Supply chain Management at Safe Cleanings Case Study Solution
The case illustrates the supply chain management practices and bottlenecks at the Safe Cleanings pvt Limited that operates in the cleaning market by offering different home cleaning products like phenyls, glass cleaners and furniture polishes, while it also offers insecticides killers for home use. In the particular category the company offers toilet cleaners, mosquito spray, coils and fragrance paper for toilet and rooms.Safe Cleaning has its operations expanded globally, with the main concentration in US, Middle East and Asia. It develops separate brand strategy for each region and establishes the distinct supply chain network according to the local internal and external forces. The company produces the cleaning products and distributes in the market through relationship with suppliers and distributors, however, such relationship is always exposed to some bottlenecks, and safe Cleanings faces such deadlocks in its Asian region that hinders the smooth flow of supply chain, leading to lag behind the competition in the Asian Markets. The biggest competitor of the company are Johnson&Johnson, which competes with the Safe Cleanings in the same category with same products, along with Pfizer which offers somehow the same category products.
Supply chain Management and Distribution network Strategy Harvard Case Solution & Analysis
The case discusses the issues of the company under six categories, (1) Procurement process (2) Competitive bidding and negotiation (3) Price & cost analysis (4) Quantity& inventory (5) E-Procurement and (6) Supplier Development and offers a unique set of strategies and recommendations that could help Safe Cleanings to resolve the bottlenecks of Supply chain Network.
Keywords: Supply chain Network, Safe Cleanings, Procurement Process, E-procurement, Supplier Development
Issues
Safe Cleanings have a long and extensive supply chain network globally, yet it faces certain management and procurement issues in the Asian regions which is effecting its sales forecast and demand fulfillment in the particular market, making it lose sales in each season consistently and continuously. The main issues Safe Cleaning faces is the adaption of right supply chain strategy whether to adopt made to order strategy or use season demand forecast to make the product. Since the sales in summers exceeds the overall sales of the year, the company faces issues in meeting the demand for the product due to non-availability of the products in the market at the need of time.
In addition, the supplier network or distributor’s network is not well established in the particular Asian regions and have the monopolized system of distribution, making the company helpless to reach the market at the right time, due to high dependency on the big giant distributors.Also, most of the big distributors are already in contract with Pfizer and Johnson&Johnson, and prefers its products over Safe Cleanings due to extensive reads and long term relationship.
Lastly, the company faces problem in maintaining its inventory that causes to sometimes over inventory holding cost and sometimes the shortage of finished inventory that cause it to fail the market demand, making it lose the sales and market share in a particular period.
Operating Environment
Company’s Background
Safe Cleanings is a used based cleaning organizations, started back in 1988.Over the period of time it expanded its operations in US by selling the cleaning products through Sobeys, Amazon,Walmart and other physical malls present in the US regions.The main regions of Safe cleaning in US were New Jersey, New York and California, where the life style and density of population (target market) aligned with the company’s business strategy.Over the next few deceased Safe Cleanings expanded the operations outside US in Indonesia, Africa, Brazil, Spain, Middle East and Asia.It identified the key regions on the basis of poverty ratio, climatic situations and national income of the country to customize its products in different sizes to cater the market. Also the company entered into the above regions by identifying the market fragmentation in the particular industry, which gave it the opportunity to capture good sales and Market share.
Safe Cleanings operates successfully in the other regions by developing the strong supply chain network and lead the markets, However in the Asian region, the company fails to develop strong distribution network due to strong distributor should , late entry in the market and ineffective supply chain strategies, making it to lag behind in the competition.Also, some external factors like political and economic issues also hinders the company’s strategy in developing strong market position.Since J&J and Pfizer are already offering the cleaning products and insecticides in the market with strong brand awareness and brand positioning along with strong distribution network, Safe Cleanings faces the deadlock in entering and holding the market due to weak supply of products and demand supply equilibrium in the market.
Competition
Safe Cleanings faces the direct competition from Johnson and Johnson and Pfizer products. The company lags to build strong brand awareness and supply chain network due to inability to develop the supplier relationship and distribution network. Since Johnson& Johnson holds the maximum market share due to its well-known brand Mortein (in insecticides) Safe Cleanings product fails to undercut the competition from its offerings in insecticides killing segment.
Pfizer’s leads the market in the phenyl and floor cleaning segment through its strong distributors and supplier relationship. The company has its own factory in each region along with the self-opened distribution network which offers it the competitive advantage in maintaining the distribution cost and supplying the product in each leading store and retail routlets without depending on the external distribution networks. It also allows it to analyze the sales for a particular season through JIT and Inventory management systems employed in the company..................
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