Ajax Safety Shoe Company

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Ajax Safety Shoe Company is a Germany based family business that deals in the manufacture and sales of safety shoes for steal and coal industry operators. The company faced many challenges caused by low priced safety shoes from China and thus, it had to implement new strategies to tackle the challenge. One of these strategies was to target specific markets that either prioritizes employee safety over price and targeting customers that focus more on quality than price (Blanchard, 2010). Such customers will prefer to buy expensive shoes but safer than cheap shoes that can easily put employees in danger.

The paper provides a detailed report discussing global supply chain and manufacturing strategy with respect to Ajax Shoe Company. The main focus will be; the changing environment that is competitive, management of logistic and supply chain, importance of having greater competitive advantage over competitors and lastly, the evolution of the concepts of supply chain. The key objectives will be to discuss the concept of global supply chain and the key aspect to take into consideration when venturing in the global market with your product or service. The paper will compare the global supply chain with the concept that Ajax Shoe Company has been using as it expands to the rest of the global market. The paper will further discuss the manufacturing strategies of Ajax Shoe Company and discuss its effectiveness in the competitive market it serves. The final section of the paper will be a summary of the important information covered with respect to global supply chain and manufacturing strategies.

B. Ajax Safety Shoe Company:

i. Design and Quality:

Ajax Safety Shoe Company designs all its safety shoes. The headquarters of Ajax Safety Shoe Company has the following departments charged with different responsibilities; administrative department, production department, marketing department and sales departments. The production department constitutes of designer specialists and production professionals (Minagawa, & Monden, 2016). Designer specialists designs different types of safety shoes whereas the production team is in charge of producing shoes with the exact specifications (FULGONI, 2018). The designer team is divided into two categories; the female safety shoe designer team and the male safety shoe designer team. The designs do not only provide the shape and look of these shoes but also specifies the right material to fit every section of each shoe. All this is necessary so as to come up with high quality safety shoes for the company’s customers.

ii. Order Administration:

There are quite a number of specialists in the marketing department and each of them is charged with the responsibility of ensuring their part of the marketing process is under control.  Communication is important between the marketing, sales and production teams in order to ensure that any complaints or requirements by customers in the market are adhered to at all levels (Hines, 2004). The main means of communication between these departments is via phones. During communication, they end up discussing such vital details regarding; sales, new and existing orders, new requirements and requests for the product/design change etc.

Very often the administrative teams at different departments are faced with department related challenges and difficulties. For instance, the cheaply imported shoes from China into the German market had a negative effect on the entire production, marketing and sales departments. As such, different departments had to work together to come up with a way to deal with the competition (McCollough, & Shook, 2017). Ajax Safety Shoe Company was struck by a certain decline in demand, sales and profit. The production department played a first key role in resolving the problem and more information regarding this is discussed in the section below.

iii. Production:

The company had to work on its designs and production in order to deal with the competition from the cheaply imported safety shoes from China. As a production strategy, the company decided to come up with new designs that were better than the imported once. Ajax Safety Shoe Company hired highly skilled designers to come up with new, more presentable designs. Designs only did not work and therefore, the company started sourcing high quality leather from Brazil. The production was not as expensive as the company had expected because most of the owners of the Brazil leather uppers were descendants of the Germany families and thus, offer them fair prices.

The production of these new safety shoes was slightly higher than normal shoe production and thus, it was up to the marketing and sales departments to get the right market for expensive yet high quality safety shoes and sale them. The marketing team started targeting highly-developed regions with coal and steel mining operations and marketed the products at (Lopez, 2014). It was clear that such regions, the management teams of mines were more interested in the safety of their workers over price. As such, they were willing to purchase expensive safety shoes from the Ajax Safety Shoe Company provided they were of good quality and assured them safety of their workers.

The leather is designed into upper shoe components in Brazil. These components are then assembled there with respect to their designs, colors, quality and sizes and then shipped flat (Kameshwaran & Viswanadham, 2013). At this point, they only require final stitching to their respective backs of the shoes which is done in Germany. Shipping of readily made upper shoes parts is cheaper compared to shipping small parts of leather and then make uppers in Germany.

iv. Distribution and Retailing:

Ajax Safety Shoe Company distributes its safety shoes around the world but its center of distribution is in German. The Ajax Safety Shoe Company has offices in different countries in Europe where they supply their safety shoes. The company’s offices are staffed by personnel from different departments of the firm responsible for sales and marketing. The company outsources its management to countries it operates in and thus, the staff members that are staffed in those countries are mainly citizens of these countries. They are required by the firm to work closely with customers/companies they supply their shoes to ensure that they adhere to their cultural needs as well as functional requirements.

All products of Ajax Safety Shoe Company pass through their distribution centers before going to the final market (Porter, 1980). The distribution offices are equipped with computerized systems to help in the monitoring of handling running orders and placing new orders for the esteemed customers of the company. At the company’s headquarters, some shoes are made to be stocked for later sales and thus, shipped to the distribution centers. From the distribution centers, they are transported to the respective customers that placed their orders.

The company’s headquarter is equipped with adequate tools to handle the processes of; final stitching (production), order processing, shipping and ensuring the products reach the final customer effectively. For some large customers like Deutsche Telekom, the company handles everything until the commodities reach them as they are big and reliable retail customers (Yeoh, 2017). Deutsche Telekom has a wide range of final customers who have online accounts with the firm through which they make purchases for their safety shoes.

The online account not only make it easy for placing client shoe orders but also makes it easy for the company to keep shoe records. These records helps the company know the shoe size of each of their customers and the shoe they previously purchased and thus, get them the best fit for their personal requirements (Habib, 2015). With these accounts, the firm’s customers can easily log on to their accounts, place orders for the shoes they would like to purchase and the shoes are shipped to their respective residential places in a day’s time. 

After receiving the safety shoe orders from the company’s clients whether individuals or retailers, the company moulds sole types that best suit the order specification and request for uppers of different types and colors and have them put together by the automated machine. With this process, the company manages to come up with safety shoes of different designs, colors and appearances for certain sizes and supply them to their customers.

v. Demand and product characteristics

Demand for safety shoes by coal and steel mining companies as well as agricultural firms and individuals are constant. The demand is unpredictable and comes in a variety of patterns that the company has to be flexible enough to adjust and be able to meet them head-on (Fulgoni, 2018). Despite the rise in demand as mining activities increases in European countries that are served by the company, there is stiff competition in the safety shoe market.

The most common source of competition in the safety shoe market is cheaply imported shoes from China. The company faced a great challenge from the Chinese shoes that are cheap in price and low in quality. Chinese shoe companies have access to the countries cheap labor resulting from a large population in China and desperation to earn a living at all cost (Porter, 1985). Their shoes attracted most customers whose main interest is price other than quality and safety of their workers.

The company had to work against the competition and the only way was to produce safety shoes with higher quality despite the high cost of production (Habib, 2016). The company then looked for markets with customers interested in maintaining the safety of their workers over getting cheap and life risking safety shoes. In order to meet safety shoe demand and still keep up with the competition, the company had to adopt the conceptual framework below;

C. Conclusion:

Ajax Safety Shoe Company deals in safety shoes for coal and steel mining companies and faces a great competition from cheaply imported Chinese safety shoes. To keep up with the competition, the company designs its own shoes so as to come up with great quality better than the competitors’. The company uses pure leather imported from Brazil. Pure leather is not cheap and therefore, the company has to minimize production cost by having its uppers put together in Brazil before they are shipped to German to be stitched to their soles at the company’s headquarters.

The Ajax Safety Shoe Company has a wide range of specialists that help with the production, marketing and selling of its products. This makes it easy for the company to put up with the competition in the market. Chinese safety target middle class and low class individuals and companies to whom price is a key focus. Ajax Safety Shoe Company as stated in this paper targets upper class individuals and firms to whom quality and safety of their workers is a priority. The company has also managed to offset the challenge by hiring locals in countries they sale their safety shoes in so as to work closely with locals and manufacture the right shoes. Right is teams of meeting the countries’ local cultural requirements and quality needs.

Global supply chain and manufacturing strategy is essential for firms and companies operating across borders and nations. Globalization is essential for lowering the cost of labor and also subjects a firm to closer overseas markets (Stank, Myers, & Mentzer, 2007). The key challenges associated with globalization are; need to engage in offshore activities such as after markets or assembly plants and increase the competition the firm is subjected to that is time-based.

Supply chain management refers to the management of both downstream and upstream relationships with customers and suppliers so as to deliver primary customer value at the least possible cost to the company’s supply chain as a whole (Trzuskawska-Grzesińska, 2017). Logistic on the other hand is the process of strategic management of the procurement process, supply of the company’s products and services, storage of materials, parts and inventories that are finished through the company and its channels of marketing in a way that will maximize current and future profits of the firm.

D.

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January 19, 2024
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