Question 1
When the product range of a company is widened, the supply chain becomes a key component of the company. When a product range is widened, the supply chain and its management also changes. In this case of The Smooth Coffee Shop, the stages of supply chain will change. According to Leeman (2010) the design of a supply chain will depend on the needs of the customers and the roles of stages involved. The supply chain of the coffee shop will have three stages namely raw material suppliers, manufacturer which in this case is the shop and customers. The suppliers will supply the raw materials needed to make the ice cream, and the cooked food, the shop will manufacture the food and then offer it to consumers. The production of cooked food and ice cream will be in-house and not outsourced. According to Ivanov and Sokolov (2009) in-house production gives a firm independence over the production, eliminates costs of logistics and risks of delaying the production. Even though in-house production requires heavy capital and expertise, it is better in this case where cooked food and ice cream is involved. It is easier to produce them than outsource them.
Another change that will be made is to centralize head office management. The shop ahs had individual outlets managed individually. Since the product range is being widened and some shops being closed, it is easier and cost effective to have a centralized head office. Ivanov and Sokolov (2009) explain that centralizing management makes decision making easier and faster and the costs are reduced because there is no need of many managers as would be when there are individual shops managed independently. Central management will also ensure that decisions made affect the whole shop in the same capacity and that way all outlets will be better rather than few shops having better management performing better and the rest of the shops performing poorly and as a result the whole shop suffering. Another important aspect of the supply chain will be inventory management. The shop will have just-in-time inventory because of the nature of the products. Ice cream and cooked food are perishable and sensitive and customers need them fresh and therefore stock that is just-in-time is required.
Question 2
Innovation and technology are an important part of any company with regards to attracting customers, developing the company’s brand and running successful advertising campaigns. According to Tidd and Bessant (2011) innovation is the product of exploiting new ideas and it is one of the important success factors in gaining competitive advantage. Innovation and technology will help the shop to develop top notch production facilities and as a result the products sold will be of high quality and have additional values to customers hence attract customers to the shop. Innovation and technology will also help with the advertising campaign of the new products added to the product range of the coffee shop.
Innovation will help give the advertising campaign of the ice cream lien and the cooked food line an edge and as a result attract more customers. Innovation and technology helps with customizing products of the shop to fit the needs of the customers in the different locations of the outlets. Innovation and technology also create new methods of interacting with customers for instance giving sales people tools to make different and more effective sales calls. Innovation and technology will also help the shop to set trends rather than follow them. As a trend setter the shop will be better placed as a competitor in the market and more customers will be curious to try the new trends. It is therefore important for The Smooth Coffee Shop to invest significantly on innovation and technology to push the widened product range to existing and potential consumers.
References
Ivanov, D & Sokolov, B. (2009). Adaptive Supply Chain Management. New Jersey: Springer Scioence and Business Media
Leeman, J.A. (2010). Supply Chain Management. New Yoprk: Books on Demand
Tidd, J & Bessant, J. (2011). Managing Innovation: Integrating Technological, Market and Organizational Change. Chicago: Wiley
