To carry
out further research, it is recommended further study regarding the
implementation of management information systems to improve some processes and,
consequently, the outcome of that organization.
Keywords:
Chain integration; Industrial equipment; Operational processes; Supply
chain management.
1. INTRODUCTION
Analysis
of the Brazilian market shows steady growth of equipment industries. We can say
based on data from the IBGE (Brazilian Institute of Geography and Statistics)
that the industry increased by 5% between February 2014 compared to February
2013. Driven by other sectors also influenced in general, production of
machinery and equipment participated with 7.5% in performance, among other
factors.
With
continued growth and government incentives to increase production, companies
have sought adaptations to survive in the face of these changes, leaving the
competition between business units in isolation and opting for a competition
among integrated supply chains.
Purpose,
Logistics has been used as a very important tool for companies, with market
competitiveness. The evolution of logistics methods allows the company to stand
out among its competitors, requiring competitive instruments as cost value
advantages.
Among
other activities, Logistics
involves the integration of activities, from extraction of raw materials,
processing, assembling, warehousing, distribution, information flow management
of customer requirements to delivery of the final product to the consumer, in
order to have criteria to minimize costs and increase service levels to
customers. Overall, Logistics can be understood as the use of planning and
programming of the product flow throughout the supply chain.
Proper
supply chain management enables effective planning efforts focusing on the core
business of the organization, allowing the possibility of an efficient flow of
goods and services through the integration of all logistics activities. This
integration requires effective management of supply chain initiatives,
encompassing not only business processes, but also the relationship with
customers and suppliers, seeking strategic partnerships that benefit all chain
components.
In
this context, the main objective of this article is presenting the theory of
the chain integration through a case study and discuss it comparing to a
company that sells parts for industrial equipment, located in greater São
Paulo, without any system or integrated software, but with own organization and
management coordinates its operational processes before the purchase and sale
of industrial parts market. And with theoretical basis to compare the
activities performed by the company in practice, suggesting possible improvements to its
supply chain.
2. 2. THEORETICAL REVIEW
2.1.
Logistics
According
to Dias (2010) Logistics is a system that manages and coordinates any business
in an integrated and strategic way, as all activities that involve improving
all available resources, with the goal of efficiency for cost, storage, flow,
inventory, distribution and production of both materials, products, as
information. In general, Logistics plans and manages all processes from raw
material to the end-customer consumption.
According
to Sales (2015), in the newspaper Valor Econômico, Logistics industry has high
expectations, it states that the vice-president of BNDES (National Bank for
Economic and Social Development), Wagner Bittencourt, affirmed Logistics
industry will be flagship of investments in the country in the coming years and
that the development bank foresees investments of nearly R $ 600 billion in
infrastructure in the five-year period 2015-2019.
Thus,
the sector is increasingly important for organizations and for the current
market, and, as Cervi (2002), recognized as an area of great opportunities
and have an increased role in business both in scope and in strategic
importance.
2.2.
Supply
chain
The
growth of competitiveness between companies made the strategic view of the
business win new concepts where prior sectors were analysed separately and
greater focus was on sales and increase profitability. Today, industries are
analysed as interrelated processes, testified by the definition of Martins
(2009) when describing the management of the supply chain as the administration
of integrated logistics system of the company, using advanced technologies such
as information management and operational research to plan and control a
complex web of factors in order to produce and distribute products and services
to customer satisfaction.
Coelho
(2010) states that from the time the process began to be seen as associated
activities, in which one influences the other, the supply chain idea emerged which accompanies the
process from procurement of raw materials to the completion of the process with
the client, taking into account that each step is one more factor to obtain the
expected profitability. Thus, for the supply chain to work in a synchronized
manner it is necessary for the management to be precise, with the control of
all stages, always focusing on the company's strategy.
To
achieve efficient management, it is necessary to understand what is the
management of the supply chain within a company. According to Ballou (2004),
the supply chain management is the coordination of the flow of goods and
information between each member of the process to achieve competitiveness and
profit for each member of the industry chain, beyond the scope of the whole
organization.
The
supply chain aims to seek integration between organizations of direct or indirect
participation from the flow of a product or service, capturing suppliers,
manufacturers, wholesalers, retailers and customers in order to provide an
effective and efficient flow of goods or services through Logistics, reducing
costs and adding value to the end customer (HILSDORF et al, 2009).
2.2.1.
Supply chain in small businesses
Small
businesses compared to large scaled companies, well-structured in relation to
supply chain, present some differences in the way they manage the processes in
this chain, Ratao and Junior Torres (2010) state that in small business, the
lack of rules and written regulations and the absence, in most cases, of a
clear definition of roles and tasks characterize the administrative informality
that surrounds all management and business relationship activities. However,
this informality originates behavioural and structural features that
characterize the forms of interaction between small business and their supplier
and consumer market.
The
idea is reinforced by Costa et al (2010) who states that regarding the
implementation of supply chain management, small businesses implement
management unlike large companies, either for lack of resources or knowledge
and skills, small businesses not fully implement the management and the focus
of this implementation seems to be different, they do not focus closely on
partners or on improving the performance of the chain as a whole. For small
businesses it is easy to realize the implementation of management focusing on
the selection of short-term partners, rather than a long-term vision for the
development of a more comprehensive relationship between the partners.
2.3.
Suppliers
and partners in the supply chain
The
company's relationship with its suppliers is of utmost importance once it
relates to vital business processes, simplifying handling and storage
activities, and as affirms Kotler (2007) that suppliers are an important link
in the general system of delivering value for the customer, and partners,
because they provide the necessary resources for the company to produce goods
and services.
Garo
Jr. (2014) states that collaboration between customers and suppliers and the
transfer of knowledge and technology represents a significant gain for the
chain, and how the company studied is Japanese, the same author in his research
of a case study integrated into the automotive industry, it describes companies
that source reinforce bonds with the supplier during the process, contributing
to the objectives are achieved, which proves the long-term partnerships.
It is
a relationship of mutual trust, where both sides are benefited, in which one
depend on the other, help each other to survive in the competitive market of
modern times, in other words, based on Martins (2009), the relationship between
client and supplier is developed through a customer's operation (buyer) on its
suppliers, seeking to achieve a degree of understanding and mutual trust where
none exists.
Integration,
as stated by Rodrigues et al (2010) have focused on exchange of information,
collaboration between two parts, including employees in the processes to reduce
costs and increase quality, especially in the technical development in order to
make the process simpler and skilful.
In
companies, the purchasing department has some traditional functions, such as
selecting suppliers, negotiating and managing contracts of different deadlines,
place orders on suppliers, develop a reliable supplier base and maintain good
relations with them. In manufacturing, the cost of raw materials, parts,
components etc. They represent more than half of the cost of the products,
which makes it potentially very influential purchasing function in the
profitability of the organization. Good negotiations mean return for the
company, and purchases have turned into an area of major interest of the
company. (MOREIRA, 2011, p.437).
As
negotiations are directly linked to the profitability of companies,
partnerships become strategic points that are increasingly gaining the
attention of managers. As well as mutual trust, information sharing and
long-term relationships are decisive points in the partnership process.
According to Santos (2002, p. 12) a long-term relationship with a supplier
makes it possible to share the business vision of both organizations, so that
both parts benefit from the process, renewing this partnership constantly,
increasing the performance of the provider.
2.4.
Purchases
A
comprehensive purchasing management form is a fundamental tool for a good
performance of organizations, Colleti et al (2002, p.2) comments that it is a
sector that should be analysed strategically, following the market needs, as
well as holding and partnerships can bring significant gains in the process of
purchases of materials.
The
shopping sector, according to Garcia (2008, p.1) and Simões (2004, p.3), is no
longer a routine activity and isolation, but part of the logistics process of
the companies, because there is an interrelationship with all sectors of the
organization, being influenced and influential factor in decision making. Thus,
the sector has gained interests of organizations and gaining ground, becoming
not only an act of purchasing products, as one needs to know to perform well,
in order to take advantage.
Besides
the possibility to obtain an advantage, the industry showed up with a great
potential for increased profitability. Confirming this point, Arnold (2008,
p.207) shows that potential explaining that when 50% of the sales income of the
companies are aiming for the purchase of raw materials, components and
supplies, through this analysis it is possible to put the sector decisive
position in making profit and competitive advantage, as in a shopping process
carried out accurately you can reduce the costs and thus achieve a degree of
price attractive product to the customer.
Even
though the importance of this sector, it is necessary to precisely define each
step of this process. By setting this function, Ballou (2004, p.344) explains
that shopping is the act that selects the sources of supply, develop procedures
for applications, negotiating prices and terms of purchase, specifies the
transport services to be used, and estimates the delivery times. In this case,
the purchasing department coordinates with the planning of production material
flow in the supply channel.
2.5.
Supply
chain integration processes
The
process of supply chain integration depends on several factors, in addition to
the definitions already described, it shows up as a decisive flow management
process to control and consequently the productive and financial gain. Ideally,
this flow of processes and information is coordinated from suppliers of
suppliers, that is, manage the flow in the extended supply chain. The more
control among members of the chain and the more it extends, the more efficient
coordination and outcomes (SLACK et al, 2009).
Only
supply chain management is possible when it clearly established its links, from
there the importance of the relationship between members. As the explanation of
Guerrini (2002), this relationship becomes more intense when there is the
collaborative process as it is the most effective method to manage the flow of
information, allowing flexibility and ability to adapt to market fluctuations,
whatever the segment of the company is.
According
to Slack et al. (2009) the key point to understand and establish a process of
integrating efficiently supply chain is to analyse the behaviour of the entire
chain, this is possible when we can analyse and control the relationships
formed by individual parts. For this relationship to be formed by individual
parts, the integration process becomes delicate according to Lambert and Cooper
(2000), it involves organizations with different features, not only cultural
reasons but technological and management development, making the successful Integration
to be achieved more by cooperation between them, than the development of
centralized management tool.
2.6.
Supply
chain management of small businesses
Within
the market context, small businesses also look for managing the best possible
way before their capabilities and limitations. Just as it is defended by
Furlanetto (2002, p.2) to address the collaborative actions of suppliers and
customers as an important strategy for companies to organize and coordinate
their supply chains in a manner that look like a big company, allows to develop
a complementary relationship structure that is based on the interdependence and
cooperation between the agents that make up a new form of coordination of the
supply chain.
According
to the same author (p.77 and 78), the pursuit of competitiveness is related
more with the great systemic, which means going beyond company boundaries, so
the logistics management must gain new dimension, trying to integrate all
activities along the chain, adding that not just a member of the chain to seek
operational excellence while others do the same.
Andrade
and Tachizawa, (2009, p.62) reveals that a striking feature of large
organizations is that interact with micro and small businesses as suppliers and
customers, along the production chain, which shows the importance of all the
integration with your agents within the supply chain, a statement that
reinforces the importance
of small enterprises for business.
In
addition to these other authors as Villareal Segoviano (2012) states that the operations
of small and medium companies there is a particular context of advantages and
disadvantages, which can consolidate or not a company at the international
level; prior to this it is necessary to raise the application of Logistics to
boost the exchange and consolidation of value creation in business.
3. METHODOLOGY
Starting
from the definition of Severino (2007), for whom a survey with case study must
be significant and very representative to a survey the case should be
significant, so that it is able to support a generalization to similar
situations, allowing inferences, there will be a case study in order to develop
guidelines to structure the operational processes of a trading company of
industrial parts aimed at the comparison between theory and practice the basics
of integration in jail in addition to examining ways to improve collaboration
among the sectors as a suggestion for the company in an integrated way, since
it presents great market potential and timid integrative actions in their
processes.
To
that end, we conducted a literature review of the issues inherent in
integrating the supply chain with the purpose of comparing the process
described in theory and what is observed in practice by lifting routine
operational process across the board of sectors the company through a notice 30
days as non-directive interviews and access to some data and information by
employees, verifying that the studied company has great potential for
improvement.
Because
it is a case study, it seeks to explain, qualitatively, the characteristics of
the studied company, based on possible sources due to lack of records,
documents, statistics regarding the process and is therefore an exploratory
research and nature applied.
4. THE CASE
4.1.
Basic
features
The
company, founded in 1990, of Japanese origin, located in São Paulo, sells parts
for industrial equipment as well as offers maintenance services and leases such
equipment.
It
serves more than 300 small, medium and large companies. It has few competitors
in the region it serves, advantage that can enhance their business and
competitiveness.
The
team consists of about 15 people, led by a manager. Among the employees, most
are mechanical while each sector is administered by one person. For being a
small business, multifunctionality of administrative employees is frequent,
i.e., there is a correct definition of the activities of a single sector, but
there is a responsibility to meet the needs or manager requests and customers.
So in addition to performing its primary function, the official also interacts
with others to complete the customer service.
In
the case of trade in parts, the relationship between customers, the company and
its suppliers, requiring points to be improved because accommodated due to the
partnership of time, the company does not bother to integrate both the
information about the actions across sectors to streamline their operational
processes.
4.2.
Supply
chain
The
company studied primarily presents the following process flow within their
supply chain as shown below:
Figure 1:
Company’s supply chain
Source:
Author, 2015.
The
company's supply chain is basically composed of supplier, distributor, retail
and customer. The company is an agent that mediates the purchase and sale of
parts for its customers, with more than 100 suppliers for this process. By
having the larger amounts by buying advantage and resell to retail customers,
the goal most often for the purchase of parts is based on cost reduction when
comes to quality and customer demand the purchase of parts is based on
reduction risks.
The
supply chain management, this company aims to reduce costs because the resale
to their customers should be appealing and satisfying, as well as reducing time
to acquire the necessary part without the risk of errors. For this, the
dependence of both the supplier and the customer to provide information often
results in a more streamlined process, when it comes to buying and selling.
In
relation to other sectors of the company as a financial and reception,
information and settings of some customer requirements it is critical to be
shared to prevent future errors and delays, which the size of the studied
company allows for each employee having a contact and understanding of function
of the other, with a more flexible environment and easy access to other
operating processes of the organization.
4.2.1.
Cost management
The
cost reduction, risk and delivery time management are the basis for some stocks
as the relationship with the supplier and customer to exchange technical
information to make a purchase and surest sale, as well as the buyer with the
operational staff (mechanical) and account manager and discuss the questions
for decision-making.
4.2.2.
Relationship: provider and enterprise
The
company has few, however livelong alliances with some suppliers, reflecting the
reliability of products and services, as well as payment and term conditions.
This relationship provides ease and time savings to be straight with those who
buy, as well as partnerships to maintain a connection encourages purchases
through promotions and warnings about some of the product specifications. There
are some cases in which the company is dependent on a few suppliers, for only
some have the required part, due to the lack of exploitation of other sources
decreasing the supply options.
For
some to requiring a minimum billing amount and release the order, the buyer
with his feedback and understanding selects and checks the stock possible
pieces to add and make the request. Information is also shared with the
mechanical needs and seller to such purchase.
4.2.3.
Relationship: business and customer
The
reasons that make the customer uses the company is due to performance time to
market, little competition in the area and indications of other customers. So
the reliability and flexibility they offer to older clients provide reliability
as to order parts and information, as for being the bridge between the largest
suppliers to final consumers.
In
the case of the relationship between client and other sectors of business, such
as financial and operational, except some cases, friendship and confidence in
the client's character allows trading flexibility and priority in decisions in
the sense of something late, in the case of payment or urgency in providing
service.
4.2.4.
Inventory
The
company works with the minimum stock, with maximum reduction of idle parts. It
uses the time to reduce base to serve the customer as quickly as possible,
because it is a piece of equipment that will often be stopped or maintenance
can paralyze the entire production of a company. Thus, the time limit for
delivering of a piece can be a couple of days, and it can vary up to 30 days,
because they are imported parts.
Inventory
control is performed as buyer and seller of knowledge and continuous demand for
parts. It is made a steady lifting with respect to the parts in stock. The
decision to purchase the most parts is made from the customer's request and
exchange of information between those who have access to the sector.
5. RESULTS AND DISCUSSION
5.1.
Scenario
of trade in pieces of industrial equipment
In
view of the current scenario and encouragement of production, which includes
the machines and equipment, as well as parts were published on March 6, 2015,
two resolutions of the Foreign Trade Chamber in order to reduce the import duty
289 industrial machinery and equipment without production in Brazil. The first
resolution brings 262 ex-tariff for machinery and equipment (capital goods) 187
items and renewed other 75 with reduced tax of 14% to 2% by 30 June 2016, a
situation in which motivates the trade sector pieces of industrial equipment in
which the company may have studied opportunities.
As
for the threats to the industry of pieces of industrial equipment, now faced by
various sectors, we have the Chinese competition, which increasingly
participate in the market making it more competitive thus requiring strategic
planning of the companies to try to survive and face the consequent
difficulties, according to Logistics Magazine (2011), which also adds the
market situation that spent much of 2009 stagnated, with reduced sales by 39%
due to the crisis, and in the same year, the Americas fell by 43% in sales and
in 2011. Brazil is going through an economic stability provided a growth in the
area of industry and trade, thus the logistics industry and drive is getting
great results. Industrial equipment’s are essential tools in the logistics
process, therefore, it can be said that most companies need some handling
equipment as well as parts for maintenance.
From
the data that demonstrate the positive factors to trade in industrial equipment
parts, the purchasing process as well as any other department of a branch
company needs to be prepared and integrated to the organization's success, so Kotler
(2007, p. 322) reinforces the idea to mention that within the company, the
various functional departments should work together to maximize the company's
own logistics performance.
6. ANALYSIS OF THE CASE STUDY
The
analysis of the business processes in question shows the characteristic to have
a chain of immediate supplies, with few suppliers and direct contact with the
customer. This feature demonstrates the ease control in some processes, for
example we can mention the partnership with its long-term suppliers proposed by
Santos (2002, p.12), creating a solid relationship where both are benefited.
The request at least three quotations, price negotiation and delivery of goods,
which prove that even without any specific and strategic planning for the sector,
functions basically equate with what sets Arnold (2008, p. 221 and 224), where
the purchasing department is responsible for negotiating prices that benefits
both parties.
Given
this observation and comparison of practice and theory, the process of integration
of the studied company's supply chain is directed to activities at the tactical
and operational level, i.e., has a low strategic focus. According to Santos
(2002, p. 22), when there is no strategic focus, operational effort turns out
to be much higher, so that the process is completed. It also reduces the
accuracy of future sales prospecting, since the strategic level it is possible
to establish plans and forecasts. There is no established method to manage and analyse
the relationship between links in the chain, let alone see how it can enhance
cooperation between them, which a vulnerable aspect is when it comes to control
and real implementation of a collaboration among members of the supply chain.
The
level of maturity of focus and growth in the business sector is low, because it
has no pretensions to meet new clients, being accommodated with the current
situation, going against the guidance of Arnold (2008, p. 220), and requires a
constant evaluation of the supplier, so that you can combine technical and
price. This is because most of the activities that are part of the purchasing
process are not integrated and standardized. Purchasing decisions are embedded
in the price and the requesting client service.
7. CONCLUSION
With
the growing importance and the logistics industry in recent times, development
opportunities also apply to those processes that are part of this sector. With
this in mind, organizations prepare and create ways to survive in the face of
both the market and requirements of its customers, seeking to be competitive
and strategic in their business.
We
can conclude that regardless of the type of company, the supply chain has the
basic features described in the academic literature, which proves and operates
the activities that this sector involves, but improvement is always welcome,
because due to adaptations of competitors and even new businesses can make
direct threats to the organization of life in the competitive market. In
relation to the case study, even with a history of over twenty years in
business, the company has precariousness before some processes that could be
changed to maximize purchases along with the consequent billing of its sales,
it is clear also that there is an integration of other sectors in which the
processes are subject to the knowledge of former employees without formal
knowledge, academic or its function, limiting their actions. It would be
interesting training and implementation of a computerized system, as a standard
and empowerment for employees, in order to enable faster flow of information,
making collaboration between members more intense.
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