BUSI: 2003 Operations Management
The eBags Corporation
The purpose of this paper is analyze the business operations of the eBags Corporation, and provide recommendations for both the European luggage market and footwear industry based on current strengths and weaknesses eBags demonstrates. Through research and analysis, as a group we will map out the managing growth of the eBags Corporation.
eBags is known for their innovative breakthrough of one stop shopping for luggage such as traditional travel bags and suitcases in addition to travel accessories like handbags, computer cases, and briefcases just to name a few. Operations management is a key component to the success of the eBags Corporation, and eBags has demonstrated innovative and cost effective business strategies by utilizing cross functional teams within their organization. With business growing, eBags has been able to increase their manufacturers from 10 to 300 and product lines increasing from 1000 Stock Keeping Units (SKU’s) to over 15,000 SKU’s (Schroeder, Goldstein, & Rungusanatham, 2011). Due to the level of success eBags has accomplished they were able to create the eBags product line to consumers seeking low end luggage at an affordable price; the private label consisted of 1000 SKU’s held in a warehouse in Dallas, TX (Schroeder, Goldstein, & Rungusanatham, 2011) With desires of expanding their business eBags faces a number of hurdles in deciding which line of business will best suit their organization, their suppliers and manufacturers, their customers, all while generating the highest profit for their company. eBags Current Product Flow Process Analysis
To maintain competitive in today’s market companies need to implement effective process flows. With options such as assembly lines, continuous, batch flow, and job shop it is important for companies to chose the option that is best going to fit both production needs and budget constraints. Making the wrong choice for the product flow process can be very costly for any company; however, implementing the right process can reduce costs and speed up production time.
The purpose of eBags is to create one stop shopping for luggage needs and in order to do so a wide variety of products should be available to their consumers. eBag and their manufactures use a made to stock order fulfillment process, and with various manufacturers and the eBags private label produced, eBags felt best to utilize the batch flow or batch production product flow process. This allowed products to be produced in lower volumes while still offering consumers a wide variety of products to choose from. By utilizing the batch flow process, it requires the use of general purpose equipment that does not specialize in making one specific product, which if loaded to full capacity could create a jumbled flow of products (Schroeder, Goldstein, & Rungusanatham, 2011). In order to maintain accurate inventory levels, eBags created the eBags Partner Network (EPN) which allows for the manufactures to post up to date product information to consumers ensuring that discontinued items don’t show available for purchase and consumers know the time needed for back order fulfillment. Analysis of eBags in the Footwear Industry and Recommended Product Flow Process Based on Type of Customer Order
With such success rates in the luggage industry, eBags saw an opportunity to expand their business into foreign terrain, the footwear industry. With the footwear industry being a well known fragmented market, like the luggage market, allowing for flexibility to produce various different styles, designs, qualities, sizes, and colors while maintaining a competitive price. According to Schroeder, Goldstein, & Rungusanatham (2011), the footwear industry is three times the size of the luggage industry, so venturing into this market would not be an easy task. Some of the challenges that eBags faced...