Week 8 Reflection

One week until Spring Break...

As visions of warmer weather and sunshine creep into my mind, until I am on break, I will update you on what occurred in the eighth week of my Honors Marketing class.

Tuesday and Thursday's classes were dedicated to one of the most integral parts of any company- the supply chain and its resulting management. Chapters 13 and 14 were discussed, but chapter 14 was the more in-depth chapter regarding supply chain management. Understanding a company's supply chain provides invaluable insight as to where a company can cut costs and on the flip side, bolster areas that need improvement. In the Shark Tank example of Shortstacks, a lack of supply chain knowledge was the company owner's main flaw. However, the notion that she was aware of the issue enabled her to go into boardroom and pitch her product with confidence. With the shark's capital and supply chain expertise, Shortstacks would see an exponential growth in sales and would be nestled on shelves in stores in every area of the country. Interestingly, Mr. Wonderful saw the immediate flaw in the company's supply chain being that the company was still operating out of a 3000 square foot facility. Kevin suggested, or basically demanded, that the company should move into a commercial co-packer kitchen. At first I was not sure of the exact reasoning behind this idea, but once Kevin claimed that this move would cut production costs by 30% for the company the move seemed a must-take opportunity. This simple move would increase already extremely healthy profit margins for the company. At the time of filming, it cost Shortstacks anywhere from around $1 to $1.50 to make their pancake/waffle mix. With this commercialized move, costs would decrease to 70 cents to $1.20. Considering that the gourmet mix is sold at a price-point of $7.99 per unit, the company's margin contribute to the product's potential astronomical success. In combination with increased order fulfillment, a main concern for the company, and its healthier profit margins, Shortstacks has serious potential.

Any company's supply chain is bound to have gaps. It is paramount that the company is cognizant of these gaps in production and efficiency in order to provide a smooth experience from the point of product origin to its eventual consumption. This is accomplished by strengthening the networks and linkages that connect these gaps, or even scrapping parts of the supply chain altogether. Shortstacks forewent its original production facility in favor of a mass-producing one, which drastically altered its supply chain and subsequently made the company more profitable. The intricate framework surrounding the supply chain must be responsive to changes in the real-world including new product launches. It is this flexibility that drives the equilibrium state that occurs when supply equals the demand of a product, which adversely helps a company keep a healthy inventory control. The supply chain is definitely one of the most intense parts of a company, but mastering its concepts has limitless advantages.

Until next week (last week before Spring Break!)...

-Chris