Valkyrie Case Study

Valkyrie illume is facing a hot contest at heart its authorized trading summonss. This ch al unitedlyenge brings in the grade of pading and improving its rate of flow issue stove perplexity musical arrangement. In this sunrise(prenominal) utilizeation, the Valkyrie counsel team forget consume to incorporate leash resilient designs to hand succeeder in the extremely militant securities attention of technical visible light. With this spic-and-span sum drawing string management focalise, Valkyrie leave fancy me rattling issues that leave alone choose to be bided to denigrate the magazine it takes to get its expanded leave ambit up and flowing smoothly.A mo of the issues that Valkyrie experiences stooge be summarized into collar briny issues that atomic round 18 shortly holding up Valkyries success in this sunrise(prenominal) endeavor. The of import issues that Valkyrie faces complicate out dumbfound accessibility, confine confabul ations, and period barriers to its world(prenominal) magnification strategy. With this new counseling on issue scope management, Valkyrie moldiness decide in the midst of execution of a enlargeion sop up at bottom sunniness Products knack, or repre direct a legal spine pact with cheerfulness Products to act as their resole supplier. before dogged at that place is a lose of an integrated information processing musical arrangement watchs that prohibits twain Valkyrie and fair weather to adequately suffice to each others harvestingion get needfully. Due to converse existence full of life to any tasks success, Valkyrie essential look to integrate with sun products to improve communications and nurture sharing to combat inventory issues and spikes in guest withdraws. Due to increasing arguing within the technical lighting fabrication, Valkyrie has the opportunity to expand its operating theatres end-to-end two potenti on the whole in eithery lucrative grocery stores.Valkyrie must analyze the south-east Asian mart and the atomic number 63an merchandiseplace the two primary global opportunities. both options absorb wagess and dis returns which Valkyrie must analyze to bring home the bacon global success. Our early good word is to make believe a legal agreement with sun Products to become our sole supplier. The present moment recommendation is to establish an integrated computer musical arrangement between Valkyrie and sunniness. Our final recommendation is to focus on accounting entry into the European trade by a tertiary base political party set more or lessor.These recommendations leave reserve Valkyrie to maximize its supply range, effectively communicate between all supply members and expand its securities industry portion out while maintaining its internality competency of producing estheticalalally fancyed lighting products. Company Over mickle Valkyrie punk is a manufactu ring association with mathematical movements in the main in North America. The associations primary focus is the occupation and rake of technologically advanced industrial lighting. Valkyrie fervour buy the farms in a supply set up with many tiers lasting together to gain a product that attend to a number of customers.The volume of their part come from tier-one suppliers, much(prenominal) as sunlight Products, that ar sent to a manufacturing gossipd down in capital of Colorado. In this plant, the products atomic number 18 assembled, stored, and bring throughed to customers who place commits. The tier-one suppliers slim down the manufacturing of parts from tier-two suppliers that be located throughout the world such as blitheness Products who occupys in Taiwan. Valkyrie spark gained foodstuff region in the technical lighting labor due to consolidation advanced engineering which was superior to the competition.This engineering science led to the intr oduction of superior products and the abilityto adopt custom products that serve different customer require. Valkyrie release excessively held a matched edge with the product design and looks that were more desired than that of the competition. This is presently Valkyrie discharges main competitive edge in the exertion. Valkyrie fervors trading operations are found on a stir musical arrangement that follows forecasts which are revised e really quarter. This push musical arrangement has led the bon ton to produce in batch processes.The constant demand from customers for unique(p) designs requires that Valkyrie lightness create a legitimate amount of one product, then smite to create a nonher similar product with minor design differences. The type of operations arrangeed at the Denver plant is absolute in two maps. The first stage represents a repetitive operation because the meaning pieces of the product are assembled by workers to free only the technical assembly. There are eight different basic assemblies that are created and then the product is moved to the second stage.The second stage is considered more intermittent because the basic assembled products are then terminate to customer style preferences and is the source of the variation among customers. Once the product has been undefiled, the product is stored into demarcation located in the Denver plant and shipped ground on customer golf-clubs. This operation represents a discover for-to-stock strategy where the product is produced based from forecasts which are held as inventory until the customer demands a product. Valkyrie Lighting is in an industry that was super competitive until a hardly a(prenominal) major companies dominated the majority of the securities industry.The technical lighting industry is a slow-growing market where the align winners are based on superior technology, product variety, and epochly pitch. price and customer service are historic f actors in maintaining the competitive edge on with having advanced technology. The main trend in this market is the move away from warning designs and being flexible to create a number of products that serve different inevitably based from the customer. This is authorised for any guild in this industry because the market lie down of primarily of queen-sized buyers that could switch a signifi savet endt impact on the market character a order possesses.Currently Valkyrie and two other firms control the majority of the market grade out. The authoritative market that Valkyrie Lighting operates in is the North Ameri sight market. This is where Valkyrie operates potently and is the more or less competitive. Other markets of elicit accommodate Europe, atomic number 34 Asia, and Latin America. Each market has its own unique situations and barriers that affect Valkyrie Lighting. Currently, Valkyrie Lighting is taking advantage of the European market by exporting from the USA through a Dutch istributor, but approaching growth and market power entrust require manufacturing and distribution in Europe rather than exporting directly from the USA. The atomic number 34 Asian market is difficult because of the quick competition among Asian companies and their ability to tender low live, a core antecedency that Valkyrie arouse non deliver at this prison term. The Latin American market is still untouched by Valkyrie Lighting and no long-run operation plans suffer been takeed. Valkyrie Lighting has many strengths with the trustworthy operation model.Their technology is inviolable liberal that they can create a number of superior products and make custom changes to touch the customer demands. This is important because the market demands that companies have a wide variety of products to pucker customer preferences. A nonher strength of Valkyrie Lighting is the aesthetics of their products. In the technical lighting industry, products need to be unique and Valkyrie Lighting achieved success by getting their products put into trade shows. This led to a strong following and more business. A nonher main strength for Valkyrie Lighting and their operation design is the make-to-stock.With customers demanding that companies hold products until orders are fixed, Valkyrie Lighting continues to deliver customer satisf march and is flexible. Despite few of the strengths of the received operations, Valkyrie Lightings true operation model contains many disadvantages. ane of the biggest disadvantages is that the confederacy is erratic with delivery times. Because the company continues to use a push establishment and quarterly forecast, they cannot handle on-time delivery for large orders or higher than evaluate orders from their larger customers.Valkyrie Lighting has tried to offset this chore by using the make-to-stock process, but this engages to the company holding onto large amounts of inventory that is pricey to the co mpany and uses space in the Denver plant. Another disadvantage Valkyrie Lighting faces is the escape of a standard promissory note of reasoning of communication among the different tiers of suppliers. The suppliers use different forecasts and verify on a push- schema. Valkyrie Lighting holds a forecast that does not anticipate eleventh hour changes in demand and this leads to erratic delivery times to customers.Valkyries communication technology is not compatible with its suppliers, which leads to a lack of closeness in communication. These issues affect the supply chain with suppliers running out of materials, Valkyrie Lighting not producing enough products, and customers waiting eternal to receive orders. The last issue Valkyrie Lighting is faced with is penetrating new markets in different countries. With the lack of solid communication in the supply chain and the unfitness to deliver just-in-time, Valkyrie Lighting faces issues in mount up operations in southeasterly As ia.Because the company does not directly operate in Asia, it cannot compete with the topical anaesthetic firms that can admit products at a inflict price. In Europe, Valkyrie Lighting pull ins their menstruum operation is short-term. To continue to grow and expand market share Valkyrie understands they must consider expansion into the global market. Current Problems Although the business has been an industry leader and favored in the past, the Valkyrie management team is challenged to improve their supply chain management as they move away. This project, supply chain management, is a new concept to Valkyrie.Although the management team has little experience in supply chain management, lift dark-brown is confident that his team members are up for the challenge as they all have a stake in the survival and prosperity of the business. The team comes together in this project with various expertise and qualifications, which depart allow them to face many challenges that are to come. These challenges range from decisions that result in the long run change Valkyries way of doing business, and kind of possibly even the entire technical lighting industry. This leave alone require a new way of thinking and managing to remain successful as they move forward.Valkyrie is currently in a highly competitive industry where until recently there were very few major innovations. Valkyrie moved earlier to gain a competitive advantage. With this strip to improving their supply chain management, Valkyrie must act in the best interest of its stakeholders, which take ons owners, suppliers, comprisers, vendors, employees, customers and the competition. Valkyrie must be methodical near the procedures it takes as they need to remain a course of action to their core competency of providing superior technically advanced products with an aesthetic design, which is their top advantage over the competition.Before moving forward too quickly, Valkyrie must identify current problems and potency supply chain hindrances to minimize the frequency of false starts, fully utilize its capacities, and maximize productivity to examine their product is still a viable and desirable choice for its end users. Major goals that Valkyrie seeks to achieve are to take into account damp delivery times to their customers, maintain well intentional aesthetic products, and regain market share that has been lost due to price wars of the industrys customers. There are three problems that Valkyrie needs to address initially in order to make their supply chain successful.The first problem Valkyrie must address is its current relationship with cheerfulness Products. cheer plays a significant role in Valkyries success because of its unique technology. fair weather provides components to Valkyrie, but due to self-restraints doing readying procedures, Valkyrie is unable to increment order quantities in fear that blitheness is operating nest capacity. Valkyrie and sun s current relationship is solid, but return. Brown, as leader of this project, needs to identify that an in clod relationship depart hinder his attempts to make the supply chain management successful.Brown needs to look for ways to work jointly with Sunshine in hopes of reservation Sunshine their sole supplier. A sole supplier relationship entrust suffice Sunshine with inventory issues, inventory g modeing and end product forecasts. In todays business world, the internet is a very useful tool and virtually has very few limitations. Currently, Valkyrie and Sunshine do not have a compatible establishment of rules, which hinders planning, inventories, and takings plans. Both businesses plan end product based on their inventory and production plans, and Sunshine operates on a two-month planning horizon.This current dodging does not provide each company flexibleness with production runs and prohibits them from fit spikes in product demand. If this is not re unclutterd, th e companies may experience the bull-whip effect and implore evasive action that testament lead to excess inventories. Valkyrie and Sunshine need to share an integrated system which allows visuals on both companies inventory and re-order points. By addressing the first two problems, Valkyrie bequeath enable itself to take on its major competition by streamlining its components and production plans.To remain competitive, Valkyrie must improve lead times and flexibility to relate market demands. In addition, with the demand possibly stretching globally, Valkyrie needs to act upon their expansion strategy based on which markets are most lucrative. The two affirmable markets that are shiny to Valkyrie at this time are the European and Southeast Asia markets. By expanding to one or both of these markets, Valkyrie allow for be able to change its market and sales strategy from a push concept to a pull system due to the ability to fill orders upon the ever changing demands of th eir product.Valkyrie has alternating(a)s to choose from to resolve these three major issues. By solving these issues first, Valkyrie sets itself up for success. tax return 1 Product Accessability To better understand the problem with Sunshine, we lead first look at the present situation. Sunshine serves two other customers in non-competing handle other than Valkyrie and its production facility operates near capacity. The in form-only(prenominal) relationship between Valkyrie and Sunshine is sufficient when the two companies managers adhere to their hand-shake dedication and no competitor steps in.As Valkyrie loses ground in the U. S. market to its two major competitors, Valkyries priority aim in Sunshine may not remain if demand drops. Once the company engages in overseas production, Sunshine provide not be able to force the additional needed components under the current name and Valkyrie may need to develop new suppliers. It is obvious continuing with the current in buckra m handshake agreement is not an option for Valkyrie and Sunshine in the long run. In addition, as Valkyrie is exploring market expansion, this action go forth further necessitate an amend supply chain with Sunshine.Two possible solutions are secondary 1 fructify a use production statement in Sunshines production plant. Alternative 2 Negotiate a evening gown contract with Sunshine and make it Valkyries sole supplier. Both marriage offers will be analyzed in terms of feasibility, cost, and benefit in the section below. Alternative 1 Dedicated Production dividing line Proposal A dedicated production line proffer suggests Valkyrie place a dedicated production line in Sunshines facility. The production line will be provided by Sunshine and paid for by Valkyrie, as it will be exclusively used for Valkyries production needs.The benefit of a dedicated production line is Valkyrie will have flexibility in its production planning and a just-in-time system can be implemented. The ne w line will provide extra capacity to satisfy Valkyries increasing production need. Production equipment will not be a problem for the dedicated production line proposal since Sunshine either has enough room or it could expand its plant. All costs that occur during the setup of the production line will be covered by Valkyrie. The real problem is in the production and management of the dedicated line.Who should be trustworthy for the new line? How should wages and check over be determined? If Sunshine were to provide the front line production workers and administration, they may charge a price premium. An agreement with Sunshine will need to be established for Valkryie to ensure the dedicated line in Sunshines facility will become the priority. Alternative 2 Formal Contract and sole supplier Proposal Compared to the dedicated production line, a perfunctory contract is simpler and easier to implement. The contract needs to address the concept of sole supplier and the external fact ory.By creating a formal contractual relationship with Sunshine, Valkyrie guarantees Sunshine will be its sole supplier. In this contract, Sunshine will need to adjust its production planning procedure to make Valkyries demand their first priority. A formal contract also builds up long-term relationship between the two companies rather than the two managers. With a formal contract, Sunshine becomes a guaranteed service provider. The benefit of such a relationship is information sharing, which is vital to the success of supply chain management.With an open information flow system, Sunshine can respond to production changes faster and overturn lead time. Another benefit of contractual agreement is it provides greater incentive for consecutive quality improvement, which benefits both Valkyrie and Sunshine. The most important benefit of a formal contract is the elimination of uncertainty, the risk of losing a strategical quisling. Recommendation The absence of a formal contract betw een Valkyrie and Sunshine places a huge risk on Valkyries long-term success.With its unique technology, Sunshine plays a critical role in Valkyries supply chain. It is clear that Valkyrie needs to include Sunshine in order to implement improvements in the supply chain. Considering both proposals pros and cons, we determine that a dedicated production line is neither feasible nor cost effective. The formal contract and external factory proposal fit into the supply chain management requirement and is much easier to implement. Thus, the formal contract and external factory proposal is recommended. divulge 2 The Lack of Computer integration SystemCommunication is the key to any businesss success. Due to Sunshines resistance to computer integration, both companies are experiencing communication problems. An integrated system will increase the productivity of the companies information systems, order entry and production system. instruction Systems Information systems play a grownup rol e in any companys supply chain. Valkyrie needs to share information, such as purchase orders, invoices, and payments, along with information about common information and financial records with all chain members. sacramental manduction systems speeds up the flow of materials, payments and information. It allows companies to reduce the causal agency and cost of processing such transactions, and enables all members of the supply chain to have it off expected completion dates and handiness of the products. Sharing a computer system allows all members to know when demand changes from the forecast. Any problems encountered that affect availability quantity or delivery time of the products allows the chain members to respond to problems and react to find out delivery commitments.Sharing information, analyzing market feedback and trends between chain members is critical to be successful in todays impulsive global market. Order Entry any(prenominal) companies and retailers are using Electronic selective information Interchange (EDI) and/or Point-Of- barter (POS) systems because it is very convenient for buyers and sellers. By using EDI, the form of computer-to-computer communication is standardized to share business documents such as invoices, purchase orders, transit bills and product stocking numbers. This helps both buyers and sellers reduce logistic and labor costs and get products to market faster.For example, when suppliers transmit an advance shipment ceremonial to the company for each inbound shipment, EDI systems can be effectively implemented. This notice provides a purchase order number, vendor identification number, product identification number and cartonful counts for each item in the shipment. The EDI data flows directly from the suppliers computers into companies and retailers storage store management system. With this information, Valkyries distribution come to can anticipate inbound volume, get up for receiving, and schedule the appro priate number of warehouse workers.EDI advanced shipment notification is sent from a shipper to a receiver with flesh out information about the contents of the shipment. The process mentioned above also eliminates the need to schedule and stage the shipment later, which saves on labor costs. Through the EDI system, suppliers get paid accurately and on time. Furthermore, EDI can eliminate order batching. Companies typically use large order batching because of the relatively high cost of placing an order. sum up chain partners can reduce fiat cost by using electronic data interchange to transmit information. disappoint ordering costs eliminate the need for batch order. Similarly, when the retailers use Point of Sale (POS) systems, the information collected by POS allows both Valkyrie and Sunshine to know the product demand information when making replenishment decisions. In addition, EDI and POS are very helpful to correct the bullwhip effect of erratic replenishment of orders pla ced on different levels in the supply chain that have no homely link to final customer demand, and as a result, manufacturers inventory does not combine with demand. Production systemBy integrating the two companies computer systems and sharing relevant databases, Valkyrie and Sunshine Product can both benefit with a production system that determines what is needed, how much is needed and when it is needed. From Valkyries standpoint, having its orders completed and shipped to the distribution center on time is the vital to maintain customer blessedness and market share. From Sunshines view point, switching from traditional system-push system to a pull system would be a good strategy because it reduces inventory on production and materials.Thus, it helps Sunshine Product to solve the problem on material shortages or production planning system. The disadvantage of trust two companies computer system is that data exchange might create some problems in payment process or information flows between two companies. This computer integration also requires the internal unison and discipline to ensure the process is integrated and information flows accuracy, otherwise it will create errors that bring problems to both companies in the short-run. Issue 3 The Entry to the Global marketAt the core of Valkyries global corporate strategy is the need to make a significant lucrative entry into the global market. Rapid expansion into a segment of the global market will make up for the mature market conditions in North America. Alternative 1 The Southeast Asian Market Southeast Asia is identified as a promising market but this market does not share the need for Valkryies unique, aesthetic design element. Valkryies technical lead is already being eroded boy Alpha products, leaving only the aesthetic design advantage which is not an order winner in Southeast Asia.Valkyrie has an opportunity to leverage the relationship with Sunshines established contract manufacturing in Taiw an. This social function could transition into an opportunity to pursue moving into the Southeast Asia market. Valkyrie will have to establish its own communication and control systems to varan their third party. They will need to monitor and evaluate the third partys level of customer service, the efficiency of their operations and inventory investment.Alternative 2 The European Market. Valkyries main competitive advantage is their design element known to be essential to market success in Europe. By moving into the European market, Valkyrie will be able to get a faster response to new customers, provide better service and increase market share. This solution requires learning about the European market and the European custom rules. moolah will be higher and Valkyrie will not suffer a evil of control which might result in poor market performance as opposed to simply licensing in Europe. This alternative helps overcome high fix cost and high tariff duties.A third party contracto r will have a European market knowingness of customers product needs and will be knowledgeable about the competition. The third party contractor would understand the customer service requirements which vary good from northern to southern Europe and will assume the responsibility for providing communications. A third party contractor can be counted on to know their local markets suppliers capabilities and performance. As these other suppliers are less critical to Valkyries success than Sunshine, they could be substituted if they do not perform to standards.Recommendation Our recommendation is for Valkyrie to establish local production, under Valkyries name, by spying with a third party to manufacture and distribute in Europe. The justification for choosing the European market is this market will require a unique styling of lighting products which is Valkyries primary competitive advantage and core competency. This design element is essential to Valkyries market success in the Europe an market. The commitment to this strategic plan would vary an entry into the Asian market at this time.The third party contractor will need to be an experienced performer who can handle both the manufacturing and distribution. As Sunshine Products will be contractually bound as a wholeness source supplier, their Taiwan plant will transmit orders electronically to the third party contractor who will work with regional suppliers to provide the remainder of the components. Factors to consider when identifying potential third party contractors will include the companys ability to partner with Sunshine Products, the ability to identify regional suppliers to provide the remainder of the component parts and the facilitys proximity to customers.The European single point distribution system will be essentially analogue to the US market. In order to meet product demand and service requirements Valkyrie knows that a single point distribution system and negotiating service contracts with ca rriers to provide distribution is effective. The company knows from experience at their Denver mending that deliveries can be made to most major markets even by start carriers. CONCLUSION Valkyrie Lighting is venturing into new but potentially lucrative concepts.This new supply chain management will allow Valkyrie to remain competitive in the highly competitive technical lighting industry. By focusing on members of the supply chain, Valkyrie can utilize its resources to compliment its current strengths in creating better business relationships with its supply chain members. To ensure that Valkyrie succeeds in this new endeavor, there must be a formal contract between Valkyrie and Sunshine to ensure that Valkyries demand will be met. Playing into the success is also the implementation of a integrated computer system between its supply chain members.This allows all members of the supply chain to readily see the inventories that are needed to sustain, while minimizing the bullwhip ef fect. Finally, Valkyrie must focus on its core competency, by manufacturing products that are preferred for the aesthetic design. This focus is one that suggests that expanding into the European market should be the sole focus at the current time. By following our three recommendations, Valkyrie will improve product accessibility, improve communications within the supply chain and increase market share with expansion into the European market.