Question

Case Study: St Michael

St Michael is a manufacturer of toiletry items based near Glasgow, Scotland. It has been in business for the past ten years and has built a strong portfolio of customers. Most significantly, they are the sole suppliers of toiletry items such as shower gel, body lotion and shampoo/conditioner to various high end hotel chains throughout the UK.

They have research and development (R&D) and production departments which plan and manage the extraction of flowers and fruits, develop new odor or design and produce the high quality and nice taste gel, lotion and shampoo, etc. Their material is obtained from a series of local plant garden at Glasgow. The three other key materials required for production are their signature plastic bottles, travel pouches and cartons which obtained from the manufacturers in Leeds, England, and the wooden pallets on which the filled cartons are transported. These are produced for the organization by a pallet manufacturer who has established a pallet assembly operation on the organization’s site. In addition to the carton plant and pallet assembly operation, the site at Glasgow includes warehousing and storage facilities and management and administration offices.

The business is structured by various departments. These are Senior Management, Production, Transport and Warehousing, Sales and Marketing, Research and Development (R&D), Accounts and General Administration. Each department is headed by a departmental head who sits on the organization’s management board.

St Michael does not have its own delivery fleet, but contracts this function to a local haulier, who provides, as required, manned tractor units and curtain-sided trailers to transport the carton items direct to customers and also to collect and transport the new signature cartons from the supplier in Leeds. Neither St Michael nor the haulier has any experience of using containerization.

St Michael dispatches an average of 1000 pallets per week, which is almost 100,000 cartons. This carton pallet quantity requires between 10 and 15 trailers depending on loading levels.

They have currently been approached by one of their major customers, Crown Plaza Hotels, with a view to the hotel chain using St Michael toiletry items exclusively in their hotel chains outsides the UK. Crown Plaza Hotels operate in Canada, South Africa, Dubai, Hong Kong, Singapore and Malaysia, Australia and New Zealand.

Crown Plaza Hotels have accepted that introducing the product to their hotels will need to be phased in and happy to place the toiletry items in their Canadian hotels for a period of a year initially, and begin gradually introducing it in their hotels at all the other locations after this. They want all their hotel chains to be using St Michael toiletry items within three years.

By accepting this contract the organization would initially need to increase production by approximately 50%. Senior Management have agreed that this is possible. Eventually, when all the international locations are being served, the St Michael will have to had a increase production fivefold (500%).

The Production Department has discussed this scenarios with their bottle, pouch, carton and pallet suppliers. There is no issue with the pallet supplier increasing its delivery amounts, but the plastic bottle pouch and carton producer is running at full capacity and is unable to increase production. The Organization’s R&D department has identified a plastic bottle, travel pouch and carton manufacturer near Rome, Italy, who can supply exactly the same bottle, pouches and cartons in sufficient quantities and at an attractive cost.

The local haulier indicates that they are able to supply transport to and from UK dispatch and collection points, but are not prepared to run their fleet outside the UK. The Organization now requires to develop its ability to deliver the Crown Plaza Hotel Canadian contract and eventually the contract for the other international locations. There is no problem in increasing production and there is sufficient storage and warehousing space on their existing site. It is also relatively easy to appoint new staff with the required skills and experience to the Organization’s existing departments should this be needed.

However, the Organization has no experience of trading internationally and they need to address this.

To do this they have agreed to:

1. Establish an International Trade Department

2. Appoint a Physical Resource Manager to head this department

The board of management are considering appoint you as Physical Resource Manager. To ascertain your suitability for the role you have been asked to produce a report of approximately 1000 words which covers the following assignment.

1. Explain the various tasks which would come under your remit as Physical Resource Manager.

2. Explain how the International Trade Department would be structures and how this would benefit St Michael over a structure that did not include this department.

3. Describe the links that would operate between the International Trade Department and other departments within the organization.

4. Describe the links the International Trade Department would have with external integrating bodies and why these would exist.

Answer 1

1. when there's exchange across fringes between one nation and another, there is the possiblity that exchange might be confined not normal for exchanging an equivalent boundries. this is why an international trade department should be established to look in to the flows and flaws in the business. Assets are basic to complete our work. Everything that we see and contact is a asset, which maybe we could use. as the job title says physical resources looks into every micro and macro aspect of resources which are essential to get the work done. physical resource manager will also looks to polices which need to be implemented, transportation and many other essential needs of business.

2. since we are dealing with the plastic bottle pouch and carton producer, we should be looking into industry location. ecological gauges which are levels of air contamination, water contamination, contamination coming about because of waste removal. these are few key terms which makes business to run without any pressure from environment issues. transportation cost is also part of this department which is influencing the location of production. technical progress, it as been considered that after studying number of reports technical improvement in the production has given more efficiany.

3. tax and coordinations department, deals and client support, Item Management, Purchasing, or Inventory Management, Bookkeeping, Legitimate/Regulatory Compliance, Production network, Free Trade Compliance Office, Brought together versus Decentralized Supply Chain, qaulity division department.

4. Powerful overall standards frameworks accomplish a couple of noteworthy targets. These fuse empowering the scattering of imaginative advances and creation techniques, similarly as supporting overall economies of scale. When different countries or regions have various particular standards for fundamentally a comparable thing, creators selling into various markets are constrained to convey various versions of a comparative thing.