Chapter One

CHAPTER ONE

1 INTRODUCTION 1.1 BACKGROUND The manufacturing enterprise today is faced with constant challenges as a result of modern technological developments; there is the need for it to function efficiently in an integrated manner as well as the need to ensure that it is integrated with its business “partners”, customers and suppliers outside the enterprise. Laudon (2004). New business models such as e-business have improved the ways in which business transactions are conducted today. Computers have tremendously increased business speed, flexibility and altered the way business is being conducted Fensel (2001). Consequently the business game has become so competitive that the less competitive ones stand the risk of being eliminated. Rethinking and redesigning the business model is not an option but imperative to surviving in the information era. There are several trends that are shaping business recently and its value such as Globalization and deregulation which are impacting on business of all sizes. Rapid technological changes and the need to respond quickly to cost and quality-conscious consumers have completely altered the dynamics of business transactions. These have altered entry barriers and reshape the competitive landscape.

The impact of this

dominating phenomenon is seen in the world wide integration of financial systems, trade liberation, deregulation and new patterns of industrial development. Wajcman, (2005) defined this concept as the process of increased integration of national economic systems promoted mainly by certain organizations and trans- national bodies such as the WTO, national state and multinational companies.

Also, customers now have a variety of choices and are becoming more sophisticated and

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more demanding in terms of what they want from the suppliers and the methods in which they choose to acquire these goods and services as well. Also important is the emerging digital firm, which involves an extensive use of information technology. In other to compete in the present global market, many companies need frequent reorganization of their production facilities as a result of the introduction of new technologies and continuous improvement. The digital firm is defined as one where most of the organization’s significant business relationships with customers, suppliers, and employers are digitally enabled and mediated Laudon (2004). The advantages of this form of business are many but most importantly it is the ability of such a firm to respond rapidly to its environment compared to the traditional firm.

Digital firms differ from the

traditional firm in that they rely completely on a set of information technologies for organization and management. There are four major systems that help to define the digital firm (Ibid) 1. The supply chain management system, which deals with the relationship between the supplier and the firm to optimize the planning, sourcing, manufacturing and delivery of products and services. 2. The management of customer relationship systems: the basic idea here is to develop a coherent and integrated view of all the relationships a firm has with its customers 3. Enterprise systems create an integrated enterprise-wide information system to coordinate key internal processes of the firm, integrating data from manufacturing and distribution. 4. Knowledge management systems, aimed to create, capture, store and disseminate firm expertise and knowledge. All these changes have had an impact on the market in the sense that markets have become increasingly fragmented. Mass customization has become the path to serving discriminating customers.

There is therefore need for the continuous evolution of technology to support the changes in the environment. Developments such as the World Wide Web have led to the emergence of a network whereby customers, employers, suppliers and trading partners are connected wherever they are. This has drastically improved decision making, created better ways of knowing and serving customers as well as improving profitability in order

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to gain competitive advantage. The global economy is also becoming increasingly competitive and very unpredictable. As a result companies are faced so often with the challenge of re-inventing, re-aligning and re-engineering themselves in order to stay competitive. Many enterprises have therefore seen the need to integrate processes within the enterprise and also out of the enterprise in order to map out these processes.

1.2 STATEMENT OF THE PROBLEM

The manufacturing enterprise today is more complex than it was before. Customers have become more demanding and sophisticated in terms of what they want and how they want it. This poses some challenges to the enterprise. In addition to this, there is also the challenge for the enterprise to operate efficiently in an integrated manner, while also ensuring also that it is integrated with its business partners, customers and suppliers outside the enterprise. Many enterprises have therefore seen the need to integrate processes within the enterprise and out of it in order to map out these processes. This is essential in order for a business to remain competitive. Mass customization and global competition have forced enterprises to adopt proper business models able to capture all the opportunities arising from emerging competition rules Giovanni et al (2006). As a result an increasing number of enterprises have distributed their production capacity worldwide in order to achieve lower production costs and lower distribution cost as a result of the closeness to customers. However some disadvantages have been associated with this, such as the difficulty of coordinating the different production plants. Effective operation management in such a case is the challenging task. Also, given the growing importance of small and medium sized enterprises (SME), as stated in the European Commission (2002a) “that the economic impact of micro-enterprises will increase, in the future”. During the year 2003 alone, there were 18 million micro-enterprises, with up to nine employees in 19 EU countries, that is 92% of European enterprises. In this regard studies of this nature are quite useful as they are aimed at such organizations. To resolve this problem, many frame works and methodologies have been developed. However, they have been criticized either for being too academic or simply too complex

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for application and lacking a practitioner’s point of view. This is a major problem that needs to be addressed in order to ensure successful implementation of the integrated enterprise in the manufacturing environment. Also, for an enterprise to stay competitive, it has to do so through the development of new products and services as well as the possession of new customers, an enterprise can use this frame work to understand how companies can map their IT tools on their business. In addition, because the business landscape is always changing and the impact on the markets is constant the “players” are bound to change their marketing strategy and reposition

themselves to new

opportunities and threats brought about by the fast technological developments. Porter (980). Hence there is the

need for new frame works to accommodate these

changes.

This dissertation therefore proposes a theoretical frame work for the design and management of an enterprise meant to help managers to make better strategic decisions for the whole enterprise.

1.3 AIMS AND OBJECTIVES

The goal of this project is to develop a framework that can explain the key operational characteristics of an original equipment manufacturer (OEM) with respect to its suppliers and customers, aimed at helping managers make better strategic decisions for the whole enterprise. In achieving the goal of this project, the following objectives are identified. 1. Study existing technologies from literature that supports the key operational functions of a typical manufacturing company such as the enterprise resource planning, customer relation ship management software, supplier management software. 2. Understanding the relationship between the OEM and its customers and suppliers 3. To develop a set of systematic logic that will help managers understand the operational transactions between the different parts of the enterprise. 4. To develop a framework for its applicability within an industrial setting.

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To achieve the goal and objectives of this study, an extensive literature review will be carried out to study the current state of research in the area, as well as the limitations. A critical study of the company’s dossiers will also be undertaken. Chapter 1 presents the introduction, statement of the problem and rational for the study. Chapter 2 presents the state of the literature with respect to the enterprise, customer, supplier and existing technologies. Chapter three presents the methodology, chapter 4 the

case description

and analysis, and development of the frame work, Using Oakdale Lt, Chapter 5 is on result and conclusion

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Figure 1. Summary and plan of presentation

Chapter 1

Introduction and statement of the problem research objectives

Chapter 2 Literature review, on the enterprise, customer and supplier. Software tools used for the management of the enterprise

Chapter 3 Development of Methodology and Case study,

Chapter 4 Case description and Analysis using case study

Chapter 5

Results and conclusion

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CHAPTER

TWO

LITERATURE SURVEY

2.1 LITERATURE REVIEW METHODOLOGY

This chapter discusses the current state of research in the area of existing technologies, the relationship between the original equipment manufacturer (OEM) and its customers and suppliers, and its operational functions. The literature review is carried out under three major areas towards the research objective namely; supply chain management, customer relationship management, enterprise, market places and soft ware tools used to support the OEM (enterprise), its suppliers and customers.

2.2 THE ENTERPRISE The European commission (2003) defined an enterprise as an “entity regardless of its legal form, including partnership or associations regularly engaged in economic activities”. Typically the terminology refers to a single integrated form. A typical enterprise is made up of different departments such as marketing, engineering, manufacturing, logistics, sales, services, purchasing. The definition of an enterprise has been evolved over time as different interpretations have emerged about what the components should include. Initially the enterprise was narrowly defined to be a single integrated company (Binder et al 2006). However, research indicates that different parts of a company could also be classified as an enterprise. Therefore the definition is not limited only to a “whole” enterprise. Different authors have expressed different views with regard to the definition and what constitutes the structure of an enterprise. However, some studies have come up with a different dimension of this terminology. Such studies have deviated from the traditional definition of an enterprise as a “single entity,” the rational for this school of thought being that environmental changes such as globalization and outsourcing have altered the definition of an enterprise. As a result more and more companies are involved in activities which are considered to be out of the

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boundaries of the traditional firm Binder & Cliff (2006). Such relationships are said to be promoted by collaborations and joint ventures. The definition of an enterprise in this perspective could also include parts of different companies. A growing number of studies have recognized an enterprise to be inter-organizational in nature inclusive of the traditional operations and their supply chains. Such studies advocate for alliances, partnership and joint ventures. Proponents include Hamel and Prahalad (1994) and Bremer et al, (2001) who have recommended a virtual enterprise. Byrne and Brandt (1993) defined a virtual enterprise as a temporary network of independent companies linked by information to share skills, costs and access to one another’s markets. They have an evolving corporate mode that will be flexible enough to exploit a strategic opportunity”. While Boardman & Clegg (2001) advocate for an extended enterprise, Davies and Spekman (2003) define the extended enterprise as “The entire set of collaborating companies both upstream and downstream, from raw material to end-use consumption, that works together to bring value to the market place, members view that their destinies are interdependent”. This serves to separate the extended from the confederations of buyers and suppliers.

Another dimension in the literature of

enterprises is on mergers and acquisitions which have led to the development of large scale enterprises. In this sense an increasing amount of attention has been paid to “collaborative business networks.” All these developments have got implications in terms of management. Some of these authors have suggested that a collaborative relationship could be between whole or just part of companies and that in such cases there is usually a member that can be considered dominant strategically, this development is important strategically as it can help in the reconstruction of a given enterprise structure.

In relation to this

perspective, the supply management literature has been found inadequate for addressing this issue.

To address this issue, a prevailing perspective that has emerged has

recommended a balanced view. In this light De Toni & Tonchia (2003) have stressed the need to blend both the outside-in view and inside-out view of a firm. Others have recommended a complimentary use of exogenous i.e. competitive rivalry Porter (1980); transaction-cost economies Williamson (1975; 1990) according to this group, firms have to consistently change their structures based on the market competition. The limitation of

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this view is that

they has failed to establish a link in cases where suppliers are partners

in a joint strategic relationship Binder &Clegg (2006) and endogenous theories such as competence theory Prahalad & Hamel (1990; 1994) or resource based view Teece et al (1997) which holds the view that the competence of a firm can be enhanced by its resources. This view is crucial in understanding how firms can attain competitive advantage but it is also limited in this context in the sense that it conceptualizes the firm as a bundle of resources Wernefelt, (1984). This has led to the development of what has been referred to as a dynamic dimension to the resource based view of the firm Teece et al (1997). What is important here is the fact that despite these developments, a connection still needs to be established with enterprise management or the management of the enterprise.

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Table 1: Different terminologies used by authors to define an enterprise. ( Source: Copied from Binder et al 2006) Terms

Authors

(a) Terms used for describing the new forms of an enterprise Quasi firm

Eccles (1981) Luke et al. (1989)

Strategic network

Gulati et al. (2000)

Dynamic network

Jarillo, 1988 and Jarillo, 1994

Project network

Miles and Snow (1986) Windeler and Sydow (2001)

Virtual Corporation

Byrne and Brandt (1993) Davidow and Malone (1992) Nagel (1993)

Virtual organisation

Ahuja and Carley (1999) Chesbrough and Teece (1996) Schönsleben (2000) Walters (2004)

(Virtual) Supply network

Choi et al. (2001) Cousins and Crone (2003) Lamming et al. (2000) Mills et al. (2004)

Virtual enterprise

Browne and Zhang (1999) Jagdev and Thoben (2001) Martinez et al. (2001)

Extended enterprise

Boardman and Clegg (2001) Browne and Zhang (1999) Davis and Spekman (2003)

Extraprise

Karlsson (2003)

Networked enterprise

Chung et al. (2004)

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(b) Terms used to identify the most strategically influential member Hub firm

Dyer and Hatch (2004)

Focal firm

Gulati et al. (2000)

Core firm

Harland and Knight (2001) Mills et al. (2004) Nassimbeni (1998) Seuring (2003)

Systems architect

Boardman and Clegg (2001)

Systems designer

Clegg (2003)

Systems integrator

Mills et al. (2003) Walters (2004)

Network manager

Harland and Knight (2001)

Project manager

Martinez et al. (2001)

Orchestrator

Brown et al. (2002)

(Enterprise) broker

Bremer et al. (2001) Miles and Snow (1986) Schönsleben (2000) Snow et al. (1992)

Navigator

Karlsson (2003)

Another growing set of literature have focused on the strategic importance of certain members within these structures. These groups have taken a different perspective all together with regards to the enterprise. To them, what ever form it may take, there is usually a dominant member as a result of the collaboration. This group is also of the opinion that the peripheral activities of one company could be the core competency of another member-company. Thus for the enterprise to be successful on the basis of collaboration, they need to intermediate their internal core competencies into other member companies (Lai et al, 1995)

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Some authors instead have centered their study on the need for manufacturers to focus their efforts towards a narrow range of products or segments of the entire market. This gives a strategic dimension to the focus criteria as it implies choices being made. The argument in the literature is that focusing yields better opportunities to exploit any market, Lee, (1992). However the literature is still limited in the domain of definitional works. The prevailing view is that an organization should be focused in only one area, i.e. products, process, or manufacturing task. But little has been done to guide in the selection of a focus area or what constitutes the focus criterion. Hallgren et al (2006) have proposed a framework that differentiates focus with regards to the different parts in manufacturing value chain. The area in which focus was differentiated is in the customer order decoupling point. As concerns development on enterprises there are two extreme cases, there are the proponents of mergers and acquisitions (development of large scale enterprises) and increasing growth of newly emerging enterprises which concentrate on micro-enterprises exclusively on their core competencies Muller et al (2006).

2.3 EXISTING TECHNOLOGIES

The enterprise requires tools to coordinate the activities within it Hammami et al (2003). Some studies have identified the fact that information structures are invariably linked to the operation of the enterprise and can be used for the selection of candidate software applications Toh et al (1999). Some of the reasons advanced to support the adoption of computer-based information systems include some of the advantages that it yields such as the reduction in processing time, physical storage and handling of paperwork and easy access to information. Over the years, organizations have used different tools such as business process modeling used to manage organizational change, process plan and schedule used to plan the process and schedule in manufacturing, which have not been considered successful because they are designed to function best in static environments where the assumption is that there is readily available resources which of course is not always the case.

Unforeseen

circumstances such as the breakdown of machines, change in order arrival or even a

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cancellation of order may arise. This will render the process plan ineffective (Wong et al, 2006). In this light the integrated process planning scheduling (IPPS) is considered more appropriate in that it increases the production feasibility and optimality by combining the process planning and scheduling problems (Ibid). In this light, the use of advanced manufacturing technology (AMT) has been found to be more appropriate. Shoal et al (2006) Defined it as “A family of manufacturing process technologies whose common element is the use of computers to store and manipulate data” The main attributes of the AMT are that it manages data associated with the manufacturing process by the use of computer applications. The adoption of AMT has been found to be more efficient because it is associated with the production of elaborately transformed manufactures. Typical examples include computer-aided design/manufacture (CAD/CAM), computer integrated manufacturing (CIM), manufacturing and enterprise resource planning systems (MRP 11 and ERP). The AMT however has been criticized for providing fragmented explanations as well as a lack of parsimony Shoal et al, (2006).

A lot of research has been conducted over the past twenty years with the aim of integrating designs such as computer-aided design (CAD) and computer-aided manufacturing (CAM). It became obvious that to achieve this, it was essential to part models that contain more information than geometric and topology.

One of the

recognized merits of feature based modeling over conventional geometric modeling is its ability to form features, tolerances, material properties and information which may be used during the planning process as well as its ability to associate geometric and topological information Amaitik (2004).

In spite of the common use of CAD in

industries to design parts, it was realized that the level of part model data was too low. As a result Feature based modeling was thought be an essential tool for integrating systems such as the CAD/CAPP. However, enterprise resource planning (ERP) has been found to be the most effective computer application in modern manufacturing industry. Basically the function is to exchange data with a central database that contains all information concerning the enterprise. The system is designed in such a way as to manage all the activities of the enterprise by using software modules. In this light emphasis is placed not only on the

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quality of the products and services but also on the efficiency of the internal processes (what they do and how it is done). The ERP system presents an excellent capability in planning and scheduling that yields benefits in productivity and a great increase in customer services. The ERP system innovation also makes possible the use of relational database management systems (RDBMS) as well as a graphical user interface (GUI), open systems and client services. The ERP have altered the design field of information systems, designers and management solution. They are also known to be very effective as management systems.

Quiscent et al (2006) discusses the success of the ERP

implementation project and were linked to a number of factors such as the previous information systems before the ERP was launched, organizational culture as well as future business practice of the enterprise.

As a result of changes in the external

requirements or market it may be necessary to redesign the business process enterprise to adapt to these changes and not the other way round. Business processes are said to include all the activities needed to handle all business processes, as in the case of an enterprise that is process oriented intrinsically. A partition into stages follows these steps (Ibid) •

Assessing the organizational structure

•

Modeling of business processes

•

Analyzing weaknesses

•

Modeling of advanced business processes (re-engineering)

•

Monitoring (control of business processes.

•

Implementation stage for the enterprise

•

Management and performance monitoring

2.3.1 USES AND ADVANTAGES OF ENTERPRISE RESOURCE PLANNING

The use of ERP has been mostly in the domain of larger organizations. This is due to the fact that the features and business process flows have been designed based on practices in larger organizations. However, there has been an increased use of ERP by small and mid-sized companies. The success rate in small and medium- sized organizations is said to be minimal. Some of the reasons advanced for this failure include the fact that the 14

business process alignment is affected by various environmental aspects such as the existing information systems before the ERP and also the capabilities of small manufacturers vary to those of large and medium size manufacturers, a poor implementation process, the lack of alignment with business needs and the lack of alignment of implementation practices with the firm’s competitive strategy Davenport (1998). As a solution to this problem a number of research studies are focusing on developing implementation frameworks.

Another important tool thought to be necessary for the management of the enterprise in the literature was the enterprise matrix tool whose function is to identify and map a suitable enterprise. Binder& Clegg (2006) have proposed a conceptual frame work on this. The model was built in such a way that it connects enterprise module parts of a company with enterprise modules owned by a different company. This is intended to create a structure that meets the needs of a fast changing industrial environment and still operating within reasonable cost limits. This required a tool such as the enterprise matrix to coordinate the enterprise Hammami et al, (2003).

2.3.2 MATERIAL RESOURCE PLANNING

[The long term profitability of a company is determined some how by the way the company begins its manufacturing processes. The process prior to customer order and the way the company sets out its promises to deliver quantities and times for customer order use the material requirement planning (MRP) and or recorder point system. In order to meet customer demands, the manufacturing process must have begun before the arrival of customer’s order. MRP implies that for every end item, a master production schedule (MPS) is created which specifies delivery times, quantities ordered based on demand forecast Segerstedt (2006). It is an important tool for the company selling manufacturing goods as it determines the times of delivery and customer incoming orders. The performance of these techniques and how the company uses these techniques will decide the level of customer service; capital to be invested in work process; efficiency and cost to be created and what financial gains the company is expected to

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achieve Johnson & Bru (2000).

However, the effectiveness of managing material

planning process has been found to be limited in function with regards to managing engineering change situations (shorter time period required for product development, changes in products, quality of product and time constrain). The consequences of a poorly managed engineering change situation could mean a loss of market opportunities, obsolete inventories, material shortages and manufacturing inefficiencies such as missed deliveries, poor quality lost and loss of configuration and control Clement et al (1992). To address these problems, Wanstromet al (2006) have proposed a procedure that creates a model to differentiate between items, in order to facilitate change situations. According to this study, there are many different engineering situations that may occur in the material planning process ranging from administrative to change to a completely new product. Even though the material planner can be affected by many items the material planner can only devote attention to a small percentage due to limited material planning resources (Ibid). This therefore calls for the need for the material planning resources to be allocated but to particular items.

A common tool that is being used for the

differentiation of items is the ABC classification typically used to describe items needing special attention in order to reduce the risk of overstocking and unnecessary investment in inventory. Other authors have found out that this classification is often not right as the classification is said to be more useful for spare items with distinctive characteristics besides price and demand Anandarajan (2002).

2.4 CUSTOMER

The term “customer relationship management” came as a result of the information technology. There is the lack of an appropriate definition of the concept, and this is said to be a contributory factor to the failure of CRM projects based on the limited view point that organization organizations take with respect to usage Payne et al (2005). It is often used to label technology-based customer solutions such as sales, force automation and customer centric. However, CRM is often incorrectly limited to CRM technology this is said to be a key reason for CRM failure Kale (2004). Payne et al 2005 reviewed this definition and came up with three perspectives; a particular technology solution, wide

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ranging technology. However, some authors have made some attempts on definitional issues such as Rygielski et al (2002) defined customer relationship management by four elements of a simple frame work: KNOW (A firm is expected to know and understand its customers as well as the market) TARGET (which products to sell to which customer and through which channel) SELL (Firms use campaign management to increase the effectiveness of the marketing department) SERVICE (CRM seeks to retain its customers through services such as call centers and help desk) Xu et al (2002) defined it as a term for methodologies, software and usually internet capabilities that can help an enterprise manage customer relationship in an organized way. It has also be defined as an all-embracing approach, which seamlessly integrates sale, customer service, marketing, field support and other functions that concern the customer. Ibid

Table : 2 .The characteristics of CRM (Source: Xu 2002)

Characteristics

Impact

Sales force automation

Greatly empowered sales professionals

Customer service and support

Customer problems can be solved efficiently through proactive customer support

Field service

Remote staff can get help from customer service personnel to meet customers’ individual expectation

Marketing automation

Companies can learn clients’ likes and dislikes to better understand customer need consequently these companies can capture a market before their competitors

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The World Wide Web has afforded companies the opportunity to build a better and lasting relationship with their customer than was the case before the information technology. A wide range of CRM products have therefore been developed by companies such as Siebel, Oracle, Broad vision. Some of which are made in such a way that they can track customer behavior on the web to predicting their future moves. It is essential for a company to understand the behavior of its customer as this can yield long term profits Russell (2001) stated that there is a change in the way this concept is now perceived. There has been a shift in emphasis from customer acquisition to customer retention this has therefore altered the dynamics, There has been a growing interest in the area of customer relationship management. In spite of the increasing number of published materials on this, most of which are said to be practitioner oriented, there literature on CRM has been criticized for the lack of agreement about definitional issues and strategic development Payne et al (2005)..There are different definitions and description of what CRM constitutes by different authors, this poses a problem because it affects the way an organization accepts and practices CRM Since the late 1990’s Customer relationship management (CRM) has become very relevant in the competitive business environment. New Technologies such as data ware housing; data mining and campaign management software have opened a new dimension/perspective to customer relationship management to an area where firms can gain competitive advantage and is at the core of every customer-focused business. Rygielski et al (2002) defined CRM as an information industry term denoting methodologies, software and internet capabilities that help to manage its relationship with its customers in an organized manner. Choy et al (2002) reiterated the aspect of the importance of customer retention in the view that. It is all about finding, getting and retaining customers. Its main function is to increase customer value and as a consequent share holder value. It is therefore necessary for manufacturers to strengthen their own competitive edges by focusing their resources on their core competencies. Choy et al 2002 stated that as result of customer sophistication and the expectation of higher quality service, brought about by the increasing global competition has led to a decrease in profit per unit

.CRM solutions therefore provide quick and efficient transactions to help

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enterprises to acquire, serve and retain the fast growing number of customers. It can assist the organization to improve telesales, account and sale management by optimizing information systems and contact centre implementations that allow the customer to communicate through any communication channel Shaw (1999) The main objective of CRM is to long lasting relationship with chosen customers, get closer to those customers at every point of contact and to maximizing as well as identifying the most the profitable customers and providing them with the best services (Ibid) A recent trend in the literature is that companies are trying to connect CRM activities and customer insight information with upstream operations in supply chain by so doing , the supply chain’s will generate demand activities which can be seamlessly linked to fulfill demand activities. Xu et al (2002)

A problem that most organizations face with respect to the adoption of CRM is that it means different things to different people. For some it is mass customization or developing products that suit individual customer needs for others it is used in the context of technology solution Russell (2001) develop a basic model to guide managers regarding what they should know about their customers and how this information could be used to develop a complete CRM perspective.

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Figure 2. Customer relationship management model (Source: Russell, 2001)

Of customer activity

Create a Data base

Of the data base

Analysis Customer selection

Which customers to target customers

Customer targeting

Tools for targeting selected customers

Relationship marketing with targeted customers

Building relationship

Privacy issues

Confidentiality of customers

For measuring the success of the CRM

Metrics

The literature on CRM has been found limited in the area of implementation of CRM practices. There is there fore the need for an improvement in technologies and methodologies to implement the above steps The literature on customer has concentrated on the impact of order entry points on manufacturing and logistics thus undervaluing the effects on the engineering process as such, companies are still left with the challenge of how to organize their processes Dekkers ( 2006)According to some authors, a lot of emphasis is placed

to the

consequences of order processing, stock control, replenishment and performance improvement at the detriment of the modular design and its link to the engineering management

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Table 3 The CRM continuum (Source : Payne et al, 2005)

CRM

is CRM is about implementation

narrowly

of a specific technology

defined and tact fully Moderately

CRM is the implementation of

defined

an

integrated

series

of

customer-oriented technology solution Broadly defined as a holistic approach to managing customer relationships to create share holder value

2.5 SUPPLIER The structure of the supply chain and the way it is managed differs from that of the customer. It is complicated because it involves a variety of independent, decentralized and self-interested enterprises. However what they share in common is their business processes such as production transportation and storage Huang et al (2005)The effectiveness of the supply chain depends on a number of factors such as how the enterprise effectively schedules processes to optimize the resource allocation and operational cost in the case where individual enterprises are contracted to partake in a supply chain venture, The reaction of the enterprise to unforeseen circumstances such as machine breakdown, transportation delays, new or unexpected customer order. Ibid Concerning rescheduling, most of the work has concentrated on centralized rescheduling problem in which a single scheduler makes entire decision for all the entities in a single production facility. Due to the structure of the

supply chain (made up of many

autonomous enterprises,) the centralized approaches of rescheduling have been found to be unsuitable for supply chain rather a

distributed mechanism is recommended to

coordinate the scheduling decision of each enterprise in order to obtain a fairly optimal scheduling.

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As firm search intensely for sources of competitive advantage the attention is drifting towards the supply chain management as a means of achieving differentiation in a firm strategic position. This has there for led to different dimensions in which the concept is perceived. Some researchers are focusing on the improved delivery performance and customer service Robertson et al (2002) However our understanding of these areas has not improved in spite of the

growing interest and effort in studying SCM. Although

some studies have reported a positive correlation between SCM practices and the performance of the firm, there is still the issue of inconsistency with regards to the basic definition hence the meaning of SCM is still a matter of debate and content of the SCM construct among such studies, as a result there is neither agreement on its measurement. This poses a problem of integration as well as making comparisons difficult. Added to this is the fact that the SCM literature has been criticized for the inadequate attention and effort put into theorizing. According to Ho et al ( 2002)

defining the SCM activities

should not be limited only to the firm’s involvement in managing its supplier but also to the firm’s interaction with its trading partners as well in addition to supplier in order to attain supply chain integration as well as including the other components of the supply chain such as customers. In this light some authors such as Cooper et al have argued that viewing SCM from a restrictive point of view will only provide a partial understanding of the concept and may provide a wrong interpretation of a particular function over the other (i.e. that of superiority). The global supply chain forum defined SCM as “the integration of key business processes, from end user through original supplies that provide s products, services and information that that add value for customers and other stake holders (cited in Lambert et al 1998) Other scholar have adopted a broader perception on SCM, in this case stressing the importance of management and integration of major linkages between a firms upstream and downstream trading partners as well. Others have viewed supply chain integration as a set of activities that manufacturers that is used to integrate the operations between the manufacturer and its suppliers and customers. Frohlich et al( 2001) in the same token, Narasimhan et al (1998) have perceived this concept from the decision oriented frame work of supply chain management

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Concerning rescheduling, most of the work has concentrated on centralized rescheduling problem in which a single scheduler makes entire decision for all the entities in a single production facility. The importance of the supply chain in improving performance is presently drawing much attention from researchers and practitioners. (SRM) defined in Choy et al (2003) as

a new set of supply chain applications that contribute to the

supplier selection and by so doing increases the competitive advantage of the manufacturer through the following means; support of improved business processes across the supply chain, creating a next generation architecture that can handle a multienterprise process as well as facilitating rapid product cycles and the introduction of new product(Ibid) Due to The impact of global competition (SRM) manufacturers are forced to coordinate respond quickly to the industry supply chain, from suppliers to customers. This has led to a situation where customer supplier relationship is becoming or considered very important. Selection of the supplier is one of the important functions in the supplies relationship The new paradigm in

organizing business lines into a supply chain seem to be

integration as producers, distributors and vendors are

forced to integrate

their

operational activities into large -scale networks of different services for managing materials, products, information and capital into a supply chain villa (2002). The integration of customer/supplier relationship management is a growing are of interest in the supply chain management area, meant to facilitate the selection of suppliers by the use of a help desk approach to validate the searching result done by the Case base reasoning technique (CBR) technology .Choy et al (2003) have recommended a similar approach i.e. integration based on an intelligent supplier relationship management system. (ISRMS) integrating a company’s customer relationship management system, supply rating system and product coding system by the case based reasoning technique to select preferred suppliers during the product process In spite of the growing interest in supply chain management our understanding of the area is still limited by the fact that adequate attention has not been placed to theory building researchers such as Ho et al (2002) have responded by addressing this issue in relation to the narrow perspective in which the SCM construct has been perceived, the validity of the construct, the practices achieve an advancement in theory development, and have

23

recommended a process -based view of SCM to relationship,

2.6 MARKET PLACES The role of market in today’s economy cannot be over emphasized. Electronic markets or otherwise have completely altered the way marketing is carried out in modern times. They have become increasingly popular alternatives to traditional forms of commerce. Defined as an inter-organizational informational system, that allows participating buyer and sellers to exchange information about prices and product offering Bakos (1991). It is believed that there is an increasing number of such systems that cross the organizational boundaries of the enterprise in this respect it is similar to the definitional expansion of an enterprise which is also said to be undergoing a change in terms of what constitutes an enterprise or out of the traditional definition of an enterprise. Some of the

advantages

that this form of marketing offers include the reduction of the search cost that buyers have to incur to acquire information about sellers prices and product offering in the market place, which is usually substantial, this process enables buyers to locate suppliers that match their needs. Matching of buyers and sellers /demand and supply, facilitating information exchange on goods, service and payments associated with market transactions. Economic theories suggest that the reduction in the search cost plays a crucial role in determining the efficiencies and competitive behavior ( Ibid) they also provide an institutional infrastructure, which specifies the rules of the game, issues such as contract law, dispute resolution, and intelligent property protection are covered by this structure.. Bakos (1998) discusses the great impact of internet on internet –based markets such as product offering, which involves increased personalization and customization of products through the use of such techniques as rule-based system (broad vision) which allows for the practice of one to one marketing and the lower price of goods. Business to business on the internet as well is generating a lot of interest this is due to the great appeal of the internet on business. This form of business offers a large number of buyers and sellers the opportunity of automating transactions. These markets offer advantages such as expanding the choice available to buyers and sellers, providing seller’s access to new customers, and reducing transaction costs for all the “actors. Kaplan et al (2000).

24

One of the most noted impact of the internet infrastructure has been its the reduction in marginal cost involved in the reproduction

and distribution of goods to consumers as

well as businesses (Ibid) Despite the advantages associated with electronic market places, there are some pertinent issues that need attention such as the fact that, such market may raise anti trust issues and also, there are potentially demand –side economies of scale in payment mechanisms and software Ibid, There is also the fear that as a result of the significant reduction in the search cost for prices and product information, competition may be greatly be affected. The business to business electronic commerce ,in order to be efficient must deal with challenges such as extracting information from rough sources ,classifying information to facilitate product data

maintenance and accessibility, reclassifying product data,

personalizing information and creating mapping between different information presentations Fensel et al (2001) However the debate about this aspect is that with electronic markets lowering the cost of transaction, the role of the middle man will be reduced as it will become easier to match buyers and sellers. Lee (1998)

2.7 INTRODUCTION TO THE BUINESS LANDSCAPE MODEL The business landscape model is defined as a tool or framework that enhances our understanding of the vital role of information technology. In this context it defines the relationship between the business units of an organization and its information systems. According to this framework, a typical business setting consists of an extended enterprise, which is made up of •

An enterprise

•

Suppliers (Strategic and opportunistic)

•

Customers (Strategic and opportunistic)

According to this concept an organization must be considered in relation to its suppliers or extended enterprise. Every extended enterprise consists of customers and suppliers. Customers are individuals or companies who purchase items from the enterprise. Suppliers on the other hand are individuals or companies selling products to the extended enterprise. These two are therefore considered as an integral part of the enterprise. Generally there are two types of suppliers and customers: strategic and opportunistic as

25

shown below. The extended enterprise can therefore be divided into five main sections as shown below. The extended enterprise (Zone 1) It is made up of different departments among which are engineering, manufacturing, logistics, purchasing service and sales. Information systems can be adopted that support the major business activities in this zone or to coordinate internal processes of the enterprise such as Computer Aided Design (CAD), Auto desk, Computer Aided machine Strategic customer (Zone 2) The major objective of the enterprise here is to develop customer collaboration. The enterprise focuses on market driven innovation to coordinate the activities in this zone. Customers and clients are recognized as the main source for innovation. New products are designed based on collaboration between the manager and this group of customers. Opportunistic customers (zone 3) This zone is composed of ‘potentially unknown’ customers. The main objective of the enterprise here is to develop customer tailored products. Software solutions designed to support the activities in this zone include customer relationship management solutions such as SAGE, E-CRM. Strategic supplier (zone 4) Strategic suppliers are companies that supply key parts or services to an enterprise. It is therefore essential to develop a good working relationship with its strategic suppliers for any enterprise to survive. Software solutions developed to support this zone include supply chain management solutions such as J.D Edwards, SCM and IBM, I series solution. Opportunistic supplier The main goal of the enterprise here is to trade on internet market agility. Enterprises or firms are now part of market places and therefore use it to identify sources (products, parts, resources and services) to reduce cost. The main aim of the enterprise concerning this zone is to develop supplier collaboration by capitalizing on supplier competency and capacity.

26

An enterprise is made up of different departments such as marketing, engineering, manufacturing, logistics, sales, services, purchases.

Figure 3: Business landscape framework

27

CHAPTER THREE

METHODOLOGY

The methodology for this study was adopted from Binder et al 2006, acknowledging the strategic importance of certain members within the Business landscape model and also the idea that what ever form a collaborative relationship may adopt either (whole or partial) there is often a dominant partner The method for this study could be divided into four main parts. 1 An extensive use of existing literature.

2 Data collection was based on the following •

Data files for customers and suppliers.

•

Product data Files

3 Data Analysis through the use of an expert 4 development of the business Landscape model for the enterprise of interest The study is predominantly quantitative, with Oakdale Ltd serving as the OEM of interest with its customers and suppliers. The data was for a period of one year, as indicated in the company dossiers. In order to develop the methodology, a detail study of the customers and suppliers will be carried out. This study will involve the development of a frame work based on the business landscape model. Derived from the literature to show how enterprise structures emerge, depending on the prevailing type of core competencies (A conceptual frame work for the design and management of an enterprise based on contingency planning of an enterprise Binder et al (2006).The limitation for the applicability of this frame work is that there is a lack of guidance on this. The business landscape model is explored by adopting the matrix in Binder et al (2006) The selection of the OEM was based on a trend in the literature review, that supports autonomous, elementary business units Lanbader et al 1997; Salmons &Babitsky (2001) and visualizes them as the form of enterprise for the future. The data related to the enterprise, customer and supplier were stored in separate data

28

files, so that while building the frame work reference was made directly to the variable in question. The following data is used as input in executing the framework 1 List of customers, including the dates of purchases, quantity, frequency and cost 2 List of the suppliers, including transactions, dates, quantity and frequency 3 methods of payment and amount 4 descriptions of good purchased/quantity. Data collected was based on documents such as data files for customers and suppliers, product data which was then coded. Some questions were developed based on the data collected. The customers and suppliers were classified as strategic based on the “dominance” of the unit of analysis. Dominance in this study was equated to fulfilling the above mentioned criteria’s of being strategic. And the conditions for qualifying as strategic were based on the relative importance of the applicability of a particular question to the enterprise, which were then applied to each of the customers and suppliers. In other words: Dominance=strategic Strategic=importance of question to the enterprise There were two main areas of interest for customers to qualify as strategic these were; contribution of a certain percentage to the OEM total revenue (Customers who made a contribution of

20% income to the OEM ) were selected as strategic where as those

who did not were considered as opportunistic. Also the demand pattern of the customers was considered an important criterion to qualify as strategic. This was realized by simply working out how many times a customer or supplier purchased or supplied goods to Oakdale in the year (i.e. the number of business transactions undertaken in a year between the OEM and the customer). A different method was used for suppliers. In the case of suppliers, the three most relevant criterion were 1 Oakdale’s dependency on the supplier 2 Joint involvements in the development of products with Oakdale 3 supplying bespoke products to Oakdale Any customer or supplier who made a demand or supply more than ones was considered strategic where as just once were considered opportunistic as there was no reason to

29

indicate that they would return in the future hence it could have been on the bases of ‘chance’or cost/price as the case may be. The business landscape model for Oakdale was then developed based on this rational. The above questions were applied to the customers and suppliers as relevant. To be classified as strategic, a customer or supplier has to fulfill at least one or more of the above criteria. Any customer or supplier which did not meet at least one of the criteria was considered opportunistic. 3.1 CASE ANALYSIS The analysis was done based on certain questions that were developed based on the literature as well as the company. Empirical data was collected from an original equipment manufacturer (Oakdale Lt) Different questions were administered to the customer and the supplier the rational being that they were taken to serve different purposes in the Case. The table below gives a list of the customers and suppliers coded by simply using the first letter or first two letters in cases were the variables were similar. Based on the questions developed, they were applied to all the customers and suppliers. The propositions were assessed on two dimensions Yes = 1 to indicate relevance/applicability No = 0 to indicate absence In cases where the proposition In the case where the question was applicable, the variable was considered strategic The customers and suppliers were classified as strategic based on the relative importance of the applicability of a particular question to the enterprise. In the case of customers this two questions were logically considered most important in the context of Oakdale 1 contributing 20 % of Oakdale’s income 2 Having a regular pattern of demand with Oakdale In the case of supplies, the three most relevant criteria were 1 Oakdale’s dependency on the supplier 2 Joint involvements in the development of products with Oakdale 3 supplying bespoke products to Oakdale Based on the above mentioned criteria a customer or supplier was classified as strategic or opportunistic, as the case may be. The frame work was then developed based on this

30

CHAPTER FOUR

CASE STUDY

CASE BACKGROUND

In this chapter, the developed framework is utilized using the Oakdale Ltd as the enterprise of interest with its customers and suppliers, rather than demonstrating with an unknown example The case study presented in this chapter is taken from Oakdale Ltd, Garrison, United Kingdom. It is a small manufacturing company with a good turn over. The company produces hard landscaping products using computer aided production methods. The nature of production and the scale of business at Oakdale suits the requirements of the proposed framework, it was

then decided to apply this framework to an existing

enterprise, where the analysis can be used to demonstrate a real case of how this proposed frame work can be utilized. To demonstrate this framework, the data on customer purchases as well as suppliers from the supplies are used for the case study

4.1 CASE DESCIPTION

The case was carried out in a small original equipment manufacturing company at an (OEM) that deals with hard landscaping products and manufactures decorative paving, walling and hard landscaping products by using high quality natural ingredients and computer aided production methods, to replicate a wide variety of surface patterns from traditional worn flagstones to contemporary timber decking. The company is involved in the following activities; paving, rotunda/octunda, winding, path, stepping stones, walling edging, accessories. The company is also considering some form of diversification in the future. The selection of the company was based on the review of the literature, which indicates the growing importance of small and medium enterprises in the 21st century, The Company is a single business entity with the case examining it The company

31

operates in a very competitive business environment, where the power dynamics are complex, meaning that the company is not in a very powerful position in relation to its competitors. This makes it essential for the company to have a good understanding of its customers and suppliers in the terms of their relationship. Most of the suppliers have high delivery reliability. The purchasing orders are based on delivery agreements and forecasts are sent to all suppliers and items ordered in the same way. The main technological tool in use is the CRM which is used for the management of customer relationship 4.2 Theoretical model for analyzing and developing a structure for the case study. The case analysis was based on the theoretical model generated from the following; OEM (Oakdale Ltd) =OEM Unit of analysis (UOA) = company or individual LIST OF CUSTOMERS STRATEGIC CUSTOMERS 1 Is the UOA you are analyzing one of the key customers to the OEM (ie a UOA that contributes 20% of the OEM income? 2 Is the UOA developing products jointly with the OEM? 3 Is there some form of customized relationship that can be observed between the UOA and the OEM? 4 Does the OEM vision or any quality document specifically mention about working with the OEM? 5 Does the UOA have a regular pattern of demand (ie more than two times in a year) with the OEM? OPPORTUNISTIC CUSTOMER 6 Is the unit of analyzing just one of the customers to the OEM (ie gives ad-hoc business projects/contracts to the OEM? 7 Is the UOA you are analyzing one of the customers to the OEM but gives the company a steady (but not significant) source of income? 8 Is the some form of relationship that exists between the UOA and the OEM? (This could be a simple memorandum of understanding or even some form of legal contract) 9 Is the UOA in some form involved with providing (or demand) the OEM additional capabilities to perform its business?

32

10 Does the OEM help or contribute to making the relationship between the OEM and the UOA modular in nature. STRATEGIC SUPPLIER 11 Is the UOA you are analyzing” one of the major suppliers of the OEM to) 12 Is the OEM developing products jointly with the OEM? 13 Is the some form of customized relationship that can be observed between the UOA and OEM? 14 Is the OEM highly dependent on the UOA in terms of supply of a product/Is it non substitutable? 15 Does the UOA supply bespoke product to the OEM? OPPORTUNISTIC SUPPLIER 16 Is the UOA you are analyzing “just one of the suppliers to the OEM (ie gives ad-hoc business projects/contracts to the OEM) 17 Is the UOA you are analyzing one of the in some form supplying products jointly with the OEM (i.e. increasing the value chain) 18 Is there some form of relationship that exists between the UOA and the OEM?(this could be a simple memorandum of understanding or even some form of legal contract0 19 Is the UOA in some form involved with providing (or demanding) the OEM additional capabilities to perform its business? 20 Does the UOA help or contribute to making the relationship between the OEM and the UOA modular in nature? List of customers and suppliers /applicability of questions

33

Table 4, Analysis of customers and suppliers Customers MKM .B. S UM A T & C ltd KLK LTD FSW LTD SPS LTD GBS PHW JB LTD DSL MKM B.S. (ED, LTD) FEM J H (CTS) KIC MJ M & LTD MKM A DE-PA MKM B.S.(SCA) LTD C B S LTD BR SE MG (UK) Ltd B B.S. &HC. MA CO MKM RCLTD WA RO & BU JYK Ltd HE BU SP PA B ME MKM B.S.(DFD) PER HO PAR RO MKM ALY NO BU CL JO LDPS MKM WBY EL H.BM S G ST LTD J & A M KE MKM HXM J.M & S LTD MKM SKGS MKM MRH MKM BWK JOS P (MB) LTD MKM BUSUP BOR AGGS P WOHSE & S MID FO LTD PUR TRE ROD OF RMD LTD MKM KDY ANT ST JAM WT LTD GRE & SN LTD SWI NSR CHA GDN C W G LTD T.A.S BSP & PAT B.S. LTD MKM WTNA YO INDT

Suppliers 1,5 5 5,7 2,3,5,10 5,7 5,7 5,7 5,7 5,7 5,7 5,7 5 5,7 5 5 5,7 5,7 5,7 5 5,7 5 5 5 5,7 5 5 5 5 5,7 5,7 5 5,7 5 5 5 5 5 5 5 5 5,7 5,7 5,7 5,7 5,7 5 5 5 5,7 5 5,7 5,7 5 5 5 5 5 5 5 5,7 5

Lu St Co AN BK HLG LTD CTLE CMT LTD CRS U LTD FL SS CEM U ORTNS LTD D. G. EPTS REM GH & CO DAM U BAR& WHS C R F LDPE PDTS CON PDTS (KKDY) LTD W.HD TST JM TPN TSPT MED S CO HA N AGTS KU EXTS T UN OF YK CATE LTD XI D ST CO. LTD Thn Wlhm Eu EpT EC .F LTD CIVL & MNE LTD LKD PV SN EL PLC BIP SK IN BR LTD Den Fdg SGL CN GP MT WT AS BP O K L TD RJL EPT LCO SLS LTD UM ST ITNAL

TTL BTR

11,12 13, 16, 20 14 16 14, 16 00 00 16 0 16 16 16 16 16 16 16 16 16 16 16 16 14,16 14, 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 14, 15 ,16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16

(BBS) Rat St Ept STKS BR LTD SHF MTLS H LTD SM ECL LTD FST PS HL LIMITED Ms Ida Pthe U Ltd YKSHE WTR CDSTP LTD Matn Sls Ltd SDGD RC WLS SCT EDN HP BDG MT D-T LTD ES PRJTS LTD SPE LTD J S FWDG GB LBRTS LTD SM TNR & SN LTD MC PT HR LTD Pvc (Pm Co.) Pck Br EV ASTEl Pltats LRCO U LTD

34

N. E T RCDS TYRT LTD YKSHIR IN B. SS FWD SK DEV UMR MC PLC HWTH T( R) BMER Dg Bo & Ss (Sht)Ltd HK FTRS LTD WRD B (MTON) LTD/PA ARS LTD SCM PLC FGST. SSLTD LAFG RD A LTD A. RK SE LTD NHBC UPX (YKS) LTD KC B. HLTH LTD TYN G CB LTD TNER FAB T C HRN JCB PLtC D TQ LTD WMN EQMT LTD HL'S AT BSS LK ALS CA (U) LTD CTY EL F MER LAB LTD BRC BDTN TRS FTBL C Ai CH LTD WLSELY UK LTD IMECHE NVF PTS LTD HPM STM LTD FIT RPSE TRN Pat Sci R VKG DT NUMD (UK) LTD Zen w& s JOS P (MD) LTD CHIP PT H Wels Wc Ltd EBY GRTHM CAS Ma (Ma Ad S) Technocopy TES I.C ABR INS LTD ST PRCTS LTD W T BD LTD PESN PR NWSQT (N E) LTD D. Pat & W BIF W S. LTD TMOVC PL LTD SOD SFT AL WDKLTD PR ENG B LTD

16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16

MKM SFD STH MKM RPN W T BN LTD J T DVE LTD C & C SPS PER HMES (TSD) SA TRN & SN LTD BTA t/a MS WD & NYR LTD STLY GDN C FI PT HE JEW H.H &SN CH/CHQ C VOL SVN LTD BE ML GDN C

5,7 5,7 5,7 5,7 5 5,7 5,7 5 5 5,7 5 5,7 5 5 5 5

R S CMPTS LTD WTWD TBR & F JVH LTD THOE LTD SG . U LTD TBMRE PRS & LMD Prcs Pv $TLtd. R&J Bgs SNLHT SC GP GRHM TD LTD STYS: SP TMC LTD BLDS M F Tsde s J.HLNSC .LTD CTR ST LTD A5 HLTD Mdlton F Ltd

16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16

BBUR A WT TA GGE LTD BGHSE ENG LTD BTISH TLCM Plc G SNBL & SN LTD RMDE E. C Thpsn & sns OR PYT PR TTL P.Ltd DYLD IND RHMDSH DTRT C MSD (DLGTN) LTD ARCO ORT IM LUB J & L IND SS QTY MGMT S Wlmsns LDEN GP T-MB (UK) LTD

16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16

The business landscape model for Oakdale was then developed based on this rational. The above questions were applied to the customers and suppliers as relevant. To be classified as strategic, a customer or supplier has to fulfill at least one or more of the above criteria. Any customer or supplier which did not meet at least one of the criteria was considered opportunistic. In analyzing the case, it became obvious that different collaborative relationships existed between Oakdale, its customers and suppliers.

35

THIS PAGE IS SAVED SEPERATELY AS PAGE 36 CHAPTER 4

36

CHAPTER FIVE

RESULTS

The outcome of the analysis in chapter four indicate that there are different collaborative relationships that have develop between Oakdale, the customers and its suppliers It was out of the scope of this study to explore the reasons or dynamics of the differences in the relationship. However, the researcher’s main interest was within the scope of how these relationships developed and not on why. These relationships have implications on how the enterprise is managed.(enterprise management).

Quadrant 1 (STRATEGIC CUSTOMERS) The customers and suppliers were classified as strategic based on the relative importance of the applicability of a particular question to the enterprise. In the case of customers this two questions were logically considered most important in the context of Oakdale 1 contributing 20 % of Oakdale’s income 2 Having a regular pattern of demand with Oakdale

MKM.B.S was considered strategic on the grounds that (most strategic customer) •

Contributed more than 20% of Oakdale’s income (203,877.51) alone

•

Had a regular demand pattern with the enterprise.

•

Served the dual function of being a customer and a supplier

AT &CL Ltd Qualified, as a strategic customer on the bases of having •

a regular demand pattern with Oakdale

•

Contributing a steady and regular income above 10% to Oakdale.

KLK LTD Qualified as a strategic customer on the following bases: •

Develops product jointly with Oakdale

•

Have some form of customized relationship with Oakdale 37

•

Has a regular demand pattern with Oakdale

•

Helps to make the relationship between Oakdale and KLK Ltd modular

Below is a group of customers who were classified also classified as strategic but not as strategic as the ones above. The customers listed below were classified as strategic customers on two main reasons. •

Have a regular demand pattern with Oakdale

•

Gives a steady but not significant income to Oakdale

38

Table 5: List of strategic customers STRATEGIC CUSTOMERS FSW LTD

MKM SKGS

JOS P (MB) LTD

SPS LTD

MKM MRH

MKM BUSUP

GBS

MKM BWK

PUR TRE

PHW

JOS P (MB) LTD

MKM KDY

JB Ltd

MKM BUSUP

ANT ST

DSL

PUR TRE

MKM WTNA

MKM B.S. (ED, LTD)

MKM KDY

MKM SFD STH

J H (CTS)

MKM A

MKM RPN

MKM A

DE-PA

W T BN LTD

DE-PA

MKM B.S.(SCA) LTD

J T DVE LTD

MKM B.S.(SCA) LTD

BR SE

PER HMES (TSD

BR SE

MKM RCLTD

SA TRN & SN LTD

MKM RCLTD

MKM B.S.(DFD

STLY GDN C

MKM B.S.(DFD

PER HO

JEW

PER HO

MKM ALY

MKM ALY

MKM SKGS

ANT ST

MKM MRH MKM BWK

39

Table 6. List of opportunistic customers OPPORTUNISTIC CUSTOMERS UM

EL H.BM

W G LTD

KIC

S G ST LTD

T.A.S BSP &

MJ M & LTD

J & A M KE

PAT B.S. LTD

C B S LTD

MKM HXM

MG (UK) Ltd

J.M & S LTD

B B.S. &HC.

BOR AGGS

MA CO

P WOHSE & S

WA RO & BU

MID FO LTD

JYK Ltd

OD OF RMD LTD

HE BU SP

JAM GRE & SN LTD

PA B ME

SWI NSR

PAR RO

CHA GDN C

CL JO LDPS

WT LTD

YO INDT C & C SPS BTA t/a MS WD & NYR LTD FI PT HE H.H &SN CH/CHQ C VOL SVN LTD

MKM WBY

BE ML GDN C

STRATEGIC SUPPLIER In the case of supplier, the three most relevant criteria were 1 Oakdale’s dependency on the supplier 2 Joint involvements in the development of products with Oakdale 3 supplying bespoke products to Oakdale Lu St Co • Was considered as one of the major suppliers of Oakdale • Is involved in developing products jointly with Oakdale A BK HLG LTD 40

• • •

Some form of customized relationship exists between this supplier and Oakdale Considered as one of the suppliers that gives ad-hoc contracts/projects to Oakdale Contributes in making the relationship between Oakdale and the supplier modular in nature.

The following suppliers qualified as strategic on the following bases • •

Oakdale is highly dependent on this suppliers in terms of product Was considered amongst the suppliers who provided ad-hoc business contracts /projects to Oakdale.

These suppliers are as follows; CEM U ORTNS LTD EC .F LTD CIVL & MNE LTD FST PS HL LIMITED CTLE CMT LTD, the main reason why this supplier qualified as strategic to Oakdale was because of the OEMs high dependency on this supplier. •

Strategic in term of Oakdale’s high dependency on the supplier

OPPORTUNITIC SUPPLIERS These suppliers were thought to be opportunistic as they were considered as “just” one of the suppliers to Oakdale. Meaning their products or services could be substituted. The relationship with Oakdale is probably because they are supplying their goods/services at a cost effective price or other reasons which are considered out of the scope of this study Below is a list of those suppliers considered to be opportunistic

41

Table 7 : list of those suppliers considered to be opportunistic CRS U LTD FL SS D. G. EPTS REM GH & CO DAM U BAR& WHS C R F LDPE PDTS CON PDTS (KKDY) LTD W.HD TST JM TPN TSPT MED S CO HA N AGTS KU EXTS T UN OF YK CATE LTD XI D ST CO. LTD Thn Wlhm Eu EpT LKD PV SN EL PLC BIP SK IN BR LTD Den Fdg SGL CN GP MT WT AS BP O K L TD LCO SLS LTD UM ST ITNAL TTL BTR (BBS) Rat St Ept STKS BR LTD SHF MTLS H LTD SM ECL LTD Ms Ida Pthe U Ltd YKSHE WTR CDSTP LTD Matn Sls Ltd SDGD RC

J S FWDG GB LBRTS LTD SM TNR & SN LTD MC PT HR LTD Pvc (Pm Co.) Pck Br EV ASTEl Pltats LRCO U LTD R S CMPTS LTD WTWD TBR & F JVH LTD THOE LTD SG . U LTD TBMRE PRS & LMD Prcs Pv $TLtd. R&J Bgs SNLHT SC GP GRHM TD LTD STYS: SP TMC LTD BLDS M F Tsde s J.HLNSC .LTD CTR ST LTD A5 HLTD Mdlton F Ltd BIF W S. LTD TMOVC PL LTD SOD SFT AL WDKLTD PR ENG B LTD BBUR A WT TA GGE LTD BGHSE ENG LTD 42

TTL P.Ltd DYLD IND RHMDSH DTRT C MSD (DLGTN) LTD ARCO ORT IM LUB J & L IND SS QTY MGMT S Wlmsns LDEN GP T-MB (UK) LTD N. E T RCDS TYRT LTD YKSHIR IN B. SS FWD SK DEV UMR MC PLC HWTH T( R) BMER Dg Bo & Ss (Sht)Ltd HK FTRS LTD WRD B (MTON) LTD/PA ARS LTD SCM PLC FGST. SSLTD LAFG RD A LTD A. RK SE LTD NHBC UPX (YKS) LTD KC B. HLTH LTD TYN G CB LTD TNER FAB T C HRN JCB PLtC D TQ LTD WMN EQMT LTD HL'S AT BSS LK ALS CA (U) LTD

WLS SCT EDN HP BDG MT D-T LTD ES PRJTS LTD SPE LTD Wels Wc Ltd EBY GRTHM CAS Ma (Ma Ad S) Technocopy TES I.C ABR INS LTD ST PRCTS LTD

BTISH TLCM Plc G SNBL & SN LTD RMDE E. C Thpsn & sns OR PYT PR Pat Sci R VKG DT NUMD (UK) LTD Zen w& s JOS P (MD) LTD CHIP PT H PESN PR W T BD LTD

CTY EL F MER LAB LTD BRC BDTN TRS FTBL C Ai CH LTD WLSELY UK LTD IMECHE NVF PTS LTD HPM STM LTD FIT RPSE TRN D. Pat & W NWSQT (N E) LTD

The findings suggest that there were some customers who on the bases of the above classification qualified neither as strategic nor opportunistic customers. They were sort of in-between) In this respect the researcher used her discretion to classify them as least strategic while those who met the requirements were classified as the most strategic customers. The classification as applicable to Oakdale was in the categories of most strategic, strategic and opportunistic customers. In the case of suppliers, the analysis took a different trend. There were some suppliers who fulfilled the conditions to qualify as strategic and there was a case where the supplier was qualified as strategic not necessarily because it fulfilled the conditions but simply because of Oakdale’s high dependence on the supplier which could be as result of supplying goods at a cost effective price or simply because of other reasons which are out of the scope of this study

CONCLUSION The findings of this study suggest that there exist different forms of relationships between Oakdale and its customers and suppliers, and these relationships may have some implications on the management and design of the enterprise. Some of the relationships were found to be strategic, whilst others were opportunistic. The strategic relationships, either from the supplier or customers are more important to the enterprise managements than the opportunistic once, even though all of the customer/supplies trading with 43

Oakdale are considered significant to the managements. From the analysis Oakdale positions in competition with other company of the same trading interest is not the best because of the small number of strategic customers that the enterprise can rely on. In the case of suppliers, there was high a high dependency of Oakdale to certain suppliers because of their unique products supplied to Oakdale, example of such suppliers include: CTLE and CMT. The current exploration of the enterprise, supplier and customer relationships is probably the first of such study for Oakdale and it is preliminary. It is not conclusive with respect to how the changes in management strategies and overall effect on the enterprise will be perceived. The future viability of enterprise will depend upon careful management research, including the policy management options. Despite its preliminary status, the present study can be used as a framework for framing future

proposition

which

could

be

used

for

better

management

approach.

Recommendations from the present study include recognition of all the suppliers and customers, but it will be relatively good, to step up additional efforts to increase strategic customers, hence preventing jittering of the enterprise during innate uncertainties which do exist in today’s present business world. Recommendations for further research It would be useful to investigate in detail the reasons and ways of developing more collaborative relationship with potential /existing customers.

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REFERNCES

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