The report will describe about the challenges faced by Heineken USA in the new approach of supply-chain management aspects in USA. The case study provides ample amount of information regarding the business processes of the company in United States. The security of the web-based portal of the supply chain management of the company is at stake because of the competitors present in the beer manufacturing industry. Heineken is the most popular brand in the brewery industry that has a substantial market share in the country. The report will discuss about the innovative solutions provided by the consultant in order to improve the market share as well as the sales of the company. Supply chain management is a vast area that can be improved in many ways both in terms of digital aspects and in the physical aspects of innovative approaches of supply chain management. The report is divided into four parts such as organization’s strategy, enterprise analysis, system evaluation, change management and risk issues. Strategies are to be formulated in these aspects in order to improve the overall performance of the company in the US market. The case study portrays that apart from having benefits there are several disadvantages too that are to be mitigated in the due course of time.
Organization’s strategy is an important aspect for the growth and development of organization. Heineken’s organization strategy is developed but it is not effective in terms of doing business operations in U.S. Organization’s strategy is an internal aspect of the company that are formulated in terms of gaining the market share as well as the different types of other internal problems faced by the company. Heineken’s strategy is though good at its initial stage but they are not updated enough to compete with the other beer manufacturing company. The company launched an Internet based system that is responsible for the mitigation of the problems of distribution, supply chain management and lead time reduction (Harper 2015). The organization is responsible to take the challenges faced by them in the external market which can be done by various processes such as meeting, presentations, individual meetings, group meetings, etc. Customer feedback must have to be included in order to formulate an enriched organizational strategy that would follow the customer demand in the market.
Stakeholders and stakeholder management
Stakeholders are an important part of the business in the different operational department of the business. Stakeholders of Heineken include shareholders. CEO, COO, CTO, CFO, etc. that are responsible for strategy building and the important decision making process of the company. The stakeholders of the company are responsible for making decision in the increasing sales as well as the impr
oved operational process of implementation of various systems that will mitigate the supply chain management issues and the distribution problem of the company (Goetsch and Davis 2014).
Stakeholder management is defined as the systematic analysis, identification, implementation and planning of different actions that are designed in order to engage the stakeholders of Heineken. Stakeholders of Heineken consist of both internal and external stakeholders that would involve in the new strategy formation which will boost the sales of the beer. Stakeholder management of Heineken consists of four steps such as:
- Identification of stakeholders
- Assessing the interest and influence of stakeholders
- Developing communication management plans
- Engaging and influencing the stakeholders (Cummings and Worley 2014)
Organization structure and design
Organizational structure and design of a company is responsible for the maintenance of the different strategic functions as well as the different employees of the organization. Employees are the important part of the business that are known for earning revenue for the company. It can be said that the company must restructure their organizational structure to a functional organization structure. It can be said that the present organization structure is not competent enough to achieve the sales target and the reduction of the lead time in the manufacturing and the distribution system of the company to the consumers (Asmawi, Rahim and Zainuddin 2015). The case study portrays that the company has issues in the delivery and distribution of beer in the market due to the lack of communication between the different employees who are working in the manufacturing sites and the ones who are working at the corporate headquarters. Functional organizational structure is appropriate in this purpose so that they can cooperate with each other while improving the new systems of supply chain management in the company.
Information system and strategic alignment
Information system and strategic alignment are the aspects that are required to increase the productivity of the employees as well as the productivity of Heineken as a whole. Heineken has a good reputation in the breweries industry that is possible due to the improved information system and information technology used by the company used by the organizational context of Heineken. However, it can be said that with the increase of competition of the breweries market in different parts of the world especially in the market of United States, the company is not becoming able to cope up with the competition and the market demand. The strategic alignment must be set as per the requirements of the functional department of the company (Nahavandi 2016). The strategic alignment must adhere to the set regulations and the technological aspect of the information system used by Heineken. Heineken uses different technologies which are successful at the initial stage but are not competitive enough with the due course of time. Hence, up gradation of the technologies are essential in order to increase the profitability of the company.
The market opportunities in terms of the breweries market are huge. It can be said that the companies in this industry are growing day by day. Hence, the competition in the market rises. Heineken is one of the most popular companies in the beer manufacturing industry that supplies quality beer to the consumers for many years. Market opportunities also consider the fact of quality maintenance equally. It can be seen that the consumption of the beer is increasing day by day both in terms of European market and the US market. It is the reason of the growth of competition in this sector (Mulki, Caemmerer and Heggde 2015). Quality and taste of beer is important in terms of market opportunities that are responsible for the increased market share along with the improved brand reputation among the consumers. The brand popularity among the different consumers are related to the increased sales of the company that will incorporate using latest trends and the different types of technologies in the Information Systems and Information technologies that serves popular Heineken beer to its consumers (Glor 2014).
From the case study, it has been evident that Heineken has ownership interests in more than 110 breweries. Its products were available worldwide in over 170 countries. Heineken is the leading brand in the European market. In USA, Heineken had its offices in Los Angeles and Atlanta (Kim and Price 2003). However, Heineken beers are brewed and bottled in Netherlands and it is shipped to various points in USA. It is when the distributors place order the product was manufactured in Netherlands and then was shipped to the different locations. The highest demand location was supplied with the product on a priority basis.
The recent second largest brewer was not in the position where it is now. The organisational structure and the mode of delivery system were not as advanced and lean as it is now. Due to the long time trade to deliver the product create hindrance for the company to deliver the products in time (Ibriwesh et al. 2017). This lead to the situation where the organisation had to think of better supply chain performance in order to meet the demand of the market and create more dominance in the market compared to other competitors.
The practice of collecting the requirements of a system from the consumers, stakeholders and the users of the product or service is termed as the requirement elicitation. In the view point of Hadar et al. (2014), is non-trivial because one can never be sure if the user and the customers are asking for the product or not. In fact the requirement elicitation practice involves interviews, user observation, brain storming, role playing and prototyping. In case of Heineken, it can be said that the requirement elicitation is rather user based observation. It has been found that when the distributors placed orders, the manufacturers would focus on the same and then provide delivery. As a consequence of not being able to reflect the market condition, the company faced problems in terms of supplying the right quantity of product in the market (Kim and Price 2003). The way the company used to collect the demand draft was the most inefficient way and all other developed organisations in the same field were found to use the right means of collecting the demand of the product. These companies were far advanced in terms of its supply chain management. Thus, the need for improving the supply chain for Heineken was also felt (Jayeola et al. 2014).
Analysis technique for an organization depends on the basis of improvement that the organization is seeking for. The major aim is to analyze the strengths and weaknesses of the organization and also to find out the available opportunity in the market that the organization would take in order to improve its operational activities (Zheng 2014). For the market analysis technique, it has been found that Heineken depended on the sales representatives from Heineken USA who would meet together three months ahead of delivery in order to plan out the sales and the promotion details. It was understood that in order to understand the condition of the market, it is important to use better tools and techniques to analyze the market.
The market analysis technique was rather labor intensive and there was no central planning. Beer orders used to arrive at different times that automatically made it difficult for the company to co-ordinate the brewery production with other production techniques and shipment and delivery option (Kim and Price 2003). The market analysis depended mainly on the collective response of the suppliers and the users by sharing information about the delivery options and the demand of the distributors.
Requirements Analysis and Specification
Requirement analysis is the process of determining the user expectations for a new and modified product. The new requirement must be quantifiable, relevant and detailed. As pointed out by Stark (2015), requirement analysis requires frequent communication with the users in order to remove the ambiguity or any kind of conflict. In addition to this, it also requires complete documentation of all the aspects of the project development. The need for the new business model was felt due to the lack of supply of the product on the right time. It was understood that if the situation is not altered, it would degrade the sales and the profit of the organization to a large extent (Laitinen et al. 2015). Thus, the establishment of the new e-business model was felt.
The most important thing to be considered is the faster delivery option to be availed for the distributors and remove the shortage of the supply in a timely manner. In addition to this, the market was getting saturated by the increasing numbers of competitors as well. The aim of the new model was to reduce the time of supply that was increased because of the inventories and the storage rooms (Said and Bellogín 2014). Thus, a strategic decision was necessary in order to change the nature of the supply process and the trading options.
The iterative process that takes place throughout the lifecycle of the project is known as the requirement validation. As commented by Beel et al. (2013) it is very important to question and clarify the validity of the order in order to ensure that the complete process could be carried on smoothly. In case of Heineken, it was clearly evident that there was a need for the changes in the supply chain. The faster they can deliver the product it would be beneficial for the company as it would generate more demand.
The HOPS model was thus introduced as a new business model that would be accessed with the help of internet (Kim and Price 2003). The suppliers would use their online platform and could give their order easily. Thus, there remains the option of forecasting the demand for the company that they can easily keep a trace of the demand and can supply the product without making any delay.
The process of evaluating the entire performance of the system in order to understand how likely they perform in the market is called the system evaluation process. It takes place in a number of steps:
It has been clearly evident that the organisation needs to focus on the supply chain and the delivery option. The best option selected for this was the online booking option. A browser was selected that could be used by the suppliers and the distributors as well. The sales forecast can be easily reviewed by the company and they can supply the product to the particular locations (Bailey et al. 2015). Thus, the time of delivering products will be reduced. In addition to this, the users or the distributors who do not have the access of the overall system could also easily demand their product. This would help them to increase the market share.
The requirement of the newly framed model was felt when Heineken could not meet the demand of the major distributors of the product. Heineken was facing certain major challenges in the overall activities of the supply and the distribution. In order to enhance the efficiency of the delivery of the product in the major regions, it was important to think of better ways for delivery. By that time, the internet and the electronic related things were becoming popular and people were getting accustomed to it. The web based supply chain would provide the best option to the suppliers and the distributors (Said and Bellogín 2014). Heineken got the opportunity of using the electronic platform and thus, there remain the chance that the organisation would eventually grow in the market and would get the opportunity of expanding its business in the other regions as well where it might not be able to supply its product due to lack of knowledge and product demand detail from the distributors (Kim and Price 2003).
The new business model was completely based on internet and web browsing activities and thus, there remained lesser chances of requirement management to be applied for the purpose of maintaining the overall application. Heineken benefitted a lot from this particular business model. The only equipment required for the process of supply and distribution is the access to the web browser (Jayeola et al. 2014). In fact, it has been evident that the distributors became less anxious about the running low at the time of extreme heated wether or the excess supply if there is a presence of local brewery in the particular region.
The new business model was not only beneficial for the suppliers but for the distributors as well. The order planning time has reduced from three days to just 45 mins. In addition to this, the distributors got the opportunity of keeping the correct forecast of the order and thus, the overall situation narrowed down to a more accurate forecast (Kim and Price 2003). This innovative technique used by the Company was the first of its kind and can be easily regarded as the major reason behind the success of the company.
Potential Change Management and Risk Issues
Overall change process
Change management is essential for a company in order to grow and maintain the sustainability of the company in the competitive market. Heineken has huge employee base that will follow functional organizational structure in order to maintain a smooth flow of communication among the employees and the customers of the company. Change is constant. It can be said that the company must change their strategy, business model improvement, strategic management, improved customer service, manufacturing process and supply chain management process, etc (Miao et al. 2013). In this scenario of Heineken, all these changes are required in order to improve the HOPS system i.e. Heineken Operational Planning System in the company’s supply chain management process. The case study explains that the company is facing fierce competition in the use of the technology also that is the result of the slow growth of the company in the US market. The theoretical implementation of Lewin’s change management model is a perfect model that the organization can implement in order to remove the hindrances of the different types of employees in the organizational context (Bryman 2013).
End user perceptions of the system
The Heineken Operational Planning System (HOPS) is responsible for the supply chain management different types of issues in terms of the supply chain management issues of the company. The users of this system are initially happy with the different technologies in the system. However, it is easy to use but the issue is regarding the security of the technological systems used by Heineken. Heineken will have to use other technologies that will ensure the security of the company (Lam et al. 2015). Technological security leads to breach of data that will lead to loss of profitability along with the less sales of the company. The perception of the new technology to the customers and the employees of Heineken are to be communicated by the theoretical frameworks of the company. Lewin’s change management model will be responsible for the change of the perceptions of the employees of the different types of operational department (Amabile and Pratt 2016).
Senior management support for change
Senior management of the company includes the stakeholders of the company and the shareholders of the company. Stakeholders are responsible for the initiator of the change in the different types of the operational department. The senior managers must cooperate with the different types of the employees of the company. Heineken is the leading company that must initiate change in the different types of the supply chain management issues of the different types of the facilities present in the various regions of Europe and United States (Nazir and Shah 2014). The new technology must be supported by the different types of employees of the company. The IT department of the company must formulate with the customers demand along with the need of the company. The company is focused in achieving the sales of the beer along with the brand reputation within the market (Wineman et al. 2014).
Leadership and change agent roles
Leadership is the issue that is vital for initiating the change initiator of the company in order to lead time reduction as well as the increase of sales that will be responsible for the change management of the different operations of the company. Participative leadership of the company would be useful in order to involve all the employees in the decision making process of the company so that the employee relation of Heineken reaches at a new dimension. Participative leadership is also known as democratic leadership that will help Heineken in the different types of the process of the supply chain management of the company (Sung and Choi 2014). The change agent roles will be completed by the leaders of the organization. The sales of the company will automatically increase if the leaders of the company become successful in convincing the employees while accepting the new technology in the manufacturing facilities of the company.
It can be concluded that Heineken will develop its reengineering process in the supply chain management process of the company at its manufacturing sites. The company must be collect the demand data in order to formulate economical and efficient methods of technology implementation in reduction of the lead times of the supply chain process as well as the market demand. Apart from that, it can be said that leaders of the organization is responsible for the lead time reduction, inventory reduction, sales increase, procurement of the cost reduction, etc. Heineken’s product is so much popular in the different parts of the world. The report will discuss about the different types of issues that the company must address in order to implement new technology to the manufacturing sites of the company. The operations department will have to use the technology in the improved relation with the distributors of the company.
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