INTERCOSMETICS Harvard Case Solution & Analysis

INTER COSMETICS Case Solution

INTRODUCTION:

The purpose of this case study is to analyze the supply chain system and the procurement strategy of the Inter cosmetics Company. The issue will require a comprehensive analysis of the current policies and strategies of the management of the organization as they are the core of the business practices and culture that is being pursued in the organization. This will assist in analyzing the current issues that hamper the efficiency of the existing supply chain and procurement process of the company and propose alternatives for the management of the organization along with the implementation and the follow up procedures to appraise the system and revive it as per the need of the organization if the management deems feasible to do so.

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OVERVIEW:

Inter cosmetics is a cosmetics and a furniture dealer that is based in Canada. The company operates at a wholesale level as it procures finished goods and products from various suppliers and manufacturers both local and international. The company has an established market and customer base in various cities of the country and this presence of the organization at multiple locations allows it to attend a greater customer and market segment of the country.

The management of the organization has adopted a pull system and strategy or the supply chain of the company as to allow the flexibility for the organization to limit the stock and inventory levels cost for the company. The supply chain of the products for the company that it offers to the customers is based upon both the domestic and international suppliers and vendors and this allows the management of the organization to diversify its supply chain.

There are several issues in the supply chain that affect the performance of the business negatively both in terms of the profits and revenues of the organization and the growth of the company. These issues affect the efficiency of the supply chain in terms of lead times in the delivery of the products of the company and this in turn also effects the financial performance of the company due to the high cost that are incurred in the procurement process. Therefore, it is necessary that the management of the organization reduces and tackles these challenges and the issues of the supply chain in order to improve the supply chain and the standards of the organization as a whole.

ISSUES IDENTIFICATION:

“The primary issue for the management of the organization is to increase the efficiency and effectiveness of the supply chain of the organization in order to increase the performance of the business”.

SECONDARY ISSUES FOR THE COMPANY:

There are several secondary issues for the management of the organization that contribute to the bigger picture of the ineffectiveness of the supply chain of the organization and identifying them is necessary for adopting and practicing suitable solution steps.

ABSENCE OF THE BIDDING PROCESS:

The absence of the bidding process in the supply chain and procurement system of the organization is a negative factor for the management of the organization as it negates the advantage that the management of the organization could extract by attracting a greater pool of suppliers and contractors or the organization. The company uses pursue price and quality approach with the vendors and suppliers of the organization however, this does not compliment the benefits and the advantages that the management could get by adopting bidding based approach.

PULL SYSTEM STRATEGY AND POLICY OF THE COMPANY:

The pull system based approach of the management of the organization in the supply chain of the business does not contribute for the welfare and positive approach of the business in the market as the order levels and orders of the procurement department of the organization are based upon the orders of the customers and this often leads to lead times in the operations of the business resulting in the dissatisfaction of the customers of the company................

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