Abstract
The Tug-of-War case exemplifies the key managerial problems that business executives have to deal with in their bid to create successful and profitable operations. Faced with numerous challenges, Voici Brands have to find a way of overhauling its supply chain operations as the processes have proved to be ineffective, at least compared to its major competitors. The company has been experiencing a decline in sales, majorly due to inefficiencies in delivering the products to the market and frequent stock-outs. As a result, there is an urgent need to overhaul these operations.
The problems facing the company emanate from both internal and external forces. Internally triggered challenges accrue due to the company’s decentralized operations where each unit operates as a standalone. On the other hand, the problems resulting from external forces include increased competition and the need to implement economical operations. Key alternatives that the company may consider to address the issue comprise implementing an integrated supply chain, adopting an incremental and gradual change, and adopting a togetherness approach. This paper recommends an integrated supply chain approach as the best solution to Voici’s challenges.
The Tug-of-War Case Brief
Background
After finding itself in the middle of numerous challenges, Voici Brands have to implement the strategies necessary to streamline its operations. Over the last few years, the company has experienced a sharp decline in sales due to supply-related problems such as stock-outs and late deliveries. Meanwhile, Marquise, Voici Brand’s major competitor had significantly consolidated its operations, hence boosting its bottom line (Sheffi, 2005). Marquise has outsourced its products from the ‘supply Chain City,’ which is more efficient. As a result, Marquise was able to reduce the time taken to make deliveries as well as avoid stock outs.
Voici Brands CEO, Jack Emmons, realized that there was a need to steer a complete overhaul of the company. However, his company was too centralized to achieve this goal easily. The company was comprised of five key business units, all of which operated differently each with their own suppliers, legacy, and management. The unit heads would not just sit down and watch their efforts of creating reliable and stable supplier relations and other key business processes in their sections washed away due to supply chain integration. Nevertheless, Jack opted to appoint a supply chain head who would oversee the desired changed in the procurement and logistics operations (Sheffi, 2005). However, this was not easy as the CEO had to make a choice between hiring an aggressive outsider, Ravi, and a Voici veteran, Tony, who lacked the necessary experience in supply chain consolidation.
Key Problems
Voici Brands is facing numerous problems that are affecting the company’s desired level of efficiency and profitability. Essentially, these problems can be categorized into two: those arising from the external environment and others emanating from the internal environment. Regarding the external environment, Voici Brands is facing stiff competition, majorly from Marquise, a company that seems to have got it right concerning efficiency in supply chain operations. Additionally, Voici’s inability to take its products to the market within a shorter time and frequent stock-outs have resulted in a decline in sales.
Internally, Voici Brands faces a serious problem that emanates from its decentralized operations. Each unit operates as a subsidiary, with its own autonomy. As a result, it is becoming difficult to create a uniform supply chain strategy that can help the company eliminate its bottlenecks. Evident from the case is also a possibility of power wrangles and political pressures that may lead to reduced organizational cohesion. With each unit head having an autonomy, conflicts may be unavoidable. Jack is also faced with a challenge regarding who to appoint for the position of a supply chain czar.
Alternatives
To address the problems that Voici Brands are facing, Jack can consider a number of alternatives available. The first option is to implement an incremental change as opposed to an instant overhaul in the supply chain operations. This would entail changing the business gradually (Flynn, Huo& Zhao, 2010). For instance, the desired change can be implemented in one of the business units and then can be moved to the other units once it proves successful. The advantage of this approach would be a reduced risk of failure.
Another alternative available is to integrate the supply chain operations. This would involve consolidating the different supply chain operations in the business units. A key advantage that would arise out of such a move is increased efficiency and reduced cost of operation. However, there is a risk of loss of control by the unit heads. Similarly, Jack can also opt for a togetherness approach where all business heads will be involved in creating strong and efficient supply chain operations. This would involve soliciting the ideas and opinions of unit leaders and managers in processes such as setting targets and communicating the business objectives to the employees. An advantage of this approach would be reduced resistance and increased cooperation. However, such an approach would be slow in terms of execution.
Recommendation
Having considered the possible alternatives available and the situation at Voici Brands, the best option would be to implement an integrated supply chain. This would entail creating an environment that allows everyone to work together in order to achieve a common business objective (Flynn et al., 2010). Essentially, it would call for information sharing and consolidation of the different processes involved in the supply chain. Currently, each business unit has adopted its own processes, a fact that sees some delays in some of the company’s core operations. The overall effect is to have the company processes rendered ineffective. If the information is shared between all the units, such bottlenecks could easily be avoided. Similarly, functional integration would ensure that each department in the company works together to reduce operational costs. Information technology would also play an important role in the implementation of the supply chain integration.
References
Flynn, B. B., Huo, B., & Zhao, X. (2010). The impact of supply chain integration on performance: A contingency and configuration approach. Journal of operations management, 28(1), 58-71.
Sheffi, Y. (2005). The Tug-of-War. Harvard Business Review, 39-44.