'Chase Strategy OPS571 Week 3 Essay\r'

'This calendar week a portion of our study commissioned on gross revenue and operations supplying. The gross sales and operations planning handle helps companies provide better guest service, lower stock-take, come down customer lead times, stabilize production rates, and give away top charge a better project of the business (Chase & adenine; Jacobs, 2011). Sales and operations planning evolved into aggregate planning that stresses the importance of cross-functional teamwork and tightly integrated efforts between sales, dispersal, logistics, operations, finance, and product development (Chase & Jacobs, 2011).\r\n compound planning focuses on intermediate-range (three to 18 months) plans that target grueling be and using capacity most efficiently. The main(prenominal) purpose of an aggregate plan is to determine the beat emerge combination of production rate, workforce level, and inventory (Chase & Jacobs, 2011). Chase Strategy\r\nThe pass over outline is i of three production strategies for aggregate planning in use to daylightlight. According to Hamlett (2013), the chase strategy, or direct spaning strategy, sets production to meet or match the entreat for products. It is an appropriate strategy for production situations with varying subscribe and little to no inventory. To handle variations in demand, a alliance matches the production rate to the suppose rate by hiring and firing employees. The chase strategy is used mostly in service industries that focus on meeting forecasted demand and adjust the workforce accordingly. Meeting demand so-and-so come in the form of workforce adjustments that include the use of day labor, contractors, seasonal workers, and overtime pay. Advantages and Dis profits\r\nA primary service is the flexibility to meet demand fluctuations. Another advantage is keeping inventory low, freeing up adjustment to buy other items such as cranky materials or components, thus reducing inventory carryi ng damages that are associated with holding inventory in stock. The cost of capital, warehousing, depreciation, insurance, taxes, obsolescence, and shrinkage are all inventory carrying cost (Hamlett, 2013). Due to variations in product demand a caller using the chase strategy can experience fluctuating workforce levels in retort to changing demand. The impact to the company is join ond hiring and provision costs and a decrease in employee esprit de corps (Ritzman & Krajewski, 2003). Examples of Chase Strategy\r\nThe combination of change productivity and flat or declining global demand has businesses requiring supply chain re-engineering. The result of these efforts has made them more than efficient than ever before. Finding demand to strike the supply generated is a growing challenge that has change companies large and small, including the iconic chocolate company Hershey’s (Kash, 2011). After years of growth and success, Hershey’s scratch a rough period in which senior management saw diminished financial results. direction realized they were not properly aligned to make out effectively, requiring an overhaul in strategy. Research and employee surveys revealed senior management was not aligned in their beliefs about how the company should compete in the future. The result was conflicting messages across the entire operation.\r\nMarketing had not responded to retailers growing motivating for lower inventories, better use of shelf space, and slight product packaging complexity (Kash, 2011). The changes in the securities industry caused Hershey’s to review every aspect of its â€Å"demand chain” without impacting the current supply chain in place. Hershey discovered that many products were not aligned with consumer demand and retailers were not happy about carrying increasing inventory due to confusing product offerings (Kash, 2011).\r\nThe company identify the need to move from a supply-driven approach to a deman d-driven, consumer-focused strategy based on a whirl versus push theoretical account (Kash, 2011). It was clear Hershey could no weeklong win pushing more variations of supply into the commercialize; instead it needed to employ a customer focused supply approach. The resulting transition to a demand-driven model exceeded expectations with the company, in February 2010, announcing render cash flows from 2009 operations multiply 2008 cash flows and 35 percent elevateder than 2004 record cash flows (Kash, 2011).\r\nAnother example of a company using the chase strategy is retailer Neiman Marcus that ramps up pro tem employment to meet an increase in holiday sales. The increased employees are utilized both(prenominal) in-store and in the warehouse to meet customer demand. Neiman Marcus mails out their â€Å"Christmas Book” in mid-September and sees a large increase in orders immediately afterward. Sales playscript begins a steep ascent that invoices in early declinati on (Auguston, 1992).\r\nThe September demand represents 52 percent of peak shipments, and October represents 91 percent of peak shipments. Demand in November and December are in excess of 100,000 shipments per week reaching a peak demand volume of 28,000 orders per day translating to more than double normal sales (Auguston, 1992). Neiman Marcus meets this enormous demand shipping 90 percent of holiday sales within 1 day and 99 percent within 2 days with 99.4 percent accuracy. Achieving these extraordinary results requires advanced planning that includes hiring ccc additional people to work in their distribution center during the holiday season. Twenty percent of these temporary workers return each year (Auguston, 1992).\r\nConclusion\r\nThe chase strategy helps companies match production to demand by hiring and firing workers as necessary. The chase strategy is a best fit for companies that require manufacturing flexibility and change capacity on a frequent basis. The major cost o f this strategy is the hiring and firing of workers and the associated decline in morale. For industries that require highly skilled labor, or where there is strong competition for labor, this strategy is not an best choice. This strategy is effective when low-skilled labor is acceptable and during periods of high unemployment.\r\nReferences\r\nAuguston, K. (1992, December). Neiman Marcus Plans Picking to Meet Peak Holiday Demands. in advance(p) Material Handling, 10(25), 44-48. Chase, R., & Jacobs, F. R. (2011). Operations and Supply train Management (13th ed.). Boston, MA: McGraw-Hill Irwin. Hamlett, K. (2013, Spring). Strategies Used in performance Planning & Scheduling. Retrieved from http://smallbusiness.chron/strategies-used-production-plannig-scheduling-1808.html Kash, R. (2011, April). The Hershey Company: Aligning privileged to win on\r\nView as multi-pages\r\n'