Any type of business always requires effective communication. At any one point there is never over communication and as the case study of Kami Corporation pointed out there is a need for communication and cooperation.
Expansion and growth of a business is always a positive. However, there are also many draw backs but with effective management, communication and all the components necessary for prosperity the business will definitely succeed. Kami Corporation is a new company formed from under the Mega Corporation umbrella. This new business venture was especially formed to assemble and produce Aiwa TV’s. Aiwa is a subsidiary of Sony but their TV’s has a weaker position than its other audio equipment and components. They have decided to push their TV’s into a bigger market and had a goal of supplying 50 percent of the world market. So as not to strain Aiwa’s capital and managerial resources they would have to focus their resources on product development and marketing. This then leads to finding a company which would do their own investing in a plant and equipment.
Aiwa have their designs and goals in mind, it was just to find a company now to make the tangible products a reality. This is where Kami Corporation stepped in. They would be the ones to create a new site, factory, gather materials, labour and create the item. So now supplier identification, development and management are the sole responsibility of Kami Corporation. Mrs. Lee, the owner of Kami Corporation, has a team in place to operate this new venture. The two new items to be manufactured are 14 and 18-inch TV’s for sale in Japan, the Middle East, Europe and South America. Kami would however produce the TV’s only for Aiwa and Aiwa would be liable to buy all of the completed products.
Initial orders would start in the 20,000 to 30,000 range. If everything goes according to plans then the orders would be increased and production would then become much higher. Everything produced for Aiwa had to be of highest standards and followed according to all proper regulations and procedures. All costs savings would be shared between Aiwa and Kami. And as this case study shows, things do not always go according to plans. There was an unexpected delay in shipping the completed products even though Mrs. Lee took a somewhat dangerous head start. This was due to human obstructive behaviour on behalf of a customs agent. The first units were eventually shipped out on the last day of an already extended dead line.
Parts for the new TV’s would come from a source found by Kami Corporation. They would have to identify materials and parts made from only quality material in order to keep up to the Sony brand name. These parts could be cheaper than that used by Sony but there were factors such as durability and quality to be considered. If purchases were made and there were to be savings then this would be enjoyed by both Aiwa and Kami. Expertise in international sourcing, purchasing management, logistics and inventory control had to be developed by Kami Corporation. The international source for parts also enjoyed financial benefits from their sales to Kami. The purchases had to be managed in and efficient yet effective manner. Logistics needed to be carried out to its smallest detail in order for production to be completed before deadline. Inventory control also proved to be very vital in final activities under Kami.
In the first instance, the TV’s first shipment was delayed due to a customs agent but then it drifted to within Kami Corporation itself. Delays started to occur and the excuses were because of wrong orders in parts and materials, further delays at customs, inefficiency at its own warehouses and as far as export permits. Orders seem to be mixed up and then backlogs start to build up rapidly due to increase orders demanded by Aiwa. When materials were indeed ordered some were...