Chase Strategy OPS571 Week 3 Essay

This week a portion of our ingest focused on sales and operations cooking. The sales and operations imagening process helps companies provide better client service, cut back inventory, shorten guest lead times, stabilize production localises, and give top management a better view of the business ( pursue & Jacobs, 2011). Sales and operations planning evolved into coalesce planning that stresses the importance of cross-functional teamwork and tightly integrated efforts between sales, distribution, logistics, operations, finance, and product discipline (Chase & Jacobs, 2011).Aggregate planning focuses on intermediate-range (three to 18 months) plans that target lowering be and using capacity most efficiently. The main purpose of an store up plan is to determine the best combination of production rate, hands level, and inventory (Chase & Jacobs, 2011). Chase StrategyThe train dodge is one of three production strategies for aggregate planning in use today. According to Hamlet t (2013), the chase scheme, or necessary matching outline, sets production to meet or match the consume for products. It is an separate strategy for production situations with variable conduct and little to no inventory. To superintend variations in consider, a club matches the production rate to the order rate by hiring and firing employees. The chase strategy is used mostly in service industries that focus on meeting forecasted demand and adjust the workforce accordingly. Meeting demand can come in the form of workforce adjustments that include the use of day labor, contractors, seasonal workers, and overtime pay. Advantages and DisadvantagesA essential advantage is the flexibility to meet demand fluctuations. Another advantage is retentiveness inventory low, freeing up inter trade to buy other items such as raw materials or components, thus reducing inventory carrying cost that be associated with holding inventory in stock. The cost of capital, w atomic number 18ho using, depreciation, insurance, taxes, obsolescence, and shrinkage are all inventory carrying costs (Hamlett, 2013). Due to variations in product demand a lodge using the chase strategy can sire fluctuating workforce levels in response to changing demand. The impact to the company is change magnitude hiring and training costs and a decrease in employee esprit de corps (Ritzman & Krajewski, 2003). Examples of Chase StrategyThe combination of improved productivity and flat or declining global demand has businesses requiring supply chain re-engineering. The result of these efforts has made them more efficient than ever before. Finding demand to absorb the supply generated is a growing challenge that has affected companies large and small, including the iconic chocolate company Hersheys (Kash, 2011). After years of growth and success, Hersheys hit a rough period in which senior management saw belittled financial results. guidance realized they were not properly line up to make d o effectively, requiring an overhaul in strategy. Research and employee surveys revealed senior management was not aligned in their beliefs about how the company should compete in the future. The result was counterpoint messages across the entire operation.Marketing had not responded to retailers growing collect for lower inventories, better use of shelf space, and less product packaging complexity (Kash, 2011). The changes in the marketplace caused Hersheys to review every aspect of its demand chain without impacting the current supply chain in place. Hershey discovered that more products were not aligned with consumer demand and retailers were not happy about carrying change magnitude inventory due to confusing product offerings (Kash, 2011).The company identified the need to move from a supply-driven approach to a demand-driven, consumer-focused strategy based on a pull versus push model (Kash, 2011). It was clear Hershey could no longitudinal win pushing more variations of supply into the market instead it requisite to employ a customer focused supply approach. The resulting transition to a demand-driven model exceeded expectations with the company, in February 2010, announcing record cash flows from 2009 operations doubling 2008 cash flows and 35 share higher than 2004 record cash flows (Kash, 2011).Another congressman of a company using the chase strategy is retailer Neiman Marcus that ramps up temporary employment to meet an increase in holiday sales. The increased employees are utilized both in-store and in the warehouse to meet customer demand. Neiman Marcus mails out their Christmas Book in mid-September and sees a large increase in orders immediately afterward. Sales volume begins a steep ascent that bankers bills in early December (Auguston, 1992).The September demand represents 52 percent of peak shipments, and October represents 91 percent of peak shipments. Demand in November and December are in excess of 100,000 shipments per week rea ching a peak demand volume of 28,000 orders per day translating to more than double normal sales (Auguston, 1992). Neiman Marcus meets this capacious demand shipping 90 percent of holiday sales indoors 1 day and 99 percent within 2 days with 99.4 percent accuracy. Achieving these extraordinary results requires advanced planning that includes hiring 300 additional community to work in their distribution center during the holiday season. Twenty percent of these temporary workers return each year (Auguston, 1992).ConclusionThe chase strategy helps companies match production to demand by hiring and firing workers as necessary. The chase strategy is a best fit for companies that require manufacturing flexibility and change capacity on a frequent basis. The major cost of this strategy is the hiring and firing of workers and the associated decline in morale. For industries that require highly skilled labor, or where there is strong competition for labor, this strategy is not an optimal choice. This strategy is effective when low-skilled labor is acceptable and during periods of high unemployment.ReferencesAuguston, K. (1992, December). Neiman Marcus Plans Picking to Meet government note Holiday Demands. Modern Material Handling, 10(25), 44-48. Chase, R., & Jacobs, F. R. (2011). Operations and Supply Chain Management (13th ed.). Boston, MA McGraw-Hill Irwin. Hamlett, K. (2013, Spring). Strategies Used in Production Planning & Scheduling. Retrieved from http//smallbusiness.chron/strategies-used-production-plannig-scheduling-1808.html Kash, R. (2011, April). The Hershey Company adjust Inside to win onView as multi-pages