4234 Words Sep 29th, 2013 17 Pages
JCT Task 3

Business Report Based on a Scenario

JCT2 Supply Chain (V2 GRADUATE-0610)-PA

A. Recommend, with sufficient support, the adoption of one of the following strategies by the power tool company: a Keiretsu network, a virtue company, a vertical integration, or a different supplier chain strategy:

Supplier chain strategies are one of the most important aspects of supply chain management. The key to success of an organization is the supply chain strategy. The supply chain makes up 55-85% to total costs for a business, so it is understandable why so many people are searching for newer and better strategies. (Bruce O. Bartschenfeld)

A Keiretsu Network: Keiretsu network is a network composed of manufactures,
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In the broadest sense, Fill
Rate calculates the service level between 2 parties. It is usually a measure of shipping performance expressed as a percentage of the total order. (John Taras)

v. Other Metrics: The various other metrics are Inventory Months of Supply (inventory on hand/average monthly usage); Inventory Rationalization (an analysis that categorizes inventory by various categories); Material Value Add (sell price minus material cost divided by material cost); and Upside Flexibility (the ability of a manufacturer to meet additional demand requirements) (John Taras)

C. Discuss THREE of the following issues that could complicate the development of an efficient, integrated supply chain: local optimization, incentives, large lots, and the bullwhip effect.

Local Optimization: In local optimization, every facility in the supply chain tries to optimize its own decision with very little regard to the impact of its decision on other parties within the same supply chain. (David Simchi-Levi). To remain competitive, enterprises must produce services of high quality, customized to local needs, open to be integrated with other services, environmentally benign, and technically advanced. (J. Dorn).
However, during the execution of the supply chain it is important to optimize locally to maximize your investments in critical resources: infrastructure, assets and technology. Local optimization - focusing on local profit or cost minimization based on limited

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