Supply Chain Management Systems

Question: Discuss about the Supply Chain Management Systems. Answer: Introduction Blackmore is one of the trusted natural health brands, for supplying vitamin and supplements. It deals with inspiring people for taking control and investing in the health and well being. The company was founded by 80 years ago through the pioneering of naturopath under Maurice Blackmore. He believed in giving health properties of herbs, minerals and vitamins given to him for the development of the entire system in the healthcare and naturopathic principles. Products Blackmore is committed for delivery of natural healthcare services and healthcare which is to meet the high quality standards. Blackmore is providing more than 250 vitamins, minerals, herbal and natural supplements, which are produced by the internal people with a combination of traditional knowledge and scientific evidence within the principles of GMP (Goods Manufacturing Unit). Blackmore also provides naturopathy advice in free to the clients on personal health and on the products for getting access to products. Blackmore has engaged in supplying products in various categories of health, nutritional food supplement, herbal medicines, and health care services in the veterinary sector. Location Size The head office for the general inquiries is at Warriewood, Australia and Research office is at Lismore, Australia. Blackmore will be addressing the risk of losing the clients through the steps for ensuring the products in natural stages of the supply chain management. It has international offices in New Zealand all over Asia. The founder of Blackmore has laid high emphasis on the fact of healthy people as well as the healthy planet. Environmental and Social Impact The company has some long term commitment in the context of an environment as well as social responsibilities. Given protecting the planet for upcoming generations, Blackmore is continuously developing a different process for decreasing the impact of the products and its packaging, by improving rates of the recycling and developing such packaging solutions which will be enhancing the environmental policies. Furthermore Blackmore, glass is usually preferred as container since the 1960s by the superior recycling process and premium presentation. Blackmore is also looking to the environment factor by the composition of the material, with a view of ensuring the packaging will be free chemicals toxicant. Blackmore is managing all the initiatives of the environment and sustainability for having a compliance with Therapeutic Goods. Blackmore also aims in reducing the intensity of the environment and footprints of carbon on the facilities and operations conducted. In the past twelve months, the company has increased the operations for meeting the demand of followed by the unexpected growth. For meeting this aim, the company has started a new initiative for better management of the waste, recycling and consumption of energy at Blackmore Campus. Further, there was role back of the implementation plan for increasing the capacities for handling waste and also for the introduction of new recovery and process and streams. The campus of the Blackmore and the companys headquarters has feature filled with services of sustainable energy needs as well as running in parallel to the grid. The most important aim in this feature is to promote biodiversity in the local environment. It aims at providing the green environment and sustainable environment. GRI guidelines - Gap Analysis Gap analysis refers in making the comparison with actual performance with the desired performance. The company utilizes the resources effectively or not with the presently available resources. Gap Analysis focuses on the matter of new approach to be implemented for the growth of the industry (Ehlers et al., 2016). The gap analysis can be regarding new and innovative strategy to be implemented for the development of the firm. The company has gap usage in between the potential for the market and actual present use. Gap analysis will be evaluated for Blackmore by GRI guidelines. The Global Reporting Initiative (GRI) is the international non-profit company which will be pioneering and developing with the use of Voluntary Sustainability Reporting Framework. GRI aims to make sustainability report standard for practicing in the companies. The frameworks of this reporting system give metrics and process for the measurement and reporting as well as performance with the impact of sustainability (Grassini et al., 2015). GRI will be enjoying the partnership of strategy in UNEP. The focus point of the Australia works in providing economic co operation and improvement in the company. The Gap analysis adopted by Blackmore, it is doing the recycling of the material used for packaging. Blackmore is also using natural and naturopathy services. Blackmore is also aiming in developing a combination of scientific and traditional approach (Vincent et al., 2016). GRI Guideline Investors and Stakeholders Compliance with the GRI guidelines will help the company in many ways. GRI guidelines will also help to many potential investors, shareholders and other stakeholders of the company (Ortiz Marn,2014). The compliance of the GRI guidelines the company has some advantage, which includes external as well as external. Internal Benefits are: A better understanding of opportunity and risk will be increased in the company (Castelo,2013). Help in emphasizing the link among the non financial and financial performance of Blackmore. GRI guidelines will be influencing the strategy of long term management as well as policy and business plan (Mori Junior et al., 2012). GRI will be streamlining the methods, reduction in the expense and improvement in the efficiency. GRI helps in assessment and benchmarking the performance in respect of laws, rules, standards, codes and voluntary initiatives. The comparison will be done on the internal performance, and among the company and industries (GRI's Standards.2016). Helps in getting avoided from the implication of publicized environment, governance, and social failures. External Benefits are: Mitigation or reversal on the negative environment, governance, and social impacts. Helps in the improvement of reputation and loyalty towards brands. Helps the external stakeholders for the understanding the organizations honest as well as tangible and intangible assets. Helps in demonstrating the expectations and influences of the company in the regards of sustainable development. In the above explanation, the details discussions have been done on the benefits of the stakeholders and other investors about Blackmore. According to the guidelines of the GRI states that there should be acceptability of the multi stakeholder engagement, with the engagement in the best combination of technical as well as diversified knowledge of the in the reporting needs and utilizations. This approach will enable will enable in producing the guidance of the reporting sector of the company. Shareholders of the company are offered many discounts in the products. Shareholders of the products are given 30% discount on the recommended retail price of the company. All the products are delivered in free across the Australia. The orders can be placed online. The investor of the company gets news updates and an invitation to the special events and special offer given by the company. Further, Blackmore is engaged in the DPR (Dividend Reinvestment Plan). Blackmore gives dividends, directly through a bank account. Cost behavior estimation and identification Blackmore has acquired Byron Bay firm Global Therapeutics worth of $23 million for increasing the share of the market in the medicines made of Chinese herbs. Global Therapeutics is a pharmaceutical company which is engaging itself with a view of running increasing its position in the market (Banker et al., 2013). The costs identified in the operation of Global Therapeutics are the operating cost. The operating cost is of three categories which are under research and development category which comes under variable cost because it is varying every year. The company has no fixed cost in its operations. Identified variable costs are research and development, general and administration and Party related expenses. As the company, do not have any fixed cost, so it is running in loss. The acquisition was taken place above will help him in recovering the loss faced by the company (Banker et al., 2013). Global Therapeutics is operating of the research and development activities, so it will be only having some of the variable components as given below: Operating Expenses: 2015 2014 2013 $ $ $ Research and Development 36657 16324 12855 General and Administration 9671 385 2309 Related Party Expenses 65 332 499 Total Expense 46393 17041 15663 Cost behavior is related to how the cost will be changing depending on the level of the activity (Banker et al., 2013). The cost which will be varying proportionately with the change in the level of production is termed to variable cost. The costs whose effects remain unchanged on level getting varied are termed to as fixed cost. Through the identification of the cost break even point can also be found out (Blackmores.com.au.2016). Break even analysis is a very effective tool for measuring the performance of the company. Break even analysis will be helping in getting understand the strategy to be adopted for the Blackmore for the implement. Break even analysis is a useful tool for measuring the profit and loss at various levels of sales and production (Bu et al., 2015). Break even Analysis will also be predicting the effect of cost and change in efficiency over profitability (Drury,2013). Balanced Scorecard The balanced scorecard is management system and planning of strategic which will be used by the business, non profit and government companies all over the world for the alignment of vision and mission of the company. The balanced scorecard is semi standard structured report for getting help in the process of designing the process and automation tool for keeping track the activities. The first generation of the scorecard has four perspectives. The four perspectives are as follows: Financial This section helps in identifying and measuring the advantage of the stakeholders regarding cash flow, dividend, operating income. Regarding financial perspective, Blackmore is providing the good dividend to the shareholders of the company and offering 30% discount on the products. Regarding non financial perspective the company is designing innovative approach for in the packaging sector (Ratnasingam,2014). Customer This section helps in encouraging the customers. This section will be recognizing the measure of the clients. In the company perspective, Blackmore is giving free delivery of the products to its clients and ranks the customer by importance (Gawankar et al., 2015). Internal Business Processes This section describes identification in getting excelled. Blackmore uses the natural herbs and ingredients for manufacturing its products. The company will be introducing more innovated products for this approach (Humphreys et al., 2015). Learning and growth This section identifies the scope of improvement and growth in the company regarding innovation and value creation of the company regarding innovation and giving profit to the company. Figure 1 Balanced Scorecard Source: (Boscia McAfee,2014) The Break even calculated for the given information is 11417 units at this point company should maintain its unit, below this unit company will have to shut the business (Painter et al., 2015). For getting $ 150000 profit after tax, the company has 12.70 $ of contribution and 28290 units needs to be produced. Working for this effect is given below: Revenue 647,846 variable cost 288,560 Contribution 359,286 Fixed cost 145,000 Income before tax @30% 214,286 Net income 150,000 The memo will be helping in getting established the two strategies, which can be used to reduce the breakeven strategies of Blackmore for decreasing the breakeven units and get higher profits. The memo will be effectively depicting the strategies and portraying the calculation, which will be providing an in elaboration of the effect of the strategies on profits of Blackmore. Therefore, the inclusion of strategy on Recharge Bar will help Blackmore for the development of profits. Action Line: The two strategies affecting the breakeven point in units, will be generating profit by the Blackmore. The strategy basically focuses on the overall selling price of Recharge Bar with 30%, which will help in decreasing the breakeven units to 10083. In addition, the second strategy is to decrease the variable cost by 30% that is the packaging cost, which will decrease the breakeven point to 10721. Now the actual breakeven point in units in comparison to the newly adopted strategies is 11417. So it can be analyzed that acquiring of the strategy is will be increasing the selling price of Recharge Bar which will help in decreasing breakeven point and in turn increase in the annual profit from $23100 to $34860. Rest of Memo: The strategy acquired for "Recharge Bar" is for the enhancement in the break even point and annual profit of the Blackmore (Blackmores.com.au.2016). Here is the following strategies which will be implemented are as: First Strategy Given Data In units Protein Shakes Power-up Vitamin Juices Recharge Bars Expected Annual Sales 15,000 15,000 7,000 Selling price 7.8 9.5 7.28 Ingredient cost 3.1 3.6 2.75 Packaging cost 0.35 0.35 0.05 New Data In amounts Protein Shakes Power-up Vitamin Juices Recharge Bars Expected Annual Sales 15,000 15,000 7,000 Selling price 117,000 142,500 50,960 Ingredient cost 46,500 54,000 19,250 Packaging cost 5,250 5,250 350 Gross profit 65,250 83,250 31,360 Total Gross profit 179,860 Staffing and facilities 117,000 Marketing costs 28,000 Profit 34,860 Sales 310,460 24.58 Fixed cost 145,000 145,000 Variable Cost 130,600 10.20 Contribution 179,860 14.38 Breakeven point in units 10,083 Second Strategy Given Data In units Protein Shakes Power-up Vitamin Juices Recharge Bars Expected Annual Sales 15,000 15,000 7,000 Selling price 7.8 9.5 5.6 Ingredient cost 3.1 3.6 1.925 Packaging cost 0.35 0.35 0.05 New Data In amounts Protein Shakes Power-up Vitamin Juices Recharge Bars Expected Annual Sales 15,000 15,000 7,000 Selling price 117,000 142,500 39,200 Ingredient cost 46,500 54,000 13,475 Packaging cost 5,250 5,250 350 Gross profit 65,250 83,250 25,375 Total Gross profit 173,875 Staffing and facilities 117,000 Marketing costs 28,000 Profit 28,875 Sales 298,700 22.90 Fixed cost 145,000 145,000 Variable Cost 124,825 9.38 Contribution 173,875 13.53 Breakeven point in units 10,721 Conclusion On concluding the report, it can be said that report has completely described the entire requirement given. Blackmore has achieved the factor of sustainability in compliance with GRI guidelines because it is making its product based on the environment and social impact of the company. Evaluation of the gap analysis with the GRI guideline has helped in the better analysis of the company. Gap Analysis has identified the gap among the allocation optimization and integration of the resources with that of the current level of allocation. Gap analysis claims in providing a foundation for measuring the investment of time, money and HR resources necessary to get a particular income. Cost Behavior in necessary for the planning and controlling of the management cost. Cost behavior will also help in minimizing the cost of the company. The implication of the balanced scorecard with the full explanation of the four perspectives has clearly brought the true aspect of the company's performance rega rding integrated report of the company. 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