmen sing their work.
Supply Chain direction
Relationship to the job
Datas assemblage to turn to it
Background of the Study
Company Profile
Golden Dragon Plastic Manufacturing is a exclusive proprietary concern that is founded and managed by Michael King and his married woman, Cindy King. The company started at 1998, bring forthing quality plastic bags/ poly bags to be either distributed to marketing agents or sold straight to consumers. The mark market is largely provincial clients from General Santos, Cagayan City, Iloilo City, etc. The mill is presently located at Bulacan City and employs 50-100 workers. Its 24-hours operation includes bulge which is the transition of natural stuffs to long strips of plastics, cutting which is the film editing of long strips of plastics to smaller pieces based on sizes and colourss, pluging which is the punching of fictile bag holders, packaging which is the wadding of an sum of plastic bags to a crystalline container, and bringing which is the distribution of merchandises to its mark clients.
Mission
To bring forth quality plastic bags that caters to the demands of the clients at a net income.
Vision
Golden Dragon Manufacturing purposes to be the top quality plastic bag production nationally.
Organizational Chart
Factory workers
Secretary
Cindy King
Finance
Human Resource
Operationss
Michael King
Sales/ Selling
Operationss
Merchandise
The plastic bags can be used for market and refuse intents, as deep-freeze bags, or packaging of other things as applicable. It varies among sizes ( little, medium, and big ) and among colourss ( ruddy, xanthous, bluish, green, and white ) .
Rationale for Choice of Topic
Presents, fabrication houses are all over the state. The fabrication sector plays a important function in our economic system as it produces the goods to be supplied to the retail merchants and consumers. It adds to the growing of the economic system and provides employment. Assorted surveies have been made to measure the success of fabrication houses. However, it had been a common quandary that fabrication houses at times are non able to command the internal operations and pull off its stock list expeditiously and efficaciously. A possible ground might be the hapless direction of the supply concatenation. Some may non handle the supply concatenation parts as interdependent with one another, or some may non even cognizant of its being. The importance of supply concatenation direction in turn toing the operational and inventory concerns of fabrication houses is that when each division is managed decently and is connected with each other, it does non merely assist cut down costs, but independent houses in the supply concatenation procedure would move together as one that makes it the more cohesive and good for all.
Problem Statement
How can Golden Dragon Plastic Manufacturing manage its supply concatenation efficaciously that will take to higher net income border?
What are the factors that led to excess or surplus stock list in the house?
Research Aims
This survey aims to:
Determine or plot the failings of the house in footings of supply concatenation direction
Determine the consequence of supply concatenation direction in managing stock list jobs
Determine ways in work outing stock list jobs
Importance of the Study
The consequences of the survey would non merely assist the group in holding consciousness and apprehension of the field of concern and ways on how to cover with the possible jobs that may originate in a fabrication house, but would besides profit the house as alternate solutions would be presented to better their operations and stock list direction that would take to higher net income border.
Review of Related Literature
A. Introduction to Manufacturing
Over the decennaries, fabrication had been present and continues to develop through clip. The fabrication sector contributes a batch to the growing of the economic system as it provides employment and encourages investing in little and average houses. There are many fabrication houses that are located in states and produce end products like plastics, vesture, footwear, furniture, canned goods, etc. The fabrication industry may look to be a successful venture that one can travel into as it produces the goods that are needed by the consumers, but merely like any other concerns, it has its ups and downs through the journey of its lifecycle.
B. What is Supply Chain Management?
Supply Chain Management is the direction of multiple relationships and concerns from providers or suppliers of natural stuffs to the terminal users or clients of those processed or finished merchandises. Pull offing the whole supply concatenation is really ambitious ; nevertheless, many concern people wanted to hold the relationship with its providers and clients because it is by this manner that they gain power in the supply concatenation. An illustration would be a collaborative prediction between a provider and a retail merchant, and so every bit far as a maker, can bring on supply concatenation effectivity to set its order and procedure of finished merchandises. Firms in the supply concatenation will hold a incorporate system that helps each other to calculate future demands, giving critical determination for both retail merchants and providers of merchandises, and doing a less-troubled stock list system that could incur net income border within a period because holding hapless stock list turnover increases the cost and decreases the net income border. The Supply Chain Management consists of activities such as systems direction, sourcing and procurance, production programming, order processing, stock list direction, transit, repositing, client service, gross revenues and information assemblage, publicity, research and development, merchandise design, operations direction, and entire system/value analysis. The aim of Supply Chain Management is to take down the investing in stock list and increase client service.
C. Importance of Supply Chain Management
As what Mendoza and Ventura said in the decision portion of their article “ A Serial Inventory System with Supplier Selection and Order Quantity Allocation ” , “ The importance of supply concatenation direction in today ‘ s competitory environment forces companies to concentrate their attending on the survey and analysis of stock list policies inclusive of their supply concatenation systems, instead than work outing separate stock list policies for every phase involved in the system. ” Wherein they are stating that “ many factors in today ‘ s planetary market hold given companies competitory advantage by concentrating their attending to their full supply concatenation ” , buying is one of the most strategic countries in the full supply concatenation as it provides immediate chances for cut downing costs and accordingly increase net incomes in the procedure. Purchasing is of import given that the cost of natural stuffs and constituent parts account for bulk of merchandise cost for most industries. In this instance, supplier choice should besides be accounted for because the natural stuffs or constituent parts that they supply every bit good as the monetary values along with the seasonableness and confidence of being able to provide the sum needed are all in their control. ( Mendoza & A ; Ventura, 2010 )
D. Excess Inventory and its Causes
One major quandary that can really go on in a fabrication house is covering with extra stock list. Excess stock list are merchandises produced and was non able to be sold to the mark market, hence stacking up along the infinites in the warehouses. Excess stock lists may be dead, slow-moving, or ruined. One of the causes of extra stock list would be the inaccuracy of stock lists due to hapless direction of supply concatenation. There could be multiple points that are involved within a rhythm of a supply concatenation procedure of a house that leads to overlook of stock list records. The extra stock list would besides happen while holding inappropriate computation of supplied stuffs in the supply concatenation, therefore doing a excess in the stock list that corresponds to higher supply concatenation cost of the house. Manufacturing companies that has a broad scope of operation tend to carry on supplies in an informal method to cut down work burden, but they do non expect the effects of holding extra supply. Furthermore, stock list system information in companies is studied as a sensitive portion of the procedure operation of the company that leads to both inventory loss and extra stock list. Most inventory system does non mensurate accurately the stock lists because of assorted and immense sum of supplied stuffs in a house, and at the same clip, larceny factor are non included in observing and analysing stock lists. There are little instances of vanishing stock lists that leads to a higher inaccuracy of overall stock list analysis, therefore reasoning to more loss and irrelevant costs for the company.
Another factor that affects stock list is the logistics of the stuffs in supply concatenation direction. Efficiency in logistics with proper information consequences to a better public presentation of overall stock turnovers and avoids extra stock list. A survey modelled a system of First-Use-First-Serve ( FUFS ) to which they use inventory system information where they allocate stock lists prioritising clip to a served location that requires the stock lists instantly, and it improves the steps of the stock list system. This system makes usage of extra stock list to reassign them to be used to another dealing and diminish the stock list at manus. In footings of stuff demand planning, which is the stock list order of a house from a provider, it conducts analysis of information taking to extra stock lists. This includes the frequence between orders, the location of mistake, and late units. These factors affect the overall stock list steps ensuing to mistakes taking to a higher job within the stock list system of a company. Furthermore, the mistake in location increases the transporting cost, but the material demand planning should be maximising within its intent of holding a more precise ordination for a company. The batch size order of a specific stuff affects the company ‘ s measurement analysis to holding extra constituents, therefore giving the company the option to bring on it to a concluding merchandise stock list and once more increasing the stock list at stock.
Other factors that contribute to extra stock list are low client demand, forecast mistakes, inaccurate stock list records like non able to track dual orders, insufficient planning and executing, long lead times in production, obsolescence, maestro agenda smoothing, distribution channel accommodations, alterations in stock list retention costs, and house ‘ s regular mercantile establishments or gross revenues squad have non done their parts good. Customer demand is the chief factor that has to be taken into history sing extra and disused stock list. The general director Judgess whether an stock list is extra and disused, while the finance individual analyzes the hazards, makes follow up programs, and assures that policies are followed. Inventory allowance is recommended for surplus and disused stock list. Furthermore, non being able to track dual orders greatly harm the company particularly its operations. Retailers and clients tend to be impatient in waiting for merchandises that require long lead times to bring forth which in consequence led them to hold multiple unreal orders from different providers or distributers. This so would do troubles in the fabrication houses when the retail merchants and clients cancelled their other extra orders, go forthing the house with unneeded stocks in production. The orders produced by the fabrication house so would be a waste as true orders are non able to concentrate on. Distinguishing true demand from dual orders would avoid overestimate of the demand rate, clients ‘ sensitiveness to detain, and extra stock list.
E. Solutions for Excess Inventories
In turn toing the job of extra stock list, alternate solutions have been presented and used in fabrication houses. Selling is an of import facet in every organisation. It is where the whole organisation ‘ s life is. Without gross revenues, the house would non be able to bring forth hard currency and survive. Having a good relationship with current clients is a good index of success in marketing the house ‘ s merchandise or services. However, holding strong clients now does non restrict one in happening and turning new clients. Marketing activities should be done on a regular basis. Firm ‘ s should reexamine and see adding new merchandise lines and cut downing those unprofitable 1s. Good selling happens when people get to understand the company, its merchandises or services, and holding them realized that the merchandises or services offered match their demands. Excess stock list can be sold to others internally or externally. Some ways are selling in sizes to a centralised settlement auction that maintain records and provides high returns, selling everything at an blink of an eye to a murderer, selling in little volume to a excess stock list murderer where returns from clients can still be sold, making an on-line history of selling extra merchandises, and donating the merchandises to the populace as charity that earn revenue enhancement tax write-offs from the authorities. Obsolete stock list undergoes technology reappraisal foremost to see if there would be other utilizations for it. Manufacturing companies can hold different attack on this recycling procedure of stuffs to complete goods. They can straight roll up used merchandises and finally dismantle them to do natural stuffs for the merchandise itself, transact with retail merchants that they are administering to, or to farm out a 3rd party to work for the aggregation of stuffs or used merchandises. In this theoretical account of supply concatenation, they could diminish fabrication cost because the used merchandises are of without value to other retail merchants or consumers but merely to the fabrication house. The direction should carry on quarterly analysis of the possible or possible extra stock list to be able to cut down stock list revelation when the 12months computation of extra stock list is made.
Datas assemblage for prediction had been an attack in finding future gross revenues or client demand. In the modern clip, fabricating environments require huge sums of informations in order to be every bit efficient as possible or whatever their ends possibly. Merchandise and procedure design, assembly, stuffs planning, quality control, programming, care, mistake sensing are merely some of the informations gathered for fabrication houses. All of the informations are stored in information warehouses. For some concerns, informations collected antecedently may assist find prognosis or future events. Furthermore, the creative activity of an independent group responsible for pull offing the consensus prediction procedure would be advisable as it besides manages the political struggle and informational and procedural defect by the organisational distinction more efficaciously. There are surveies and research of how to exactly calculate the market supply of fictile demands like plastic bags. It contains concern schemes along exportation and importing of these merchandises. It concerns about prioritising the planetary market, and it involves the dollar rates for those states. Manufacturers could utilize this planning to farther increase their market by using the inquiries informed by the research. The survey would sum up the attack on where should plastic be invested in footings of where the larger market are for them. It would demo the ingestion per twelvemonth and be used as a prediction tool for the wining old ages of fabrication.
Although there are many good alternate solutions presented in covering with extra stock lists, many makers are still tempted to travel for the simpler yet more of an irrational manner. Price cutting is non a wise and healthy scheme. It is merely allowing the consumers feel that the lone thing unique about the house ‘ s merchandises or services is the monetary value. It would go the lone consideration that they see in buying the goods and services offered by the company. Schemes that can be done are better or alone packaging, particular offers for top clients, holding the clients confused with trade names through price reductions and holding them settle with the company ‘ s trade name, and guaranting the clients of the purchase worth and good usage of the merchandise even if the monetary value is a small high. Having a publicity through monetary value film editing like heavy sale or price reduction would merely lasts for a short period of clip. Overall, it is still advisable that houses have to be after in front to avoid extra production. Inventory direction should be done sagely in every house.
Theoretical Model
Conceptual Model
Delivery Centre and Goods Collection Centre
-Order processing ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Transportation ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Warehousing ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
Supply
-Sourcing and procurance
( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Inventory direction ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Material demand planning ( Brown, K. , 1994 )
Sale
-Customer service ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Sales and information assemblage ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Promotion ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Demand Forecast ( Finreporting, 2011 )
-Pricing ( Yossi, A. , 2001 )
Production
-Production scheduling
( ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Product design ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Process design ( Choudhary, A. K. , Harding, J. A. , & A ; Tiwari, M. K. , 2009 )
-Quality Control ( Choudhary, A. K. , Harding, J. A. , & A ; Tiwari, M. K. , 2009 )
-Maintenance ( Choudhary, A. K. , Harding, J. A. , & A ; Tiwari, M. K. , 2009 )
-Fault sensing ( Choudhary, A. K. , Harding, J. A. , & A ; Tiwari, M. K. , 2009 )
-Research and development ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Product Remanufacturing ( Canan, R. , Shantanu B. , & A ; Luk N. , 2004 )
Merchandise
Order
Merchandise
Order
Seller
Clients
Figure 1: Self-management Delivery Logistics Mode ( Liu, Y. , Huang, J. & A ; Zhang, Q. , 2010 )
Logisticss Department
Here, the endeavor does logistics on its ain. This manner patterns self direction and is prone to lesser hazard. However, it increases the investing of the company as it places great importance through higher demands for logistics direction ability.
The Delivery Centre and Goods Collection Centre in the theoretical account represent a section or a individual who manages the orders and the flow of merchandises in the supply concatenation. The procedure starts with the endeavor telling natural stuffs from the seller, and it would provide the natural stuffs to the company to be placed in the Delivery Centre and Goods Collection Centre. The house so would utilize these supplies in the production procedure, and finished merchandises would be picked up at the Delivery Centre and Goods Collection Centre by the marketer or seller for sale. Customers so would order finished merchandises from the marketer, and the marketer would present the goods to them.
In the theoretical account, the pointers pointed to the right indicate the flow of stock list from natural stuffs up to being served or delivered to the client. On the other manus, the pointers indicating to the left represent the flow of information or order from the client or clients that is being sent to the provider by the organisation. The solid lines represent the flow of information every bit good as the information being shared by the section that is being gathered from all of the internal procedures of the supply concatenation. Furthermore, the broken line represents the feedback given by the clients to the organisation and passed to the providers.
The group chose this type of supply concatenation theoretical account because it is applicable and used by many of the Small and Medium Enterprises ( SME ) today in the Philippines. Besides, the theoretical account is simple and easy to understand.
B. Operational Model
Delivery Centre and Goods Collection Centre
-Order processing ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Transportation ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Warehousing ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
Cause: Supply CHAIN MANAGEMENT
Consequence:
Net income Margin
-Reduced extra stock list
-Reduced wastage
Figure 2: Self-management Delivery Logistics Mode ( Liu, Y. , Huang, J. & A ; Zhang, Q. , 2010 )
Logisticss Department
Production
-Production scheduling
( ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Product design ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Maintenance ( Choudhary, A. K. , Harding, J. A. , & A ; Tiwari, M. K. , 2009 )
-Fault sensing ( Choudhary, A. K. , Harding, J. A. , & A ; Tiwari, M. K. , 2009 )
-Product Remanufacturing ( Canan, R. , Shantanu B. , & A ; Luk N. , 2004 )
Supply
-Sourcing and procurance
( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Inventory direction ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Material demand planning ( Brown, K. , 1994 )
Sale/ Selling
-Customer service ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Sales and information assemblage ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
-Demand Forecast ( Finreporting, 2011 )
Merchandise
Order
Clients
Merchandise
Order
Seller
The independent variable or cause is supply concatenation direction. Under supply concatenation direction is a supply concatenation theoretical account with different activities under each division. They are mutualist with each other, and effectual direction of the whole supply concatenation would take to a positive relationship of the dependant variable, net income border. Effective supply concatenation direction would ensue in decreased extra stock list and wastage which in bend would automatically take to a higher net income border.
The activities listed under each division of the supply concatenation theoretical account are believed by the group as indispensable due to its relation with the job and aim of the paper ; nevertheless, there are some activities that are excluded such as:
Table 1: Activities Excluded in Operational Framework and its Reasons
Activity
Reason
Procedure Design ( Choudhary, A. K. , Harding, J. A. , & A ; Tiwari, M. K. , 2009 )
It is non applicable because fictile fabrication houses adopt one procedure merely of all time since.
Quality Control ( Choudhary, A. K. , Harding, J. A. , & A ; Tiwari, M. K. , 2009 )
It is hard to mensurate.
Research and Development ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
It is non applicable because research and development on plastics are non for concern major instead they are for Chemical Engineers.
Promotion ( Cooper, M. , Lambert, D. , & A ; Pagh, J. , 1998 )
It is non applicable because the fictile bag industry does non utilize advertisement schemes.
Pricing ( Yossi, A. , 2001 )
Internal monetary values are confidential and the company does non desire to portion any information about it.
C. Hypothesis
Effective supply concatenation direction positively affect the addition in net income border of Golden Dragon Plastic Manufacturing.
V. Methodology
A. Research Design ( schemes on how to garner and analyse pertinent informations to get at solution )
Initially, the group conducted a preliminary interview to happen out the chief job of the company. After holding told of the job, the group found reappraisal of related literature through secondary beginnings of diary articles in the cyberspace. Then, a conceptual model was besides found based on the reappraisal of related literature, and an operational model was formed out of it. The group made interview inquiries on each variable of the operational model. Finally, we would see the house to hold a better penetration of the whole operations and would carry on the interview to our respondent. The group so would analyse the information gathered and do decisions and recommendations.
We gathered informations on secondary beginnings of diary articles in the cyberspace for reappraisal of related literature and have found out some solutions for the job of the company. Then, an interview would be conducted to the existent company, and information gathered would be compared to the 1s on the reappraisal of related literature. The comparings and analysis made after would take us to decisions and recommendations for the job of this survey.
B. Respondent
Our respondent will be Michael King, proprietor of Golden Dragon Plastic Manufacturing. He is familiar and trades with the overall operation and gross revenues and marketing facet of the house.
C. Data Gathering Procedure
Measure 1: The group conducted a preliminary interview to happen out the chief job of the company.
Measure 2: The group found reappraisal of related literature through secondary beginnings of diary articles in the cyberspace.
Measure 3: The group found a conceptual model based on the reappraisal of related literature so formed an operational model out of it.
Measure 4: The group made interview inquiries on each variable of the operational model.
Measure 5: The group would finally see the house to hold a better penetration of the whole operations and would carry on the interview to our respondent.
Measure 6: The group would analyse the information gathered.
Measure 7: The group would do decisions and recommendations.
VI. Mentions
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Ifandoudas, P. , & A ; Gurd, B. ( 2010 ) . Costing for Decision-Making in a Theory of Constraints Environment. Journal of Applied Management Accouting Reserch, 43-59.
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Lin, C.-P. , & A ; Lin, H.-M. ( 2010 ) . Maker-buyer Strategic Alliances: an Integrated Framework. The Journal of Business & A ; Industrial Marketing, 43.
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Mendoza, A. , & A ; Ventura, J. A. ( 2010 ) . Proceedings of the 2010 Industrial Engineering Research Conference. Industrial Engineering Research Conference, 1-6.
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Cooper, M. , Lambert, D. , & A ; Pagh, J. ( 1998 ) “ Supply Chain Management: Execution Issues and Research Opportunities ” , International Journal of Logistics Management, The, Vol. 9 Iodine: 2, pp. 1 – 20
Liu, Y. , Huang, J. , & A ; Zhang, Q. ( July 2010 ) . Development Mode of Automotive Logistics and Optimizing Countermeasure of China ‘ s Automotive Enterprises. International Business Research, 194-200.
Gumrukcu, S. ( 2007 ) . Inventory Accuracy Improvement Via Cycle Counting in a Two Echelon Supply Chain. Retrieved March 8, 2011: hypertext transfer protocol: //0-proquest. umi. com. lib1000. dlsu. edu. ph/pqdweb? did= 1313914901 & A ; sid= 1 & A ; Fmt= 2 & A ; clientId= 47883 & A ; RQT= 309 & A ; VName= PQD
Kang, Y. ( 2004 ) . Information Inaccuracy in Inventory Systems. Retrieved March 8, 2011: hypertext transfer protocol: //0-proquest. umi. com. lib1000. dlsu. edu. ph/pqdweb? did= 1184153501 & A ; sid= 1 & A ; Fmt= 2 & A ; clientId= 47883 & A ; RQT= 309 & A ; VName= PQD
Wee, K. ( 2000 ) . Inventory Coordination in Supply Chain Management. Retrieved March 8, 2011: hypertext transfer protocol: //0-proquest. umi. com. lib1000. dlsu. edu. ph/pqdweb? did= 726064201 & A ; sid= 1 & A ; Fmt= 2 & A ; clientId= 47883 & A ; RQT= 309 & A ; VName= PQD
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Yossi, A. ( 2001 ) . The Effect of Collaborative Forecasting on Supply Chain Performance. Retrieved March 8, 2011: hypertext transfer protocol: //0-www. jstor. org. lib1000. dlsu. edu. ph/stable/822489
VII. Appendixs
A. Sample Interview Guide