“Custom Building Your Dreams”

Posted on July 14, 2012July 15, 2012 by nicholasw301s12

Elkhart, Indiana is the heart of the Unites States “RV Country,” and is home to HL Enterprise, the premier manufacturer of park trailers, travel trailers, and 5^th wheels. The company began in 1986, when industry experts Mel Hyman and Peggy Flager founded the company, but then decided to retire in 2006 and sold Evolve Capital. Evolve Capital pushed the company into financial ruin in 2011 and the two previous owners, along with a new partner, Randy Hoff, repurchased the assets and rights to the product name in order to again bring success to the company.

HL Enterprise has a strong customer-centric focus with the idea that “H L understands what you want…and our goal is to build your dreams.”

“Their park trailers are somewhat similar to the traditional Hy-Line product lines, but with many new upgrades, Hoff explained. “The triple slide trailers feature island kitchens, Corian countertops, thermopane patio doors, cherry wood cabinets and all-tinted windows. Most of what we’re doing now is dictated by the market,” Hoff said. “A lot of the interiors are more plush and there is more of a residential appeal in construction. We also went to a higher ceiling. It’s no longer a travel trailer (84-inch) ceiling. Now it’s a 96-inch ceiling.”

With 32 production line employees working out a 2 building, 35,000 square foot factory, this small business works hard to roll out 4 trailers daily are a retail price starting at $30,000. The new owners, who are actually the founders, are now working hard to bring the company back to the success that it once was.

“We’re doing a lot of damage control from the previous owners,” Hoff said, without elaborating. “We didn’t buy the liabilities, but we’re working with the dealer base and customers in trying to restore their confidence.”

Recently, the company has gone global with a dealer base in 40 states, along with Canada, England, and Australia; currently the company is also looking to create operations in China!

I found the three attached articles to be very interesting because it completely focused on moving the company back into the direction of their original goal. Creating a quality product that is desirable to the customers, while making an adequate profit. Yet the Evolve Capital did not follow through with this goal, and in turn failed.

Do you think that most ownership companies are truly knowledgeable about the products that they are producing, or are they just hungry to acquire and build capital? Also, how do you think the company evolves, no pun intended, when a new management team takes over and does not hold true to the original idea of the company or corporation? It appears that stories like this seem to repeat themselves constantly in business, including Dell, Starbucks, Apple, and so many others.

http://www.rvbusiness.com/2011/02/former-hy-line-owners-repurchase-assets/

http://www.hylinetrailers.com/about-hyline.html

http://www.hylinetrailers.com/pdfs/RVB%20HyLine_Page%2026.pdf

Intake of Lexapro Medication Linked to Birth Defects

Posted on July 14, 2012July 14, 2012 by jenniferre301s12

Welllbutrin Lawyers Handling Birth Defects Cases

The effects of consistent and continuous intake of medications containing selective serotonin-reuptake inhibitors, such as Lexapro, has been tested for various side-effects. Recent tests have shown a significant correlation between such medications and the number of newborn children born with pulmonary hypertension for medicated patients. While this these statistics do not pertain directly to seller’s risk or buyer’s risk of the manufacturing company of Lexapro and the intermediaries, which sell this medication directly to the public, these statistics do relate to the seller’s risk and buyer’s risk of the manufacturing company of Lexapro and the genreally medicated public, respectively.

Past a certain rate of occurrence, or once the correlation between the intake of medication containing selective serotonin-reuptake inhibitors and any resulting birth defects similar in nature to pulmonary hypertension in children of prescribed patients have been proven to significant enough, the drug control agency of various governments will mostly likely restrict or ban the sale of Lexapro and similar medications.

In order to determine an acceptable rate of occurrence or statistical correlation, many of the same mathematical procedures demonstrated in our assigned readings will be utilized in the process of that determination. Buyer’s risk, seller’s risk, and statistical process control are all mathematical procedures likely to be utilized. Theories covered in our assigned reading, such as sustainability, will also be considered in the process of determination for the various drug control agencies and judicial systems likely to be involved in this case. Specifically the regulation and reputation components of the sustainbility theory will be considered, not only for the manufacturing company of Lexapro medication and the like, but also for the respective drug control agencies likely to be involved in this case. What is most important to note in my posting, in my opinion, would be that the theories and procedures described in our text and during our class sessions, do not only pertain to management operations considerations of specific companies, but they also pertain the considerations of various governmental agencies and individuals, which themselves often operate as a company and operations manager, respectively.

http://www.timesunion.com/business/press-releases/article/Lexapro-Investigation-Reveals-Severe-Side-Effects-3698320.php

http://www.lexaprobirthdefectslawsuits.com/

Home Depot Margins Higher Now Than Before Housing Crash – Thanks Logistics!

Posted on July 11, 2012 by kathrynb301s12

After over 30 years in business Home Depot admitted their supply chain processes were not a priority for many years. The main priority was expanding the business. When the housing market crash began in 2006 they knew they had to shift their focus. As Home Depot CEO Frank Blake explains, “A downturn is a terrible thing to waist.”

Most Home Depot stores are large warehouse stores with ample extra room for inventory and storage, but they began opening smaller stores in smaller markets that could not hold the same amount of inventory. This lead to stock-outs and unhappy customers. They realized it was time they completely changed their supply chain processes starting with centralizing operations by rebuilding their distribution process. Before 2006 only 30% of the orders were store-centric, while managers made 70% of the orders. The transportation model had its own similar shares of changes to be made. They started with the construction of 24 new rapid deployment centers located throughout the country, each would serve about 100 stores. These facilities were to be flow-through facilities for quick cross-docking and little storage. The RDCs allowed their products to be shipped with 24 hours of arrival now. Currently, one third of the RDCs are built and being used. Home Depot is already seeing the benefits.

It seems Home Depot may have chosen the perfect time for their restructuring because now that their new processes are beginning to run the housing improvement and construction markets are growing. Home depot’s margins increased 35%, net income for the fourth quarter increased 32%, and sales rose 6%. Ms. Tome, the chief financial officer of Home Depot, claims the restructuring of their supply chain processes is the reason for these large increases.

Home Depot is not only the leader in the improvement industry, but is the second largest retailer in the country, second to Wal-Mart. Can we expect to see greater growth as the last two thirds of their RDCs are implemented? How can other retailers learn from Home Depot’s changes?

http://topics.nytimes.com/top/news/business/companies/home_depot_inc/index.html

http://www.dcvelocity.com/articles/20090801verticalfocus/

When Forecasting Goes Too Far

Posted on June 21, 2012June 23, 2012 by scottc301s12

I, like hopefully some of you, am a huge basketball fan. Of course the early exit from the playoffs by our beloved Chicago Bulls was demoralizing, but I still find myself glued to the television and often cheering or cursing the players on screen during the current NBA final series. While right now the Oklahoma City Thunder is down three games to one against the Miami Heat in a best of seven series, I have been listening to a great deal of sports talk radio over the last two days and most everyone is saying the same thing… because no team in NBA history has come back to win a championship when down three games to one in the finals, Miami is going to win.

This sounds like forecasting gone too far.

Simply because something hasn’t happened before doesn’t mean it wont eventually happen. No one can possibly know the outcome of the future, so why should we even try to predict it?

This makes me think about how some companies, especially start-ups, may have an extremely difficult time coming up with initial sales forecasts. Who could have predicted things like the meteoric rise in demand of products from companies like Apple and Microsoft, or the rapid decline in domestic auto sales years ago? According to MaRS, a Canaidian consulting firm, initial forecasting of sales is paramount to a strong start in a new business venture. http://www.marsdd.com/articles/sales-forecasting-for-start-ups/ For a company to be able to properly allocate resources to things like distribution and storage of finished inventory, accurate sales forecasting can have a major impact on a company’s bottom line. Forecasting sales too tentatively could cause a great deal of lost potential revenue whereas too strong a sales forecast can result in major expenses related to the excessive production. This leads to what in my opinion is an interesting debate over what type of forecasting method to use, but also how much weight should you assign to those forecasts?

As we enter the final minutes of the NBA final’s games five, I have a feeling that in this case, the forecasting consensus may be right. Congratulations Miami.

Central question: Knowing that even the most accurate and thoughtful forecast could be completely inaccurate, how much stock should be put into its creation? What are some instances where forecasting is crucial? When is forecast simply unimportant?

References: “MaRS Discovery District.” Sales Forecasting for Start-ups. N.p., n.d. Web. 21 June 2012.

The Yellow ‘Post It’

Posted on May 31, 2012May 31, 2012 by tariqa502

The yellow ‘post it’ on the fridge read, “Tariq, Don’t forget to buy Milk”. I felt annoyed with my mother that I had to use creamer again in my
morning coffee. Running out of food in the home is bothersome. However, running out of supplies in manufacturing or large retail outlets can be very costly and may even ruin good, honest reputations.

For me, learning about Inventory Management in class and in further reading prompted questions in my mind about the importance of good Stock Control. I mean, who really pays proper attention to the subject until (like me) they see that supplies have run out and normal production is hampered or even stopped? Well the answer to that is the Inventory manager. Using very sophisticated ‘post it’ systems, his/her job is to ensure that all the parts and pieces are available at any time during normal operations to allow business to keep moving whether in manufacturing, retailing or any operation which involves simple or as in most businesses, very complex supply chains.

In my company SABIC, inventory is key. Lack of critical operational components would result in millions SRs in Gas losses. Recently, I took time to quiz the Inventory Manager about the challenges he faces in keeping good stock. I won’t explain here how the system works; rather I will deal with some of the challenges and I will try to add a few thoughts and solutions of my own.

The primary goal of Inventory Management in my work place is twofold:

To ensure availability of spare parts for process and safety equipment.
To do all this at the minimum purchase cost. (Inventory % costs unknown)

Using a super sophisticated SAP Inventory Management system with all the ‘bells and whistles’ there are still (a) several factors which do affect a planned lead time and there are some (b) special challenges which lie outside the powers of SAP to deal with.

Factors related to Lead Time.

The critical nature of spare parts
Sources of spare parts, local or outside Saudi Arabia
Country of origin and shipping methods
Clearing customs and delivery

Since spare parts procurement is subject to a critical ABC Analysis, I suggest three additional changes:

To factor into the ABC analysis a ‘spare parts depreciation table’. Knowing when the most critical process/safety parts need to be replaced in advance their expiry date would generally increase chances of their future availability.
Stock cheaper, inferior but easily (locally) available substitute spare parts to be used in the absence of preferred products. (i.e. Using creamer instead of milk).
Pay extra money to use procuring agents to source and tender for highly critical spare parts.
Swap, barter and buy spare parts collectively with other SABIC companies to reduce purchase costs and increase even further the chances of spare parts being available.

Special Challenges

Non- Availability of ready-made spare parts for custom specifications.
Delivery Failures attributed to Suppliers.

For special challenges, my solutions are as follows:

First, use SAP Inventory to source companies that make or can make and deliver reliable custom made parts. Contacts can be had through the
machine/operations (machine needing the parts) manufacturing company or possibly a competitor company using a similar technology.

Second, communicate actively and fully with tardy supply companies to have them understand the critical nature of their products. Begin
with and maintain goodwill. Escalate the relationship with disappointment, distain and even possible punishable future sanctions.

Finally

In my work place, replenishment lead time is dogged by delivery delays. Improvements need to be in more precise forecasting and knowing well in advance what the product demands are. Proper analysis of historical SABIC purchase records combined with carefully calculated projected usage and mindfulness of corporate needs would in my view, help our Inventory Manager to acquire and maintain a proper assortment of spare parts while the ordering, the shipping, the handling, and inventory costs can be kept well under control.

However, before I start advising an industrial giant on inventory, let me begin with a few polite words with my mother about yellow ‘post its’ and how she plans in future to buy milk.

References

Etihad Airways modernizes approach to inventory management.

Posted on May 20, 2012June 8, 2012 by yousifk502

Amadeus, a global leader in technology for the travel and tourism industry, and Etihad Airways, the Abu Dhabi-based National Airline of the United Arab Emirates, announce that they have successfully implemented Amadeus Altéa Inventory for the airline. Adoption of the new generation IT solution strengthens Etihad Airways’ capacity to maximise revenue on every seat.

Ali Saleh, Head of Revenue Management, Etihad Airways, said: “Etihad has added 37 new destinations in as many months. When expanding so rapidly it is critical that we have the latest IT platform in place to support our commercial objectives. We have migrated our core systems without any interruptions and we could not have achieved this major milestone without Amadeus’ precision planning and excellent execution.”

Etihad Airways is using Amadeus Altéa Inventory to manage inventory control, schedule changes, passenger re-accommodation, special service requests and yield management functions. The airline’s improved decision making capabilities will allow it to increase yield and reduce its operational costs.

Frédéric Spagnou, Amadeus’ Vice President, Airline Business Group, commented: “Amadeus is committed to helping all airlines to implement their business strategy in the most efficient and flexible way and to manage their operations in a secure IT environment. We are very pleased with our partnership and joint effort with the Etihad team, which has enabled a very quick and fully controlled migration.”

The very smooth migration project, which took only 9 months from project kick-off to cutover, is part of a wider IT modernization program for Etihad which includes adoption of the Amadeus e-Ticket Server and interline e-ticket functionality, Departure Control System and the online booking engine to power the airline’s commercial website.

Etihad is one of 28 airlines across the globe that has selected Altea CMS, the industry’s only next generation IT platform for passenger management. Currently Altéa Reservation is used by over 150 airlines to power their sales and reservation functions and Altéa Inventory has been adopted by leading airlines including British Airways, Qantas and Finnair.

This is a very unique and value-adding system, can you think of any other systems within the airline business that will increase efficiency on the airline’s part and promote better customer service?

Forecasts vs. rumors

Posted on May 20, 2012May 20, 2012 by Ali Almahdi

Corporations like Apple, Samsung and Motorola; we hear rumors about them all the time. Like Apple with the iPhone 5, and Samsung with the new S3 and Motorola with the new Atrix 3.

I still can’t forget when everyone I know didn’t buy their iPhone 4 waiting for iPhone 5 and they were disappointed with the iPhone 4s. And now, the same thing is happening, people who are about to upgrade their phones and didn’t buy the S2 saying they’ll wait for the new Galaxy S3 and or iPhone 5.

Since I am obsessed with technology, and I keep up to date by buying the latest gadgets in the market. And while doing this course, during class when we were talking about product cycles and inventory management, I began wondering. At that very moment, I remember when I was thinking in my own world, when my teacher asked me a question that I didn’t pay attention to, and I had to ask her to repeat the question again. It was about the product life cycle and how short it is with technology.

Then during class, we started looking at the forecasting time horizon, during this part of the discussion; I was wondering what is their forecast period? Short?

We move on to the forecast methods, and during that very specific part I was trying to see which method they could possibly use? I know as the Professor said, forecasts are seldom perfect. However, they need some kind of forecast to keep the inventory right.

Immediately two blog posts of my colleagues came to my mind. First, Car dealerships with zero cars to sell. Corporations like Apple and Samsung do not want to be like those dealerships.

Second, Why Guess When You Can Forecast?

I quote from my colleague post:

“The mistake our team made was to purchase the product inventory from manufacturing companies without accurately forecasting the demand for those products.

The result? We ended up with far more inventory than we could sell. Food products are perishable; their expiration deadlines are much shorter than for other consumer goods. As those expiry dates approached, a considerable percentage of the inventory we had bought was wasted in our own warehouse. Needless to say, the company suffered some heavy losses.”

I think those corporations deal with this situation very frequently, in fact, the news of the S3 affected the iPhone 4s sales in some regions specifically in Bahrain. I do not have data to back my theory but I have seen this happening.

I wonder how does corporations like Apple deal with those rumors? How can they forecast the demand on the existing products when there is a rumor about a new product? I believe those corporations are living on the edge with their products and forecasts. They probably calculate the risk and add it to the product price to cover the forecast loses? I don’t know. But I can tell you this, it must be really hard.

To Order or Not to Order?

Posted on February 2, 2012July 3, 2012 by hiram301

Inventory management is something that does not sound that difficult to manage but it is one of the most crucial processes a business, whether small or big, needs to worry about. There has to be an optimum point where a firm can know when and how much to order. Many people think that they can order too much in advance and avoid shipping cost but this would be a bad decision for the business. What people do not realize is that sometimes the storage cost of the inventory far exceeds the shipping cost.

So what happens when a firm orders too little? The biggest problem most firms face is inadequate inventory to fulfill consumer demand. A big business can lose a huge order if they do not have inventory to fulfill the requirements where has a small business such as a small retail store can lose a customer if they do not have enough inventory. Economic Order Quantity helps businesses find the optimum level where they can order at the lowest cost.

This is extremely important because inventory is an asset on the balance sheets and also appears on the income statement. Like the professor said, it’s better to hold more assets in cash than in inventory. There have been many instances where I walked into a store and walked out disappointed just because what I wanted was not in stock. Some businesses can get affected by it but some don’t. For example, I walked into Dunkin Donuts and ordered an egg and cheese on a croissant but the employee told me they were out of croissants. It did not keep me from going there next time. On the other hand, a store that I went into for the first time did not have a size in a dress that I had liked. They were even out of the size for my second option. I remember that I did not go to that store again.

One company that I think would consider inventory management as one of their most crucial processes would be Wal-Mart. A store which has such a high turnover would need extremely efficient inventory management techniques. Wal-Mart follows JIT process because they do not like to hold inventory and like to avoid backorders. A company has to be quick and efficient to manage JIT effectively. I have never had inventory issues when I have walked into Wal-Mart.The link to an article below talks about their zero-tolerance policy on late shipments and their JIT process of inventory management.

Inventory management is extremely important and something we all should remember when or if we are running our own or even someone else’s business. Have you ever been disappointed because of poor inventory management?

Operations and Project Management in Today's Competitive Environment

Extending our classroom to the world!

12 Inventory Management