Thursday, June 05, 2008

Rosewood Case Study: E-Commerce Technologies Benefits and Solutions

Rosewood Case Study: E-Commerce Technologies Benefits and Solutions for Rosewood Furniture and Cabinets Ltd.


EDI may not be a suitable method of recording and tracking product sourced shipments from Brazil as their national level of B2B technological capabilities may not be sufficient for the task. In particular a JIT system may be impossible to sustain on a materials sourcing level. An inventory reserve for factory production scaled to online ordering systems may however function effectively. However base component systems for the furniture exclusive of veneers may possibly be easily streamlined with JIT levels of improvement.

A JIT system would allow Rosewood to implement Deming/Shewhart Cycle type reduction of waste and elimination of defects, all through plan, do, check, act. However as is demonstrated by recent GMC announcements regarding the closure of an Ontario truck manufacturing plant, inefficiencies and productivity issues concerning worker and management costs of production could obliterate any attempts to implement significant quality improvement measures within Rosewood's manufacturing facility. A commitment to total quality improvement has obviously not been made in many North American manufacturing facilities. Often the strategy of American and Canadian producers when faced with international competitiors with stronger quality commitments has been to exit the product category in question, such as Haier's purchase of Siemens AG computer division products or Sony-Ericsson buy-outs. An ineffective JIT implementation at Rosewood might easily place it in the target cross-hairs of superior quality management competitors. More recent Toyota pull-system negotiations have revealed a questionable commitment to partnership in relation to suppliers and more of a strong-arm tactical approach to pricing and defects intolerances which highlight an inflexible nature in respect for rate of quality improvement. Rosewood Ltd. needs to be reminded that the nature of their premium product may not require uber-competitive predatory management of operations, process, supplier, or employee relationships.

Market Objectives: Michelle and Curtis Cook (CITP) describe the general benefits of e-commerce technologies for Canadian exporters at Export Source.

Numerous functions fulfilled are listed such as:

Eliminating the need for on-site salespeople: This may be an ideal solution for numerous products as evidenced by web sales at Amazon and Overstock which have increased the global reach of many small and medium sized businesses particularly in clearing excess inventory. However Rosewood would need to exercise caution and evaluate its platform to determine customer acceptance of this method of sales for their particular products. Premium ranges often denote premium costs for marketing and competition is often stiff due to the possible high profit margins involved. However traditional and loyal customers may not easily transition to web-based sales unless their target profile determines an openess to new marketing approaches.

Confirming product ranges and availability: While this is a standard feature of online sales benefits to large scale businesses an opposite and detrimental effect could harm Rosewood's position in local and international export markets. Unless a JIT system of manufacturing is effectively implemented or otherwise an inventory safety stock-piling is in place, sudden increases in orders due to online sales could impede efficient push or pull systems in the manufacturing schedules at Rosewood. Lack of availability due to an under-stocked order schedule could cause Rosewood to lose valuable loyal repeat customers however it is yet to be determined if Rosewood customers actually are one-time or repeat buyers unless they represent a wholesale distributor or possess agency agreements with showrooms and retail sellers in the USA and Canada.

Providing real time prices and methods of payment: Anecdotal evidence for example, in the provisioning of premium products such as fine furniture suggests that the sales approach to pricing and payment strategies often attempt to mirror the exclusive cache of "by appointment only" or "pricing on request" which shields the manufacturer from competitive pricing strategies in new or developing markets. This might not be the best choice for Rosewood.

Determining methods of shipment: This would provide ample research into customer preferred shipping methods and perhaps eliminate a need for JIT materials sourcing especially if customers are willing to wait for exclusive options, designed, build and crafted fine furnishings. Obviously if these customers wanted a large factory built product JIT they might have contacted Sears and Roebuck.

Online ordering and confirmation: Again depending upon the target customer profile the comfort and convenience of online ordering and confirmation of order may not match consumer preferences for this product and needs to be determined by market research on the ground.

Evaluating customer satisfaction: This could be a double-edged sword as is the case at Sierra Trading Post "Geoffrey Beene Linen Sport Coat (For Men)" receives numerous but mixed reviews perhaps discouraging first-time or new buyers from making purchase. Rosewood would need to provide continuous improvement performace reviews for products and refine quality based upon customer recommendations. There is just no point in gathering customer satisfaction ratings if one has no intention of responding to and improving upon them. Rolls Royce might provide a sterling example of a product for which improvement has never really been a serious customer concern. Perhaps Rosewood furnishing must avoid online sales and marketing to maintain a high perceived value for money product, in short supply and often, in high demand. http://www.sierratradingpost.c...ort-Coat-For-Men-.html

Providing secure and safe transactions: Again security issues will be determined by target customers comfort with conducting transactions online. For example, while older does not necessarily mean richer, it often means less inclined to conduct transactions online out of unfamiliarity with e-commerce technologies.

Niche: JIT and E-commerce are most effectively implemented in large scale multinational corporations with similarly sized market-based captialist competitive aggressors jostling and jousting over market share and seeking to increase profits for the benefit of stakeholders and shareholders. It needs to be determined whether Rosewood's products and category require such improvements at present or in future. Cautious and experimental changes might be made but at present Rosewood appears to possess a unique product with unique features and small to moderate production outputs. In such a position growing market share and maintaining the niche are exactly the reasons Dobson and Green left a high scale production oriented employment to start their own business. Are they eager to build such a business around themselves again?

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