Operating in the primary sector, Perfumes Guyana executes both Businesses to Business and Business to Consumer process. Their main focus is satisfying both physical and psychological needs while delivering excellent customer service and quality products. Technology is the driving force impacting the way companies transact businesses. This report examines the JIT method and implications if such system is adopted by the company.
WHAT IS J.I.T?
Efficiency and reliability are principles within Perfumes Guyana framework, at no time should resources be out of stock. As defined JIT is “a Japanese management philosophy applied in manufacturing which involves having the right items of the right quality and quantity in the right place and the right time” (Kootanaee1, 2013). Being the sole importer of brands such as Intimate, Emami and ICL, value propositions are achieved. These items are bought for resale to other businesses and walk-in customers. The suppliers and manufacturers are geographically located beyond the borders of Guyana mainly Trinidad, USA, and India. Based on the traditional method of buying and storing goods it has proved to be a well-strategized approach in terms of inventory holdings.
TYPE OF INVENTORY MANAGEMENT SYSTEM USED
“Good purchased in bulk guarantees Economies of scale” (Singh, 2018). This allows Perfumes Guyana to be cost leaders in the market. Orders placed with the supplier are basically transported by sea in large containers to the designated ports. Depending on the location or country of origin, it can approximately 3 months until goods are received. A special formality exists for countries of export example, India starts manufacturing upon receipt of part payment on the invoice (Smith, 2018).
JIT practice does not apply to all items stocked in the company’s storage. Everyday essentials including water, juice, milk, and toiletries use JIT method. However, it is not applicable to inventory for resale.
BENEFITS OF IMPLEMENTING JIT INVENTORY MANAGEMENT SYSTEM
Should JIT be incorporated in purchasing inventory, Perfumes Guyana would benefit in such ways that too much working capital is not tied up with items sitting on the shelves. The bond is currently overstocked with items expired or near expiry date. Due to inconsistent reorder level and a change in demand for a particular product. JIT would eliminate this catastrophe by reducing the overall expense. The available cash can compensate for day to day expenses including miscellaneous purchases and utility bills. The rapid technological changes and research ; development, new product offerings, better quality and competitive brand is entering the market. Customers would eventually switch to the new product. JIT allows management to monitor the purchasing trend and place orders for items based on demand, this avoids outdated products. JIT is ideal for Perfumes Guyana mainly because they are not financially stable at all times to make bulk purchases. This would allow small investments where they can stock the least amount of products rather than no items at all. Limited storage is required for the small quantity of products this will eventually reduce security cost, insurance cost, and damages. It would, therefore, provide additional retail floor space.
DISADVANTAGES OF JUST IN TIME
However, JIT inventory management can have an adverse effect on the company’s operations. Unable to take advantage of exciting opportunities to benefit from discount and economies of scale because of minimum quantity purchased. Due to fluctuating demand and supply, fast selling items may sell seasonally but only limited pieces available resulting in stock shortages. Customers will seek alternative products from rivals because of inconsistency. Once they leave, it can be difficult to regain their trust and patronage. Buying minimum quantity will result in price increases for the items, affecting business performance since customers are price sensitive.
REASONS WHY JIT IS NOT PRACTICED IN PERFUMES GUYANA
Perfumes Guyana strives on not just satisfying but delighting customers (Forrester, 2018). Adequate inventory is important but because of the geographic proximity of the suppliers and manufactures limits the potential for achieving JIT deliveries. Having a healthy relationship with the supplier can make JIT possible, however, reliability is not guaranteed should an order be placed immediately for the earliest delivery. The manufacturer may not have raw material, factory breakdown, and strikes. The company would place orders without calculating reorder level. This may result in stock out since it is based on assumptions (Rampershad, 2009). (708 words)
CHAPTER 1 (B) – NATIONAL CULTURE
Perfumes Guyana is characterized by a low-profit-margin, minimum waged and semi tedious jobs that demand customer interaction constantly (Doerga, 2016). Loyal employees and low staff turnover results from practices of Hofstede’s culture dimensions and as such this report examines each culture as it relates to the company.
WHAT IS CULTURE?
Each employee is considered the company’s most valuable asset with a unique set of personal and work-related experiences, strengths, weaknesses, and career goals. (Hofstede, 1984) Defines culture as “the collective programming of the mind which distinguishes the members of one group from another” at the same time influences the values within the working environment. Culture can be learned and developed through constant interaction with no written rules or law to dictate how it should perform. According to (Hofstede, 1980), there are several dimensions existing within an organization such as high versus low power distance, individualism verse collectivism, masculinity versus femininity and high versus low uncertainty avoidance.
HOFSTEDE’S NATIONAL CULTURE
Collectivism vs Individualism explained by (Ghauri, 2003) is “the relationship between an individual and his/her fellow individuals, the collectivity which prevails in society”. An experienced business coach (Smith, 2017) emphasized that teamwork is “together we achieve more” this can be seen vividly in the company’s culture. Collectivism is morally embedded within Perfumes Guyana operation with staff working together in moving the company closer to its goals. Employees value the relationship and feel motivated with guidance and support from fellow colleagues. This cultural dimension is healthy for overall success since each staff job description can only function effectively with the corporation from their immediate coworkers. The distribution department collaborates with sales and warehouse team to ensure customer orders are prepared and delivered as promised. As a team, they are willing to take the risk since member supports each other should there be any failure. Collectivism eliminates competition, hatred, and malice among team members while promoting harmony and a friendly working environment. An appraisal is conducted quarterly recognizing the committed and achievement of the team’s contribution towards success from brainstorming sessions prior to marketing campaigns.
Power distance dimension expressed by (Insight, n.d.) Is “the degree to which the less powerful members of a society accept and expect that power is distributed unequally”. Perfumes Guyana organizational chart displays a short hierarchical ladder which is vividly displayed in an open area visible to all staff. Each staff is aware of their list of duties and whom they should report to in terms of superiority. Ownership, responsibility, and accountability are key characteristics of each member on board. The internal operations proved that a high degree of power distance exist mainly because managerial positions are highly acknowledged and respected. Junior staff generally accepts power inequality while feeling comfortable and believes that it is appropriate. Concerns and dissatisfactions among staff are raised with superiors through a WIFLE (What I feel like Expressing) sessions weekly. This involves management listening and addressing issues arising such as poor working conditions, favoritism or other minor issues that may arise occasionally.
Uncertainty Avoidance explained by (University, 2009) is “the extent to which a society, organization, or group relies on social norms, rules, and procedures to alleviate the unpredictability of future events”. Decisions are made solely by management after intense research and analyses from data gathering. Striking with strong uncertainty avoidance, the company is risk adverse since management dislikes and feels uncomfortable with unpredictable happenings. This sense of insecurity demanded manuals and systems to be implemented, guiding staff to ensure activities are well executed in accordance with management strategic plans. There is no room for failures and mistakes, management sees that as a threat towards the company’s success, for example, marketing department utilizes Facebook to build awareness and communicates the brand message to the target audience. However, recently the marketing department was approached by a television network sales representative trying to persuade management to utilize their station to channel its message to a wider geographic area. Because of risk adversity, the opportunity was lost. From past experiences with television stations, no fruitful results yielded from ads and promotions.
Masculinity versus femininity is understood that women are more service-oriented and caring for others especially the weak. They value relationships and people before money, develop and maintain the quality of life and preserves the environment contrary to masculinity traditions where men take more assertive and dominant roles. These values include the importance of showing off, achieving something visible and making money (Hofstede, 1983). Perfumes Guyana dominated the femininity line where both men and women execute different roles. The CEO is currently a female, being authoritative and delegating duties and responsibilities to a male manager. This company thrives on customer service, and as such both male and female are constantly trained in areas such as sales and services to provide that exceptional feeling. (794 words)