A. Analyze whether a Keiretsu network, a virtual company, a vertical integration, or a different supply chain strategy should be adopted. A Keiretsu network is a network of businesses that own stakes in one another as a means of mutual security, especially in Japan, and usually including large manufacturers and their suppliers of raw materials and components. There are two types of keiretsu: vertical and horizontal. Vertical keiretsu illustrates the organization and relationships within a company, for example all factors of production of a certain product are connected. A horizontal keiretsu shows relationships between entities and industries normally centered on a bank and trading company. The two are complexly woven together and …show more content…
There could be potentially higher costs due to low efficiencies resulting from lack of supplier competition. There could possibly be a decreased flexibility due to previous upstream or downstream investments. The company could incur a decreased ability to increase product variety if significant in house development is required. The process of developing new core competencies may compromise existing competencies. I believe vertical integration is the best choice for the company given its type and the market conditions. I believe the tool company should adopt it, however constant monitoring of the discussed negative parameters should be done on a quarterly basis.
Discuss the metrics that should be used to measure performance of the supply chain.
Supply Chain measurements or metrics such as Inventory Turns, Cycle Time, DPMO and Fill Rate are used to track supply chain performance. Supply chain management metrics can help you to understand how your company is operating over a given period of time. Supply chain measurements can cover many areas including Procurement, Production, Distribution, Warehousing, Inventory, Transportation, and Customer Service any area of logistics. However having good performance in one part of the supply chain is not sufficient. Your supply chain is only as strong as its weakest link. The solution is for you to focus on the key metrics in each area of your
In a Keiretsu network the manufacture will combine the best features of all three methods, it is part collaboration, using fewer suppliers and some vertical integration. An example of this style of Keiretsu network would be that the tool company can work closely with one supplier, such as a parts maker but not by buying out the company. Here the commitment to a long term business relationship promises continued mutual growth. They collaborate with each other and share
Costco is among the leading global retailers which provide customers a wide range of merchandise, ranging from small to well-known brands. The company began operations in 1983. Over the years, Costco has been a retailer in low cost membership-only leader, in warehouse club of merchandise. Moreover, Costco does not offer frills warehouse business models as its competitors do. Costco’s major competitors are BJ’s Wholesale Club and Sam Club (Costco, 2010).
Vertical integration is a system where an organization grows its business operations into various steps on a similar creation way, such as when a manufacturer owns its supplier or distributor. Vertical integration can help organizations lessen costs and enhance efficiencies by diminishing transportation costs and decreasing turnaround time, among different favorable circumstances (Clara, 2016). Notwithstanding, in some cases it is more viable for an organization to depend on the set up mastery and economies of scale of different sellers as opposed to attempting to wind up vertically integrated. It can be a forward integration or backward integration or a combination (Berkowitz, 2011). For example, acquiring a supplier or distributor in the
Also by decreasing outside businesses input it will increase the efficient use of inputs into the business. Another benefit of vertical integration is that it improves the exchange if information through the different stages of the production line. Some competitive advantages could include; avoiding foreclosures, improving the business marketing intelligence, and opens up opportunities to create different products for the market. Some disadvantages of using a Vertical Integration Strategy include the internal costs for the business and the need for overhead costs. Also if the business is not well organized and fully equipped and prepared the business will struggle using this strategy.
In recent years, the importance management of supply chain has been a popular topic for a discussion and debates especially among the researchers, academician and practitioners. Still, the literature on supply chain management (SCM) especially in exploring the supply chain performance measurement is very limited. This limitation is due to the affected (in return) by many aspects of the firm’s environment and operations. The lack of investigation on understanding the supply chain measurement will affect the objectives and motivations of several supply chain concept even though there is a lot of literature on number of conceptual frameworks, discussion on characteristics, hierarchy and structure of performance measurement framework.
What is your evaluation of the Total Supply Chain Cost (TSCC) program developed by Owens & Minor and Virginia Mason?
1. It has been said that forecasting using exponential smoothing is like driving a car by looking in the rear-view mirror. What are the conditions that would have to exist for driving a car that are analogous to the assumptions made when using exponential smoothing?
Vertical integration is the process of combining firms, usually under a single ownership, that are different parts of a larger production scale. This could be anything from two firms to all of the firms that make up the supply chain. Due to combining multiple smaller firms, this form of integration has an effect on the market power that the firm(s) has (Riordan, 2008). This differs to horizontal integration which is the combination of firms or expansion of a single firm at one particular point of the production process (Black, Hashimzade, & Myles, 2009, p. 206-7).
The biggest disadvantage to vertical integration would be cost to the company. It is expensive
When in 2003, two new parents searched for a diaper bag that looked great and worked well, they found nothing. So they invented something. Almost decade and hundreds of products later, Skip Hop grew into a well-recognized global brand that is known for its innovative, great design and the highest quality baby products.
2. Which of the following is a benefits that firms should expect to gain from the use of horizontal integration: Better realization of economies of scale
customers provides resources to firm in supply chain by feedbacks written or oral which is vital for firm to change and rework on strategy by
This paper intends to define operations management and analyze an ethics decision made by operations managers in the workplace or in a known organization.
Evolution of SCM started with manufacturing industry and retailers with construction industry been unable to adapt quickly but Akintoye et al, (2000); Vrijhoef and Koskela, (2000); Dainty et al (2001a) opine that many construction organizations have now realized and increase their interest in SCM concept. This approach is been used in tackling various problems associated with basic construction operations like: inadequate flow of information from the consultants to the contractor; inability to properly evaluate the risk associated with construction task; rise in price competition due to adversarial approach in material sourcing; dishonesty, environmental fear and frustration.
EXISTING PROBLEMS AND WEAKNESSES IN THE CURRENT PROCESSES AND ADDITIONAL CAPABILITIES NEEDED TO BE DEVELOPED: