Solution to BIS Corporation case

SALIENT POINTS OF THE CASE

 Bis Corporation is paint manufacturing company established in 1964, It has

now eight manufacturing plants and sell to 2000 retail stores.

 Distribution system is single tier where product is produced in plants, stored in 17 warehouse and then to retail outlets

 It has 12 shareholders and newly appointed CEO

 It produces and sells about 400 SKUs at similar price. Gross margin is 20%

 All the production and distribution strategies were formed 20 years ago and were never modified. So new CEO wanted the supply chain to be modified

 Reengineering of production, inventory and logistics functions should be done.

 CEO and share holders are not willing to construct new manufacturing plant.

Main problems faced by BIS Corporation:

 Single tier network which causes low truck utilization and high transport costs.

 No clarity that how inventory should be positioned 4000 SKUs.

 No clarity about which product /product family should be produced in which plant.

 Low customer service.

So the consultancy has suggested 2 tier systems with primary and secondary warehoses.It collected data for following:

- Demand for each product family

- Annual Production capacity at each plant

- Maximum capacity of warehouse

- Transportation costs

- Set up costs

- Potential locations

BIS has also done market survey and identified growth in its markets for each product family. Case Analysis: Production Strategy: - BIS can select among the following strategies: A. All products can be produced at every plant. Advantages: 1.It will reduce transportation cost. 2. High customer service level. Disadvantages: 1.High inventory level to be maintained. 2. High overhead cost. B.Two production units in one zone’s, high volume low cost products can be produced in each plant and low volume/demand can be produced at one production plant out of two in each zone. Advantages: 1.Reduction in inventory level. 2. Less overhead cost. Disadvantages: 1.Comparitively high transportation cost. 2. Lower customer service

Ware house and distribution strategy:- Fig- Assumed location of Production unit and W.H. (original)

Geog. Zone-4

Production unit-8

Primary WH-17

Statein USA-50

*Secondary WH-34

Retail zone-550

Total states in USA are 50 divided in to 4 zones. So each zone contains approximately 12 states. So we can assume that each zone of USA consists of 2 production units. Three zones contain 4 warehouses each and one with 5 so total 17 warehouses is distributed. So each production unit is connected to 2 warehouses and each WH serves three states. Each state contains about 11 retail zones. So one WH have to serve to about 33 retail zones. So it is difficult to serve all 3 states (33 retail zones) from only one WH with satisfactory level of customer service. Suggested strategy:

BIS Corporation can go for 2 -tier distribution network by establishing 34 secondary WH’s. Total 51 WH will be there. So on average each state will get one WH. All the present WH will serve as primary WH each for 2 secondary WH and the local retail zones. Advantage:

 High customer service level.

 Low transportation costs to customer.

Drawbacks:

 High inventory.

 High set up costs.

 High inbound transportation costs.

 High maintenance costs.

*** for fig & amp; more detail visit to:   http://www.slideshare.net/Khurshid0529/bis-corporation-case

Excessive use of networking sites by employees during working hours.

1. Definitely, access to networking sites during work hours distracts the employee but it is not universally applicable. Stress is overcoming the employee that’s making them to search for immediate leisure time during the work hour. Our thesis, for the main part, is the polemics for companies current intention. To substantiate it, we have three questions to be answered.

• Research finding has given one side of the face but it has not predicted any probable upshot of implementing the current contemplation. Will it be judicious for long run? Our consideration is it may increase the cost due to its proportionate effect to decrease labor efficiency.
• Ignorance of social networking site can be viewed as loss of a valuable business proposition.
• Being heed less to social psychology may have an adverse effect upon corporate responsibility as well as sustainability.

2. A socially active employee should be considered as an asset of the organization i.e. globally recognized. The purport is very obvious – profit. But we should not achieve it at the cost of business sustainability and corporate responsibility.

If this were our firm, we would encourage this practice to a limit keeping the homeostasis of stress and work efficiency in mind. We would rather try to covert this agility in business mode of accessing the information and canvassing the opportunity, if any, at informal level. These active employees are the face of globally recognized organization for there would be role in incorporating corporate social responsibility.

3. If we were in this situation we would like to consider this quandary from a different angle. On one side, there is company contemplation to block the social networking site during office hour as it has paramount effect on the productivity level of the employee and increasing cost at the end and on the other, facing the challenge of looming hue and cry from the work force i.e. now latent but obviously going to affect the efficiency of the employee in the long go considering growing stress. The following steps we would rather consider;

• Counseling of employees about the use of networking site during working hours.
• Make them realize that the work assign to them is much more important to them and for the company which is paying them.
• Make them realize that the growth of company will ultimately leads to more perks.
• Cut down the perk of employees who are unable to meet the deadlines and counsel them about its reasons personally.
• Block the access social networking sites during work hour but let them use it at the time of respite.

***Note: This article is co-authored by,

• Khurshid Alam
• Kazi Wasim Zaman

Role of HR in Corporate Sustainability

Corporate Responsibility is the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life .As the language of sustainable development enters the business mainstream, the responsibility for managing social and environmental issues is slowly shifting from the corporate fringe to an important business function. The ulterior motif is to develop the structures, systems, and ways of working and personal values that will support the organisation’s sustainable development objectives; and to encourage others in the company to act as enthusiastic agents of change. It is quite evident from several researches that agencies that successfully align human resources management with agency mission accomplishment do so by integrating HRM into the agency planning process, emphasizing HR activities that support mission goals, and building strong HR/management relationships. The private sector has recognized that it is not just financial and technological capital that provide companies with the competitive edge, but people, or human capital. Without attracting and retaining the right people, in the right jobs, with the right skills and training, an organization cannot succeed. Therefore, people have been recognized as companies’ most important asset. Thus integrating HRM into the agency strategic plan is of paramount importance. Many companies have adopted an approach to business that recognises the role of social and environmental issues in enhancing commercial performance;

But if this strategy is to succeed, employees need to see the sustainable development objectives clearly reflected in their personal targets and rewards. Performance appraisal must take into account the contribution of individuals and teams to longer-term social and environmental goals as well as short-term financial objectives. Ultimately it is all about environment that begets the sense of nuance difference in every aspects .Creating the ambience , invigorating the strength ,concentration must be on the issues like - Keeping in contact with employees on secondment, sabbatical or maternity leave & identifying the role to utilise their competencies on return uptake of flexible working arrangements & sabbaticals, measuring retention rates of top performers . These might be complemented with the publicising of environmental and social credential of employee brand , offering a competitive package that reflects the organisation’s sustainability vision and values .These types of attraction will slowly encourage employees to volunteer in community projects and charitable causes, identify‘ champions’ to help disseminate the sustainability vision and values, educate employees on their role in upholding environmental and community initiatives through technical training programmes, develop values and competencies in line with sustainability, ensure that the induction process reflects and educates around the organisation’s sustainability vision and values and thus ensure the organisation has a robust and well communicated ‘wellness’ programme available to all employees. The recognition through reward and applause will develop a culture whereby expatriates encourage local participation and cohesion with the global corporate sustainability plan. The integrity of these synergistic approaches define this corporate sustainability which will in turn provide a fresh,

invigorating, perspective of the world, to foster innovative approaches to a variety of business problems..

~ “A company is known by the people it keeps.”

***Note:This article is co authored by,

• Khurshid Alam
• Kazi Wasim Zaman