4.2 LOGISTICS
This is the management of inbound materials and outgoing product/ finished goods which involve activities such as ordering of materials, production scheduling, inventory control, product allocation and transportation, end-user support, etc.
In order to achieve all these effectively, adequate measures have to be put in place and the use of Supply Chain Management Tool administered at the company’s headquarters in Japan will be an ideal way out as it will have accurate information. This tool is best launched as an extranet, i.e. a collaborative network that uses internet technology to link businesses with their suppliers and customers.
The extranet will serve as a form of electronic catalogue/ database where every aspect of running the supply chain from ordering of materials, invoicing, arrangement of delivery time, return of products, tracking and payment are made – it also gives an easier indication of stock level. The working pattern of the extranet is attached in Appendix 2.
The added benefits of the extranet include the use of uniform terminologies, avoidance of variances, under-charging, over-charging as well as other system and inventory errors that could have occurred at any level of the supply chain.
4.3 COMMUNICATION
Communication is the flow of information at every stage within this supply chain – this can either be at the pre-assembly stage i.e. flow of information between the suppliers and the assembly plants or post-assembly stage including feedback from the end-users. The extranet facilities used for logistics can also be used as an essential communication tool; it can be programmed to trigger notification to the next chain of event for every task carried out and requesting confirmation when such trigger is received.
4.4 STOCK-LEVEL MAINTENANCE
Effective maintenance of stock level is crucial as it will in many cases determine the smooth running of the business. It compensates for the difference in timing between supply and demand (Slack et al, 2004).
Reasonable, stock held at any point in time should be sustainable for a complete cycle inventory, that is, if it takes three weeks to completely assemble/transform the PSU, then there should be corresponding material that can be used for up to three weeks in stock.
The company can as well adapt a multi-stage inventory system, scheduling different components to arrive just-in-time (i.e. as at when needed) - this can be achieved by using material requirement planning and control. This will lead to fast throughput manufacturing, and minimise cost of stock storage.
4.5 CAPACITY MANAGEMENT
The company is targeting an initial sales figure of half a million units for the first six months of sales, hoping this will rise to four million units a year after two years. With a forecast target like this, the company should put in place strategies that will help them cope with the forecasted increase in demand and also the capacity to increase production.
As the product is the first of its type, there is a possibility for the demand to outweigh the forecast. The company must put in place measures that will enable them to cope with higher demand as may be required otherwise they will lost on substantial market share.
4.6 MATERIAL HANDLING, TRANSPORTATION AND DISTRIBUTION
The movement of products within and from the assembly plants to various locations has to be well-planned. The use of fleet transportation from individual plants can either be in-house, outsourced or mixed with factors such as budget, or technical capability playing a major role.
In most cases, the handling of cargo for sea transportation will be outsourced but the logistics need to be well calculated so that products will arrive at reasonable time to their destinations hence Ulstar Plc must ensure it has detailed information of shipments relative to location, size and frequency.
There are instances that will require having a break point in transportation service area between where the two assembly plants (Thailand and Mexico) can use common carrier(s) or fleet as this will be a significant transportation savings in many practical cases.
4.7 TRACKING
The extranet will be an effective system to use to track down movement of materials and product and to confirm delivery of such. Correct identification of material and documentation must be done at every stage of material handling to ensure such are delivered rightly.
4.8 CONTINGENCY PLANS
These are the action plans that will be followed in the case of major incident that can cause disruptions or uncertainties such as natural disaster, terrorism or tragic accident to minimise loss of lives and property.
Decision-making at such period must be precise and well coordinated. This in some cases might involve evacuation of people, closing down of facilities, or moving such to a different location.
On the logistics side, adequate back-up plan must also be in place. This could include having hoard storage of stock/materials for se on raining days such as in event of natural mishaps like earthquake or hurricane. They can also map out a substitute transportation route and/or modes that will be used in case of such events.
Post-disaster recovery to facilitate continuity of operations may be in the form of change of work pattern or transfer operation in the affected part of the chain elsewhere.
5.0 END-USER SUPPORT
The determination of the project director is to build a reputation for the company to have the best customer support. They must therefore put in place adequate support systems for the end-users of the product – this avenue will be used to gather feedback, give assistance on resolving any problem(s) end-user may have with the product, hence working towards good customer satisfaction (Wikipedia, 2006b). Some of the support systems are detailed below.
5.1 USERS’ MANUALS
Publication of a good users-manual that comes with the product at time of purchase will be necessary. The manual should explain the basics of how to operate/use/troubleshoot the Personal System Unit and should also have simplified diagrams illustrating all these basics as the manual will be the first ‘point of call’ for customers who might require help with the product.
5.2 CUSTOMER SERVICE HELPLINE
It will be ideal for the helpline to be operational round-the-clock, with charge-free phone number (i.e. at no cost). For the UK market, a 0800- number will be ideal for those calling from landline. Also there should be a free number that can be dialled directly from mobile phones.
The helpline will be of two accessibility levels where customers’ queries can be answered – these are the first-line and technical levels. All incoming calls will be treated as first-line and only very few calls that cannot be successfully dealt with at this stage will be forwarded to the technical call centre. The staffs of the call centre (in-house or outsourced) must be provided with scripts that have as many answers to possible case-scenario.
Waiting time spent by customer must be minimised as much as possible and advanced technologies such as call-back service should be adopted; this will be of particular benefit during peak period.
5.3 ONLINE HELP AND E-MAIL SERVICES
A well-laid out website with adequate simulated Frequently Asked Questions and possibly with animation of some of the simple operation methods will be ideal for this type of product.
A recent research by Transversal Research concluded that online help and response time to email by sent by customers to most telecommunication companies is poor (Transversal, 2006). Ulstar Plc will have to work hard to avoid falling into this same statistic category.
Adequate effort should be made to ensure that the usability standard of the website is good. Also, the website should have link for customers’ feedback and optional email facility for cases when customers want to give detailed feedback or ask question(s) via email. All contacts made by customers must be acknowledged promptly and should be acted upon or noted for necessary action(s) to be taken.
5.4 IN-STORE HELP
The various retailers’ outlets selling the products serves as representatives of Ulstar Plc one way or the other, hence they must be available to give assistance of high level to customers.
Workshops and road-shows will have to be organised to train staff members of distributors and retailers so as to ensure they have first-hand level of information and know-how about most aspect of the system and also ensure that answers to well-detailed technical and non-technical questions are well scripted, as most end-users will be getting in touch with them directly.
5.5 POSTAL CONTACT
The company should have a postal address where written communications (feedback or complaints) can be sent. It will also be a way questionnaires enclosed with the product at the time of sale can be returned. In cases when products might have to be returned, appropriate measures should be put in place for the couriers-service collection or alternative registered mail to avoid such getting lost in post.
5.5 RETURN POLICY
There are various reasons for which a customer might want to return a product – this can range from the product being defective to personal reason(s) by customers. There are many laws and regulations that have to be adhered to in terms of customers’ statutory rights. For customers of the product in the UK, the company must ensure it adheres to the Sale and Supply of Goods to Consumers Regulations 2002 (HMSO, 2002) - it stipulates a number of guidelines that have to be followed in terms of cooling off period.
Also, customers of the product within the European Union, by law, have the right to withdraw from the purchase of an item within seven working days of the day after the date the item is delivered (Eur-Lex, 2006).
The return policy should be hassle-free as this will be one of the major factors that can frustrate more customers to stop using a product or service (Transversal, 2006). Product still within warrantee period can be exchanged for a new one, except the customer insists on having the returned product repaired in cases where there is cherished information stored on the system.
6.0 QUALITY MANAGEMENT TECHNIQUES
Every good product in the market, no matter how successful it seems can be improved one way or the other, the PSU is not an exemption to this. Though the product is a new concept, a range of quality management techniques can be used to ensure the product is a step ahead of any forthcoming rivals.
6.1 CONTINUOUS IMPROVEMENT
The management of the company can adopt this technique by consistently looking for simple and small ways in which the product can be enhanced. This can be in the form of simple cosmetic change to the shape of the product, introduction of more colour ranges, reduction in the weight of product – this type of improvements might look insignificant but their impacts on output performance in term of sales will reflect how beneficial such is.
The improvement/enhancement has to be introduced in a reasonable time scale perhaps quarterly or bi-annually, except when absolutely essential. If vivid improvement changes are being made too often, it might result in giving a wrong impression to customers.
These types of improvement will continue in a cycle of four stages i.e. Plan, Do, Check and Act (PDCA Cycle) – the company plans a change aimed at improvement, execute the change, study the change to see how effective it is and implement (or possibly) abandon the change.
6.2 TOTAL QUALITY MANAGEMENT
This is a technique where an organisation gives commitment to develop a process that achieves high quality product and customer satisfaction. (Stevenson, 2005).
Ulstar Plc can adapt this approach by:
- Finding out exactly what the customers want by conducting interviews, surveys, questionnaires and any other tool that help to involve the customers’ voice in the decision process.
- Designing process that will facilitate doing the job right the first time; determining where mistakes are likely to occur and trying to prevent them.
- Designing a product of quality that will meet or possibly exceeds the specification customers are expecting in terms of appeal of brand.
- Extending the concept of “quality at the source” to suppliers e.g. suppliers should provide components that meet specifications. In effect, everyone involved in the chain becomes quality inspector working towards meeting best-possible quality standards.
7.0 QUALITY ASSESSMENT TOOLS
These are tools used to identify problem area within a supply chain. Three assessment tools that Ulstar Plc can implement to control and identify possible defects in the supply chain are:
7.1 CAUSE-EFFECT DIAGRAM
This tool, also known as fish-bone diagram, is used to identify and isolate all possible causes for a particular effect such as short-fall or defect. The diagram acts as one of the steps taken towards solving a problem. After all the possible causes have been listed, comprehensive study will then be made to narrow down the list until the actual cause can be identified and rectified (Muhlemann, 1992).
The problems are identified by asking the what, when, where, how and why, and adding some possible answers in an explicit way.
The example above analyses the possible causes of a ‘faulty 4G-chip’ through the cause-effect diagram – the problems are categorised into five broad areas. Solutions can be sought by tackling these problems from the root.
7.2 WHY-WHY ANALYSIS
This analysis is used to structure brainstormed ideas towards problem root causes.
This analysis is effective in identifying the problems faced by 4G technology and shows the lapses in some of the areas that should have been looked into during the manufacture of the product.
7.3 PARETO DIAGRAMS ANALYSIS
Having a range of issues that could have caused a problem can lead to confusion as to which one should be sorted first. Using Pareto Analysis, however, can help resolve this type of situation as the principle behind this tool stipulates that problems rarely have equal impacts, and it is best to start by sorting the problem that looks most threatening.
To have a credible Pareto diagram, it is important to have a statistic detailing the trend of individual cases of problems. In the case of this report, we do not have a real-life data and have home simulated some problem to produce the Pareto diagram below.
The Pareto diagram above has been used to highlight the effect of various problems, in their order of rated importance.
8.0 REFERENCE
Dilworth JB, (2002). Operations Management – Providing Value in Goods and Services. 3rd ed. Orlando: Harcourt College Publishers.
Eur-Lex, (2006). The Portal to European Union Law [online]. The European Union Commission. Available from: [Accessed on 25 October 2006].
Fitzsimmons J. and Fitzsimmons M, (1998). Service Management: Operations, Strategy and Information Technology. 2nd ed. New York: McGraw-Hill.
HMSO, (2002). The Sale and Supply of Goods to Consumers Regulations 2002 [online]. Office of Public Sector Information. Available from: [Accessed on 25 October 2006].
Huczynski, A. and Buchanan, D. (2001). Organizational Behaviour – An Introductory Text. 4th ed. London: Prentice Hall.
Muhlemann A., Oakland J., Lockyer K., (1992). Production and Operations Management. 6th ed. London: Longman Group UK Ltd.
Slack et al., (2004). Operations Management. 4th ed. Harlow: Pearson Education Ltd.
Slack, N and Lewis, M, (2002). Operations Strategy, 3rd ed. London: Prentice Hall.
Stevenson W, (2005). Operations Management. 8th ed. New York: McGraw-Hill.
Transversal, (2006). Press Release - No Answer from Telcos' Customer Service. Transversal Research. Available from: [Accessed 26 October 2006]
Waller DL, (2003). Operations Management: A Supply Chain Approach. 2nd ed. Int. Thomson Business Press.
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Wikipedia, (2006b). Customer Service [online]. Wikipedia; the free encyclopaedia. Available from: [Accessed 13 October 2006]
Worthington, I. and Britton, C, (2003). The Business Environment. 4th ed. Harlow: Pearson Education Ltd.
9.0 BIBLIOGRAPHY
Academic Services. 2004. Citing references [online]. Bournemouth University. Available from: [Accessed 25 October 2006]
Brown, S., Mcdowell, L. and Race, P., 1995. 500 tips for research students. London: Kogan Page
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APPENDIX 3 - GROUP LOG
