Business Plan for Slow Wing Research Proposal

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Inventory Management Strategy. In his book, Streetwise Project Management, Dobson (2003) advocates the use of a just-in-time inventory management strategy to keep inventories low and manufacturing process more productive. This approach, though, will require close coordination with a Brazilian supplier, warehousing operations, planners and forecasters, and transportation directors throughout the inventory management process. In this regard, Epps (1995) advises, that such an approach requires the efficient transportation of materials from outside vendors directly to the work-in-process area, where the required value added processes of the manufacturing operations take place, which is followed by the shipping of the finished products to the customer within a reasonable timeframe. This inventory management strategy can save manufacturers the costs of inspection, stocking, material handling, inventory tracking, carrying the inventory, and the dangers that are typically related to damage to parts and their tendency to become obsolete over time (Epps).

The just-in-time inventory management strategy has become a performance management technique that endeavors to complete the process right the first time and to avoid any non-value added activities that will detract from the company's profitability (Epps). According to this analyst, "The time a part is delayed, moved, or inspected is referred to as non-value added time. It is waste time because no value is created for the customer when the product is not being processed. Under the JIT concept activities such as moving parts, waiting for parts, machine setup, and inspection are referred to as non-valued added activities. Inefficiencies in production cause non-value added activities" (Epps, p. 40).

Inbound and Outbound Transportation Strategy. The inbound and outbound transportation strategy to be employed in the company's secondary operations in Brazil will by necessity need to be supportive of the just-in-time inventory management strategy described above. Fortunately, compared to some of its neighboring countries in South America and the Organisation for Economic Cooperation and Development (OECD) countries, Brazil's costs and procedures required for importing and exporting a standardized shipment of goods are highly competitive but are slightly higher in some cases than other South American and OECD nations as shown in Table 2 and Figure 2 through 6 below.

Table 2

Costs and Procedures Involved in Importing and Exporting a Standardized Shipment of Goods: Brazil 2009.

Indicator

Brazil

Region

OECD

Documents for export (number)

8

6.9

4.5

Time for export (days)

14

19.7

10.7

Cost to export (U.S.$ per container)

1,240

1,229.8

1,069.1

Documents for import (number)

7

7.4

5.1

Time for import (days)

19

22.3

11.4

Cost to import (U.S.$ per container)

1,275

1,384.3

Figure 1. Documentary Requirements for Exports from Brazil vs. Region and OECD.

Source: Based on tabular data in The World Bank Group, 2009.

Figure 2. Time Required for Exports (Days) from Brazil vs. Region and OECD.

Source: Based on tabular data in The World Bank Group, 2009.

Figure 3. Average Cost to Export (U$ dollars) per Container from Brazil vs. Region and OECD..

Source: Based on tabular data in The World Bank Group, 2009.

Figure 4. Documentary Requirements for Imports from Brazil vs. Region and OECD.

Source: Based on tabular data in The World Bank Group, 2009.

Figure 5. Time Required for Imports from Brazil vs. Region and OECD.

Source: Based on tabular data in The World Bank Group, 2009.

Figure 1. Average Cost to Import (U.S. dollars) per Container Imports from Brazil vs. Region and OECD.

Source: Based on tabular data in The World Bank Group, 2009.

It should also be pointed out that the International Maritime Bureau has issued advisory warnings concerning the territorial and offshore waters in the Atlantic Ocean from Brazil as having a significant risk for piracy and armed robbery against ships; to date a number of commercial vessels have been attacked and hijacked while at anchor as well as when they were underway and their crews robbed and stores or cargoes stolen (Brazil, 2009).

Warehouse/Distribution Center Strategy. Some of the features that Slow Wing would want in a warehousing service in Brazil include the following:

1. Security: controlled access; guard services, fences, surveillance, closed-circuit television; alarm systems.

2. Adequate floor load and ceiling capacities.

3. Weather protection and temperature control.

4. Adequate lighting and sprinkler system.

5. Adequate dock facilities and support equipment.

6. Empty pallet storage facilities and trash disposal area.

Product segregation capabilities (e.g., commodities, food grade, chemical, pharmaceuticals, etc.) (Bolton, 1997).

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Outsourcing/3PL Strategy. The company would be well advised to enlist the services of a third-party logistics provider to facilitate the movement of goods into and out of Brazil in support of its secondary operations base envisioned herein. According to a report from Business Wire (2007), "Global manufacturing companies are striving to improve their supply chain efficiencies with improving global trade, diversified geographical operations, and adoption of the outsourcing route. These manufacturing companies require global services, relationships, and technologies that only larger third-party logistics (3PL) firms can provide" (Outsourced 3PL market, p. 1). By outsourcing this function to a Brazilian third-party logistics provider, Slow Wing would benefit by avoiding the pitfalls that will inevitably occur for those unfamiliar with being "on the ground" in a foreign country. The more sophisticated nature of the just-in-time inventory management approach recommended herein will also require close logistics integration that can be provided by outsourcing this function to a knowledgeable third-party logistics provider with experience and expertise in the Brazilian marketplace (Gelinas & Bigras, 2004).

Customer Relationship Management. In the not-too-distant past, customer relationship management was a labor- and time-intensive enterprise that required elaborate record-keeping and data analysis in order to discern meaningful trends and develop timely responses to them. Today, though, innovations in technology have provided companies of all sizes and types with the ability to perform customer relationship management (CRM) operations effectively and efficiently. In this regard, Ragins and Greco (2003) note that, "Emerging technologies offer companies the potential to improve their ability to attract and retain customers, capture more information through the online channel than through any other customer contact point, and practice effective CRM" (p. 25). Such information collected by the secondary operations located in Brazil can be used in a variety of ways by Slow Wing to augment its current CRM function, but it would be important for both headquarters to employ the same or compatible CRM applications for this purpose to help coordinate data analysis and develop appropriate responses to shifts in consumer demand and to identify current and future trends.

Supply Chain Integration. Although the authorities do not provide a universal definition for this term, a useful definition provided by Lummus, Vokura and Krumwiede (2008) indicates that, "Integration is a process of interaction and collaboration in which manufacturing, purchasing, and logistics work together in a cooperative manner to arrive at mutually acceptable outcomes for their organizations" (p. 56). Therefore, the objective of developing an integrated supply chain between the U.S. headquarters of Slow Wing and its secondary operations in Brazil would be to eliminate all constraints to the seamless flow of material, cash, resources, and information needed to achieve our organizational goals and support the just-in-time inventory management approach described above. As Lummus and her associates emphasize, better integrated supply chains result in improved organizational performance.

Performance Management Strategy. According to Lindholm (1999), "Performance management (PM) is a strategic HRM process that enables the multinational corporation to continuously evaluate and improve individual, subsidiary unit, and corporate performance against clearly defined, preset objectives that are directly linked to company strategy" (p. 45). Generally speaking, performance management seeks to emphasize the communication of organizational goals throughout the organization and its suppliers and usually a formal performance evaluation as well as informal performance feedback concerning the progress being made toward organizational objectives (Lindholm).

In an increasingly globalized marketplace, it is not surprising that a growing number of researchers have examined issues such as the impact of national culture on performance management objectives in cross-cultural settings. These cross-cultural differences are referred to as the "psychic distance" that exists between the national cultures of the organizations involved (Evans & Mavondo, 2002). According to these authors, "There is a negative relationship between psychic distance and organizational performance [which] is attributed to the fact that psychically close countries are easier to learn about and understand" (p. 515). The United States and the United Kingdom, for example, share a high congruence of cultural dimensions defined by Hofstede (2009); by sharp contrast, there are some significant incongruities between the national culture of the U.S. And that of Brazil as shown in Figure 1 below that will inevitably increase the psychic distance involved in doing business with Brazilian suppliers and warehousing vendors (definitions and description of the five cultural dimensions are provided.....

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