Republic of the Philippines

UNIVERSITY OF NORTHERN PHILIPPINES

Tamag, Vigan City
2700 Ilocos Sur

COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY

Optimizing Supply Chain Efficiency: A Case Study Analysis of

Manufacturing Company in the Philippines

Hansa Creation Inc.

Presented on the Faculty of the

College of Business Administration and Accountancy
University of Northern Philippines
Tamag, Vigan City

In Partial Fulfillment
of the Requirements for the subject
Operational Management & TQM (CBMEC 101)

Submitted by
PODEROSO, JOBELLE F
BSBA 2M

Submitted to
HEIYAN VON LAPPAY
Instructor

2024

Quirino Blvd., Brgy. Tamag, Vigan City, 2700 Ilocos Sur ISO 9001:2015
Website: www.unp.edu.ph REGISTERED
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 Republic of the Philippines
UNIVERSITY OF NORTHERN PHILIPPINES
Tamag, Vigan City
2700 Ilocos Sur

I. INTRODUCTION

Hansa Toy International Inc, Is a large company engaged in finely crafted and hand
sculptured stuffed animal reproductions. Founded by German-born Hans Axthelm in 1972,
with the vision to create "amazingly realistic" plush animals designed from Artist Portrait of
the world's majestic and exotic wildlife. Hans and the Artisan Team have dedicated themselves
to the development and production of "true to life" replications of animals in their natural
habitat. Designs are as exact as possible in their detail. Offers a unique collection of hand
crafted, highly realistic and very cuddly plush toys representing animals from around the world.
Hansa is famous for their unique and close-to-nature reproductions of the world's best loved
animals. These popular products are found from children's playrooms, to offices and upscale
corporations. These are life size, realistic animal reproductions that are lifelike in nature. Soft
sculptured creations offer a therapeutic effects to many and provide emotional support to
individuals. The company’s philosophy is the conservation plus education equals preservation.
Their operation reflects this credo. High worldwide safety standards are maintained in the
completion of these realistic stuffed animal products. Recycled materials are used to conserve
natural resources. For instance, each animal creation is filled with fiber made from recycled
PE bottles. The company is fully involved in preservation of ecological habitats and the
survival of wild animals and caring for fauna and flora.

From their socially responsible, eco-friendly studio environment, Hansa Creations

lovingly designs each masterpiece from portraits of animals in their natural habitat, each with
its own unique personality. Each animal's "coat" is meticulously cut by hand, never stamped
out by machine. Soft paws, swishing tails, and especially soulful eyes and faces are lovingly
detailed to create the life-like look that is unmistakably Hansa. It is because of this love and
passion with which every adorable, heirloom quality, cuddly, Hansa Creation is crafted, not
only what it is but how and why it is. This is the inimitable soul of a Hansa Creations. This is
what makes a Hansa Creations gift so special.Originally created for the most exclusive
European clientele, Hansa began their rise in the toy industry specializing in true to life animal
replicas for avid nature collectors. With their growing popularity, Hansa Toys began producing
a larger array of both wild and domestic animals and introduced themselves to the North
American market place where they continue to grow today.

What makes Hansa Toys so different from their competitors is the quality and pin point
accuracy of specific animal characteristics that are used in each production. Each piece is
designed with a unique personality by artists from portraits of animals in their natural habitat.

Hansa animals appeal to collectors and animal lovers of all ages. The life-sized pieces
have exceptionally strong, yet lightweight, structural metal frames and can even be "ridden"
by children and adults (up to 250 lbs.). Each animal comes with a "Teaching" tag describing,
in detail, the animal's habitat, lifestyle, history, location, how they care for their young and
their eating habits.

Quirino Blvd., Brgy. Tamag, Vigan City, 2700 Ilocos Sur ISO 9001:2015
Website: www.unp.edu.ph REGISTERED
Certificate. No. SCP000580Q
Email: deancte2021@gmail.com Telephone # (077)674-0789_
 Republic of the Philippines
UNIVERSITY OF NORTHERN PHILIPPINES
Tamag, Vigan City
2700 Ilocos Sur

Significant research goes into reproducing every animal species. As noted above, the fabric
for the spotted and striped animals is custom designed and exclusively created in small
quantities to Hansa's exacting specifications.
Each animal created is hand finished by Hansa's artists to give each their own unique
personality just as in real life.
The meticulous detail and the broad range of 17 collections positions Hansa as a "preferred
supplier" to many zoos, wildlife parks, garden centers, holiday displays, media events, photo-
shoots, museums and gallery exhibitions. Hundreds of animals, from Aardvarks to Zebras
make this the world's largest collection of "realistic" soft sculpture animals in today's market.

Over the years, Hansa has received many awards for its designs including "Animal of the Year"
as well as other internationally recognized awards and Artist designed product
nominations.The unique combination of industry experience and European influence executed
in the design, creation, and quality control is what makes Hansa's animals exceptional.

II. ANALYSIS

Supply Chain Mapping

The end to end supply chain mapping process of Hansa Creations Inc.

1.RAW MATERIAL SOURCING

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 Republic of the Philippines
UNIVERSITY OF NORTHERN PHILIPPINES
Tamag, Vigan City
2700 Ilocos Sur

Stage: The process begins with the sourcing of raw materials, such as acquiring
materials like fabric, stuffing, and other components needed for manufacturing plush
toys.
Activities: This involves identifying suppliers, negotiating contracts, and ensuring the
quality and timely delivery of raw materials.
Stakeholders: Suppliers, procurement specialists, and quality control teams are
involved in this stage.

2.PRODUCTION
Stage: Raw materials are then used in the production process to create the plush toys.
Activities: Manufacturing involves cutting, sewing, stuffing, and detailing the plush
animals to achieve a lifelike appearance.
Stakeholders: Production managers, artisans, quality assurance teams, and
operations staff play key roles in this stage.

3.DISTRIBUTION
Stage: Once the plush toys are manufactured, they move to the distribution phase.
Activities: This includes inventory management, order processing, packaging, and
preparing the products for shipment.
Stakeholders: Warehouse staff, logistics coordinators, and distribution partners are
essential stakeholders in this stage.

4.CUSTOMER DELIVERY
Stage: The final stage involves delivering the plush toys to end customers.
Activities: This includes transportation planning, order fulfillment, and ensuring
timely delivery to customers.
Stakeholders: Transportation providers, customer service teams, and end customers
are involved in this stage.

KEY STAKEHOLDERS INVOLVED

Suppliers: Responsible for providing raw materials needed for production.

Procurement Specialists: Involved in negotiating contracts and ensuring the
sourcing of quality materials.
Production Managers: Oversee the manufacturing process to ensure efficiency and
quality.
Artisans: Skilled craftsmen who handcraft the plush toys with attention to detail.
Logistics Coordinators: Manage the distribution and transportation of products.
Warehouse Staff: Responsible for inventory management and order processing.
Customer Service Teams: Handle customer inquiries and ensure customer
satisfaction.
End Customers: Receive and enjoy the final products.

Quirino Blvd., Brgy. Tamag, Vigan City, 2700 Ilocos Sur ISO 9001:2015
Website: www.unp.edu.ph REGISTERED
Certificate. No. SCP000580Q
Email: deancte2021@gmail.com Telephone # (077)674-0789_
 Republic of the Philippines
UNIVERSITY OF NORTHERN PHILIPPINES
Tamag, Vigan City
2700 Ilocos Sur

Performance Metrics and KPI’s

The following key performance indicators (KPI’s) and collect relevant data to measure and
analyze the current performance.

1.Inventory Turnover: This measures the number of times a company’s inventory is

sold and replaced within a certain period.

Calculate the ratio of the cost of goods sold (COGS) to the average inventory value
for a specific period. This metric indicates how efficiently the company is managing
its inventory levels and can be calculated using the formula

Formula: cost of goods sold (COGS) divided by the average inventory at cost

2.Order Fulfillment Lead Time: This measures the time it takes for a company to
process and fulfill an order once it is received.

To calculate the order fulfillment lead time, measure the time it takes from when a
customer places an order to when the order is delivered. This metric can be calculated
by subtracting the order entry date from the delivery date.

Formula: Order Fulfillment Lead Time = Delivery Date – Order Entry Date

3.On-Time Delivery Rate: This measures the percentage of orders that are delivered
to customers on or before the promised delivery date.

To measure the on-time delivery rate, calculate the percentage of orders that are
delivered on or before the promised delivery date. This metric can be calculated by
dividing the number of on-time deliveries by the total number of orders and
multiplying by 100.

Formula: On-Time Delivery Rate = (Number of On-Time Deliveries / Total Number of

Orders) x 100

4.Supply Chain Costs: This includes all costs associated with the supply chain
process, including inventory carrying costs, transportation costs, and labor costs.

Quirino Blvd., Brgy. Tamag, Vigan City, 2700 Ilocos Sur ISO 9001:2015
Website: www.unp.edu.ph REGISTERED
Certificate. No. SCP000580Q
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 Republic of the Philippines
UNIVERSITY OF NORTHERN PHILIPPINES
Tamag, Vigan City
2700 Ilocos Sur

To calculate the supply chain costs, add up all the costs associated with managing the
supply chain, including inventory carrying costs, transportation costs, and labor costs.
This metric can be used to evaluate the efficiency of the supply chain and can be
calculated by adding up all the relevant costs.

Formula: Supply Chain Costs = Inventory Carrying Costs + Transportation Costs + Labor
Costs

Challenges and Pain Points

Hansa Creations Inc., as a global leader in creating realistic animal reproductions, faces
several challenges and pain points in its supply chain process. These include long lead times
due to the intricate hand-sculpting process and the use of 100% recycled materials. Inventory
imbalances may arise from the high demand for their educational and collectible soft
sculptures, which cater to the emotional needs of children and parents seeking alternatives to
digital devices. Transportation delays might occur due to the handling of large, life-size
animal reproductions, such as the 5-meter (16-foot) tall Giraffe
Supplier issues could stem from the need to maintain a steady supply of high-quality,
recycled materials that meet safety standards for use in their creations

To address these challenges, Hansa Creations could consider optimizing their production
scheduling, exploring more efficient transportation methods, and developing strong
relationships with suppliers to ensure a reliable source of quality materials.

III. CONCLUSION

Best Practices and Benchmarking

Hansa Creations Inc. can significantly enhance its supply chain management by
adopting the following best practices

1. Inventory Management: Implementing a just-in-time approach to minimize waste and

prioritizing resilience against external risks by maintaining appropriate inventory
levels to meet customer demand.

2. Supplier Relationship Management: Establishing effective communication channels

with suppliers, prioritizing relationships that are most important, and using supplier
information management or supplier relationship management platforms to build
better lines of communication.

Quirino Blvd., Brgy. Tamag, Vigan City, 2700 Ilocos Sur ISO 9001:2015
Website: www.unp.edu.ph REGISTERED
Certificate. No. SCP000580Q
Email: deancte2021@gmail.com Telephone # (077)674-0789_
 Republic of the Philippines
UNIVERSITY OF NORTHERN PHILIPPINES
Tamag, Vigan City
2700 Ilocos Sur

3. Digital Transformation: Implementing digital solutions, such as cloud-based

platforms and advanced supplier data analytics, to provide real-time insights across
the supply chain, predict future trends, and enable organizations to remain proactive

4. Supply Chain Integration: Ensuring full supply chain integration by reducing errors,
increasing departmental efficiency, and providing stakeholders with a holistic view of
the supply chain.

5. Data-Driven Insights: Utilizing supply chain and supplier data software to provide
cleansed data from which insights can be derived, enabling organizations to identify
bottlenecks in the supply chain, forecast and meet demand, and predict potential
disruptions before they occur.

6. Global Collaboration: Empowering organizations to collaborate and work together on

a global scale, ensuring that teams work as effectively as possible while being aligned
on the overall strategy and its execution.

7. Supply Chain Compliance: Maintaining awareness of regulations in both the

company’s own country and globally, ensuring that operations are seamless and
lawful, and that suppliers are aware of regulations and complying with them.

8. Supplier Risk Management: Understanding suppliers’ previous performance and the

risks they pose to the supply chain, integrating internal risk management into the
overall supplier lifecycle, and utilizing supplier risk management software to assess
and mitigate against supplier risks.

9. Performance Metrics Tracking: Continuously monitoring key performance indicators

(KPIs) to ascertain how the supply chain is performing and identifying areas for
improvement.

10. Process Optimization: Utilizing insights from supply chain software to focus on core
areas that need to be improved and optimized.

Recommendations

Based on the analysis conducted, here are some recommendations and actionable
strategies to optimize and improve the supply chain process of Hansa Creations Inc. in
Pampanga. These recommendations prioritize impact, feasibility, and resource requirements
to ensure effective implementation.

Quirino Blvd., Brgy. Tamag, Vigan City, 2700 Ilocos Sur ISO 9001:2015
Website: www.unp.edu.ph REGISTERED
Certificate. No. SCP000580Q
Email: deancte2021@gmail.com Telephone # (077)674-0789_
 Republic of the Philippines
UNIVERSITY OF NORTHERN PHILIPPINES
Tamag, Vigan City
2700 Ilocos Sur

Firstly, Hansa Creations Inc. should implement a digital inventory management system to
gain real-time insights into inventory levels, demand forecasting, and automated
reordering.This will help manage inventory imbalances and reduce the risk of stockouts or
overstocking.
Secondly, developing strategic partnerships with key suppliers is crucial to ensure a
reliable supply of high-quality, recycled materials. Collaborating on product development,
sharing forecasts and demand data, and implementing supplier performance metrics can
improve supplier performance and reduce supply chain disruptions.
Thirdly, optimizing transportation through consolidating shipments, using multi-modal
transportation, and partnering with logistics providers that specialize in transporting large,
fragile items can reduce transportation delays and costs.
Fourthly, implementing a supplier risk management program to assess and mitigate risks
associated with suppliers, such as supply disruptions, quality issues, and compliance risks, is
essential to ensure a reliable supply of high-quality materials.
Fifthly, utilizing data analytics and supply chain software to gain insights into the supply
chain, identify areas for improvement, and track performance metrics is recommended to
make data-driven decisions and optimize supply chain processes.
Sixthly, adopting lean manufacturing principles to reduce waste, increase efficiency, and
improve product quality can help Hansa Creations Inc. reduce lead times, improve inventory
management, and reduce costs.
Lastly, investing in training and development programs for employees to improve their
skills and knowledge in supply chain management is crucial to ensure that employees are
equipped with the necessary skills to manage the supply chain effectively.

These recommendations aim to optimize and improve the supply chain process of Hansa
Creations Inc. in Pampanga, prioritizing impact, feasibility, and resource requirements to
ensure effective implementation.

Quirino Blvd., Brgy. Tamag, Vigan City, 2700 Ilocos Sur ISO 9001:2015
Website: www.unp.edu.ph REGISTERED
Certificate. No. SCP000580Q
Email: deancte2021@gmail.com Telephone # (077)674-0789_