A Case Study in Supply Chain Operations

Global integration goes beyond worldwide presence to provide the visibility and control needed to respond rapidly to global market dynamics and achieve the highest level of operating efficiency and cost$-$effectiveness. Given its rapid worldwide growth, one of the industry$$s leading manufacturers of electronic components needed to gain greater control and visibility over supply chain operations in order to handle the increase in worldwide production. The manufacturer wanted to migrate to a single$-$partner environment to more efficiently and cost$-$effectively manage the growing complexities of worldwide planning, sourcing, production and fulfillment. Many companies are seeking to globalise their supply chains, but the true benefits lie in global integration. The organisation$$s ability to deliver a highly integrated, global supply chain infrastructure, with strong control mechanisms and a single point of contact for all aspects of the end$-$to$-$end global solution is the only clear choice. One requires a dedicated global business management team, led by a Strategic Account Manager, for efficient handling of all the day$-$to$-$day operations. This enables the organisation to focus on its core competency $$ creating innovative new technology. A centralised global supply chain management, leveraging key functional resources, integrated technologies and standardised processes to provide greater global visibility and consistency, more rapid market response and increased production efficiency. With a single, collaborative view of supply chain functions, inefficiencies throughout the supply chain can be easily identified and corrected.

For Example $-$ Leveraging its Optimised Configuration Solution, the organisation deferred the final configuration, assembly and distribution of products so it could be done in$-$region, at a time when demand is more certain, giving the organisation greater flexibility to better accommodate forecast inaccuracies and ensure channel satisfaction. In addition to ensuring $99$ percent on$-$time order completion, the organisation was able to reduce the amount of exporting required, delivering a $20$ percent reduction in overall transportation costs and a $35$ percent reduction in rush$-$order freight costs. The next challenge was addressing the high cost, short life span and inconsistent quality of component supply, which added to the complexity of the client$$s global forecasting, sourcing and production activities. Inefficiencies were noted in the organisatio$$s sourcing and supplier management processes that required the manufacturer to stock high levels of inventory, causing significant Excess and Obsolescence $($E&O$)$ at the end of the quarter. This was leveraged through Vendor Managed Inventory $($VMI$)$ techniques and implemented supplier hubs to minimise E&O risk, while ensuring consistent component availability to meet growing global demand. The organisation also created supplier portals to better manage supplier relationships, track performance, improve visibility and assert quality control measures. The results were dramatic. The organisation reduced inventory levels by $50$ percent, lowered sourcing expenses by $15$ percent and materials cost by $5$ percent. The migration from a fragmented, multi$-$vendor environment to a single supply chain partner has significantly enhanced global execution and visibility, resulting in lower operating costs, faster time$-$to$-$market and reduced risk for the client. The flexibility, control and efficiency of the new global infrastructure enables the organisation to deliver the highest levels of service and to leverage the most costeffective solutions for solving the organisation$$s specific challenges on an ongoing basis. It$$s not just about presence, it$$s about integration

$2\mathrm{.}1$ Describe the challenges facing the organisation. $(12)$