PSC 495 Business Proposal Project Summary

PSC 495

Internal Business Proposal

Executive Summary

This business proposal is to offer a potential solution to the problem which the organization is facing with its inventory management system. At present the company is facing issues related to inventory because enough inventories are not available at times and this happens due to delay from suppliers’ end. This finally affects the production process of the company and thus, the delivery to the customers.

This paper discusses the purpose and the problem statement to clearly state the condition of the company and how exactly this issue affecting the company’s progress and sales. This is shown by the statistical records in the chart shown in the problem statement section. Further this report discusses the data and research findings about the previous efforts that were made by the company to resolve this issue. However, those didn’t work well. This report proposes the top three problem solutions with their graphical depiction to resolve the issue in a best possible way. The report also discusses the effects of the solution to the stakeholders of the company and which of the stakeholders will be benefited the most by this solution. Following the stakeholders analysis, the report discusses the change management plan which will be regarding the implementation of the proposed solution into the company. This proposal report provides the implementation methods for the solutions so that the company resolves the issue successfully. Finally, the report discusses the success evolution plan to determine the specific measures for evaluating the success and further ends with conclusion providing specific steps you would like key stakeholders and sponsors to take in the implementation of the proposed solution. There are several charts in the report to show the results of findings statistically and for better understandings of the proposed solutions.

Purpose Statement

The reason for composing this business proposition is to determine the recognized issues in the inventory management of the organization and creating potential solutions for that issue. The organization is confronting a major issue with its stock administration as the conveyance of crude materials from the suppliers’ end is more often postponed and with no accessibility of the crude materials the organization is not ready to finish its requests on time. This proposition comprises of the information discoveries which delineates that the organization is confronting tremendous misfortune in its benefits because of ill-advised stock administration. Thus, the organization needs to take some serious steps towards resolving this problem.

Problem Statement

A manufacturing company can only function well if it manufactures its product on time and deliver them to the end consumer whenever they require it. The complete good will of a company depends on its sincerity and commitment to the consumers and delivering the product on time may ruin this good will. Further if the consumers are unhappy, there will not be any more orders and no more new consumers leading the company towards a loss. This may be the result of lack of essential raw materials and inventory items with the company as it will delay the process of manufacturing. This lack of essential raw materials and inventory could be due to delayed supply of raw materials from the suppliers and requires great attention of the company to be resolved fully. Therefore, there should be a better relation of the company’s management with the suppliers and the communication process between them should be carried out frequently. This will enhance the process of faster delivery of raw materials whenever needed by the company.

The accompanying chart demonstrates that how the organization was not able expands its production in the previous five years because of the inaccessibility of the raw materials, store units, spare parts and so forth. The diagram likewise demonstrates stagnation in the production development of the organization which has nearly stayed same for as far back as five years. A few times organization has confronted the issues with this inaccessibility of various items required at the season of assembling and this accounts that the suppliers deferred the conveyance from their end.

This unavailability of raw materials and required inventory at the time when the orders are to be completed, leads to operational loss and distrust of the customer (Cachon & Fisher, 2000). Further, it leads towards the loss of good will in the market and the company may lose certain number of customers.

Data and Research Findings

A research was conducted on the 50 individuals of the company to know their views about the previous solutions which were earlier implemented to resolve the issue. The people chosen for the interview included the management individuals, department managers and the employees from each department. This survey was done by asking the individuals a set of questions to which they had to answer in yes or no. The results of the findings are given in the graph below.

The information in the above graph demonstrates the rate of the people who trust that the past arrangements were agreeable. The information unmistakably speak to that people were unsatisfied with already implemented arrangements. They think that the past arrangements were not sufficiently viable to keep up the administration quality for the clients. There is additionally the solutions of past arrangements that were completed in the previous 5 years to determine this issue demonstrated as follows:

Efforts were made by changing the suppliers and working with new suppliers

The logistics solution of the suppliers were monitored for efficiency and different routes were analyzed

Different communication methods were tried within the company

Suppliers were asked to deliver the raw materials just in time

The above arrangements were executed beforehand in the organization yet no effective changes were gotten in the benefits and the conveyance postponement of the crude materials from the suppliers’ end still proceeded. Additionally, the representatives of the organization were likewise not fulfilled by the execution of these proposed arrangements and they trust that past arrangements were not practical, neither demonstrated any huge development.

Proposed Solution

Following are the proposed solutions which can be used in order to improve the inventory flow.

Building Strong Communication between the suppliers and the company’s management

Communication plays an essential role in bringing any change in the organization. Suppliers are not able to supply at time because of lack of flow of information between suppliers and management of organization. So, focusing on improper communication channel, building strong communication between both the parties would be a good solution.

Using Proactive Approach

It would be good if the management of organization is following a proactive approach rather than a reactive approach. With Proactive approach, the situations are created such that inventory issues never arise. It is opposite to reactive approach in which solutions are found after meeting the problems. What management should do here is to ask suppliers for early delivery. If suppliers delay in delivery of raw materials, inventory management has sufficient time to control the process.

Developing a strong internal process to manage the supply chain effectively

Poor internal process also creates imbalance in inventory output and raw material supplies. Developing strong internal processes will make the supply chain work effectively as each of the participants will work according to the plan. Strong chain of command will force everyone to produce output within time. Anyone not responding within time will be spotted easily. A sense of responsibility is necessary to be developed. The advantage of this approach is that there will not be any issue of unavailability of raw materials as there will be a backup always.

Stakeholder Analysis and Benefits

The stakeholders of the organization are management staff, customers, suppliers, vendors and others. The issue of delay of delivery affects each of the stakeholders of the organization. Because of the delay in delivery process, employees are not able to give their best performance. Also, the customers are not satisfied with the organization. Suppliers are not delivering on time, which is the major issue of the problem. Earlier implemented solutions did not pleased stakeholders. Stakeholder realized that those solutions did not affect the quality process to a much extent. The delivery system was not improved after adopting these solutions. Quality is the first need of the customers and it was not achieved after the implementation of the earlier proposed solutions. Currently proposed solutions are considered as appropriate solutions by stakeholders. They are finding them best fit in order to improve the selected issues. They considered communication gap as the main issues for the delay in process.

Implementation of effective communication channel will be improving the system and will work effectively according to the need. Supplier will be getting into touch of inventory manager of the organization by following the communication channel. In this way, they will deliver the raw material at accurate time without any delay. If the raw material is delivered on time, then all other processes will also be on time. Proper management of inventory will affect rest of the processes as inventory operation is the first and last step of entire processes. Employees of the organization will be most suitable sponsors of the change process. Employees will first be given introduction about the changes and then they will understand the need of change. For example, getting the need of improved communication channel, they will involve themselves into the system and bring the automatic change.

The most affected stakeholders will be suppliers. They will have to manage their delivery process to align it to inventory of organization. If organization require raw material, then suppliers have to process the request as soon as possible. If the organization does not need raw material, in that case, suppliers have to wait until inventory is reached to its optimum level. Entire change will be made in the delivery process of the suppliers and organization will be affected only in inventory related activities. Coordination among the suppliers will also be a major issue. To maintain the optimum level of inventory, it is essential to manage the suppliers accordingly. If the material is required in excess, then more than one supplier will be asked to process the request and in another case, only one or two suppliers are to be contacted.

Talking about the obstacles of the change, suppliers will be the major ones. Employees of organization may show change resistance but through the effective training sessions, they will get themselves involved in the process. But, suppliers are not bound to follow the protocols of the organization. So, organization has to think about the processes which will bind them to follow a common pattern. Legally, there are certain things, which can be used to do so.

Change Management Plan

In order to implement the solutions proposed in this report, it is essential that a proper communication management plan is developed and followed in the organization. However, this communication implementation may require some change into the organization and thus, managing that change is very essential for the success of the plan. The following change management techniques can be implemented to develop a successful communication with the suppliers and resolve the issue:

Employee Buy In

Often the change in the organization is resisted by the employees. Thus, the change managers need to properly communicate with the employees and help them understand the need of change to the organization. The following steps are essential to implement the employee buy in:

Lay out the vision of the change
Personalize the tasks
Get them prepared for the change
Follow up
Become aggressing to handle the resistance to change

The change managers need to be sure that whether the employees who are brought in for the change are affected by the others or not and considering this factor, the managers must decide regarding the resistance to change (Tucker, 1993).

Methods to address Employee resistance to Change

Firstly, it is necessary to reinforce the change in order to address the employee resistance. Thus, employees need to get motivated and this can be done by developing performance management and the good compensation plan for them. This will create interest of the employees into activities of change as they will be appraised for being its part. Employees show resistance if they feel that there are no benefits from the change, so if they will see good compensation offers to fulfill their needs they will get attracted towards participating in the change process (Stanley, Meyer & Topolnytsky, 2005).

Communicate to the Employees

The change managers must prepare a solid communication plan to communicate the change needs with each of the employees. The intensity of resistance to the change will be high if there is no such appropriate communication plan. As communication plan and change resistance are closely related and both executes in parallel so it is necessary they run together for better change in organization. The managers can also use “Face to Face Interview” with the employees to get a sincere and true feedback from them about the change (Stanley, Meyer & Topolnytsky, 2005).

Implementation Methods

To ensure the vitality of the business, it is highly required to maintain good purchasing practices with suppliers of the organization. The first thing in this regard will be good purchasing practices using communication protocols. Management has to make sure that the channel responds from both the sides. Suppliers should actively participate into the communication process. Effective communication can be established using the following steps-

Making no delay in communication will be effective as delay causes carelessness. Suppliers should be brought in the communication as soon as possible. Sooner they are in, better will be the delivery process.

There must be objectives set by management so that suppliers are known about the needs of organization.

The process of communication should be a continuous process. Regularity creates habits. Suppliers, who are in regular touch of organization, will assume delivery process as their responsibility.

In Today’s age, technology is spread widely. Communication can be better supported with the aid of technology. Suppliers can be engaged with the organization more effectively if they are using advanced tools of technology.

Do not create only one way communication. Taking feedback from the suppliers will also be good for the improvement process. Suppliers will be telling their difficulties in order to improve it. Management will take certain decision according to the feedback of stakeholder to give them best support.

Utilizing above steps will ensure that communication enhancements, etc are implemented thoroughly. Management need to engage suppliers in each of the major activities of organization so that they can feel themselves as part of organization.

Evaluating Success

Evaluating success of a problem solution is very essential and necessary to determine whether the proposed solution will be beneficial for the organization or not. Also it helps the organization to overcome any drawbacks in the proposed solution at an initial stage and then easily overcome that drawback leading towards a successful organizational change. The following are the two specific measures that will be used to evaluate the success of the problem solution:

Identify and Document the activities, indicators and outcomes to be evaluated: In order to evaluate the success of the proposal, it is necessary to identify and document the activities, indicators and the outcomes. The activities will be necessary to provide the intended outcomes and can be a direct service or information for the participants. The indicators acts as a measurement for the progress of the solution proposed and will calculate to whether or what degree will the program progress. The outcomes achieved needs to be consistent and reasonable so that they can be accomplished ideally (Baccarini, 1999).
Access the Quantity and Quality of the achievements of the proposed solutions: The collected data can be categorized into quality and quantity information. Generally, the quality measures represents the activities of the program and achievements from a narrative view point, whereas, the quantity measures are representation of activities and achievements of the program from a numerical view point. Both are essential to evaluate the success of the program and determine as well as document the effectiveness of activities and achievements of the program (Baccarini, 1999).

Conclusion

After evaluating the actual problem behind the delay of raw materials for manufacturing, it would be appropriate that a better communication plan is set up between the suppliers and the organization’s management. The stakeholders and the sponsors need to follow the implementation methods to implement the proposed solution successfully. These implementation methods are necessary as they will set an early communication with the suppliers and help the company to track the orders as well as document each and every order to the suppliers. The organization also needs to bring this change into its system as for speedy communication, technology needs to be used. Thus, a technological setup must be build inside the company to bring speedy communication within the organization and with the other stakeholders, including the suppliers.

References

Baccarini, D. (1999). The logical framework method for deﬁning project success. Project management journal, 30(4), 25-32.

Benavides, L., De Eskinazis, V., & Swan, D. (2012). Six steps to successful supply chain collaboration. Washington: CSCMP’s Supply Chain Quarterly. Retrieved February 10, 2016 from http://www.supplychainquarterly.com/topics/Strategy/20120622-six-steps-to-successful-supply-chain-collaboration/

Cachon, G. P., & Fisher, M. (2000). Supply chain inventory management and the value of shared information. Management science, 46(8), 1032-1048.

Carr, A. S., & Kaynak, H. (2007). Communication methods, information sharing, supplier development and performance: an empirical study of their relationships. International Journal of Operations & Production Management,27(4), 346-370.

CSCO insights, (June 2011). Five Strategies for Improving Inventory Management Across Complex Supply Chain Networks. Chief Supply Chain Officer Insights. Retrieved February 10, 2016 fromhttp://www.scdigest.com/assets/reps/exec_brief_network_inventories.pdf

Prahinski, C., & Benton, W. C. (2004). Supplier evaluations: communication strategies to improve supplier performance. Journal of operations management, 22(1), 39-62.

Prell, C., Hubacek, K., & Reed, M. (2009). Stakeholder analysis and social network analysis in natural resource management. Society and Natural Resources, 22(6), 501-518.

Simpson, P. M., Siguaw, J. A., & White, S. C. (2002). Measuring the performance of suppliers: an analysis of evaluation processes. Journal of Supply Chain Management, 38(4), 29-41.

Stanley, D. J., Meyer, J. P., & Topolnytsky, L. (2005). Employee cynicism and resistance to organizational change. Journal of Business and Psychology, 19(4), 429-459.

Tucker, J. (1993, March). Everyday forms of employee resistance. In Sociological Forum (Vol. 8, No. 1, pp. 25-45). Kluwer Academic Publishers-Plenum Publishers.