Diamond and Supply Chain Essay

604 WordsNov 1, 20133 Pages
Vonkel Enterprises have recently purchased Thembeka, a company that specializes in the sale and distribution of gold and diamond jewelry. This company designs, manufactures and markets fine jewelry throughout South Africa. It had previously been a family run business, and following the death of the founder and CEO, family members decided to sell the enterprise. Vonkel saw the potential for this business and purchased it, with intentions of improving supply chain performance. The domestic supply chain involves inbound shipments of raw materials from a number of small suppliers to a manufacturing location in Pretoria. Once the jewelry has been created, shipments are sent through a transportation intermediary to retail stores in Cape Town,…show more content…
All that glitters? Despite Vonkel’s desire for expansion and growth, Thembeka have experienced an overall profit loss for the past five years. An initial investigation into the company’s finances reveal that there is an overall business turnover of about $63 million (USD), and the cost of inventory alone is $27 million USD. Over 80 percent of the company’s total inventory consists of finished product. Inventory is inconsistently categorized, which also leads to a longer lead time for the organization to fulfill orders. Most of the inventory is held in various retail outlets that Thembeka own, and in franchises where Thembeka own the stock. Losses in sales were due primarily to the inability to deliver timely orders because the stock could not be located efficiently from their inventory. This resulted in frequent stock-outs during peak demand periods. In addition, designs were not well aligned to customer preferences, which meant that there were higher volumes of product left in inventory. There was very poor visibility of stock in relation to overall sales and no integrated and efficient method to track shipments, delivery, and items in stock. In addition, Vonkel identified over a million USD in stock that Themeka had accumulated over the past twelve months. Gold mining... Vonkel executives have decided to investigate potential distributors and retailers in the UK while working on their supply chain improvements. A strategy is being developed to

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