Tuesday, March 11, 2008

Solution Model

Quality is important to The Cups Corporation because it’s one of the components of value attributes as perceived by consumers. If the products meet the customer’s expectation, so it will enhance customers’ value and then increase company’s sales. Therefore, the general-purpose quality analysis tools are suitable to be used to ensure the company’s performance will resulted into process perfection. Other than quality, timeliness also plays important roles for their customers and for them also. The customers want prompt delivery and The Cups Corporation itself wants their raw material delivered on time to avoid shortage that also might shut down their assembly line. One of the quality tools that we used as a solution model is the cause and effect diagram. It is actually be used to help the company to identify and evaluate the cause of the problem and narrowing the cause to the most likely cause. As we identified that the company experienced with delay in delivery so we build this fishbone diagram to identify the potential causes. This diagram are divided into four parts which are manpower, machines, materials and methods that will ensure all possible sources of problems are considered. As you can see our solution model provides a sample causes and effect diagram for fair trade products offered by The Cups Corporation. We identified the cause of the late delivery was machine breakdown due to the old machine that have been used and maybe there is no proper maintenance. Besides, there is lack of raw material because some of its do not meet the specification that have stated by the company and most crucial cause is the late delivery of raw material from suppliers. Other causes are their employees are not ethical and the delivery time take too long due to problem with customs and transportation. The diagram below is the cause-effect diagram.



Operation systems and Concept to Solve Problem

  • As we mention before, The Cups Corporation are involved in manufacturing beverage and food and their products are classified under fair trade. In other words, they are market their product both locally and globally with oversight by certain body/organization that will ensure that the price are fair, the information at the packaging are disclosed properly and so on. As they involved with international market of course there are certain problem that arises during running their business effectively and efficiently but they take the problem as a challenge and try to solve it as they can. Some of the problems that we have identified are lack of raw material at certain time, storage and distribution problem and other problem with external environment especially competitors. Here, we proposed some of the operation system and concept that we have learned which is able to solve the problems.
  • As the business is global market, it must be able to compete with other rival in the same industry. Therefore, it must improve the value of their products and services through enhance process and capabilities, lower cost, better quality, and greater timeliness. Supply chain management (SCM) can be adopted because it’s able to enhance value and reduce cost. Besides that, because SCM is linked to suppliers and customers, so the company is able to manage their production, raw material needed and handle their transportation and storage capacity effectively and efficiently. Through the SCM, raw material shortage can be avoided by have close relationship with suppliers and build a network with the. With technologies advancement, the information of raw material needed can flow directly from The Cups organization to any suppliers and suppliers have direct access to the company’s sales data. As a conclusion, SCM can be used to solve all problems that we have identified.

Introduction of Case Organization



Organization Name: TheCups Corporation Sdn. Bhd. (52443-V)
Address: 2,Lintangan Bayan Lepas 2, Bayan Lepas Industrial Park, Phase 4, 11900 Bayan Lepas, Penang, Malaysia.
Business: Involve in foods and beverages product
Export Market: US,Japan,Taiwan,Korea
Example of product: Special Blend, Cafe Creme, Instant Cofffee Plus, Cappucano Exelso, Ice Mocha Latte
Interesting Trend about TheCups:THECUPS goes back to the early 15th century and brings back the most sought-after beverage- coffee! Enjoyed since early 1420, coffee has made its way around the world and still being enjoyed today. THECUPS has gone to great length to study the preparation of this beverage - bean selection, roasting and blending to tasting. All its coffee mix products contain the four important characteristics that coffee connoisseurs look for. They are pleasantly ACIDIC with the 'smell of morning coffee' AROMA, FULL BODIED and either nutty, sweet or smoky FLAVORED. THE CUPS gives you instant coffee products from the beans to your cups.The research team is always experimenting and blending new coffee mix for the global market.

Trend Discussion about 5 Case Studies

2002
-Loraine Ronchi of the Poverty Research Unit at the
University of Sussex studied the impact of fair trade on the Coocafe cooperative in Costa Rica.
-He found that fair trade strengthened producer organizations, improved the returns to small producers and positively affecting their life quality and the organisations’ health.
[1]

2003
-The Fair Trade Research Group at
Colorado State University conducted seven case studies of Latin American Fairtrade coffee producers.
-Under Fair Trade, producers had greater access to credit, external development funding, training, and enhanced ability to improve the coffee quality. Fair Trade producers’ families were more stable and children had better access to education rather than in families growing conventional coffee.
[2]

2005
-Nicholas Eberhart published a case study of Bolivian coffee Fair Trade producers for French NGO
Agronomes et Vétérinaires sans frontières.
-Fair Trade had a positive impact on local coffee prices thus economically benefiting coffee producers. Fair Trade also strengthened producer organizations and increased their political influence.
[3]

2006
-Becchetti and Constantino conducted an econometric analysis verified Fair Trade affiliation impact on
Kenyan farmers’ well-being.
-Fair trade farmers were more successful in diversifying production, decreasing child mortality and improvements of life quality.
[4]

2007
-Sandra Imhof and Andrew Lee assessed the potential of Fair Trade to reduce poverty and prevent conflicts in a study commissioned by the Swiss State Secretariat for Economic Affairs (SECO) in the Yungas, Bolivia. They suggest four effects of Fair Trade:
-A positive influence on conflict prevention by a reverse of horizontal inequalities biased against indigenous people in Bolivia.
-Reducing poverty amongst non-Fair Trade producers by providing competition at the intermediaries’ level.
-Producers have an opportunity to acquire new skills for them to improve their coffee quality ("learning centre").
-Indirectly reduced poverty by having influenced trends in the non-Fair Trade market.
[5]

[1] Ronchi, L. (June 2002). The Impact of Fair Trade on Producers and Their Organisations: A Case Study with Coocafe’ in Costa Rica.
[2] Wikipedia, the free encyclopedia
[3] Wikipedia, the free encyclopedia
[4] Wikipedia, the free encyclopedia
[5] Wikipedia, the free encyclopedia

Trend Discussion about 20 Articles

Fair Trade Trend Discussion of 20 Articles



2000
· Fair trade industry sales neared $100 million. Gross sales by Fair Trade Federation members topped US $41 million.
[1]
· Peyser signed a Fair Trade agreement in U.S.[2]
· Launching of the National Network Fair Trade Forum at New Delhi, India.[3]

2001
· Fair trade definition was developed by FINE.
[4]
· European United (EU) paper mentioned fair trade on Corporate Social Responsibility[5]
· Total sales for the fair trade industry in North America (U.S. and Canada) and Pacific Rim (Australia, New Zealand and Japan) were $183m.[6]
· The Doha round of trade talks was convened in November.[7]

2002
· Total sales for the fair trade industry in North America (U.S. and Canada) and Pacific Rim (Australia, New Zealand and Japan) were $251m.
[8]
· The fair trade product with the most significant increase in sales was coffee.[9]
· The volume of coffee certified by TransFair USA, TransFair Canada and TransFair
· Japan was 10.66m lbs.
[10]
· The producer region to North American fair trade industry was Asia and Central America/Caribbean for TransFair USA while Asia was the producer region for the Pacific Rim.[11]
· The number of people employed by the Fair Trade companies in North America and Pacific Rim was approximately 3,260.[12]
· World Fair Trade Day was celebrated at India and participated in the Social Development Fair at New Delhi.[13]
· Handcrafts amounted to 25.4 % of fair trade sales while commodity food lines were up at 69.4 %.[14]
· FLO launched an International Fairtrade Certification Mark.[15]
· European United (EU) papers mentioned fair trade on Communication on Trade and Development.[16]
· In Malaysia, the fair trade just begins to evolve in the year of 2002. The necessary of the fair trade law was raised by Datuk Husni Hanadzlah during the debate session for 2003 budget proposal. The framework of the fair trade law was made on October 2002 by the Ministry of Domestic Trade and Consumer. The Secretary of Parliament says that a few series of discussion have been made with the industrial party and government agency. [17]

2003
· Failed ministerial summit in Cancún, Mexico.
[18]
· There were over 3,828 people employed by Fair Trade organizations in the US, Canada and the Pacific Rim.[19]
· India's Commerce & Industry Minister, Arun Jaitley, led the country's delegation to the Cancún trade talks in mid- September.[20]
· Fair Trade Forum - India (FTF-I) organized World Fair Trade celebrations in four regions.[21]
· Publication of the third edition of the Arabic Directory of Malaysia (ADOM) 2003-2004.[22]
· In March 2003, the government decides to introduce the Fair Trade Act within two years to replace the nation control price mechanism including Akta Kawalan Harga 1946 and Akta Kawalan Bekalan 1961. The Minister of the Domestic Trade and Consumer said that the act (Fair Trade Act) that will be announced during the end of the Rancangan Malaysia Kelapan (RMK8) will overcome the cartel or monopoly issue that been practice by this Malaysia industry. By setting up this act also enable a mechanism such as a council can be establish if there are unethical trade practice by the industry participator.[23]

2004
· IFAT launched the FTO Mark which identifies registered Fair Trade Organizations.
[24]
· The European Union (EU) adopted the “Agricultural Commodity Chains, Dependence and Poverty – A proposal for an EU Action Plan”.[25]
· In Wales, the campaign to make Wales the world’s first Fair Trade country was launched by the National Assembly for Wales.[26]
· Cato Institute's vice president for research Brink Lindsey referred to fair trade as a “well intentioned, interventionist scheme...doomed to end in failure."[27]
· Fair Trade Forum - India (FTF-I) hosted the launch of the Global Journey of Fair Trade Mark at Mumbai.[28]
· Starbucks purchased 4.8 million pounds of Fair Trade Certified coffee.[29]

2005

· Failed ministerial summit in Hong Kong.
[30]
· In the European Commission communication “Policy Coherence for Development – Accelerating progress towards attaining the Millennium Development Goals”, Fair Trade is mentioned as “a tool for poverty reduction and sustainable development”.[31]
· French parliament member Antoine Herth issued the report “40 proposals to sustain the development of Fair Trade”.[32]
· October is Fair Trade Month for Global Exchange Fair Trade Stores.[33]
· Fair Trade Forum - India (FTF-I) facilitated members participation in the Fair Trade Fair at Hong Kong.[34]
· The conflict between Starbucks and Ethiopia began on March.[35]
· Starbucks purchased 11.5 million pounds of Fair Trade Certified coffee. Starbucks invested $1.5 million in 40 social projects (education programs in Nicaragua and hospital renovation in Papua New Guinea).[36]
The FTSE/ASEAN 40 Index was launched which covers Indonesia, Malaysia, the Philippines, Thailand and Singapore.[37]

2006

·
Fairtrade certified sales were approximately $2.3 billion worldwide. In October, over 1.5 million disadvantaged producers worldwide were benefiting from fair trade.[38]
· 569 producer organizations in 58 developing countries were FLO-CERT Fairtrade certified and over 150 were IFAT registered in December.[39]
· On July 6, the European Parliament adopted a resolution on Fair Trade.[40]
· The French chapter of ISO (AFNOR) adopted a reference document on Fair Trade.[41]
· Italian lawmakers started debating how to introduce a law on fair trade in Parliament.[42]
· Belgian lawmakers discussed a possible legislation on fair trade.[43]
· Fair Trade Forum - India (FTF-I) organized fair trade food workshop in four regions.[44]
· For Malaysia, major non-fuel commodity exports such as palm oil, timber and rubber accounted for 6.5% of gross domestic product (GDP).[45]
The ASEAN Economic Minister has agreed to introduce the ASEAN Economy Community proposal to be accepted and agreed by all the leader of the ASEAN countries during the ASEAN Grand Meeting in Cebu, Filipina, on December. [46]

2007
· The
Fairtrade Action Network was created, an international fair trade volunteer web-based network.[47]
· The Dutch province of Groningen was sued by coffee supplier Douwe Egberts for requiring its coffee suppliers to meet fair trade criteria.[48]
· Scottish and Welsh governments were attempting to become the "world's first fair trade country".[49]
· In June, a report Fair Trade and Development criticising the British government for "failing to support fair trade ".[50]
On February, Marc Choyt, the President of Celtic Jewelry was interviewed on the issue of Fair Trade for a segment on Fair Trade jewelry.[51]

2008

· On January, Belgian lawmakers proposed possible fair trade definitions and three proposals were debated. A consensus on a definition has not yet been reached.
[52]
· On January, The Fair Trade Federation (FTF) members exhibited at twenty-one major international trade shows in the Spring of 2008.[53]
· Asia Consumer Fair 2008 helps to promote opportunities, sales and awareness in the trade and tourism of participating countries.[54]
· In January 2008, the government introduce Dasar Amalan Perdagangan Adil ( DAPA) to stop the monopoly by the producer company that purposely hiding goods to raise its price. The Minister of the Domestic Trade and Consumer, Datuk Mohd. Shafie Apdal said, the government would not compromise with the sellers that take advantage to play tricks to push for the government to raise the price. Under the Price Control Act 1946, the government only can punish the sellers that selling the control goods exceeding the ceiling price that determined, or does not put price tag on the goods sold, whether it is control goods or not. But by the Fair Trade Act, government can take action over the unethical sellers.[55]


[1] Anstey E. (April 30,2002). Co-op America Newsroom.
[2] Everage, L. (November 1,2003). Fair Trade: Coffee With a Cause - and an Effect. Gourmet Retailer Magazine.
[3] Fair Trade Forum - India (FTF-I) article
[4] Wikipedia, the free encyclopedia
[5] Wikipedia, the free encyclopedia
[6] 2003 Report on Fair Trade Trends in US, Canada and the Pacific Rim
[7] The Times (June 28,2006)
[8] 2003 Report on Fair Trade Trends in US, Canada and the Pacific Rim
[9] 2003 Report on Fair Trade Trends in US, Canada and the Pacific Rim
[10] 2003 Report on Fair Trade Trends in US, Canada and the Pacific Rim
[11] 2003 Report on Fair Trade Trends in US, Canada and the Pacific Rim
[12] 2003 Report on Fair Trade Trends in US, Canada and the Pacific Rim
[13] Fair Trade Forum - India (FTF-I) article
[14] Wikipedia, the free encyclopedia
[15]Wikipedia, the free encyclopedia
[16] Wikipedia, the free encyclopedia
[17] Utusan Malaysia Online (October 17,2002)
[18] The Times (June 28,2006)
[19] 2003 Report on Fair Trade Trends in US, Canada and the Pacific Rim
[20] BusinessWeek Online (October 6,2003)
[21] Fair Trade Forum - India (FTF-I) article
[22] International Malaysia-Arab Frontier (IMAF) Sdn Bhd article
[23] Utusan Online ( March 12, 2003)
[24] Wikipedia, the free encyclopedia
[25] Wikipedia, the free encyclopedia
[26] Wikipedia, the free encyclopedia
[27] Wikipedia, the free encyclopedia
[28] Fair Trade Forum - India (FTF-I) article
[29] www.starbucks.com/csrannualreport (updated 3/07/06)
[30] The Times (June 28,2006)
[31] Wikipedia, the free encyclopedia
[32] Wikipedia, the free encyclopedia
[33] Global Exchange Press Release-Trends in Fair Trade
[34] Fair Trade Forum - India (FTF-I) article
[35] Faris, S. (February 6,2007). Fortune Magazine.
[36] www.starbucks.com/csrannualreport (updated 3/07/06)
[37] Lydon, T. (October 12,2007). New Asian Index Launched; ETFs Won't Be Far Behind.
[38] Wikipedia, the free encyclopedia
[39] Wikipedia, the free encyclopedia
[40] Wikipedia, the free encyclopedia
[41] Wikipedia, the free encyclopedia
[42] Wikipedia, the free encyclopedia
[43] Wikipedia, the free encyclopedia
[44] Fair Trade Forum - India (FTF-I) article
[45] Ang, E. The Malaysia Star.
[46] Abas. A Utusan Online ( August 27,2006)
[47] Wikipedia, the free encyclopedia
[48] Wikipedia, the free encyclopedia
[49] Wikipedia, the free encyclopedia
[50] Wikipedia, the free encyclopedia
[51] www.fairjewelry.org
[52] Wikipedia, the free encyclopedia
[53] Fair Trade Federation article
[54] europe.bloombiz.com (February 29,2008)
[55] Utusan Online (January 8,2008)

Sunday, February 17, 2008

About our weblog

This web blog is established for the operation management course work Our group is doing the project based on fair trade products, one of the Corporate Social Responsibilities(CSR) elements. We will discuss about the fair trade issues and cases. We are encouraging feedback from all the readers. Thank you.