Running head: BRUYNZEEL KEUKENS: MASTERING COMPLEXITY 1

BRUYNZEEL KEUKENS: MASTERING COMPLEXITY

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Table of Contents
Introduction......................................................................................................................................2

Problem Statement...........................................................................................................................3

Bk’s New Priorities..........................................................................................................................3

Advantages of After sale services................................................................................................4

Advantages of short lead time.....................................................................................................5

Advantages of product innovation...............................................................................................5

Organizational Model......................................................................................................................6

Bk’s Value Chain.............................................................................................................................7

Advantage of new value chain system.........................................................................................8

Kraljic matrix...................................................................................................................................9

How Kraljic matrix is helpful....................................................................................................10

Appendices....................................................................................................................................11

Appendix 1. New supply chain..................................................................................................11

Appendix 2 Kraljic matrix.........................................................................................................12

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Introduction

Bruynzeel Keukens was founded on 1987 in Netherland. Bruynzeel Keukens has

specialization inis specialized in sShipbuilding, carpentry and wooden floors. Bruynzeel

Keukens faced challenges in the industry and there were several issues, such as: the i.e. company

hadwas experienced bankruptcy in 1982., but it made a comeback and had managed to improve

its But Company came up again and improved its operations and start its operations for kitchen

market in Netherland.

Bruynzeel Keukens is consists of two different market segments, with one beingone is

construction market and another is retail market, but the company is market leader in the

construction market and it also has the that has market share of 23%, whereas it hascompany

have 4% market share in the retail market. Bruynzeel Keukens has strong brand image in the

industry and is considered as one of the successful businesses in the industry. Bruynzeel

Keukens is a well reputable and trusted brand in construction industry due to its reliable products

and products’ performance.

After being successful in the construction iIndustry; the company’s Company

management is considering to enhance itsthe performance inof retail market and to boostand its

market share. The mManagement’s objective iwas to double the company’s market share inof

retail and maintain itsthe construction segment, of the company i.e. to 60%, because the

company has made the decision of shifting . Because company decided to shift its focus from

construction to retail industry due to its profitability.

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Actually, the company wantsed to diversify its market segments because it iscompany

was dependent on only one segment which is aand that was bit risk for the company.

Considering this, theSo, company has decided to diversify its operations and move into retail

market due to the retail market’s high profitability. There is a risk of operating ininto

construction market because if any company changes its vendor then it leaves a negative impact

on the financial health of thate company. Products of retail market are more profitable than

products of Construction Company.

Problem Statement

After making their mind to diversify; now the challenge for the company is how to

manage its procurement process and its logistics so that it could boost its to increase consumers’

satisfaction. The company should also considering to introduce a decrease its inventory to

increaseAlong with that how company should decrease its inventory to make diversification

successful and increase its market share in retail segment. Additionally, the company should also

focus on maintaining its market share in the and along with that how company should maintain

the market share of the construction market segment.

Bk’s New Priorities

For Bruynzeel Keukens; the industry is awas bit complex and its operations are a were bit

complicated so, it is the time for the company to havewas a time to make strategic planning for

the new business priorities as by following the objective of the company. Bruynzeel Keukens

should focus on strategic planning for business issues and development of new priorities. The

cCompany hasve to plan according to the strategies which it plans in orderingly to protect the

company against reduce any future shocks.

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Further, the priority of the company is logistics management, and in thein logistics

management; lead time management, outbound logistics, inbound logistics are important factors

to management the inventory effectively. Lead time management is very important to manage

the inventory properly in upstream and downstream. Providinge customers services and

maintaining good relations with customers is also an important aspect to consider. This logistic

management will allow the company to fulfill the order on time, and the and company further

can further improve through customization option.

The cCompany should work on inbound logistics to manage the flow of material from

supplier to the its production unit of company. And Ooutbound logistics include the management

of final goods’ delivery to the end customers. So, the current priority of the company is to

manage the logistics and operations of inbound and outbound logistics. Along with that, the

company has also prioritprioritizedy the management ofis to manage small batches so that it

couldan manage its operations effectively.

Advantages of Afterafter sale services

A good after-sales service is a major factor in customers’ retention. Moreover, it

improves the satisfaction of the customer, increasing the chances of the product being bought by

the customer againhis or her buying the product again. According to a study conducted in 2020

by study by Shep Hyken's CX consulting company;, 96% of customers would leave a business if

the service is poor. This is why the after-sales support should be a priority in thea retail business.

Apart from the obvious benefits of increasing the customer retention rate;, after-sales

services can also be beneficial for the business’s image of the business. These after-sales services

help into differentiatinge your product in comparison to yourfrom the competitor’s product,ion
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and boosts your brand image. Additionally, a good after-sales service also improves the “word-

of-mouth” marketing. This is important because satisfied customers tend to recommend your

products to others.

Advantages of short lead time

The advantages of short lead time in the supply chain are obvious. It means that you have

more flexibility in your market and you will be able to fulfill your orders faster. Additionally, a

shorter lead time means that you will have more cash on hand. In addition, you will have the

opportunity to replenish your inventory faster. This is a good thing for both your company and

your customers. However, you should keep in mind that shorter lead times will cost you a bit

more in shipping.

A short lead time will save money for your business, which. It will enable you to meet

your customers' deadlines. By eliminating the middlebetween-steps;, you will be able to make

the processes much simpler and more efficient. The best way to begin is to identify the critical

lead times. When you have identified these, you will be able to break them down into smaller

parts. In addition, you will be maximizing the warehouse KPI metrics.

Advantages of product innovation

The main advantages of product innovation lies in its ability to lead to better products and

services. In the long run, product innovation can increase the company’s overall profit. s of a

company. The long-term benefits of the process will be evident in the improved products and

services that result. For example:, an improved iPad will most likely generate more profits than a
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similar model from the same source. Hence, product innovation is an essential aspect of any

business.

Product innovation can be extremely beneficial to a business. In addition to thea

company's better future;, it can boost itstheir sales by increasing revenue and improving its the

customer experience. But in the short term, it can also lead to long-term competitive advantage.

Therefore, it is essential to consider product innovation when creating a new product. You

should think about the benefits it can provide as it is . It is crucial for your business.. It is

important for your brand to survive.

In addition to creating improving a better product, a business can also improve itsan

existing product. For instance, Intel Intel, for instance, has been improving the CPU for over a

decade. Hence, it is essential for product innovation to be successful in a competitive market.

The key to success is to ensure that the new product is better than the existing one. In addition, it

must be relevant to the majority of consumers. Otherwise, the idea will not have any value.

Organizational Model

The business model for construction market segment iwas a bit sorted and simple, as the

construction companies do not manage high inventory at their account, and they order products

for production to the companies. So, the lead time is not an issue for the in cConstruction

Companiesy and neither is it worth never worth consideration. But the retail market segment has

complex inventory management system and lead time is an important part for retail market

segment. So, the company can use itsthe previous oOrganizational model because the level of

complexity is different for retail segment and retail segment demands innovation and product

development more frequently.

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Retail segment will fit thefor the previous oOrganizational model because retail segment

is compatible with the oOrganizational model as construction segment but only the complexity

and innovation level differs. To manage the logistics and other relevant activities; the company

needs to improve its logistics and procurement process. Along with that, the company should

also havehave to manage its purchase plans. It Company should adopt jJust-in-time method for

raw material and manage the outbound logistics for delivery of products to the end users.

The business model of a retail business is the structure in which a retailer creates value

for its customers and appropriately appropriates that value. The current state of the retail

environment is marked by unrelenting change, escalating customer expectations, and an intense

competition. In response, a new study suggests that the best way to create a sustainable

advantage in the retail market is to innovate its design. By looking at the three design

components;, a new retailer can create a unique business model.

The main benefit of this business model is that the retail organization is able to focus on

the needs of its customers. No matter ofWhether it is a large or small company;, the supply chain

management of a retail organisation is essential for ita company to remain competitive. In

addition to focusing on the needs of its customers; the company also needs to drive focus on, it

also needs to focus on the demands of its suppliers. Its’ success depends on a number of factors,

such as: customers\ satisfaction, and it is crucial to make the most of it.

Bk’s Value Chain

Bruynzeel Keukens should focus on analyzing the value chain that the company already

uses, and after the analysis; the company should develop new value chain system based on the
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analysis, further refer toin appendix 1. Wwe have developed previous and new value chain

systems of the company.

So, the old value chain systems wawas divided into four segments, i.e. Market sensitivity,

process, virtual integration and network integration. Based on my analysis; I found that the

company was not following the updated demand system and its market approach was not

compatible as compared to its competitors. The process was not effective, there was not any

cooperation with suppliers and buyers, there wereas communication gap and the relationship

between the company and its suppliers ’s relationship was not reliable. For virtual integration,

the company dido not have enough IT support and neither did it haveo any inventory. And in the

last, for networking there was neithero any coordination and nor any particular structure for

networking and the and information was kept as secrete.

Whereas, after this analysis, I developed new value chain system that can address these

issues. Theto company should become more become more market oriented and company should

adopt competitive forcasting systems, i.e. surveys to know about the changing business and

market trends. For process, the company should work on communication and improvement of its

upstream and downstream operations, alongside which, it with tht company should also develop

relaible relations with suppliers. To make this possible; it is important for company to work on

virtual integration and adopt new andnd updated IT systems. It should work on Work on

inventory management system and try to reduce the chances of obsolete product cost. For

nNetwork integration; the company needs to use itscompany information wisely and that is only

possible if the information is easily available and there iscraete a sorted delivery system.
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Advantage of new value chain system

The purpose of production systems in the retail business is to prevent the spoilage and

obsolescence of products. Consumers’ tastes change and the technology advances. Holiday-

specific packaging and season collections may be obsolete before they even hit the shelves. New

technology can make older models less popular, and the same can happen with older models of

electronics. With this in mind, it is important to implement an efficient and effective systems in

order to keep up with the consumers’ frequently changing demands.

Aside from keeping the track of seasonal fluctuations;, pProduction sSystems can also

improve the supply chain management. By using an economic order quantity formula; ,the

businesses can determine the optimal level of inventory to order , and they can minimize their

costs by ordering and holding inventory. This formula takes into account factors, such as:

demand in units, ordering costs, and holding costs. It is best to use a system that allows the

employees to work as efficiently as possible without sacrificing on quality. For example:, if a

warehouse is undergoing a seasonal change;, this strategy can help it make better decisions.

Information process flow encompasses the invisible aspects of a Production System. It

involves the capture, transmission, and utilization of data. It is often used in industries with high

volume and low variation. The information process flow is usually based on a single piece or

assembly line. A continuous production system is a digital system that leverages the economies

of scale and reduces handling and shipping costs. It allows for accurate and reliable data

management.
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Kraljic matrix

This framework is a strategic tool used by supply chain managers. It includes four

quadrants that identify the most critical and strategic purchasing decisions for companies. These

quadrants help the companies in identifying the most important components that impact theire

company's overall business and supply conditions. The components in the lever, strategic, and

critical quadrants are those whichthat have a high business impact. In the bottleneck and non-

critical quadrants the, suppliers are of low economic value and have a little impact on the

company.

The Kraljic matrix is based on the lean manufacturing concept, and can be applied to

products or services. For instance, an airline may need engine parts from one supplier and incur

high expenditure. This product would fall underin the critical quadrant. A stationary company

would purchase stationery from several suppliers but incur a low amount of money and be

classified as routine. The model applies to both products and services, and will be useful toto any

industry.

The Kraljic matrix is a useful tool for assessing the risks associated with suppliers. It

helps the companies in identifying which suppliers are important and which ones are not. It will

also helps the organizations in understanding how they can reduce the impact of the risk on their

businesses. Ultimately, the matrix is a valuable resource for improving the supply chain. So, it is

essential to develop a comprehensive strategy for the procurement of materials. There are many

factors that contribute to the success of a business.

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Based on the analysis of Kraljic matrixwe; we found that the suppliers from bottleneck

quadrant can be avoided because the quantity ordered was small. So, Bruynzeel Keukens should

avoid these suppliers. For Retail market Segment; the cCompany should maintain its relationship

with suppliers and avoid the suppliers which comes under bottleneck. The cCompany should use

few sources to make strong relationship with them and manage long-term contracts with the

suppliers.

How Kraljic matrix is helpful

A Kraljic Matrix is a useful tool to determine if you are maximizing your supply chain's

benefits. It forces the organizations to think strategically about the products and services they

procure and focuses efforts on the areas that can yield maximumthe most profits. The model is

also easy to understand and use, but the axes are vague. The definition of supply risk and how to

differentiate between high and low risks is unclear.

The Kraljic matrix enables organizations to dedicatefocus their resources to theon areas

of greatest profit and minimizminimization ofe risks. It forces the organizations to think

strategically about their suppliers and focus their efforts on the areas where they can

generatemake the most profit. The system is easy to use and implement, but it is not perfect. The

only downside to the matrix is that it is vague. The factors that constitute high and low risk are

not clearly defined.

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Appendices

Appendix 1. New supply chain

Market sensitivity Process Virtual Integration Network Integration

forcasting open Adopt IT system share company

Survey communication management information
cooperation and inventory system develope delivery
logistics and ignore obselete system
management product cost
develope
relationship with
suppliers

Appendix 2 Kraljic matrix

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