Discuss about the Analyzing Supply Chain Activities of Mulberry.
The report aims to discuss the interfacing areas of logistics with the three core functional areas (marketing, production, finance) of an organization Mulberry. The report would also analyze the order processing system of the company by studying the current process, identifying the challenges and recommend solution for the same. Further, the report would discuss the existing supply chain system of Mulberry to identify the challenges faced by the company and provide recommendations for the same.
Mulberry was founded by Roger Saul in the year 1971 in United Kingdom. The company produces leather goods with its USP as women’s handbags. Mulberry is known internationally for its British lifestyle brand. It produces a range of leather products for men and women. Its product range includes women’s handbags, pouches, purses, accessories, shoes, clothing, men’s bag, accessories, shoes and other men’s and women leather products. It has established its brand image for producing highly-crafted fine leather goods. Mulberry has strategically positioned itself in the minds of the consumer for premium quality bags and accessories for youths and females. This has supported the growth of the company in terms of sales and revenue which is spurted during the peak season (Mulberry, 2016).
Mulberry faced the challenge of automated warehouse processes which could not help to achieve economies of scale. The company partnered with Manhattan Associates to achieve efficient warehouse and store more stock.
Manhattan system benefitted the company through better inventory control, enhanced utilization of warehouse storage space and deployment of labor (Manhattan Associates).
Mulberry is one of the listed companies on the London Stock Exchange. Its apprenticeship program helps the youngsters to explore job opportunities through its training and placement at the company sites.
Logistics interfacing with marketing includes forecasting of demand, warehousing, product packaging, stock of finished goods, outbound transportation and after sales support.
Logistics and marketing together contribute towards increased customer satisfaction which results in higher company profits.
Logistics is considered as the other half of marketing because both the activities aim towards providing the product to the consumer. Price, promotion, product and place are the four Ps of marketing mix. The marketing mix ‘place’ is connected to logistics because a customer might be convinced by the promotions and advertisements but cannot buy the product until and unless it is available at the stores (Riccio, 2011). On the other hand, logistics and supply chain is affected by a weak marketing campaign because if people are not interested to buy the product then the inventory investment would be affected. Mulberry has to maintain the location of the handbag stores in order to attract to target audience.
Other than place, logistics also have an impact on the final price of the products of Mulberry. The costs of transportation and distribution are considered to calculate the price of the product (Riccio, 2011). Further, out of stock also has an impact on the brand image of the Mulberry and customer tends to give up their buying decision. This may result in losing the customer permanently. Mulberry has been consistently thriving towards managing its inventory control to reduce the prices of its handbags.
Logistics is affected by the various sizes and shapes of Mulberry products in the process of achieving economies of scale (Riccio, 2011).
Lastly promotional activities have an impact on the logistics and needs to be communicated to the logistics department to maintain the brand image.
Logistics interfacing with finance and accounting includes budget and allocation of the resources of organization.
Every organization thrives towards eliminating the layers of cost from their logistics process. Mulberry has also been struggling for the same to achieve its economies of scale. The activities of supply chain are affected by the financial decision of Mulberry which aims towards cost reduction and profit maximization. The logistics process has a huge impact on the company profits, cash flow, cost of product and risk management. It is an important factor to improve the financial performance of the company. Mulberry uses vendor-managed inventory system to increase its revenue by thirty to forty percent. Vendor managed inventory system gives the liberty to suppliers to manage the on-site inventory. VMI system helps to achieve the economies of scale and increase the company revenue by increasing the product sales (Trunick, 2011).
Logistics interfacing with production include inbound transportation, raw material stock, process scheduling and warehousing. The storage of raw material and inventory control depends upon the production quantity of Mulberry. Inbound transportation is an important activity of supply chain system because it maintains the relationship with the key suppliers. Inbound transportation is affected by the production activities such as flow of raw material in the process, in-plant warehousing and others.
Mulberry has an automated order processing system through which customers can easily place their orders through phone, email, internet or in person.
Mulberry’s order entry system takes the basic data which is required to process the order of the customer. Customer places an order through phone, email, internet or in person.
The sales configuration system of the process takes care of the customer’s order and ensures customer satisfaction.
Shipment planning system coordinates the product outflow by determining the orders lined in process and their location to be shipped. The system ensures that the consumer receives quality product on time.
Automated inventory control system of Mulberry updates the stock to manage the inventory system and reflect the changes in inventory.
The customer’s credibility is analyzed by looking up his address and other details including updated credit score. Invoice and Billing process calculates the amount to be paid by the customer by computing discounts, taxes and other charges to generate invoice.
Mulberry maintains its long term relationships with the customers through customer relationship management system. The marketing and advertising activities influence the minds of consumer and position the product in the minds of the people. Further, the promotional activities and offers attract the customer through lucrative deals and discounts. After sales services ensure that the customers are satisfied to retain loyal customers.
Mulberry has a specific routing system which determine the method to source the product from a different location.
The company has an advanced scheduling system which schedules the delivery of goods and services.
In spite of an automated order processing system, Mulberry still faces the challenge of providing timely delivery of products to the customers. Customers have become increasingly demanding in nature and expect the product to be delivered on time as a basic requirement. Due to complex processes and system, sometimes there is a delay in the product delivery which causes customer dissatisfaction. Though it is equally important to create new customers but retaining old customers is the fundamental necessity for an organization. Customer dissatisfaction may lead to loss of permanent customers which is a huge loss because company’s eighty percent of the revenue is generated from the twenty percent of its old customers (Kruger, 2011).
Timely delivery is a huge pressure for the company because of its complex supply chain system. It has been found that 58 percent of the purchasers tend to give up because the product was not delivered on time. Mulberry needs to take measures to improve its order processing system to provide timely delivery of the products.
Real-time visibility and order updates
Mulberry must adopt real-time visibility to provide timely delivery of its products and services by tracking the order id of the customers (Chung, 2016). This would ensure timely delivery of services which would lead to customer satisfaction.
Reduce Cycle Time and Improve Efficiency
Time is very critical while processing a order and the organization should also try to reduce its time of order cycle to improve the efficiency of the overall process.
Mulberry was facing the challenge of ineffective inventory control because of various issues. Mulberry was not able to deploy labor effectively which did not support efficient picking. After analyzing the problems, Mulberry resorted to the solution to partner with Manhattan Associates to improve its inventory control (Manhattan Associates, 2016). Manhattan’s software system enabled the company to meet the demands of the customer by maintaining its inventory control. Mulberry is now able satisfy the customer demands by dispatching timely consignment (ERP Search, 2016).
Demand forecasting helps to balance supply and customer demand by maintaining minimum inventory in the system. It forecasts the demand by analyzing the season patterns to fulfill the customer demand. It has the ability to capture the trends and patterns of the market and then responding to them with an adaptive Unified Forecasting Method. It has the feature of maintaining the integrity of the system and thus removes any duplication. It also takes into account the exceptional factors in order to determine the correct demand. Its Proprietary Unified Forecasting Method helps to sense the trend and demand patterns.
Financial planning helps to plan and forecast the performance of the organization which helps to determine the quantity of inventory to be maintained through step-by-step workflows.
Item planning helps to synchronize item and assortment plans in order to inform the planners to make the required amendments in the plan.
The system functionality involves making of purchase orders, relocating, adjusting and disposing of the inventory, making sales orders, picking, packing and shipping, counting the physical inventory, running and scheduling reports and then finally printing the barcode labels.
Manhattan SCALE helped the organization to switch to IT based approach for inventory management (Logistics and Supply Chain, 2013). The company was able to meet the demands of the customers during peak season (Retail Technology, 2010). Manhattan SCALE has been employed to provide the following services:
Mulberry has achieved its economies of scale by partnering with Manhattan Associates and has created an effective inventory management system to meet the customer demands.
The biggest challenge that the organization is facing is that it is unable to manage the inventory level across the channels which includes web, catalog, stores and other channels.
Omni-channel planning would help the company to manage its inventory level across all the channels. The system would ensure promotion planning across all channels of Mulberry through its channel specific hierarchies and planning metrics. The system quickly compiles the what-if situations to reforecast the inventory at every level of the business. The system would maintain the consistency of planning and development at every level of the organization.
Further, the system ensures the accurate reflection of inventory across the channels by tracking individual channel.
Conclusion
The report has successfully analyzed the supply chain process and logistics interface with marketing, production and finance department of Mulberry. Logistics is directly connected to the marketing and advertising of Mulberry. The raw material and inventory control is affected by the production and manufacturing processes of the organization. Budget planning and resource allocation interfaces with the finance and accounting department.
Further, Mulberry’s automated order processing system takes the order from the customer and updates the inventory to reflect the change. Its shipment planning controls the outflow of product and routing system directs the flow of product from one location to other. It’s invoicing and billing system generates the invoice of the customer after investigating the credibility of the customer. In spite of an automated system, Mulberry faces the issue of timely delivery of products and services for which it needs to integrate real-time visibility within the system.
Mulberry’s supply chain system has been upgraded by partnering with the Manhattan Associates. Manhattan SCALE has improved the overall efficiency of the supply chain system through its integrated transport system and reducing the different layers of the process. The system has supported the organization to achieve its economies of scale by utilizing the warehouse effectively. Though the changing consumer trends become a costly affair for the company for which Mulberry could integrate an ERP system within the process to reduce the cost.
List of References
Chung, S. (2016). Reducing Omni-Channel Challenges with Order Processing Software. Acctivate. Retrieved from: https://acctivate.com/order-processing-software-omni-channel/
ERP Search. (2016). An Independent Supply Chain Management Software Review. ERP Search. Retrieved from: https://www.erpsearch.com/manhattan-associates-review.php
Esker. Challenges In Sales Order Processing. Esker: Document Process Automation. Retrieved From: https://www.esker.com/order-processing-automation-software/challenges.asp
Intel. (2012). Transforming Intel’s Supply Chain to Meet Market Challenges. Intel IT. Retrieved from: https://www.intel.in/content/dam/www/public/us/en/documents/best-practices/transforming-supply-chain-to-meet-market-challenges.pdf
Kruger, E.R. (2011). Top Market Strategy: Applying the 80/20 Rule. US: Business Expert Press.
Logistics and Supply Chain. (2013). Mulberry implements demand and fulfillment system. Logistics and Supply Chain. Retrieved from: https://www.logisticsandsupplychain.com/4555-mulberry-implements-demand-and-fulfilment-system/
Manhattan Associates. (2016). Mulberry bags Manhattan Associates for supply chain success. Manhattan Associates. Retrieved from: https://www.manh.com/sites/default/files/sys/en-gb/document/manh-mulberry-and-manhattan-case-study-en-gb.pdf
Manhattan Associates. (2016). Ranked best warehouse software for 8 consecutive years. Manhattan Associates. Retrieved from: https://www.manh.com/products/warehouse-management
Mulberry. (2016). About Us. Mulberry. Retrieved from: https://www.mulberry.com/gb/about-us
Om Prompt. (2016). Order Gaps. Om Prompt. Retrieved from: https://www.omprompt.com/order-gaps
Pacmanfull. (2016). Invoicing Data Flow Diagram. Pacmanfull. Retrieved from: https://www.pacmanfull.com/invoicing/invoicing-data-flow-diagram
Retail Technology. (2010). Mulberry bags supply chain IT for business growth. Retail Technology. Retrieved from: https://www.retailtechnology.co.uk/news/678/mulberry-bags-supply-chain-it-for-business-growth/
Retail Technology. (2013). Mulberry puts demand and fulfillment in cloud. Retail Technology. Retrieved from: https://www.retailtechnology.co.uk/news/4690/mulberry-puts-demand-and-fulfilment-in-cloud/
Riccio, E.F. (2011). Logistics Today: The logistics – marketing interface. Ukraine Business Online. Retrieved from: https://www.ukrainebusiness.com.ua/news/2532.html
Sourcing Journal. (2015). Top Five Issues Facing Retail Supply Chains. Sourcing Journal. Retrieved from: https://sourcingjournalonline.com/top-five-issues-facing-retail-supply-chains-cbx/
Trunick, P.A. (2011). Finance & The Supply Chain: Show Me The Money. Inbound Logistics. Retrieved from: https://www.inboundlogistics.com/cms/article/finance-and-the-supply-chain-show-me-the-money/
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