Reengineering the Supply Chain in a Paint Company

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Reengineering the supply chain in a paint company
Sanjay Sehgal
Ex-ICI India Ltd., Gurgaon, India

Reengineering the supply chain

Received April 2004 Accepted July 2006

B.S. Sahay
Institute of Management Technology, Raj Nagar, Ghaziabad, India, and

S.K. Goyal
John Molson School of Business, Concordia University, Montreal, Canada Abstract
Purpose – The purpose of this paper is to outline the importance and benefits an organisation can achieve through supply chain integration. These benefits are primarily in the area of achieving superior customer service and operating with lower working capital. Design/methodology/approach – A three level framework for achieving the integration has been proposed which is in the form of structural integration, process integration and performance integration. The paper also describes in detail the factors influencing an organisations working capital needs and how this integration mechanism allows the organisation to exercise control over these factors. The framework has been described in the form of a case study in a paints company. Findings – The research findings reveal that most of the Indian organisations have aligned their supply chain objectives with their business objectives. They are now on course for aligning their processes and management focus. Enhanced levels of competitiveness would require Indian organisations to manage the three-dimensional alignment of achieving the agenda set by the business strategy. Research limitations/implications – Further research work should focus on assessing the current level of supply chain integration. It is essential that structure and strategy should be aligned to achieve the business objective of providing superior customer service at the lowest cost. Practical implications – This paper provides a detailed study to help supply chain managers improve supply chain efficiency through reengineering. Dramatic improvements have been achieved with the improvement of service levels (OTIF) by more than 20 per cent across all regions. Planning orientation and organisational integration resulted in process optimisation across the supply chain. Originality/value – The benefits of re-engineering have increased company’s commitment to the integration of the Supply Chain Organisation and it is driving further business improvement initiatives through this organisation. This framework can also be used as a guiding source to carry out organisational transformation process. Keywords Supply chain management, Working capital, Sales strategies, Customers, Business process re-engineering, India Paper type Case study

Introduction In the information age companies that formerly deal with consumers through complex supplier, distributor/retailer channels are now finding themselves face-to-face with their end customers. These customers are becoming more demanding and desire

International Journal of Productivity and Performance Management Vol. 55 No. 8, 2006 pp. 655-670 q Emerald Group Publishing Limited 1741-0401 DOI 10.1108/17410400610710198

IJPPM 55,8


maximum value from the products they purchase. “After World War II. . .low labour cost was the source of competitive advantage but, as wage rates rose, this shifted first to scale-based strategies, where capital investment was used to boost labour productivity, and then to the focused factory approach. . . next was the move to the flexible factory. . . then companies used variety as a competitive weapon that have, in fact, pioneered time-based competitiveness” (Stalk, 1988). As the competitive context of business changes, it brings with it new complexities and concerns for the management of business (Christopher, 1996). Companies require adequate strategies for moving information and products quickly throughout their supply chain network. Supply chain...
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