Q1)The company defines (perceives) supply chain management as "the strategic coordination within IAC and its coordination with its supplier base and customers..." (p. 3).

1. Discuss the major strength of the above definition (perception) of supply chain management.
2. Discuss the major weakness of the above definition (perception) of supply chain management.
3. Of the ten elements of supply chain management listed on pages 3-4, what are the most important two elements to focus on considering the supply chain challenges faced by IAC?

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3. Optimization involved using resources for the maximum benefit: a smooth system throughput helped to minimize waste and maximize profit. 4. Flexibility referred to being able to deviate from normal to special conditions (such as volume flexibility and design flexibility) without incurring significant burden of additional cost and time. 5. Planning the entire supply chain with accurate forecasting. Early involvement of customers and suppliers could increase the accuracy of forecasting and thus the accuracy of planning. 6. Innovation required thinking outside of box.' New ideas were the triggers for procedural changes in the SCM system towards lowering costs and increasing quality. 7. Problem solving by generating strategies and training/encouraging the employees to quantify the problem and make decisions based on data. Areas for improvement could be identified objectively using a method such as value analysis. 8. Lean management streamlined the processes by eliminating waste and non-value adding activities/resources, while keeping high quality standards. 9. Closeness of suppliers enabled short reaction times from suppliers and minimal movement between suppliers and buyers. Suppliers could become an integral part of the buyer's facility and faster coordination could be maintained. 10. Cooperative orientation emphasized the buyer and seller relationship as a partnership: a long-term commitment with fewer suppliers and sharing of future plans was sought. Logistics Department When Salinas arrived in Reynosa, the logistics department (also called the MRP department) had a total of 14 employees: one superintendent, one manager, two supervisors, five buyers and five planners. Members of this department were organized into two groups, each composed of five buyers (or planners) and a supervisor. The buyer group was responsible for material procurement and the planning group was responsible for coordinating production activities with delivery schedules. There was a large gap between the two groups' interests, which made their coordination difficult; as a result, it was common to see insufficient production schedules being launched that often required materials to be expedited for production. In addition to being ineffective, the MRP department was causing high labour costs for the plant as unscheduled overtime productions were often necessary; therefore, IAC decided to reorganize the department. The team was reduced to a total of four logistic planners - who performed the functions of buyers and planners led by a new logistics manager. The combination of both functions led to increased communication and transparency since each buyer-planner would then have control over several materials through the entire supply chain. Transportation Planning The planners used to work with Excel sheets for transportation planning; only one person had access to the file and there was almost no transparency. The customer placed an order via the EDI system, which would be transferred to the Excel sheet, manually modified and then sent to the suppliers; consequently, there were frequent mistakes causing both overstock and shortages. The new logistic planners standardized the process and replaced the manual Excel lists with SAP software. Through this standardized virtual system, customers would place orders directly in the SAP system and the information would be passed along to the suppliers: surplus and shortage became much easier to avoid and the process became leaner. 3. Optimization involved using resources for the maximum benefit: a smooth system throughput helped to minimize waste and maximize profit. 4. Flexibility referred to being able to deviate from normal to special conditions (such as volume flexibility and design flexibility) without incurring significant burden of additional cost and time. 5. Planning the entire supply chain with accurate forecasting. Early involvement of customers and suppliers could increase the accuracy of forecasting and thus the accuracy of planning. 6. Innovation required thinking outside of box.' New ideas were the triggers for procedural changes in the SCM system towards lowering costs and increasing quality. 7. Problem solving by generating strategies and training/encouraging the employees to quantify the problem and make decisions based on data. Areas for improvement could be identified objectively using a method such as value analysis. 8. Lean management streamlined the processes by eliminating waste and non-value adding activities/resources, while keeping high quality standards. 9. Closeness of suppliers enabled short reaction times from suppliers and minimal movement between suppliers and buyers. Suppliers could become an integral part of the buyer's facility and faster coordination could be maintained. 10. Cooperative orientation emphasized the buyer and seller relationship as a partnership: a long-term commitment with fewer suppliers and sharing of future plans was sought. Logistics Department When Salinas arrived in Reynosa, the logistics department (also called the MRP department) had a total of 14 employees: one superintendent, one manager, two supervisors, five buyers and five planners. Members of this department were organized into two groups, each composed of five buyers (or planners) and a supervisor. The buyer group was responsible for material procurement and the planning group was responsible for coordinating production activities with delivery schedules. There was a large gap between the two groups' interests, which made their coordination difficult; as a result, it was common to see insufficient production schedules being launched that often required materials to be expedited for production. In addition to being ineffective, the MRP department was causing high labour costs for the plant as unscheduled overtime productions were often necessary; therefore, IAC decided to reorganize the department. The team was reduced to a total of four logistic planners - who performed the functions of buyers and planners led by a new logistics manager. The combination of both functions led to increased communication and transparency since each buyer-planner would then have control over several materials through the entire supply chain. Transportation Planning The planners used to work with Excel sheets for transportation planning; only one person had access to the file and there was almost no transparency. The customer placed an order via the EDI system, which would be transferred to the Excel sheet, manually modified and then sent to the suppliers; consequently, there were frequent mistakes causing both overstock and shortages. The new logistic planners standardized the process and replaced the manual Excel lists with SAP software. Through this standardized virtual system, customers would place orders directly in the SAP system and the information would be passed along to the suppliers: surplus and shortage became much easier to avoid and the process became leaner.

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Strength of the Definition The major strength of the definition of supply chain management SCM as the strategic coordination within IAC and its coordi... View the full answer