Value Chain Management

Value Chain Management

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Value Chain Management


Royal Caribbean Cruise Ltd (RCCL) has two distinct supply chains which create a unique challenge. Each supply chain is managed by a Provision Master. The first supply chain includes all food, beverage, and lodging inventories that needed for the trips. The second supply chain encompasses “corporate spend” materials, such as office supplies, printing services, hardware and software, printed materials, computer supplies, marine consumables (spare parts, fuel, lubricants, any and all services associated with the ship maintenance and etc).
The Provision Master for the first supply chain is required to prepare a list of materials needed for the next cruise or sometimes for a few upcoming cruises and to disperse the inventory to various cost centers on the ship which based on the cost centers’ requisitions.
The Provision Master is facing a challenge jobs because the Provision Master must analyze the previous trips experiences, the season, and the current customer base so that enable to come out a list which can satisfy the passengers’ need. The Provision Master may need to consider where the passengers from like US based, European based or Asian based because different region passengers consume different things. The Provision Master also has to consider the number of child passengers on the cruise because they consume less than adult passengers. When the list is finalized, it is transmitted to RCCL’s procurement department, which then does an extract in the system and sends purchase requisitions to suppliers via electronic data interchange (EDI), fax or e-mail.
“We want to work very closely with our suppliers so that we can effectively plan for the deliveries of truckload quantities of materials to key strategic locations. In this way, we can fulfill requirements to the fleet as needed,” explained by Michael Allsup, RCCL’s VP of supply chain management. Besides that, RCCL do not specify on one supplier who provided goods or services in excess of 10% of RCCL’s expenditure because avoid suppliers access power on the prices.

Operation
These are the activities related to the production of products and services. This area can be split into more departments in RCCL such as the marketing department responsible for promotion and advertising, human resource department responsible for recruiting potential employees, financial department responsible for the financial support and etc. Each department is work closely with another department so that integration is made and achieves the company goal.
After the purchasing on materials is made, then it turns to operation part which is transforming the raw material into finished food and services.

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Each ship contains up to six galleys that produce high quality foods for different venues. The average Celebrity Cruise ship stores approximately 21, 600 pound of various cuts beef for an average seven-night cruise. The chefs on the cruise will work together and transforming the raw materials into delicious food according to the menu. After that, the food will be prepared and served on cruise. The crews will provide the best vacation experience to the passengers based on their professionalism.

Outbound Logistics
These are all the activities concerned with distributing the service to the customers. For example, RCCL would entail the unweaving commitment to service and a desire to deliver the best cruise vacation possible. Besides that, RCCL improve their competitive advantage by improving innovation of on-board products and state-of-the-art cruise ships.

Marketing and Sales
This functional area essentially analyses the needs and wants of customers and is responsible for creating awareness among the target market of the company about the firm’s products and services. RCCL make use of marketing communications tools like advertising, sale promotions and etc to attract customers to their cruise service.
The target market of RCCL is focuses on active families and adults who are vacation enthusiasts interested in exploring new destinations and seeking new experiences. The advertising campaign brings together a variety of media, including print, television, and Internet to increase the name recognition for RCCL.

Service
RCCL commit to provide best quality service and best cruise vacation experience to the passengers. The crew is the most valuable assets to RCCL because they counted on to represent the company professionally and serve the company’s customers. RCCL also handling the complaint issues from the passengers to unsure that improvement are continuously.

Support activities
Procurement
This function is responsible for purchasing the materials that are necessary for the company’s operations. An efficient procurement department should be able to obtain the highest quality goods at the lowest prices. To improve processes within both supply chain, RCCL decided to institute a collaborative commerce approach.
“We want to work very closely with our suppliers so that we can effectively plan for the deliveries of truckload quantities of materials to key strategic locations. In this way, we can fulfill requirements to the fleet as needed,” explained by Michael Allsup. The closer of RCCL work with the suppliers, the better of reducing overall cost in the supply chain.
The company saw that it needed to provide much more guidance and much more timely information about inventory positions, itinerary changes, or even menu changes that could drive or change consumption patterns. RCCL then needed to translate the needs of these operations programs into purchasing and supply chain requirements. RCCL’s procurement and logistics processes together spend in excess of $600 million of the company’s $2.9 billion in total revenue.
Technology Development
Technology is an important source of competitive advantage. Companies need to innovate to reduce costs and to protect and sustain competitive advantage. RCCL develop the E-Commerce which operate web sites with customer booking capabilities or provide electronic documents to the customers. RCCL is using the latest information technology software to manage its operations. These software packages enable the company to optimize decisions about pricing, inventory, and marketing actions. Besides that, RCCL was the first company in the cruise industry to develop an automated booking system.
Human Resource Management
RCCL realized that employees are an expensive and vital resource. RCCL value its employees as the company’s most valuable asset. They are counted on to represent the company professionally and do the utmost to serve the company’s customers. Hence, RCCL would manage recruitment and selection, training and development to the employees.
Firm Infrastructure
The RCCL infrastructure includes planning and control systems, such as finance, accounting, corporate strategy and etc. For example the Provision Master planning and forecast the customers’ need and make purchasing on raw material to avoid wasted.
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