The Supply Chain in A Brick and Mortar Environment Essay
The Supply Chain in A Brick and Mortar Environment
The trading of company stock to the public has been going on for many, many years. Over the years the supply chain for buying and selling equity stock has changed with innovations in technology. Today, the old brick and mortar environment of equity trading is being replaced by virtual trading through websites like Ameritrade, E-Trade, and Trade Station.
Brick and MortarWhen a privately held company needs money to expand their business, quite often they choose to sell part of the company through a public stock offering. To facilitate this process an investment banker is most often involved helping value the company and determine the price of each share of stock. Once the value of each share of stock is determined and the amount of funds needed by the company are complete, the investment banker forms a syndicate of broker/dealers who take on the responsibility of either purchasing all the shares of stock the company has to offer or to help sell in an initial public offering.
The investment banker and syndicate members receive a concession for each share of stock sold. For example, if one share of stock is being offered at a price of one dollar, the investment banker and syndicate may split a 20 cent concession for their efforts. The process in which the stock is offered to investors prior to the development of the Internet was generally through brokers calling investors via the telephone. Another common way was the actual store front or office of a broker/dealer where individual investors could actually walk into an office and purchase new stock offerings directly. These offices were branch offices of a much larger firm like Merrill Lynch, Morgan Stanley, and Charles Schwab who might have been members of the offering syndicate.
Brick and MortarSupply ChainIn the apparel industry there are several specific methods of the supply chain as it relates to the classic brick and mortar environment and one method really does not have a benefit over the other. The first method of discussion for the classic supply chain is the direct supply method where a company will make direct contact with its material suppliers to place orders; the supplier will then make arrangements to ship the material to the specified destination. This method generally takes a great deal of coordination on the purchasers parts because they may many different parts for many different department so generally it would require a very expensive staff to ensure that the ordering is performed properly.
The second method would be for a company to utilize an outside source to perform their purchasing and materials for manufacturing. This is a very effective method which allows a company to basically wash its hands of the entire supply chain process and holding the specialized company accountable for properly handling the purchase and ensuring accuracy. The down side is that it is very expensive to employ and outside company, this method can also not be feasible for many small brick and mortar companies.
Web Site Supply ChainThe supply chain in a web site environment for an apparel company is much simpler then a tradition supply chain in many cases. The supply chain for these companies includes the purchasing of materials or finished products from other sources and creating a finished product sold under the familiar names of these companies. The use of the internet allows the goods to be purchased more efficiently then they were before. It also allows for a considerable financial savings in many cases. This is due to simplifying the whole process of procurement for the companies.
They can now deal with these suppliers electronically from places all over the world. Wherever they can find the best deals for what it is they need. Orders are processed much faster this way and products can then be shipped out sooner then they would be traditionally. This allows the companies to move the products much quicker then they would ever have been able to using traditional methods. The result is larger profits for them and for the suppliers. Much of that is due to the better turn around. With the process being shortened, what is in demand can be procured in less time and sold to the customers that demand it.
Supply Chain ModificationFor most “brick and mortar” type businesses they rely on customers actually coming into their stores to buy the goods they are looking for. However, with the advent of e-business and it success, it is harder to get people to come to these stores so they are now either going out of business or starting their own online services or e-Businesses. This has caused many to move out of traditional spaces and into warehouses where they can store mass quantities of products and have fewer people on the payroll thus cutting costs.
This also serves as a means to get more people interested in these companies as more and more people are finding it difficult or to time consuming to stand in lines for what can be hours just to buy a few things in a store with only a few registers running, this is also done to cut costs but in the long run it only serves to hurt business as people eventually get tired of the same old treatment and will go somewhere they will get fast friendly service. In many cases these customers will go to the internet versions of these same stores and get the same items delivered to their homes rather than go to these stores.
For the companies previously mentioned they were for the most part off-sets from actual brick and mortar type businesses, the only exception is pyramid collection as they started as an e-business and have done quite well given their relatively small size and classification.
As more and more traditional businesses are seeing market shares slip away to e-businesses, and their efforts to hold onto customers are not terribly successful. Many of these brick-and-mortars compete only with prices without regard to the level of service that consumers want. They undercut not only their online rivals, but also themselves, and their services are not financially sustainable. The best way to compete would be to take an honest look at the user experience, which is something most brick-and-mortars never do. E-businesses and traditional businesses alike could look to market leaders for solutions to their customer service shortcomings.
A brick and mortar business has been the tradition for many years. As technology has become more advanced, e-business has had the opportunity to emerge into the market. It helps to save consumers time if not money all the time. By choosing to shop online, shipping charges are attached to all purchases, which brick and mortar companies do not have. The trade off has been shipping charges for a hassle free shopping experience. With e-business, a consumer can miss traffic, long lines at check outs and congestion of other shoppers. Brick and mortar companies will not go away as they are still a needed part of the consumer market. These companies need to focus on how to get the customers back into their businesses and offline. The choice between e-business and brick and mortar businesses are determined by what consumers consider the advantage of their shopping experience. All business revolves around the consumer.