Strategic Supply Chain Management

Case Study analysis

Assignment

Submitted by:

SUSHEEL KUMAR

201286

Submitted to: Dr. Praveen Kumar T

Case study 1

1. What are the key problem areas of whirlpool?

2. What is the importance of strategic sourcing?

3. What are the pros and cons of whirlpool global sourcing

strategy?

Answer 1. One of the major challenges that the whirlpool corporation

encounters in the market is innovation resistance. Due to the long-term nature of
innovation, consumers are less interested in new products or improvements
mainly because it is an interruption to already existing established routines.
Consumers get used to a particular product and it becomes a problem to
convince them to change to a different outfit altogether.

Innovation resistance can be due to two main factors, which are the degree of
change or discontinuity with regard to the change, and the extent of conflict
between the innovation and consumer belief structure (Oster and Rossant 98).
Another challenge that the corporation have been dealing with is the issue of
quality and efficiency. Whirlpool products have had its share of consumer
complaints with regard to the standard of performance.

Electronic malfunction is a major setback on the corporation’s reputation and

can cause unimaginable damage to its market share globally. Most of the issues
raised by consumers are related to company’s response to consumers complains.

Answer 2.

Strategic sourcing skills play an important role in the cost structure and
competitiveness of small and large businesses. These skills involve analyzing
high-volume purchases and developing long-term partnerships with a select
group of suppliers that are capable of providing quality products and services at
low costs.

Cost Management

Strategic sourcing benefits both buyers and suppliers. It benefits buyers because
they can negotiate lower unit prices for high-volume purchases, thus reducing
cost of goods sold and maintaining the ability to price their products
competitively. I

Supply Stability

Strategic sourcing can help build stable supply partnerships. For example,
restaurants rely on their suppliers for key ingredients, such as meat and produce,
because a disruption in the quality or quantity of these supplies could affect
their ability to serve customers.

Risk Management

Strategic sourcing can help in risk management. Close supplier relationships

can help companies identify and resolve potential problems quickly. For
example, if a strategic supplier is having cash flow problems, its main customer
may advance some working capital to allow it to continue operations.

Answer 3.

Pros and Cons of the Global Sourcing Strategy by Whirlpool

Whirlpool recognized that factors such as lack of appropriate technology, delays

in transportation, language, and cultural differences,economic and political
stability, and the availability of foreign resources could make global sourcing
for a company to be a tricky process. Acknowledging the influence of such
factors, Whirlpool established an international procurement headquarter in
Shanghai. This venture served as a global sourcing strategy to oversee the
company manufacturing operations in Asia besides giving support to other
global operations of the company that sourced components from Asia.

This global sourcing strategy had advantages. For instance, the strategy enabled
the company to decrease transportation delays, offer support to the company
manufacturing, and decreasing language differences in Asia. Other pros of
Whirlpool global sourcing included gaining market share, lowering capital
investments, increased production flexibility, and ability to focus on the main
competencies. Though China offered many advantages to the global sourcing
strategy for Whirlpool, it had some cons. These Cons Global sourcing strategy
include lack of reliability, inadequacy in IT infrastructure and transportation,
inadequately capable service providers, and inconsistencies in quality and
reliability. Such cons existed despite the fact that China offered cost advantages
to raw materials.

Criterion for identifying, evaluating and selecting suppliers by Whirlpool

Whirlpool used a criterion with high standards in choosing and considering a

Whirlpool supplier. A potential supplier had to meet the quality requirements
set to be considered Whirlpool supplier. Such requirements posed challenges for
most suppliers as it made it difficult to attain the 60 percent score during the
initial round of audits. The company utilized the "Sourcing Strategy
Development Process" that comprises of four steps consider adequate suppliers
of DC they would choose. The four SSD steps are internal, external, strategy
development, and Implementation analysis. The internal analysis entailed
defining the commodity and allocating the resources and resources. This step
also prioritized and identified process-partner requirements followed by an
evaluation and review of the performance of the current supply base. The
internal analysis step also identified the switching costs. The external analysis
involved analysis of the competitors and the supplier industry while evaluating
competitor strategies and performance. This evaluation step involved the use of
Best-in-Class-Performance analysis and the SWOT analysis. Based on the
results from the first and second steps, the third step involved the development
of the sourcing strategies.
Case Study 2

1. Why would the Ericson technician not share the news of fire?
2. What should the Ericson have done differently in response to the delay
of chips?

3. What would Nokia have done better in its dealing with Philips?

Answer1.

The overall issues revolve around a lack of effective communication structure in

the company. One reason is that the technician didn’t think the issue was
important enough to bring up to management directly. Putting the technician in
the power of deciding what incidents are significant enough to be important
means that management won’t be made aware of everything. There also wasn’t
a defined path of communication for who you should go to when these issues
occur.

Answer 2.

One thing he could have done is determine the state of the current stock and
better estimate the demand of consumers. If the company expected a future
increase in demand, they could order more buffer stock to help replenish in
circumstances like this one. Another thing he could have done is reacted more
quickly to the situation, since Nokia took advantage of their slow response.

Answer 3.

They could have worked with Phillips to try and get an earlier deadline on stock
delivery to give more of a time buffer if this incident happens. They also could
have asked for specific language in the contract putting Nokia’s demand in front
of other clients. They also could have spread out their business to multiple
suppliers to take on less risk when one supplier falls through.
Case Study 3

1. Review the apple supply chain for its iPhone product. What differences
set it apart from its

competitors.

2. What are the apples key advantages in how its manages its key supply
chain operation?

3. What are the challenges that apple faces in future? What are the
implications of supply chain?

Answer 1.

Apple has an inimitable supply chain for its iPhone product. Apple’s iPhone
starts its supply chain with R&D in the United States, work with 156 suppliers
and part assemblers in China and finally finds its way to retails and Apple stores
all around the world. One of the characteristics of the iPhone product is short
new product development cycle which is less than a year. The other
characteristic of the iPhone’s supply chain is that all department working
closely together to deliver the work. For example, the industrial design team
works closely with the production team to guarantee mass production. Apple
controls its supply chain internally instead of outsourcing itsmanufacturing to
third-party service providers unlike what the other competitors like Samsung
do. To avoid bottleneck issue for key parts, Apple purchase supplier’s
production capacity in advance and buy the capital equipment for suppliers in
exchange for supply assurance and low cost. Apple also forecast its iPhone
demand in advance to manage production ramp-up issue. Apple using the deal
negotiated with the supplier by pay for machinery and fulfill its firm
commitment to future supplier volume.Apple doing the iPhone’s assembly in
China to take advantage of cheap and skilled labor for the operation and the
quality control process. In the logistics area, Apple has the intermediate
warehouses at UPS and FedEx and its warehouses in Elk Grove, California to
ensure all retailers have the product stock they need to meet the market’s
demand. All of the above characteristics of Apple’s supply chain set Apple
apart from its competitors.

Answer 2.

believe all differentiation points mentioned in question 1 represent advantages

for Apple’s supply chain management but perhaps its most essential one is its
relationship with its suppliers which allows it to modify its stocks according to
demand: no sold out and no excess products. Suppliers are involved in every
step of the way since the conception of the product itself withApple designers
working very closely with suppliers months before production starts. Apple
does not hesitate to put the price to make sure their suppliers will consider them
as top priority clients by paying in advance, getting full supply assurance, and
on top of that, it manages to block its competitors and keeps them continuously
delayed through exclusivity agreements. Another critical advantage that Apple
gets from suppliers is a workforce of engineers ready to work on products
assembly in China.

Another very important key advantage that Apple has managed to gain is
customer satisfaction. It has obtained this through a high-quality buying
experience especially in Apple stores with the Genius Bars which provide
technical support and advice to customers and through an extremely performant
reverse logistics system that manages warranty claims, trade-ins and Apple’s
recycle and reuse program. This system allows customers to solve all technical
problems without leaving home; through internet and through providing ready
for delivery boxes.

Answer 3.

Apple is constantly upgrading and reinventing new versions of their signature

products. What a constant challenge for them will always be what is next, what
more can they do to improve the quality and additives of these products. Or do
they create an entirely new product? Will this product be as successful as their
signature products? With advancements in technology every daythey need to
ensure that is logistically viable for them to apply these new components to their
existing supply chain. They also depend on constantly updated demand forecasts
and what will happen to their real-time operated supply chain if they cannot
deliver this.
Case Study 4

1. How does the mosaic acquisition strategy create or destroy value for
itself and target firms?

2. Asses the channel that mosaic uses to find and attract target companies.

Mosaic predominantly used trade shows, networking events, and newspaper

advertisements to source entrepreneurial partners skilled in home and office
improvement. Exhibiting at trade shows and attending networking events were
the primary means of marketing the Mosaic brand. The three senior executive
partners participated in an average of eight or nine tradeshows per year,
focusing on those within the province of Alberta, such as in Red Deer, Fort
McMurray, Grand Prairie, Edmonton, Spruce Grove, Stony Plain, and
Sherwood Park. Key benefits of trade shows were that they attracted wide
audiences, generated 25 per cent of leads, and provided Knight with the
opportunity to meet and speak with potential entrepreneurs and clients.
However, trade shows cost Mosaic $100,000–$150,000 per year, with such
expenses mainly going toward rental space and staffing. The return on
investment for trade shows also varied per year, depending on the general
economy, weather conditions, and people’s needs. As Knight noted,
tradeshows were “expensive, and the return in investment is not proven because
the leads are so hard to track . . . you’ll do a show and distribute your card, and
someone will call you two years later.”

The partners actively networked by attending social events in an attempt to meet

potential entrepreneurs. Each week, they attended at least one networking event,
including educational seminars and business events, with each event costing
approximately $100. While doing so gave them the opportunity to meet potential
entrepreneurs and clients and generated 50 per cent of leads, it also presented
some difficulties. As Knight recalled, “Challenges are always starting
conversations with folks you want to get to know, finding out who the decision
makers are in the room, and of course, spending many nights away from home