Cameron Balloons as a British company

Cameron Balloons is a British company established in 1971 that primarily manufactures hot air balloons. Since then they have grown to production of about 500 balloons per year, with a market share of about 70% of those produced in the United Kingdom. They are well-known for quality, novelty, and their interesting balloon shapes (Harley Davidson, the Sphinx, Beethoven, etc.) (Civilian Air Authority, 2012). With their U.S. facility the company produces over 1 balloon per day, and averages almost $10M in annual sales.
 
Cameron Balloons is a leader in the hot-air balloon market, a very competitive market because of the overcapacity of many competitors in many countries, all vying for a limited customer. An additional strength for Cameron is that they are designed and built by two distinct companies that are independently owned and managed but are linked and committed to building the industry’s best and most unique product. In addition, the Bristol, UK location can handle venues in Europe, the Middle East and Africa more cost-effectively; the U.S. operation in Ann Arbor, Michigan, North and South American and much of Asian and Oceana.
 
One of the most important aspects of Cameron’s business is its operational management section. Certainly, its sales and marketing departments must reach out to new venues, but fortunately, the company’s products act as a large billboard most times; and there are internal controls in billing, human resources, etc. But to make the process come together, effective inventory management is the key to ensuring that these balloons can be made on a regular basis with reliable materials that are in stock, ready to be customized, and central to the value chain. Lacking inventory information, or having too much or too little hurts the company. Thus, inventory management is clearly a top priority for the company. Cameron holds about 1/4 million pounds worth of stock on average, for instance, all supporting the five basic operational objectives for the company: quality, speed, dependability, flexibility, and cost. Additionally, by holding some specific types of inventory for storage, Cameron Balloons is assured that they have sufficient stocking materials to satisfy their growing market demand. It is this buffer zone that has allowed Cameron to cut the actual time of order to delivery down and increase customer satisfaction — reduce down time, returns, and still have plenty of time for any additions or modifications necessary (Muller, 2011).
 
The learning module also pointed out how subtle fiscal market issues can have a major impact upon the balance sheets. For instance, if the capital invested in inventories is released, it is used elsewhere — reducing the asset side of the balance sheet, but providing a greater return on investment and decreasing operational costs. The key, we learned is keeping a balance between inventory (stock) on hand, orders in, purchasing in bulk whenever possible, and moving inventory. The additional balances require that in order to deliver on-time to the client, in order to get paid, there must be a logical balance in the manufacturing side. The cash flow position of the company is thus important and must be considered in order to maximize the efficiencies of the other business groups.
 
Doing some additional research, we see that if we look at the Bristol Plant alone, we find that they regularly hold about £250,000-300,000. Consumers have high expectations of the type of materials used, which in the current global environment has both positives and negatives. In some cases, costs have increased astronomically, but globalization has also opened the door for more competition and thus suppliers with lower prices. With the average price of a hot-air balloon from £22,000 or $45-50,000, we can see that inventories match only about 10X the average price, and with product as high as it is, inventory is getting turned quite fast.
 
The most important lesson from the Cameron Balloons Virtual Factory tour seems to be the synergies realized when there is appropriate organization between stations. For instance, we can use a simple diagram to show the efficiencies of Cameron (Bized, 2011).
 
However, incorporating more IT solutions could help Cameron streamline even more. A just in time inventory set up with suppliers would allow special colors or materials to be ordered and tracked as soon as orders were placed, and computer aided design would ensure greater efficiencies on the floor.
 
Using a computer-based simulation as a learning tool is actually quite valuable. Instead of just reading about a thing, we are experiencing and organization. It is much easier to understand the way interdependence and synergy flow into an overall operation by watching or experiencing both smooth and breakdowns in operations. In addition, instead of just examining ratios, balance sheets or even narratives about marketing and production issues, we are better able to understand how departments intermingle to create a finished product.
 
REFERENCES
 
BizEd. (2011). Guided Tour of the Cameron Balloons Virtual Factory. Retrieved from: http://www.bized.co.uk/virtual/cb/tour/index.htm
 
Civilian Air Authority. (2012). GINFO Search Results Summary. Retrieved from: http://www.caa.co.uk/application.aspx?catid=60

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