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Essentials of Supply Chain Management

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Contemporary economic transformations require business practitioners involved in distribution to be able to determine strategic objectives, estimate advantages and strengths of enterprises, evaluate possible external threats and dangers and conduct business operation according to the environmental changes. Reliable Bearing Co. Ltd. is a distributor of products related to bearing, belting, power transmission, roller chains, sealing, casters, lubricants, electrical motors, and associated services. The company has two locations within Canada: in Mississauga and Concord. It has successfully operated as a distributor and supplier in Canada for twenty five years. The company has acquired a good reputation amongst consumers by distributing well-designed, state-of-the-art, convenient and reliable power tools, devices, and machinery. High quality of goods distributed by Reliable Bearing Co. Ltd. enhances constant consumers’ demand and influences manufacturers and retailers to cooperate with the company.

The complete evaluation of business performance of Reliable Bearing Co. Ltd. should consider its customer services, pricing and cost strategies, and managerial practices aimed to improve the quality and efficiency of the organization’s supply chain.

In order to increase its market competitiveness, improve effectiveness, solve and prevent occurrence of problems specific to consumers, save costs, develop innovations related to the power transmission industry, and implement new distribution-associated practices, Reliable Bearing Co. Ltd. engages in numerous network relationships. Those steps involve relationships with suppliers, manufacturers, retailers, competitors, government organisations, and non-governmental institutions. Furthermore, Reliable Bearing Co. Ltd. is a member of the Independent Distributors Inc. (IDI), the largest Canadian industrial distribution network, and the Power Transmission Distributors Association (PDTA), an international trade association representing over two hundred power transmission distribution companies (Reliable Bearing, 2012).

Although, the inflation rate has definitely affected the cost of products distributed by Reliable Bearing Co. Ltd., the organization has implemented a range of innovations such as website marketing, online payments, and other practices of e-commerce in order to facilitate the market growth.

In accordance with the definition provided by Kotler & Keller (2011), “a service is any act or performance one party can offer to another that is essentially intangible and does not result in the ownership of anything” (p. 346). Reliable Bearing Co. Ltd. company provides clients with quality services; the Service Department performs defect detection, ongoing diagnostics, repairs, general overhauls as well as emergency repairs of distributed products. In addition, customer services are improved by technical support over the phone, by e-mail, real-time "chat" online, and fax. According to Kotler & Keller (2011), “when the physical product cannot easily be differentiated, the key to competitive success may lie in adding valued services and improving their quality” (p. 326). Service personnel of Reliable Bearing Co. Ltd. can correct a problem with products over the telephone or by advising customers how to correct it. The company sales staff is capable of providing “critical application solutions, despite technical challenges or quality requirements” (Reliable Bearing, 2012). In addition, the company possesses its own means of transportation; timely deliveries of products to customers contribute to the growth of demand for the company services. 

In conformity with the organization’s official data provided via its website, the company personnel totals thirty employees including managers, technical professionals, IT specialists, drivers, and marketing experts. A contemporary professional involved in distributing operations should be fully aware of the current development trends in the branch that his/her company specializes in. They involve obligatory awareness of technologies, competition, demand behavior, specific research, financial, and demographic studies, and perspectives. He/she should be aware of efficient management models in other companies and branches. In addition, in order to successfully solve problems specific to consumers of electric appliances, a business practitioner should be well-educated, skillful, goal-oriented, sociable, self-confident, and sane. Therefore, the senior managers of Reliable Bearing Co. Ltd. pay much attention to its organizational culture and personnel’s skills. Moreover, there is a well-developed system of new personnel training. According to the company profile, which is available on its website, technical support and training seminars are regularly held “to facilitate the advancement of operational productivity” (Reliable Bearing, 2012).

The team of the company uses an efficient and flexible model of business utilizing   distribution and sales through retailers such as Buy, Sears, and Wal-Mart in Canada.

Today, communication activities of companies have become extremely dynamical and global. The information systems designed within the last decades have strengthened immeasurably the ability of financial capital to move fast, which can result in the potential destruction of steady economic systems. These economic changes have a great impact on management in general and management of distributing companies in particular. Computer awareness and skills allowed professionals of Reliable Bearing Co. Ltd. to build their company’s virtual network structure, promote goods and services in the social media platforms, and, thus, strengthen their impacts on correlations between supply and demand for distributed goods.

The company utilizes well-developed practices of information sharing and ordering coordination; therefore, those allow the organization to gain access to the data related to supply chain performance, control plan-to-pay processes, reduce the number of errors, and implement effective strategies of resource planning in everything from personnel to distributed products. Furthermore, the process of information sharing facilitates communication between senior managers, employees of Reliable Bearing Co. Ltd., suppliers, and other companies. With accurate and timely information, the company’s procurement managers can predict fluctuations in supply and demand, identify risks, redesign business operations, and improve ordering coordination to avoid losses. By sharing transactional information with suppliers, the organization can ensure that it obtains reliable, up-to-date and accurate data needed to improve its internal and external business operations.

In order to operate profitably and remain competitive, all employees of Reliable Bearing Co. Ltd. coordinate their activities. Those include purchasing activities, repair contracts, forecasting, quality improvement, optimization, distribution, and scheduling deliveries. Timely information regarding changes in supply and demand enables the company to integrate and consolidate data from its departments in Concord and Mississauga, improve logistic schemes and order processing, besides modify rates of procurement and volumes of inventory. “An effective way to stay on the same page as your suppliers is to share transactional information with them” (Blanchard, 2010, p. 55). However, in order to improve its business performance, Reliable Bearing Co. Ltd. should streamline its internal processes and, consequently, promote and enhance cooperation with consumers and suppliers.

Although, a wide assortment and sufficient quantity of high-quality goods are the two prerequisites of successful distribution, they should correspond to customers’ demands so that the company can avoid financial losses associated with unclaimed or obsolete products. Utilized strategies of sales promotion do not correspond to the company’s objectives and current market conditions. Moreover, an interview with the company representative, who agreed to be interviewed on condition of anonymity, has revealed that the company possesses enormous inventory due to mismanagement of procurement and underestimated demand for some products. Procurement involves the purchase of materials and services; it has a considerable impact on the efficiency of a supply chain (Hugos, 2003, p. 44). Therefore, to remain competitive, Reliable Bearing Co. Ltd. should develop a relevant strategy of purchasing activities and focus on the acquisition of appropriate volumes of power transmission products, repair contracts, types of freight transportation, and other procurement-related services among others (Blanchard, 2010). By implementing suggestion and complaint systems, conducting customer surveys, and providing relevant regulations, the company can regulate its procurement, monitor service performance, develop new services, improve customer satisfaction and, thus, increase effectiveness of business operations.

 Reliable Bearing Co. Ltd. offers a wide range of products related to bearing, belting, power transmission, roller chains, sealing, casters, lubricants, and electrical motors at a fair price. Hence, these goods are widely available for consumers. In Reliable Bearing Co. Ltd., prices are generally set by Carl Faria, the owner and the head of the company. Taking into consideration the fact that consumers generally perceive prices as indicators of quality (Kotler & Keller, 2011), the company utilizes a flexible pricing strategy so that Reliable Bearing can benefit from its distributing operations. Business practitioners of the company monitor fluctuations in demands of potential clients, estimate costs, analyze prices and offers of the company’s competitors, select a pricing method, and offer the final price to the head of the company.

Estimating costs, managers of Reliable Bearing Co. Ltd. utilize activity-based cost (ABC) accounting (Kotler & Keller, 2011). They calculate expenses on warehousing, logistics, promotion, technical support, office expenses, and other real costs of the company operations. Furthermore, the company cost strategy is implemented taking into consideration competitors’ costs and prices and the customer's perceived value. Customers, who order electronically, are provided with discounts. In addition, sometimes, Reliable Bearing Co. Ltd. establishes special prices in order to attract more customers.

Changing official regulations, economic transformations, technological advances, constantly increasing competitiveness, price fluctuations, and growing consumer requirements influence effectiveness of distributing companies. Business environment is becoming extremely complicated under different global, national, and regional circumstances. Therefore, in order to meet the changing demands of the 21st century, Reliable Bearing Co. Ltd. faces the urgent necessity to be able to implement flexible strategies and accordingly, perform beneficial transformations of its structure, performance, cost strategies, pricing, staffing, and organizational culture.

In conclusion, despite today’s extremely complicated business environment, organizations can increase their effectiveness and avoid potential threats via organizational transformations. Lastly, senior managers and executives of Reliable Bearing Co. Ltd. “must be ready to efficiently and effectively manage the changes facing their organization or their work area” (Robbins & Coulter, 2010, p. 154) in order to promote the company’s steady development.

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