Peanutty Food and company is a Brazilian company which is involved in business to business associations and supply of elements to large consumers (Chengbo, 2009). Its business is centred on making and supplying of ingredients made from peanuts (mainly) and other nuts (secondarily) to food companies (ibid). In addition, it provides services to food companies as regards to preparing food (ibid). It is a well-structured company with four departments which can be Research and Development, Creation, logistics and Management (ibid).
In spite of its significant growth rates as shown by the quantity of its operations and commitment to its customers, it is confronted with some challenges which are as follows:
- It has only one supplier which supplies its raw materials leading to the distributor having more bargaining ability over them.
- Comparatively low planting and development of peanuts when compared with other countries which have better competitive and comparative advantages
- Little bargaining electric power of peanutty over its customers
- No clear vision towards supply chain and future of the company
- Unbalanced hierarchy levels.
- Poor management anticipated to centralised (one person) expert.
Therefore, because of the above, this newspaper provides answers to the questions below:
- In terms of provider selection, managing company relationships and expanding sourcing strategies, what strategies should Peanutty's professionals try ensure the way to obtain raw materials because of its operations, while reducing the chance of stockouts or high development costs?
- What activities could be developed by Peanutty to lessen or manage the energy of its customers to minimize risks and improve profitability?
- Critically measure the benefit for performance way of measuring systems to this company?
- (Given the four regions of the company (R&D, development, logistics and management), choose ONE resource chain process and suggest a proper performance measure and rationale for your decision?
Supplier Romantic relationship Management (SRM) is described in line with the Institute of Source Management as '' a mutual commitment over a protracted time to work together to the shared benefit for both parties, sharing relevant information and the risk and rewards of the romance'' (Chengbo, 2009). It provides a perfectly consistent romance between a buyer and a supplier to help make the most use of the capabilities and resources for the best support that may be found in the marketplace.
Peanutty Food and company whose obstacle has been how to manage its relationship with its provider effectively, therefore needs to cultivate a seamless interaction with its supplier by following the steps below:
- Building Trust: The Bible says '' Two cannot walk alongside one another except they agree''. Trust is the petrol that will keep a relationship heading. It really is paramount in any society, organization, partnership or alliances. It is not merely being in contract but a common commitment between several parties as possible derived from the definition above. Thus, it is vital for peanutty to ensure that shared determination is enshrined in its provider relationship management. This permits peanutty and its company not only sharing information, but devoting time and resources to understand themselves which encourage the creation of goodwill in the long run (Wisner et al, 2008).
- Shared Eye-sight and Aims: Not merely should peanutty have a clear goal and objective but its supplier should have common knowledge of them (ibid). Supplier romantic relationship management becomes successful when all the lovers involved mutually agree to one another's goals and aims which form the basis of their romantic relationship.
- Personal Relationship: Peanutty professionals should stress more on the interpersonal relationships using their suppliers since communication among people is the vehicle that moves things in virtually any relationship or collaboration (ibid).
- Mutual Gain and Needs: To resolve the situation of Higher bargaining vitality of Supplier over Peanutty, there's a need for the business to be suitable in its needs using its supplier to be able to ensure a gain -win situation. Therefore, Peanutty needs to address the problem of their partnership with the cooperative population- Distributor to ensure they are also pleased with the bargaining reached in order to truly have a long lasting romantic relationship.
- Commitment and Top Management Support: There's a popular expressing that ''the bad person you know is better than the good person you have not seen''. Thus, Peanutty should dedicate the best people, resources to make its relationship succeed using its company (ibid). Wisner quoting from publisher Stephen R. Covey says '' without involvement, there is absolutely no commitment. Therefore, a high level of participation should be focused on Peanutty's partnership with its supplier which should begin from top management levels to ensure an effective collaboration (Wisner et al, 2008).
- Change Management: Handling change requires great effort (ibid). Peanutty faced with the task of reducing the stock out risk and producing at low costs must attempt global outsourcing for new suppliers while expanding and maintaining an improved relationship or relationship with its old time dealer. The suppliers can be sourced from USA due to its closeness or China because of its cheap labour and being the best manufacturer of peanut on the planet. With this situation of sourcing for new dealer, come some changes- new relationship, new agreements and new administration policies etc. , which may affect its goal or vision (ibid). Thus, Peanutty should be focused to its group of core principles that ought to not change whatever the situation (ibid).
- Information Posting and Lines of Communication: Communication is the life span wire of a relationship or collaboration. Whether formal or casual, Peanutty should ensure there's a free circulation of information in its collaboration using its suppliers since Trust and Confidentiality are extremely important to the success of its conveyance.
- Developing Relationship Features: Do the suppliers have the right technologies, employees and resources to produce the right products in line with the final consumer specs? Are they versatile enough to attend to changes in customer requirements? These questions are very important and the answer to them, are the acid test that can determine whether a supplier meets the necessity or not. Therefore, Peanutty should ensure that its suppliers meet its customer requirements to assure a long enduring romance with them.
- Performance Metrics: There's a great dependence on Peanutty to evaluate its partnership shows with its suppliers putting into consideration quality, costs, delivery, and versatility of the alliances or human relationships. The evaluation system shouldn't only be grasped by both get-togethers but also should be easy to measure and directed to the purpose of the partnership. Thus, by performance steps, loopholes are diagnosed and stuffed there giving way for continuous improvement over time. Continuous improvement is lots of related small improvements which gives go up to the reduction of waste over time (Chengbo, 2009).
Customer Marriage Management corresponding to Joel D. Wisner et al is ''the infrastructure that permits the delineation of and increase in customer value, and the correct means by which to motivate valuable customers to remain loyal- indeed to buy again'' (Wisner et al, 2008). The school of thought that says, Customers are always right is very important and really should be enshrined in every activity of a business.
Customer Relationship Management is more than simply developing a software application for its going, it is treating customers of a business well, developing and maintaining an extended -long-term and profitable with customers, and also producing an interpersonal marriage with customers every once in awhile (ibid).
Peanutty, may be confronted with challenges of high bargaining electric power from its customers as a result of any of the followings (Recklies, 2001):
- Their customers may buy in large volumes
- The quantity of the offering industry is large but of small operators
- The industry where Peanutty belongs may operate with high set costs
- The capability of the customers to produce the products
- The products might not exactly be strategically important to the customer
However, judging from the above, there is a need for Peanutty to create a stronger customer marriage bottom to ensure it manages the bargaining electric power and maximizes its success as they are examined below:
1. Customer Romance Management Role: Peanutty should seek to be a good value-enhancing supplier to its customers by outsourcing once and for all suppliers, expanding them and preserving a win-win romantic relationship using its old time customers; keeping a good distributor itself and making sure that its customer have what it will take- reputations and capacity to represent and meet with changing likes of last consumers or end-users in the market (Chengbo, 2009).
2. Following a Key Tools and Component of Customer Relationship and keeping to them adeptly in the next ways:
- Segmenting the marketplace or customers: There's a need for Peanutty to set up customers into categories in order to create a much better communication system about its products (ibid). Doing this permits Peanutty to know very well what the customer wants, and the possibility of participating in to different kinds of target marketplaces to conserve a lot of costs preventing the business from annoying its customers (Wisner et al, 2008). Also under focus on marketing efforts, we've Marriage Marketing which permits customers to choose whether to be mailed information or not (ibid). Peanutty can also use Combination Selling solution to sell additional products to its customers scheduled to a youthful purchase of such products by its customers (ibid).
- Predicting Customer Habits: If Peanutty could understand the buying behaviours of its customers, it might be at an effective position to anticipate their future behaviours which enables it to forecast the products its customers are likely to buy and purchase (ibid). Because of this, Peanutty can plan ahead by looking at its policies according to its costing, discounts and offers in order to fine-tune it to meet its aim for customers' requirements and therefore decrease its cost over time (ibid). A far more useful form of CRM that is a part of this category is Customer Churn which is also known as Customer Defection Research (ibid). Peanutty can use this as a way of minimizing customer defections. Just a little improvement in keeping customers can have a greater increase in the profits of Peanutty (ibid).
- Personalizing Customer Communications: Knowing who your customers are, their needs and how they behave allows you to modify marketing communications that suit the needs of your target customers (ibid). Forms of personalise marketing which can used by Peanutty are Clickstreams and Event-based Marketing. These permit Peanutty to create some revenue.
- Automated SALES TEAM Tools: That is a tool used for taking details of field activities, getting information across the home office, recreate past sales occasions and taking other company records that are specific (ibid). Peanutty may use this to control the sales details of its customers whether on the field through its office at home or work at home opportunities and movement of information through its sales people in order to create a more accurate and timely decision making thus improving the company potential to service its customers' requirements (ibid). Some of the documents that fall under this category are Sales Activity Management, Sales Territory Management and Knowledge Management (ibid).
- Customer Service Capacities: That is an essential requirement of CRM initiatives. It stresses that the right product should be produced at the right time in the right quantity, in the right condition with the right place for the right customer and lastly at the right cost (Chengbo, 2009). Peanutty should think about the aforementioned and maintain it as its Seven Rule if it really would like to ensure a good relationship using its customers and make its customers glued to it with a high degree of trust, confidentiality and commitment thus leading to managing the energy of its customer. Under this category are Call Centres Service, Information Scripting and Website Personal Service.
3. Making and Implementing a Successful CRM Program: The steps below should be implemented:
- Creating the CRM Plan: This calls for setting the aim of the program, its suitability with the corporate strategy of Peanutty, its software, substitution of existing method, employees requirement and the period and cost of implementation (ibid).
- Involving CRM users from the outset
- Selecting the right program and provider
- Integrate existing CRM application
- Establish Performance Measures
- Providing CRM Training for any users
Performance Dimension System can be an evaluation system of a couple of parameters an corporation uses to displays its programs, investment and acquisitions to learn whether they are get together its strategies or not (Wikipedia, 2009). In addition, it helps them to know if they're focusing more on results than behaviours or not.
- Peanutty can evaluate the product quality, cost, delivery of the merchandise that were provided to end user through its food manufacturers.
- Have a better understanding of versatility of the suppliers Enhance the performance of the SC for both inbound and outbound logistic
- Evaluate the performance of the suppliers(cooperatives) and the business itself
- Develop and make better supplier communication and enhance SRM
- Minimize risk in conditions of quality, cost, time and service.
- Make opportunities available for constant improvement.
- With this performance measurement, the Peanutty employees are trained and they'll have the entire information about the strategic goals.
- Because Performance Way of measuring concentrate on results, rather than behavior, Peanutty's professionals can utilise this by calculating the performance of its employees by concentrating on their efforts towards adding value to the organization (result) alternatively than behaviour.
- Bring into right position, organizational activities and techniques of reaching its goals.
- Peanutty can know whether it's interacting with its customer requirements or not through Performance Way of measuring. Because of this, it can manage the power of its customers.
- Through Performance Dimension peanutty can improve both its customer and suppliers marriage management, and make smarter its relationships using its employees. PM also enables it to know how this is done.
- Problems of bias, endurance of hide and emotions are often made known and fixed as a result of PM.
Given the four areas of the business (R&D, creation, logistics and management), choose ONE resource string process and suggest an appropriate performance measure and rationale for your decision?
Logistics is the fact that aspect of source string process that plans, executes and manages the efficiency and efficiency of both ahead and reverse move and storage of goods and services and other information that may have any bearing between the point of origins and the idea of consumption for the intended purpose of meeting certain requirements of customers (Wikipedia, 2009).
It is a very important and sensitive area in Peanutty because it handles the warehouse, importation and exportation of inputs and outputs, sales, internal and external distribution, alternative party materials and development delivery. Thus, it plays an essential role in Peanutty's business strategy therefore of the followings
- It will put peanutty at a competitive advantage over its competition therefore of necessary skills gained overtime in delivery velocity, stability, responsiveness and low priced distribution (Zacharia, 2004)
- Untimely delivery scheduled to poor logistics brings about poor sales and therefore lack of customers.
Therefore, because of the above, the choice of appropriate performance strategy depends upon the range of products of peanutty, its development, capacity utilisation and most notably, its delivery link. An increase in the performance of these characteristics brings about possible reduction in costs, on time delivery, increased stability, advanced of dependability, versatility, and therefore customers' satisfaction. The purpose of a supply chain should be how to create value for his or her customers most importantly end user or consumer of something. It is thus in this regard that the Performance Steps here are being advised to be appropriated to the source chain procedure for peanutty relative to World Class Performance Strategy (Wisner et al, 2008):
- Chengbo, W. (2009) '' Supply Chain Design, Integration and Strategic Issues'' Lecture Records offered in November, 2009 to MSc. Operations and Business Management category, Glasgow Caledonian University, Glasgow.
- Recklies, D. (2001) '' Porters 5 Pushes'' January 1 2010. Available online at www. themanager. org/Model/p5f. htm
- Wikipedia (2009) '' Performance Dimension'' January 3 2010. Available online at en. wikipedia. org/wiki/performance_management
- Wisner, J. et al (2008) '' Guidelines of Supply Chain Management'' USA: South Western
- Zacharia G, Mentzer T. (2004) ''Logistics Salience in a Changing Environment'' Journal of Business Logistics. January 4 2010. Available online at en. wikipedia. org/wiki/logistics_management