Page 3: Centralisation
Centralisation is the allocation of the major responsibilities of an organisation to a central headquarters whilst avoiding central domination. Staff morale was affected when the restructuring took place as there was a feeling of lost customer contact and self-determination. It was felt that the headquarters would hand out instructions to the workforce who would have to cope with unachievable workloads and delivery schedules.
Management soon recognised that it was necessary to re-establish the team spirit which had helped the business in the past, by creating a sense of empowerment. This would make individuals more active in their organisation and encourage use of initiative. Motivated, committed and well trained people at all levels are needed to bring about successful changes. It was, therefore, important to empower individuals within the critical chain of order processing, manufacturing and despatch. Local management teams also needed to focus upon issues such as meeting delivery schedules and stock/inventory control. In fashion markets, products have short product life cycles. The Griggs Group needed to identify ways of responding to fashion products with short product life cycles in a way which would not leave them with large stocks of finished goods.
Some distributors felt the number of orders completed on time was unsatisfactory. They also felt that Griggs could not be relied upon to discuss problems relating to capacity, what could be made and for when. Griggs needed to engage pro-actively with customers and not simply take orders which could not be achieved. A number of distributors commented:
'we don’t want a progress report, we just want our shoes.’
However, there were several fundamental flaws in Griggs’ current systems. Production schedules were not put into place until materials or imported uppers had been received and even if orders were well in advance, delivery dates were not due until 2 weeks before their arrival. This made it difficult for production capacity planning. At the same time, orders were difficult to trace once production had started. Orders could disappear from monitoring processes for 2 months or more.
There was a clear need to install interactive production planning and scheduling computer systems which could track and monitor an order against a plan.
Supply chain management This system was outside the control of computer systems and was also in urgent need of support. As Griggs was constantly behind with its order book, it was difficult to appreciate the size of the problem. For example, if the backlog of orders was cleared, there would then be shortages of materials to make shoes.
A Materials Requirement Planning (MRP) system was needed to enable Griggs to take control of its supply chain. The aim of the MRP system was to provide a better way of managing diverse raw materials feeding many production sites. It was also necessary to look at stock holding policies so that the most efficient stock profile could be established together with new policies and practices for order management.
Production / capacity planning
Production capacity is what can be produced over a 39 hour week. Without a planning or scheduling system, it was impossible for Griggs to plan production efficiently. Staff were often losing customer orders until the first stage of production. Occasionally, urgent deliveries were rushed through as priority jobs. A production planning /scheduling system would help Griggs to gain control over the order book and work in progress.
The Review highlighted that systems were completely inadequate for the purpose of change. There was a clear need to develop a Management Information System to improve the control of the order book and deal with the production planning process. Dr. Martens’ strong brand image provides Griggs with a platform for substantial growth. Without reengineering the business processes, capitalising on the brand name would be impossible. The way forward was to create a suitable fully integrated system to provide a sound basis for management control and performance measurement, not only of its own operation, but also that of its suppliers, distributors and product sales.)