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We/I, ____________________________________, confirm that the work for the following term project with the title: “________________________________” was solely done by us/me and that no help was provided from sources other than those allowed. All sections of the project that use quotes or describe an argument or concept developed by another author have been referenced to show that this material has been adopted to support my project.

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ABSTRACT

The report will address the brief introduction of the product to be sold, the business mission, and competitive dimensions. Similarly, the business process will be illustrated by constructing the flow chart for the order fulfillment procedure as well as the rational adoptions and the challenges expected. The facility location of the warehouse will be illustrated and the factors which should be considered before developing it for operations. The distribution models and inventory control system will be discussed to determine the models of transportations. Similarly, lean processes and Six Sigma will also be described to identify the single metrics on improving the business operations and management system. Under the lean process, the factors that can be environed during the business development will also be illustrated along with the possible ways and plans to eliminate these wastes. Lastly, the conclusion will also be drawn about the discussion on the relevant topics in the report.

INTRODUCTION

The type of product which the company will sell is hydrocodone medicine and will be distributed under the brand name Vicodin. The medication is used in the treatment and moderation of severe pain among individuals in various ways. Similarly, it is also utilized to treat coughing cases when prepared in a liquid formulation. The business mission is to earn the trust of the customers by providing innovative and valuable biotechnology to efficiently manage the rare, chronic, and severe illness causing pain. The comparative dimension used by the company focuses on addressing the position of the company within the industry. They consist of the price of the product which should be cheaper. The rates at which the company will be selling the medication will be average in regards to the existing price range of the items within the market.

The quality is another dimension where the products will be manufactured to meet the standards required. The delivery of speed and reliability should also be put into consideration. The essence of this aspect is to ensure the products can reach the customer at the minimum time possible in a reliable manner. The order qualifiers which will be considered entail the quality and whether it meets the standards of the market. Primarily, this aspect is vital in ensuring the customer can identify the product (Thamir and Poulis 34). Therefore, branding of the items and distribution to regular stores for sale is a crucial aspect. On the other hand, the order winner for the product is where goods with best preferences such as the price and quality are attractive for the customers. Besides, it assists the company to be competitive in the market. There are many similar products in the market, but using these criteria would help in penetrating and attracting the new customers.

BUSINESS PROCESS

The business process is referred to as the collection of the linked tasks which assist in delivering services and products to the clients. The set of activities needs to be completed to so that the company can accomplish their goals. These factors are always categorized into methods, operational processes, and supporting business processes (Thamir and Poulis 35). Working on an e-business will need the company to develop an order fulfillment process which guides the activities of the company. Additionally, it can be done through the development of an application program interface to facilitate the protocols of servicing the customers. The following is the flow chart which the firm will apply to meet the demands of the clients.

Figure 1: Flow Chart of Business Process

The Explanation of the Order Fulfillment Process

Receiving orders is the initial stage where the development of shopping cart integration is developed. Print orders are the next step where the company receives the order through the panel of the fulfillment control system. Pick, pack, and ship stage entails the circumstance where the orders have been printed and sorted to be delivered to the customers (Thamir and Poulis 35). Lastly, the ship confirmation is the next phase where orders are shipped. There are various challenges which can also be experienced by a business process in the long run. One of the difficulties is that most of the management leaders often believe that the business process is always a solution to their problem. However, it is a tool used as an intermediary to propel transaction process and allow employees to follow up with the client’s needs. Another challenge is the necessity to set a core KPI to determine the rate of success or failure of the project. Most managers shy away from developing such elements because it often makes it clear when the plan fails.

FACILITY LOCATIONS

The location of the facilities is essential for the successful operations of the business. The essence of this is to assist in providing a competitive advantage over the competitors. There are various factors to consider in when choosing the location of the facilities. The development of layout and building flow are one of the elements which should be discussed. The availability of a skilled workforce is also a vital aspect to be put under consideration is given the fact that the location selected should be pocket-friendly (Thamir and Poulis 36). The zoning and intensity of use is also another factor in determining the facility location. The capability of having material handling systems is vital in choosing the location of the warehouse. The availability of handling equipment and storage facilities should be sufficient to avoid any damage which can take place. Lastly, the size and regulation activities are also considered when selecting the location of the facility.

Factor Weighting Method

SL. No

Location Factor

Weight

Scores

Location 1

Location 2

1

2

3

4

5

Layout and flow of building

Zoning and intensity use

Proximity to major linkages

Material handling capabilities

Size and regulation

25

25

25

15

10

3

4

3

1

5

5

3

3

2

3

The total weighted score for location 1:

1 = 25 × 3 + 25 × 4 + 25 × 3 + 15 × 1 + 10 × 5 = 75 + 100 + 75 + 15 + 50 = 315

The total weighted score for location 2:

25 × 5 + 25 × 3 + 25 × 3 + 15× 2 + 10 × 3 = 125 + 75 + 75 + 30 + 30 = 335

Location two is the right place to develop the facility, since it has higher score.

DISTRIBUTION MODEL

The model of the distribution of the product is vital to ensure that goods can reach customers at the right time and place as specified during order request. Besides, there are various forms of the challenges which can be considered by the companies. However, it would be crucial to select the wholesaler-retailer distribution channel for the products. The essence of this form of distribution is because it is concerned with the efficient movement of products from the end of production up to ordering process to the consumers directly. The involvement of physical distribution through the approach of wholesale-retailer is necessary to be implemented by the firms as well. The physical distribution is always part of the larger process in distribution given the fact that the ordering of the products is often increasing with the expansion of the business operations (Gunasekaran and Ngai 690). The importance of this particular model assists in accounting the system in place by establishing partnerships with retailers to enhance faster movement of goods to the convenience of the customers. Besides it assists in improving the inspection and sorting grading quality control by the standards weights and measures, as required by the clients. The transportation of the products depends on various factors that affect the operations of the business. For instance, the location and urgency of goods are one of the aspects which can determine the type of transportation to use in the business operations. Therefore, the products which require local delivery would use road or rail transportation. On the other hand, the items which are needed in the international markets will use air for the shipment to convenience purpose. They would be effective in reducing the cost of operations and the possibility of reducing the risk of damages that may be caused in the transportation system.

INVENTORY CONTROL

Management of inventory entails storing, ordering, and utilizing the operating materials into a useful manner that reduces the costs involved. Further, it is also considered one of the most significant assets because it represents investments which will not reap the returns until the sales of the goods are made. There are various ways in which the company can manage inventory system. Use of priority stock up is one of the schemes to be used by the business. The system is essential in ensuring that the bestselling items are never going out of stock and requires regular check-ups for continuous shipping whenever ordered by the client. When the products are unavailable, the operation system of the company can be derailed. As a result, it would give other firms a competitive advantage since the customers would look of alternatives (Gunasekaran and Ngai 692). The other type of inventory control scheme is the use of drop shipping which entails engaging shippers and wholesalers to supply products on order. The benefit of this management system is that the products cannot run out of stock without even having a physical inventory.

The inventory management can be determined by keeping costs under control within the supply chain. Therefore, it is efficient to focus on the price which can be calculated by the Pareto principle. The latter states that 80% of the overall value of consumption is based on 20% of the total items. The combination to the ABC approach indicates these factors in regards to ratings. A-items consist of goods with the highest annual consumption, but top 70-80% of the value of the company accounts of 10-20%. B-items are interclass goods of average importance and entail about 15-25% of annual consumption accounting for 30% of total items. C-items are lowest goods with consumption value of 5%.

LEAN OPERATION

The most significant risk which managers always attempt to prevent is wastage of resources. Lean management is thus a useful way to determine and reduce the latter. There are many wastes which the business can envision in its future operations – the possibility of defect goods which is a recognizable waste in a lean process. They may include damaged or missing products during distribution and transportation. Further, they can also be easily generated through poor packaging. The other waste is waiting which refers to inaction that often adds the cost of operation for the customer (Gunasekaran and Ngai 695). Primarily, it takes place due to overhead charges which may be increasing as a result of time taken to wait for the product to be transformed and prepared for shipping. The moving cost is another way in which the company can determine the waste. Its essence is that transportation always carries additional charges unless the product needs to be shipped to a nearby location. Processing and motion is also another waste which is envisioned in the long run by the business. The presence of unnecessary movement can occur because of the inefficient process where there is a lack of standardization of procedures. Similarly, it can also be due to lack of training of the employees to handle the products. Waste motion is sometimes hidden costs since it is not something that can be easily visible for the managers. However, it can be observed through intercommunication between the employees and the leaders of the company. There are ways in which the waste of resources can be eliminated. The identification of types of waste is one of the steps to be followed to reduce the possibility of waste within the company. Similarly, it is essential to train the employees to understand the operations correctly.

SIX SIGMA

The management can spend every moment to work on various parts of e-commerce business system but can still not achieve satisfactory results. As a result, it is imperative to determine the critical success metric to focus on the efforts of optimizing them. One of them is conversion rate. Primarily, it states percentage of people who purchase on business platform (Gunasekaran and Ngai 699). Calculating it entails total number of customers divided by total number of inquiries while making the checkout process faster by removing any unreliable and unnecessary steps to streamline the workout in the platform. Application of the DMAIC approach is also vital since it describes fives steps on how to define, measure, analyze, improve, and control the processes. Therefore, the business should determine the costs which will rise due to employees, renting the spaces for warehouse, and inventory. The measurement will entail comparison of the annual expenses of revenue, while analysis should describe the most significant cost by considering the inventory costs or revenue generated. The improvement process focuses on the proposition of the central business hub. The control entails the evaluation of all branches of business and management by descending on the current stock to keep. The corresponding Six Sigma control is an initiative control chart, which graphically tracks the process of inputs and outputs over a given time. The measurements are then compared visually to make a limit decision in calculating probabilities of the actual performance process. The control chart will represent the average or centerline for the sum of all inputs which are divided by the total number of data points. The upper control limit is also calculated through the process of standard deviations. Lastly, the lower limits are also established through the determination of standard deviations below average, as indicated in the chart below.

Figure 2: Six Sigma Control Charts

CONCLUSION

The development of a company which sells pharmaceuticals requires a business mission to improve its operations, which assists in earning the customers’ trust by providing innovative and valuable information essential in addressing the technological solutions and services offered by the organization. Besides, setting up the business process is necessary for the firm in various ways. The essence of the latter is because it assists in determining the collection of the linked tasks which help in delivering services and products to the clients. The set of activities ought to be fulfilled to so that the company can achieve their objectives.

Further, there are also essential aspects which should be put into consideration when setting up an e-commerce business. They consist of the location of the facilities, the models which will be utilized in distribution, inventory controls such as the use of a drop-ship system as well as lean operations. Lastly, understanding the Six Sigma is also vital in determining how to analyze and control the activities of the business. These elements are useful in managing the costs involved and the marketing of the company to the targeted customers. The determination of Six Sigma is essential in understanding the process of continuous control of business performance process.

REFERENCES

Thamir, Alaskar, and Efthimios Poulis. ”Business Intelligence Capabilities and Implementation Strategies.” International Journal of Global Business, vol. 8, no. 1, 2015, pp. 34-45.

Gunasekaran, Angappa, and Eric W.T. Ngai. ”The Future of Operations Management: An Outlook and Analysis.” International Journal of Production Economics, vol. 135, no. 2, 2012, pp. 687-701.