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Case Study #1

1465 words - 6 pages

1. What parts of the supply chain are most closely involved with the situation in this case? What is the responsibility of each part in order to maintain a smooth flow of material?

Procurement Department: This department did not completely assess the demand that needed to be met. They miscalculated the demand by underestimating it to be 2500 units when the actual demand was over 4000 units. They were working in isolation rather than working closely with the Marketing department. They did not maintain a close relationship with their suppliers. Instead, they ignored any type of communication that the suppliers attempted to make with them.
Forecasting Department: The forecasting ...view middle of the document...

However, the monthly volumes were over 4,000 units instead of the projected 2,500 units a month. Also, the lead times were expected by Foster to be 14 days but were however required by the production group to be 10 days instead. Foster’s production system had only the capability of handling 3,500 units a month and 14 days were the lowest lead time that they can allow. (Monczka, Handfield, Giunipero, & Patterson, 2011)

3. How easy is it to switch suppliers? What could complicate a firm’s ability to switch to a new supplier?

It is not easy to switch suppliers especially in a short period of time. There might not be any available suppliers at the time required. It might take a long time to find the right supplier. Also, suppliers might charge higher than the previous supplier, which will cause high switching cost. Also, establishing a relationship with the suppliers takes time to build which makes switching suppliers more difficult. The firm’s ability to switch to a new supplier might be complicated by the high switching costs, the lack of trust as the relationship is not yet established, and the quality and performance might not be to par compared to their current supplier.

4. What does it mean to get to the root cause of a problem?

Getting to the root cause of a problem is finding out where the problem is truly originating from and finding a solution for the problem so that it doesn’t occur in the future. In the context of this case, getting to the root cause of a problem is communicating well with every department and passing the information along to the supplier.

5. What does it mean to be a good customer? Why does a buying firm want to be perceived by a supplier as a good customer? Provide specific examples of what a firm must do to be a good supply chain customer.

A good customer is one who communicates well with their supplier by notifying them if any changes occur in the operation plan and allowing time for adjustments to the meet the necessary changes in the demand. Also, by listening to their supplier and strategically making plans and arrangements to meet both of their goals as well as their supplier’s. A buying firm wants to be perceived by a supplier as a good customer because it would be difficult and cost more to find another supplier. Also, the quality of procured products would be guaranteed. In addition, a relationship can be established which will ensure that the goals of both parties will always be met. To be a good supply chain customer, a firm must communicate well with the supplier, establish a long-term relationship so that both parties can work together in achieving their goals, and any changes and decisions by the firm should be relayed back to the supplier.

6. Explain the role of performance measured in managing supply chain activities.

The role of performance measured in managing supply chain activities is to support better decision making, better communication, give...

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