NMS Communications Corporation is an organization that deals with the sale of electronic goods. In the last decade, the organization has significantly grown improving ranking among the best electronics companies. However, the company has a lot of potential and opportunities to grow which are untapped. According to research, companies are changing their supply chain strategies due to the global change in the market environment with the aim to increase their opportunities. For this reason, NMS communication is realizing the need to implement their supply chain strategies to deliver quality services to their customers increasing their opportunities and maximizing potential. Therefore, an evaluation of the NMS Communications push supply system is evaluated for purposes of changing it to pull supply chain system to maximize their potential.
Why NMS Communications Needs to Change Their Supply Chain Strategy?
Currently, the supply chain strategy NMS Communications applies is becoming obsolete. Their supply chain strategy is push where it entails the production of goods and services based on demand. In this case, NMS Communication is producing their goods in relations to demand forecasts done by professionals in the company. A calculation of the demand forecasts is taken from the previous or historical sales of the company. This is where company`s professional employees apply previous sales figures and number of customer ordering to calculate what they are going to produce in the next financial year. This strategy is becoming out dated. Therefore, NMS Communications need to change to a more modern method full of potential.
The first reason why NMS Communications should implement their strategy is the change in technological advancements. Currently, technology is changing quickly resulting to obsolete products leading to waste. NMS, being an electronics company, is going to experience many wastes in production due to the changes in technology. This is because customers are changing demand by buying new technologies. This will result in a change of demand. Therefore, demand will be decreased compared to what NMS was forecasting. Based on the forecast, they will produce many goods and yet the demand is changing downwards due to the change in technology. As a result, the company will incur many costs inhibiting growth.
Secondly, NMS does not have a direct communications with their customers due to its supply chain strategy. In the past, companies did not care to communicate with their consumers for purposes of increasing the quality of goods produced. Additionally, NMS is placed at the middle of the supply chain strategy making it impossible for them to control movement of goods and services. In this case, they are losing many customers in companies that have changed their strategies to communicate directly with their consumers increasing the quality of services delivered to customers and production of their goods. In order to lose their customers, NMS needs to change its supply chain strategy to increase business opportunities.
The pull strategy has various advantages that make it to be among the best. This is because Pull strategy reduces the time a company takes to produce a commodity and avails it to the consumer. The company has direct communications with their supply resulting to excellent relationships. As a result, suppliers will tend to increase efficiency in delivery of services to enhance their relationship. When pull strategy is compared to push strategy, push strategy does not encourage excellent communications. This is because NMS is placed in the middle of the supply chain where it cannot access their main suppliers. As a result, they will not be able to increase quality of goods produced in the company.
Pull strategy reduces the amount wastages in companies that employ it. Pull strategy entails production of goods and services based on the customers orders. In this case, production of goods and services is done when a customer places and confirms an order. This means that goods and services produced already have customers waiting. In the situation of NMS, they are going to save many expenses that are accrued from production due to demand forecast. For example, warehouse charges are going to reduce drastically, because there will be no goods which are going to be stored for the future use as compared to push strategy, goods accumulate in the warehouse increasing expenses. Therefore, NMS should change their push strategy to pull strategy to increasing their opportunities.
NMS Process of Changing from Push System to Pull System
NMS is experiencing several processes when they are changing from push strategy to pull strategy. In this case, three main processes are going to be applied to change from push supply chain strategy to pull supply chain strategy. The first process is new product introduction. In this production process, NMS is going to create teams that will oversee the implementation of strategies. According to the last strategy, push, many flaws including creation of a new product are affecting NMS. For instance, they take a lot of time before they produce new products. For this reason, the team is expected to find proper techniques of implementation that will make pull strategy work effectively once it is incorporated in the company.
The other process is the demand planning process. According to NMS, the flaws include late issuing of the forecast and lack of supply communications. In this case, most of NMS forecasts were impossible to achieve. For this reason, the team awarded this duties is suppose to oversee new strategies that will improve their demand planning process to incorporate the new strategy, pull. This is to ensure that there is an efficient change of strategies maximizing opportunities in the company. Additionally, the team is expected to enhance real time communication in the supply chain strategy. Moreover, the team is expected to ensure order specifications and demand strategies in the business process. In this case, the demand planning process is expected to increase quality of pull strategy.
Order management is the process that experiences drastic changes. This is because it was the team accorded in forecasting on demand of NMS. Therefore, with the introduction of pull strategy, they are changing most of their techniques to ensure efficiency and effectiveness of the company. In this case, the team is expected to take all orders from the consumers, perform a credit test to make sure that the consumers are credit worthy before posting the order in the system for production. According to this process, many implementations will take place, because this is where the process is taking place as per the strategy.
Informed Opinion on The Process
According to the changes and process used by NMS, I think they are timely, especially in this time and era where technology is changing at a swift speed. The introduction of new products in the market should be taken seriously, to ensure that there is a reduction of wastages on goods produced. Secondly, the demand planning process needed to be implemented. This is because it was technically involved in forecasting demand. Additionally the order management process requires implementation. This is because it was the department involved in almost all the supplies of the company. For this reason, I believe that NMS did the strategic decision to implement the process of order management, new order production and demand planning processes.
However, the company should incorporate training for purposes of enhancing skills in the company. This is because of the changes that are going to take place. Employees and other parties involved in the company are new to this strategy. Therefore, they are going to take time before they get used to the processes of the new strategy. Therefore, to ensure that quality in the services provided and a speedy implementation, they should include training as part of their process in changing from push strategy to pull strategy. Thus, they will enhance quality and effectiveness while they are using this strategy.
Advantages accrued to using this process in changing the supply chain strategy. One of the advantages is the reduction of changeover time. The pull strategy ensures that goods produced in a day are more as compared to when the company was using the traditional method. Secondly, maximizations of profits at the end of the financial reports are realized due to the change of these processes. NMS is going to realize maximum profits, since many expenses are extremely reduced in the production process. Thirdly, quality is going to be enhanced when NMS is implementing the processes. For instance, they will be able to communicate with their suppliers ensuring that quality is increased at all levels of the supply chain strategy.
NMS has massive potential to expand and utilize their potential, if they apply proper strategies. In this case, NMS is changing their supply chain strategy to ensure maximization of their potential by exploring all the opportunities. When they change from their traditional strategy push to the new strategy pull, they are going to improve the overall quality of the company. Secondly, they are going to enhance effectiveness and efficiency in delivery quality services and products. Finally, they are going to reduce the time a customer is expected to wait as his or her products are being produced. Therefore, NMS is making an excellent strategic decision.