Harvey Industries: A Case Study
Harvey Industries is a major brand name within a incredibly niche market. The company constitutes a variety of industrial products, largely pressurized water systems intended for washing and cleaning functions. The company develops products to become used in lots of contexts, which include airplanes, vehicles, building routine service, engines, pools and more. One of its most lucrative techniques has been assembling equipment for coin-operated car washes. Even now recent styles have adversely impacted Harvey Industries financial position. Despite sales of $1, 238, 674 last year, the corporation still managed to loose $17, 174. This is a terrible personal finances for the business to be in. Examining the operations supervision subsequently displays clear issues which can be altered to ensure a more financial balance.
There are a number of reasons for the existing financial relax of the company. First, the inventory control system is based on a reactive strategy, rather than a proactive one. Stock is usually replenished only when it is observed to be too low, or if a customer purchases an out-of-stock item. This kind of leaves the corporation in a susceptible situation, exactly where they are left open to higher price requirements and improved costs to buy the necessary stock. Not recognizing products on hand shortages promptly can drastically cut into company earnings (Brinlee 2012). A company compensates the highest price for equipments while they are necessary, rather than taking a more aggressive strategy of keeping a well-tailored inventory that ensures zero item to depart stock if it is ordered with a customer.
In addition , the company will only work with a few distributors. Harvey Sectors relies on a limited number of vendors to supply numerous repair parts. This, nevertheless , also leaves them available to vulnerabilities. These types of vendors can easily drive up prices, causing Harvey Industries to overpay. Likewise, there might be restrictions in terms of the stock the vendors have on particular parts, which will essentially limit the revenue Harvey Industries can actually make. Company analysis also demonstrated that $220, 684 with the $314, 673 was used to acquire only 179 of the 973 different parts made available from Harvey Industrial sectors. As such, it truly is clear the fact that company could possibly be suffering from in increased costs due to a lesser bargaining position with only some vendors. This kind of limited volume of vendors as well places the business in danger of not being able to meet their own customer orders, as merchant delivery takes a dangerous position in impacting sales revenue (Connerly, 2003). As such, it can be clear that supply management problems are leading to the degraded financial position.
There are many of tips that would improve profits from a supply chain supervision perspective. Operating only with a few numbers of suppliers places an organization in danger of coming to the impulse of these vendor’s demands (Stevenson 2011). Exterior research also shows how this is a growing danger