Benefits and Compensation in Human Resources

Benefits and Compensation in Human Resources What are your benefits is the first thing many applicants ask. Benefits indirect financial and nonfinancial payments employees receive for continuing their employment with the company are an important part of just about everyones compensation. They include things like health and life insurance, pensions, time off with pay, and child-care assistance. Most full-time employees in the United States receive benefits. Virtually all employers offer some health insurance coverage. Employee benefits account for between 33% 40% of wages and salaries (or about 28% of total payrolls). Pay for time not worked is the most costly benefits, because of the large amount of time off employees. Compensation is a primary motivator for employees. People look for jobs that not only suit their creativity and talents, but compensate them-both in terms of salary and other benefits-accordingly. Compensation is also one of the fastest changing fields in Human Resources, as companies continue to investigate various ways of rewarding employees for performance. It is important for small business owners to understand the difference between wages and salaries. A wage is based on hours worked. Employees who receive a wage are often called non-exempt. A salary is an amount paid for a particular job, regardless of hours worked, and these employees are called exempt. The difference between the two is carefully defined by the type of position and the kinds of tasks that employees perform. In general, exempt employees include executives, administrative and professional employees, and others as defined by the Fair Labor Standards Act of 1938. These groups are not covered by minimum wage provisions. Non-exempt employees are covered by minimum wage as well as other provisions. It is important to pay careful attention to these definitions when determining whether an individual is to receive a wage or a salary. Improper classification of a position can not only pose legal problems, but often results in employee dissatisfaction, especially if the employee believes that execution of the responsibilities and duties of the position warrant greater compensation than is currently awarded. When setting the level of an employees monetary compensation, several factors must be considered. First and foremost, wages must be set high enough to motivate and attract good employees. They must also be equitable-that is, the wage must accurately reflect the value of the labor performed. In order to determine salaries or wages that are both equitable for employees and sustainable for companies, businesses must first make certain that they understand the responsibilities and requirements of the position under review. The next step is to review prevailing rates and classifications for similar jobs. This process requires research of the competitive rate for a particular job within a given geographical area. Wage surveys can be helpful in defining wage and salary structures, but these should be undertaken by a professional (when possible) to achieve the most accurate results. In addition, professional wage surveys can sometimes be found through local employment bureaus or in the pages of trade publications. Job analysis not only helps to set wages and salaries, but ties into several other Human Resource functions such as hiring, training, and performance appraisal. As the job is defined, a wage can be determined and the needs for hiring and training can be evaluated. The evaluation criteria for performance appraisal can also be constructed as the specific responsibilities of a position are defined. Other factors to consider when settling on a salary for a position include Availability of people capable of fulfilling the obligations and responsibilities of the job, Level of demand elsewhere in the community and/or industry for prospective employees, Cost of living in the area, Attractiveness of the community in which the company operates, Compensation levels already in existence elsewhere in the company. There are many federal, state, and local employment and tax laws that impact compensation. These laws define certain aspects of pay, influence how much pay a person may receive, and shape general benefits plans. The Fair Labor Standards Act (FLSA) is probably the most important piece of compensation legislation. Small business owners should be thoroughly familiar with it. This act contains five major compensation laws governing minimum wage, overtime pay, equal pay, recordkeeping requirement, and child labor, and it has been amended on several occasions over the years. Most of the regulations set out in the FLSA impact non-exempt employees, but this is not true across the board. The Equal Pay Act of 1963 is an amendment to FLSA, which prohibits differences in compensation based on sex for men and women in the same workplace whose jobs are similar. It does not prohibit seniority systems, merit systems, or systems that pay for performance, and it does not consider exempt or non-exempt status. In addition, the United States government has passed several other laws that have had an impact, in one way or another, on compensation issues. These include the Consumer Credit Protection Act of 1968, which deals with wage garnishments; the Employee Retirement Income Security Act of 1974 (ERISA), which regulates pension programs; the Old Age, Survivors, Disability and Health Insurance Program (OASDHI), which forms the basis for most benefits programs; and implementation of unemployment insurance, equal employment, workers comp, Social Security, Medicare, and Medicaid programs and laws. For the most part, traditional methods of compensation involve set pay levels (wage or salary) with regular increases. Increases can be given for a variety of reasons, but are typically given for promotions, merit increases, or cost of living increases. The Hay Group points out that there is less distinction today between merit increases and cost of living increases: Because of the low levels (3 to 4 percent) of salary budget funding, most merit raises are perceived as little more than cost of living increases. Employees have come to expect them. This base pay system is one that most people are familiar with. Often, it includes a set salary or wage, a set schedule for merit increases, and a set benefits package. Benefits are an important part of an employees total compensation package. Benefits packages became popular after World War II, when wage controls made it more difficult to give competitive salaries. Benefits were added to monetary compensation to attract, retain, and motivate employees, and they still perform that function today. They are not cash rewards, but they do have monetary value (for example, spiraling health care costs make health benefits particularly essential to todays families). Many of these benefits are nontaxable to the employee and deductible by the employer. Many benefits are not required by law, but are nonetheless common in total compensation packages. These include health insurance, accidental death and dismemberment insurance, some form of retirement plan (including profit-sharing, stock option programs, 401(k) and employee stock ownership plans), vacation and holiday pay, and sick leave. Companies may also offer various services, such as day care, to employees, either free or at a reduced cost. It is also common to provide employees with discounted services or products offered by the company itself. In addition, there are also certain benefits that are required by either state or federal law. Federal law, for example, requires the employer to pay into Social Security, and unemployment insurance is mandated under OASDHI. State laws govern workers compensation. As businesses change their focus, their approach to compensation must change as well. Traditional compensation methods may hold a company back from adequately rewarding its best workers. When compensation is tied to a base salary and a position, there is little flexibility in the reward system. Some new compensation systems, on the other hand, focus on reward for skills and performance, with the work force sharing in company profit or loss. One core belief of new compensation policies is that as employees become employee owners, they are likely to work harder to ensure the success of the company. Indeed, programs that promote employee ownership-and thus employee responsibility and emotional investment-are becoming increasingly popular. Examples of these types of programs include gain sharing, in which employees earn bonuses by finding ways to save the company money; pay for knowledge, in which compensation is based on job knowledge and skill rather than on position (and in which empl oyees can increase base pay by learning a variety of jobs); and incentive plans such as employee stock options plans (ESOPs). Compensation programs and policies must be communicated clearly and thoroughly to employees. Employees naturally want to have a clear understanding of what they can reasonably expect in terms of compensation (both in terms of monetary compensation and benefits) and performance appraisal. To ensure that this takes place, consultants urge business owners to detail all aspects of their compensation programs in writing. Taking this step not only helps reassure employees, but also provides the owner with additional legal protection from unfair labor practices accusations. Todays competitive business environment is forcing companies to rethink how to attract and retain top talent without sacrificing business goals. Employee compensation and benefits are an employers primary tools to attract and retain talented employees, but they are facing more scrutiny now than ever. Plan fiduciaries are under increased pressure to adhere to rigid standards in light of recent corporate scandals. Waves of employee benefits legislation and regulation threaten to swamp employee benefit plan administration. Many companies are faced with unmotivated employees whose poor attitude can greatly affect the growth of the company. By introducing incentives, companies can boost employee morale tremendously. A few examples of employee incentives are paid vacations, company sponsored social activities, stock options, and bonuses or pay increases based on performance. These are just a few activities that can lead to a more productive work environment. HR is usually faced with suggestions but is unable to put them into company policy. The most challenge Human Resources department facing is employees turnover. Meeting the demands of todays changing business environment requires building and retaining a loyal and motivated staff. Therefore, finding and keeping quality employees so as to reducing turnover is one of the key challenges of HR department. Employees who feel theyre underpaid will also feel theyre undervalued and are more open to potential offers from outside firms. To a firm, the effects of turnover can be costly. The time and money it takes to recruit, rehire and retain can quickly cut into a firms bottom line. Besides the costs, especially for the high-technology companies, employees turnover means high risks of losing its important technologies and clients. To develop a loyal, motivated workforce and keeping turnover at a minimum, the first step is finding and hiring good people. Therefore, Its crucial to have a recruiting strategy in place. Secondly, it certainly takes more than money alone to attract and retain skilled professionals, its helpful to offer competitive compensation packages, for example: to be flexible and tailor compensation to individual employees; pay a little more than prevailing salaries at other firms; acknowledge your employees contributions as frequently as possible; offer staff members opportunity and reward them when they succeed. Thirdly, creating an employee-friendly work environment also play a role. The implication is clear: The more enriching your work environment, the more likely you are to retain a staff of satisfied, productive employees. The single most challenging issue facing HR executives today is the benefits package a company offers to its employees. Such benefits as retirement plans, healthcare, family leave plans and vacation time are becoming increasingly important to employees. However, such benefits are costing companies a tremendous amount of money each year and its on the rise. Human Resource executives must find a middle ground that will not only please its employees, but also be affordable to the company. The most challenging HR issue facing companies today is the ability to offer a competitive incentive package. Employees today want to work for a company that offers reasonable salaries, excellent health benefits, a pension plan and comprehensive 401k plans. Not to mention tuition reimbursement, child care centers, fitness centers, life insurance, and the all-important paid time off. Each of these perks is very costly to the company, but without them the quality of their workforce would be sacrificed. Companies seem to be adding more benefits to attract and retain employees, but with the increases in the cost of these benefits who know how long they will last. HR executives need to understand their company and be able to offer as many benefits as possible without hurting the profitability of the company. If you own your own business, your employee compensation and benefits package can be the deciding factor for many potential employees. And its not just the money. To make your company competitive and attractive to job candidates, you have to offer an exceptional total benefits package. That makes it a very important part of your business planning and management process if you hope to hire (and keep) top employees. Of all the disciplines in the human resources field, compensation is one of the most complex. Handling compensation issues requires knowledge of employment trends, the value of experience and credentials for various positions and industries, negotiation skills, company budget and the organizations bottom line. Economic conditions also play an important role in compensation and benefits issues. Addressing compensation issues can range from developing competitive wage scales to weighing the advantage of bonus and incentive payments. The term compensation means financial payments such as wages and salary paid to employees. Compensation also includes bonus and incentive payments, raises and company stock awarded to employees. Compensation specialists often have knowledge of both compensation and employee benefits. This is one reason why human resources departments sometimes combine compensation and benefits into one departmental function. HRs efforts to integrate compensation strategies and practices are a key component of successful mergers and acquisitions. In todays whirlwind of mergers and acquisitions (MAs), everyday HR issues such as employee compensation may get blown aside as countless financial and legal priorities take center stage. However, recent research suggests that HR could play a greater role in successful MAs, and, the earlier HR gets involved, the better. Depending on the circumstances of the deal-and the compensation policies of the merging companies-HR may be called on to splice disparate payment plans into a program that fits the new organization, or HR may have to discard the original plans and then create a program from scratch that complements the merged entities. Either way, old and new employees will be concerned about what is happening with their pay, so HR also must develop an effective communications plan to inform and reassure them. Compensation represents the largest of all expenses in most organizations, and it is in turmoil. The Federal governments statements are inconsistent and have resulted in much uncertainty. Executive Compensation is a global issue, including who is an executive, CERP implications, and long and short-term incentives. While some employers are reducing hiring and merit budgets, freezing salaries, decreasing bonuses and pay, passing on of benefit costs, and gasp cutting out 401k contributions they should also remain concerned about holding on to their most talented employees when the economy recovers. With decreasing revenues, sales compensation structures are being revised, such as the trend away from a revenue basis to a profit basis. Then there are the changes in 401(k) and other plans Companies are cutting their match, and the IRS is providing guidance. It is the biggest pain of Compensation and Benefits how to introduce the fair and transparent compensation policy to the organization. In the public sector, this issue is quite easy to solve as their compensation scheme are pretty rigid and people get used to them. But in the large corporations the transparency and fairness of the compensation policy can be a real issue to the employees. The organizations usually know what it means to have a fair and transparent compensation policy. But the pressure of the business and the constant need to change makes almost impossible to make the compensation policy transparent and fair to all the employees. It needs a lot of time and effort. Fair Compensation Policy needs a clear definition of job descriptions and job profiles in the organization. The value of each job must be evaluated and the organization must develop a clear system of jobs within the organization. In this stage the HRM is under a big pressure as the managers know about the impact of the job evaluation to the real salaries and bonuses. The whole system must be clearly supported by the Top Management of the company. When the organization has a clear system of job evaluation and all the job positions are put in the correct order, the organization can develop the Fair Compensation Policy. The fair compensation policy takes the following inputs, job, evaluation, job market situation, business strategy, preferences of the organization. Based on the inputs the HRM can prepare the fair compensation policy, which enables the company to reach better performance. The HRM is responsible for the correct setting and keeping the rules during the procedure of creation of the fair compensation policy. The fair compensation policy means the fair value of each job in the organization and clear process of reaching this fair value. Transparent Compensation Policy is about opening the rules for the compensation policy to employees. When the employees have a chance to understand the principles of the compensation policy and they can take them as fair to them, you are successful in the implementation of the Transparent Compensation Policy. The Transparent Compensation Policy is about the courage to open the rules and the compensation policy must be ready to be open. In case, the compensation policy is not fully implemented and the employees are not fully in the compensation range, it is very dangerous to make compensation policy transparent. Honestly, these basic rules about the Fair and Transparent Compensation Policy are easy to write, but very hard to follow in the real business life. But every HRM should implement Fair and Transparent Compensation Policy to support the performance of the business and to increase satisfaction of employees.

Current Market Conditions Competitive Analysis Essay

Before investing time, money, and resources into new product development, every company must fully understand the existing market competition. Analyzing competitors in depth will help a company determine future potential success of the new product segment. Though Keurig is the industry leader in coffeemakers and coffee portions, they too experience factors affecting supply and demand. In addition, Keurig often sees many attempts to compete with their product. However, it is important to note that even the competition has great potential. The critical points of researching the current market include knowledge of any issues that may affect long-term profitability as well as how the company can compete in the market. With successful research and analysis, the company can consider ways in which they can maximize their success and profit-making potential in their new market. Keurig Products Founded in 1992 by John Sylvan and Peter Dragone, the Keurig leads today’s market with a single brew technology that revolutionized the way many people drank morning coffee (McGinn, 2014). The chosen name â€Å"Keurig† means a form of excellence and is a name Sylvan found in a Danish-English dictionary (McGinn, 2014). The company took years to develop with minimal success and changed hands in 2006 (McGinn, 2014). Green Mountain Coffee Roasters, Inc. purchased Keurig in 2006 and turned the company into a multi-billion dollar company (Keurig Green Mountain, Inc., 2014). In the 2010 fiscal year, Keurig sold more than $330 million worth of single-cup brewers and more than $800 million worth of the single K-Cups (McGinn, 2014). What began as an office-based machine is now available in more than 9,000 retail stores for the home (Keurig Green Mountain, Inc., 2014). The Keurig is a single-portion machine that brews a consistent single cup of coffee every time the machine runs a cycle. Through patented technology, the Kuerig system includes three components unique to the company (Keurig Green Mountain, Inc., 2014). The three components include their unique single-cup brewer, the patented K-Cup, and one of the largest selections of gourmet  teas, coffees, and hot cocoas (Keurig Green Mountain, Inc., 2014). First, the brewer combines the precise amount of water with temperature and water pressure for consistent flavor every brew time (Keurig Green Mountain, Inc., 2014). Second, the K-Cups combine roaster specifications with filters and barriers to produce the most flavorful and consistent cup of coffee with every brew (Keurig Green Mountain, Inc., 2014). Last, the Keurig system offers more than 170 varieties with blends from 12 brands (Keurig Green Mountain, Inc., 2014). Defining the Market According to Mifflin (2014), the Keurig system offers something that many of the competitors do not. Keurig offers the ability to brew fresh cups and blends for less than ten cents per cup (Mifflin, 2014). The savings with this system is significant in that competitors cost around $.45 to $.50 each with similar types of single coffee pods and capsules (Mifflin, 2014). Because of this cost saving, yet advanced technology, Keurig’s target market includes both employees of the corporate world and households. The methods and strategies of their market include not focusing solely on the commercial office segment, but including the household as well as the home office segments. The Keurig plans included a successful rollout into the commercial and home office segments, which then can provide a springboard for the launch into the household segment. Keurig has many competitors but Starbucks seems to be the biggest threat. Starbucks is known for their gourmet coffee. Starbucks provides up scaled fresh vanilla bean coffee along with other wonderful brands. With this economic state Starbucks prices has caught up with them which caused the demand to decrease. Starbucks was forced to face reality and lower there price and even close a couple of stores along with reducing staff. This proves that the cost of the coffee is elastic and if the price is too high then the demand will decrease. Even with success there are factors that affect demand such as availability, competition, developments and costs. Due to the increasing demand for the Keurig system, consumer prices continue to rise. Many consumers argue that a case of 15 K-Cups cost an inexpensive $9.99, while others argue that one can purchase a 31.5oz of Colombian ground coffee for the same price. To stay ahead of the competition and attempt to fight some of the arguments, Keurig also produced the My K-Cup product. The My K-Cup product allows the consumer  to use the machine without purchasing standard K-Cups and instead use store-bought grounds to brew a single cup of coffee. In addition to the factors affecting demand are the factors affecting the supply. Neejan (2014) speaks of economics in general in that when the supply will increase if and when foreign producers enter the market. Just as well, Nee jan (2104) speaks of technology in that with the improvement of technology, productivity will rise because production can become robotic. Neejan (2104) concludes that for the same amount of costs it is possible to supply more of the product, thus the supply curve will shift to the right. This effect Keurig because if the supply decrease then the demand will increase. It the product is not present the consumers will shop where the supply is this means a lost in revenue. According to â€Å"Market Equilibrium† (N.A), â€Å"graphically, changes in the underlying factors that affect demand and supply will cause shifts in the position of the demand or supply curve at every price. Whenever this happens, the original equilibrium price will no longer equate demand with supply, and price will adjust to bring about a return to equilibrium.† This relates to Keurig given the scenario the outcome could be the same .Keurig has a lot of competition everything about the product Keurig has to be aligned. The competition lies with the store who can prepare the coffee and have it readily available. Also, the machine is not portable, and the competition could have an advantage for convenience when it comes to outside the home workers. Issues and Opportunities That Affect its Competitiveness and Long-Term Profitability Price elasticity of demand is an important factor for any firm’s profitability. It measures the responsiveness of consumers to a change in the product’s price (Colander, 2013). If consumers are very responsive to a change in price demand is elastic, while demand is inelastic if consumers are relatively unresponsive to a change in price (Colander, 2103). The more inelastic the demand is, the higher prices companies can charge for the product with higher profits. A key factor in determining the price elasticity of demand is the availability of substitutes. Some available substitutes include Mr. Coffee, Bunn, and Bloomfield Because of multiple  substitutes, technological innovation is critical. Through technological innovation, Keurig can differentiate its product from substitute products. By differentiating with new technology, Keurig can reduce the price elasticity of demand and make demand inelastic. Doing so allows for an increase in profits and works in direct relat ion to the creation of the K-Cup technology. With the cost effectiveness and reliability of the Kuerig, issues can arise that will affect the long-term profitability of the product. For example, in 2009 alone, the Kuerig coffee maker sold well over 2,000,000 units, equaling to significant labor costs associated with the product (CITATION). The amount of physical labor required to build the units, coupled with the multiple variations of models, proves high capital costs within manufacturing. For example, in initial years temporary workers constructed the K-Cups (CITATION). After Green Mountain Brewing Coffee Brewers acquired the company, a top priority became hiring full time employees to produce K-Cups at a much faster rate (CITATION). Additional issues with the Keurig product include the waste of K-Cups and an increase in competition. According to one consumer, the K-Cup is producing a significant amount of waste for landfills (Gordon, 2014). The products are not biodegradable or recyclable and any means of trying to do so comes with a price from Keurig (Gordon, 2014). Though the company is addressing some of the economic concerns, many consumers feel that the company focuses more on profits than sustainability (Gordon, 2014). Also, as new Keurig systems enter the market with an attempt to address specific issues, consumer prices only continue to rise. Simple and basic competitive systems such as the Mr. Coffee brewing system range around $75 to $100 (CITATION). Howeve r, competitive Keurig models can cost as much as $250.00 (CITATION). When considering future challenges of Keurig, there is an issue of cost in comparison with competitive models, but also with the concept that kitchen appliances come and go as a fad product (McGinn, 2014). The real strength of the Keurig system in terms of revenues is in fact not the brewing system, but instead the continued sales of the K-Cup (McGinn, 2014). Factors Affecting Variable and Fixed Costs Variable costs are those costs that change as the output changes (Colander, 2013). In contrast, fixed costs are those costs that remain constant and are  not affected by production volume. As the total cost of brewing a Keurig cup of coffee can range from ten to fifty cents, this cost is a fixed cost that remains constant in total. This cost is not affected by volume of production, but vary on a unit basis. The base unit saves ten cents by one brewing their own grounds (Mifflin, 2014). As consumers consider costs, one can calculate that with brewing 200 cups per day, the consumer will save $20 per day, $140 per week, totaling $7,280 per year. By using individual blends, Keurig provides a significant savings to the consumer. Labor costs are variable depending on a number of factors, including the number of brewers and number of K-Cups. Labor costs may increase to meet supply and demand of the units. To offset some of the labor costs, Keurig introduced the My K-Cup to the market, the refore decreasing the labor costs for standard K-Cups on the market. Controlling some of the labor cost will have to be born at the market and choosing to use your own blend as shown above will save a significant a lot in return to offset labor cost (THIS REDUCES CONSUMER COSTS, NOT THEIR LABOR COSTS). Supply and demand comes into play when you sent wages, just as it does when companies determining the price of products. If there is a shortage of workers unfortunately, wages will have to go up to attract a good worker, but if there is not the shortage wages, labor will be reasonable, and the cost of productivity will go down. (twist, 2010) (THIS SITE DOES NOT LOAD PROPERLY AND RELATES TO THE HOUSING MARKET) Recommendations on Maximizing Profit-Making Potential Perfect competition refers to markets that do not have participants large enough to have the market power to set the price of a homogenous product (Colander, 2013). There is always room for growth and changes to increase the profit making potential for companies and still stay competitive in the market. In order to compete successfully and remain profitable, a company must have a competitive strategy. A critical step in the strategy is having a lower cost producer, meaning that the company will produce or manufacture their product for the lowest possible cost without losing any of its value. This type of strategy will provide the company with a cost advantage that is comparable or relative to its competitors. The results of Keruig utilizing these recommendations will provide the Keurig with two options. First, they can undercut their competitors, thus resulting in the increase of their  share on the market. Second, they can continue selling their products at a price that is similar to their competitors, which would result in them having a higher profit margin. Keurig does not need to limit or sacrifice the quality of their product which may lead to a decrease in sales. Rather, Keurig can reduce their costs with a few options. Keurig can purchase more efficient production equipment, purchase other fixed or capital assets to increase efficiency, or do away with one or more of their cost producing activities. In addition, Keurig can source less expensive raw material suppliers, reduce employee overtime costs, or reduce the amount of waste in their products. Conclusion References Colander, D. C. (2013). Microeconomics (9th ed.). New York, NY: McGraw-Hill. Gordon, A. (2014). Opinion: Keurig needs to brew up solutions for wasteful K-Cups. Retrieved from http://thelantern.com/2014/02/opinion-keurig-needs-brew-solutions-wasteful-k- cups/ Keurig Green Mountain, Inc.. (2014). Corporate profile. Keurig. Retrieved from http://www.keurig.com/in-the-news/2010/~/media/Files/News%20And%20Media %20PDFs/keurig_CoProfile.ashx McGinn, D. (2014). The buzz machine. Boston.com. Retrieved from http://www.boston.com/ business/articles/2011/08/07/the_inside_story_of_keurigs_rise_to_a_billion_dollar_coffe e_empire/ Mifflin, M. (2014). Single serve brewer buying tips and Keurig brewer features. About.com. Retrieved from http://housewares.about.com/od/coffeemakers/qt/Keurig-Brewers-and-Single-Serve-Buying-Tips.htm Neejan, S. (2014) What are the factors affecting demand and supply? Answers. Retrieved from http://www.answers.com/Q/What_are_the_factors_affecting_demand_and_supply

Supply chain paradigms in apparel and textile sector - Free Essay Example

Sample details Pages: 13 Words: 3927 Downloads: 2 Date added: 2017/06/26 Category Management Essay Type Narrative essay Did you like this example? Recession was not all bad. It gave people time to think of new ways to improve efficiencies and optimise processes. Earlier there was simply no time to look into some of the processes that happened anyway! Supply Chain Management was one of those things. Don’t waste time! Our writers will create an original "Supply chain paradigms in apparel and textile sector" essay for you Create order Of course, there has always been a focus on SCM but recent time saw concentrated efforts towards innovation in this area. 2009 Economic Downturn Its Impact The year 2009 has been a year of re-awakening and the challenges faced in this year have forced fresh thinking in all segments of business, more so in the apparel and textile sectors. The fashion industry which saw unprecedented boom in this decade, also witnessed unprecedented challenges in the year 2009. Almost all brands and all retail formats were on extended sale period in the year 2009 and in the non sale period were offering aggressive promotions and discounts to prop up the consumption. This has led to 2009 becoming perhaps the year of lowest full price sales (in other words highest mark downs). This was also the year when all projections and forecasts went haywire and the hyper activities of previous years caught on, leading to huge inventories across the fashion supply chain and adversely affecting not only the r etailer/brand but also the suppliers, logistic providers, distributors, and the brand owners equally. Though the above gloomy picture was universal, there were some fashion retailers and brands (retailers and brands are taken together as most Indian retailers have their own private brands which constitute a significant chunk) who not only grew in sales but also had much higher full price sales compared to the competitors, and also had their inventories in reasonable control. An in-depth analysis of all such brands clearly attributes this to nothing else but better supply chain initiatives that these brands/retailers had undertaken even before the recession had hit. Some of these supply chain initiatives taken by retail formats/brands are being discussed here to highlight the impact of the competitive edge that a Fashion companys supply chain readiness brings in at all times, especially in times of recession. Apparels and Textiles The Extended Supply Chains View The Apparel an d Textile supply chain in India is not only unique in many aspects, but also by far one of the most complex. The diversity of Indian culture and hence, the fashion tastes and habits of the large demography of India leads to proliferation of local players in the fashion domain and fragmentation of revenues amongst players. Even today, there are very few fashion brands in this country with a turnover in excess of $50mn (INR 250 crore) a revenue sum considered to be very small in the developed world. India is a country that perhaps has the longest Fashion supply chain lead time of close to 400-600 days. The cotton plucked from the cotton plant can take upto as long as two years to reach the hands of the end consumer. While this might seem exaggerated, an in-depth analysis of overall textiles and garment value chain will make it obvious. The number of composite textile mills in India is very limited and textiles, even today is produced in discreet manufacturing processes across vario us stages of spinning, weaving, fabric processing etc., carried out in different locations by different players. This in turn means holding of inventory in each stage (before as well as after each stage- raw material as well as finished goods), and there is also work in progress inventory in each stage. Once the fabric is ready, it is stored as finished goods and sold to distributors and finally to retailers. The inventory level at the distributor and retail stage combined is often in excess of 180 days. In the case of garments, the garment manufacturing stage is an additional stage and hence an additional stage of inventory. The organised retail is acting as a major improvement in the supply chain and is helping reduce one level of inventory (at the distributors end). However, organised retail too has two levels of inventory one at the retail front and other at the retail warehouse. This in some way negates the advantage of disintermediation by retail in terms of supply chain time . Hence, it can be easily seen that while the most efficient fashion supply chains may be able to reach goods from the raw material stage to the consumer in about 250 days, the lesser efficient ones can take around 700 days. It is in this complex environment of Indian supply chain that we need to discuss new paradigms innovations, infrastructure, technology and a holistic end-to-end (raw material to consumer strategy) paradigms which will be the main differentiator between Fashion Leaders and the Fashion Laggards. In the field of apparels, a large number of case studies worldwide on fashion supply chain (like the case study of Zara, HM, Li and Fung) have been written. However, the economic downturn in 2009 has led to challenges faced by even the companies that were studied. Through a shorter lead time at higher cost, Zara was a great example of a responsive supply chain. In a recessionary environment, in a complex country like India, this approach can be challenged. India need s its own responsive Fashion Supply Chain, yet needs to do away with the higher cost manufacturing as incurred by Zara. This is where a number of retail chains and fashion brands have innovated and have been successful in India. Despite extended mark downs and seasonal sales, some fashion brands and retailers have come out winners not by chance but because of holistic supply chain redesign as well as implementation in the recent past. The fashion supply chain is not a one-dimensional supply chain,  but is quite varied and has several variations as shown in the chart below. Considering the diverse needs of the fashion sector, the three important concepts which need to be focussed on by any player are Mind to Market (MTM), Time to Market (TTM) and Cost to Market (CTM). Mind to market -  Mind to market is the time taken from the moment of design initiation to the time when the product reaches the consumer. This time in western nations used to be as high as 18 month s. However, it is the endeavour of every fashion retailer / brand to continuously strive to lower the same. Zara is a case study of the same (in best cases 21 days). In India, leading retailers such as Pantaloons have successfully reduced this dramatically over the last few years and achieved growth in both sales and margins despite having tighter control on inventories. Achievement of a lower TTM needless to say entails end-to-end collaborative approach between the buyers, merchandisers, planners, garment manufacturers, fabric providers, logistic providers and the retail stores. Time to market -  This is the lead time from the moment an order is released to the garment manufacturers to the time the product reaches the consumer. In other words, TTM = MTM design and planning time. Reduction in MTM and CTM plays a great role in reducing the uncertainties of the Fashion Supply Chain and finally results in better inventory management, lower obsolescence, lower mark downs and hence higher profits for the fashion retailer/brands. Cost to market -  The cost to market is the total supply chain cost including factory gate logistics (vendor to brand/retailer), the primary and secondary warehousing and distribution system, the replenishment system, and the secondary transportation. The reduction in cost to market can be significant for a brand/retailer. An an exercise last year, the supply chain cost for Big Bazaar Fashion was reduced by 1.5% which is more than half the total bottom line percentage for most retailers. This was achieved by redesigning the supply shain network and reducing the storage locations from 16 and consolidating them into just five big regional distribution centres with state-of-the-art infrastructure and technology applications. The Fashion Supply Chain Model Factors influencing the Indain fashion supply chain The fashion domain along with its opportunities, also posesses various challenges for the logistics industry: India is a multicultural heterogeneous country with the consumer tastes changing every few kilometers. This results in the retailers/brands offering becoming region specific,leading to multiplicity of Stock Keeping Units (SKUs). Some large retailers have more than 100,000 SKUs in fashion.  · The high real estate rentals for retail leave no scope for the retail stores to have any back-end store stocking of inventory. Hence, replenishment systems and their accuracy becomes critical.  · Lifestyle retail needs fast and quick-response supply chain deliverables, whereas, value retail requires cost-efficient supply chain.  · The logistics infrastructure of this country is in its early stages of evolution. The combination of these factors leads to a uniquely Indian consumption supply chain one that includes handling very large number of SKUs in pieces (eaches) as opposed to fewer SKUs handled in the form of pallets by most of the large retailers in the world. Hence, there is a growing need to learn the art of managing these complexities and design and execute supply chain solutions that are uniquely Indian. In addition to the above factors, there are multiple other factors that have an impact on a products supply chain and need to be carefully evaluated and factored in while designing the supply chain solution. The major amongst them being: Sourcing Supply chain requirement responsiveness v/s efficiency Supply chain design Retail market (geographic) strategy for the respective format Retail formats positioning strategy and its relation to the supply chain External factors the contemporary logistics landscape affecting supply chain in organised retail Sourcing India being a dominant global player in textiles, the sourcing for fashion is largely domestic. The manufacturing of garments is clustered around a few major centers woven garments around Mumbai, Bangalore and Delhi, woolens and knits in Ludhiana, knitwear and hosiery around Tirupur etc. The supply chain network design has to factor in these manufacturing bases depending upon the product mix of the brand/retailer to optimise the inbound logistics cost. A few international fashion brands also import their merchandise from the global manufacturing bases or route it from their international distribution network. Supply Chain Requirement Responsiveness v/s Efficiency Different product categories and retail formats have different requirements from their supply chains. For fashion chains like Pantaloons, Shopper Stop, and Westside, the Time to Market is the most important parameter. For hypermarkets like Big Bazaar, Spencers, and Star Bazaar. businesses that target the cost conscious, Cost to Market is also an extremely important parameter. All these factors influence the supply chain design and determine how the associated solutions will evolve to deliver the specific and exacting requirements from the supply chain. Supply Chain Design The Supply chain design revolves around a plethora of activities like designing the network and the associated decisions centralised or decentralised, based on sourcing or based on consumption or a combination thereof. The right solutions also need to be selected in the areas of Technology, Automation and Mechanical. Decision needs to be taken on whether to own or outsource be it manpower or vehicles. Syst ems and processes to be implemented need to be evaluated and implemented. It is also important to have a culture of Learning and Knowledge Management to share and train across locations. Retail Market (Geographic) Strategy The major Indian retail markets are concentrated around the urban centers, the biggest of them being Mumbai, Delhi NCR, Kolkata, Chennai, Bangalore, Hyderabad, Ahmadabad and Pune. The service levels to these cities are of utmost importance to any consumption supply chain. The distribution strategy is heavily influenced by the size of the product markets in these urban centers. The regional preferences have a major influence in deciding the supply chain strategy for specific products and categories. Further, in future, some more cities are likely to become important for organised retail. The supply chains will have to factor in the same. Retail Format (Positioning) Strategy The positioning of the brands and their value proposition determines the produc t mix and its pricing. This in turn influences its deliverables from the Supply Chain. Even for the same product category, the priorities change depending upon the target customer segment for the product. For example, apparels can be high fashion lifestyle or they can be targeted towards the masses with low prices. Though the product in both the cases is apparels, the delivery strategy determines what is a priority time to market or cost. External Factors Government is in the process of scraping the CST and introducing the VAT thereby opening up prospects of the retail boom. Also, the emergence of GST is projected to make positive impact. Evolution of seaways, inland river ways and railways has enabled these to be considered as viable options. Infrastructure developments in the form of Golden quadrangle and Cross corridors have improved connectivity and reduced transit time. More FDI in retail sector will increase the competition and there will be a greater focus on optimisin g the supply chain to maximise the profits. Consolidation activities like mergers and acquisitions will also have a great impact on the design of the supply chain network as the companies would try to exploit the economies of scale to their advantage.  Ãƒâ€š Sourcing Integrating The Supply Side In order to respond to market and consumers demands quickly, getting suppliers involved in the supply chain process is now becoming an important business practice often resulting in the formation of collaborative partnerships. To offer target customers new styles and fashionable merchandise in a timely manner, buyers must collaborate with suppliers in streamlining supply chain processes right from product design and development, technical specification development for packing, labeling and packaging, development of quality standards and manuals and rating systems containing parameters and checklists for meeting supply chain needs. Competitive advantage comes from not just sha ring information with suppliers, but also from HOW you share the data. Information is only important if it can be acted upon. Leading buyers are allowing vendors secure, online access to reports, raw data, forecasts, sales and inventory and even to the replenishment system in some instances, using web-based portals and dedicated servers. Supplies are managed online with suppliers adopting latest techniques such as Advance Shipment Notices for notification of inbound cartons and their contents to the buyers, thus enabling pre-allocation of merchandise for retail even before the goods have come in. Pre packs, Inner Packs with bar codes and other such improvements are being used to further reduce the TTM. The information about the contents of each carton is recorded when it is packed by the supplier and a unique identity is created to link the bar code label on the carton with the ASN. The ASN is transmitted to the retailer, usually via EDI, so the retailer knows: What is coming, ho w it will arrive and the number of cartons in the shipment. In conclusion, training and development of suppliers, building supplier matrices, and developing collaborative efforts were steps that the buyer had taken to establish a virtual vertical company. The Logistics Piece of Fashion Supply Chain Warehousing Warehousing is the most complicated and under-invested yet most critical logistics activity in the entire supply chain. The Fashion business requires the expertise in managing eaches at every level of activity from inwarding, putaway, picking, sorting, to store delivery. There is an increasing need to increase efficiencies, maximising inventory turns and services to the stores and customers. There is a growing need for Big Box warehousing solutions for fashion as the volumes and complexities go up in this fast growing market. Having bigger warehouses will facilitate economies of scale as the warehouse set-up costs and overheads are distributed over larger throughput. Consolidation of merchandise in fewer locations will also result in higher product availability for order fulfillment and store replenishment and therefore wider choice to the customers and higher sales. Further, these larger mechanised warehouses can be equipped with Mechanisation such as Racking, Shelving, wi-fi infr a, RF guns, conveyor system, automatic weigh-check with print and apply, and sorter systems like put-to-light (PTL), bomb-bay, ring sorter etc., to automate the merchandise sortation process and make it fast and accurate at the same time. Transportation For garment transportation, specially designed transportation network is required connecting all major consumption centers bringing in an innovation in the form of new system of volumetric goods transportation in double deck containerised vehicles and last mile deliveries from DC to Stores through tail lift fitted vehicles and Roll cages/Dolly /Nest able crates for consignment delivery directly on store floor. This has led to reduction in transit times hence lowering Time to market (TTM), lower in-transit inventories and also lower freight costs. Vehicle fitted with vehicle tracking system (VTS) monitored through a TMS (Transportation Management System) ensures visibility of all consignments on a real time basis ensuring reliable and timely movement of consignments at lower cost. Technology In recent years, fashion attributes have infused nearly all garment types: product life cycles are shortening and product proliferation is accelerating even in the most basic garments. These trends have created increasing demand uncertainty that has changed radically the basis of competition in the textile- apparel-retail channel. Increasing demand uncertainty has led to the advent of lean retailing. Retailers who once purchased large quantities of each item, far in advance of the selling season now avoid the risk of carrying inventory of increasingly unpredictable items by ordering smaller quantities of each product in advance and ordering, on a weekly basis, replenishment quantities of those products that have sold in the previous week. Lean retailing has driven changes in both information and product flow, resulting in the changes in manufacturing and supply chain practice; this has been facilitated greatly by the introduction and maturation of several key technologies: Wire less infrastructure and hand-held devices for product identification, used to provide real- time, accurate information about which products are selling at the pointof-sale; Electronic data interchange (EDI), used by the retailer to place quick, accurate replenishment orders; and More sophisticated, Warehouse Management System (WMS), which allows manufacturers to pick and pack small replenishment quantities based orders. Automated Replenishment System (ARS) works on actual pull based demand.  Automatic Replenishment System (ARS) ARS is a pull-based system instead of the traditional push based system and ensures generation and availability of correct assortment with correct quantity of all major fast moving items on store shelves most of the time. ARS works on actual demand considering shelf stock, base stock level and past sales trend and instead of manual order generation, ARS triggers an auto-replenishment order from nearest DC to stores. This pull-based system helps in lower obsolescence and lower markdown for the fashion retail business thereby directly impacting the bottomline and topline. The replenishment requirement in ARS can be in single pieces also and here WMS plays a very important role in ensuring the order fulfillment. Warehouse Management System (WMS) A good WMS enables a complete visibility of inventory in the warehouse and contributes in the warehouse operations by substantially improving the productivity, order fulfillment and accuracy. WMS enables cross docking facility to bypass traditional receiving, put away, replenishment and pick cycles by moving received goods directly from the inbound dock to fulfill outstanding demand, all while reducing staffing, equipment needs, space requirements, and inventory carrying costs. Wave planning is performed to Group of orders into waves of one or more orders that are planned and released together to pick more efficiently and meet stores requirement. WMS is also helping in slotting to maximise productivity and minimise travel time from location to location by determining the most advantageous arrangement of SKUs within a range of pick faces or slots. It minimises disruptions that result from demand variability by enabling adjustment of product placement according to seasonality, specia l promotions, and changes in customer order patterns. This results in complete visibility of inventory and the warehouse processing in system, and leads to improved order fulfillment and accuracy especially the order line fill rate at SKU level a parameter very crucial in fashion retail success -ensuring prompt replenishment of every single item in stores. Reverse Logistics Reverse flow of merchandise is an integral part of any retail business and its efficient management can augment the bottomline considerably. The reverse logistics services are required to manage the reverse flow of merchandise from the stores and refurbish, repair, refinish and re-sell these products through the factory outlets or other liquidation channels. Importance of an E2E Holistic Approach One of the most important considerations for the success of supply chain strategy is that any supply chain is only as strong as its weakest link. Hence, unless all parts of the extended supply chains extending from the raw material suppliers to the consumers work equally well and in synchronisation and harmony, the end result would be sub optimal. Some of the critical factors for the success of the chain are : Holistic approach Holistic extended supply chain approach Selection of the right supply chain solution provider  · Use of the right technologies  · Creation of the right infrastructure, specially the warehouse  · Measurement systems and the continual improvement of MTM, TTM and CTM  Execution The Final Frontier Strategy alone cant delivery the result, execution is equally critical and can be managed by own or through third party logistics (3PL) company. One of the options for fashion/retail brands is to create all the above parameters on its own. The other option is to outsource it to a third party supply chain solution provider who has the requisite competencies. Unfortunately, the supply chain solutions providers in India are very few and most of the logistic providers in India are mainly transporters and do lack most of the above critical success factors. However, with the growth of organised retail in the country, the organised logistic segment is also poised to grow. With the advent of GST (most likely in a few months) brands can further rationalise their network and by reducing stocking points, reduce the inventory as well as reduce the total cost of distribution. Reduction in stocking points also enables implementation of pull base system such as Automated Replenishment System ( ARS) thus leading to much higher fill rate and hence higher sales. However, supply chain network modeling and design is a science which requires not only modeling software application but also an in-depth knowledge of the business. Some of the supply chain companies also possess network modeling design capabilities and can add tremendous value, both in terms of higher top line as well as healthier bottom line because of their expertise in providing innovative solutions which include supply chain network modeling, state-ofthe-art technology, skilled and trained manpower, investment in the state-ofthe-art infrastructure and innovative transportation. Further, investment in infrastructure by the supply chain service providers will also help keep the balance sheet of the fashion players lighter, leading to higher returns on capital. Certain supply chain solutions companies have built core competency in the fashion domain for several years and have developed knowledge and infrastructu re and possess all the above critical factors. Such companies can be used by the fashion retailer/brands and the supply chain network design as well as execution infrastructure, warehousing, replenishment and movement activities and also reverse logistics can be completely outsourced to such companies. Anshuman Singh is the Managing Director CEO of Future Supply Chain Solutions Limited Indias largest Consumer Supply Chain Company. In a career spanning over seventeen years, he has successfully created and led organizations in the field of Retail as well as Supply Chain and Logistics.

My Family Background - 745 Words

Lin Yadanar-Reg. 1701 Mr. Lamarre- 9/24/2013 3.3 Investigation and analysis of family history (Plan Ahead) There were many different things about my family history because my parents both came from a different family background. The one thing my grandparents have in common is that they are Chinese. One different thing is that they are born in separate places. My grandparents on my father’s side were born in China then came to Burma, while my grandparents on my mother’s side were born in Burma. Another interesting thing they had in common is that they opened a coffee shop during their 20s. My grandparents on my father’s side were born in China. Then they came to Yangon, Burma to get better business. They†¦show more content†¦Mary. The second one to leave was my youngest uncle; he came to US to get better education and job. After that my mother got married to my father and moved to Yangon. 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