Question: From your previous recommendations, Primo Caf has changed its supply chain strategy that is now tailored specifically to each product ( the Bean Boiler, Family
From your previous recommendations, Primo Caf has changed its supply chain strategy that is now
tailored specifically to each product the Bean Boiler, Family Man, and Caffissimo based on customer
segmentation. Marco struggled with the redesign of these supply chain strategies initially but is getting
more comfortable with the new way of doing things after seeing the results.
Now that profitability is improving and the Bean Boiler situation has been resolved Primo Caf is
developing a new line of custom order coffee makers Code Name COCMs in the highend market
segment. Primo Caf expects to launch it in the marketplace within the next two years. Marco has asked
that you join him in the product development team to design the supply chain and select suppliers for the
COCMs.
While the Caffissimo is doing well in this segment, Primo Caf leadership believes that custom order coffee
makers could provide the longterm competitive advantage Primo Caf has been going for against its
rivals. The COCMs will fulfill a market segment not met by other Primo Caf products, with an estimated
monthly volume of to units. Cost is estimated at $ per unit and price is estimated at $
per unit. Marketing does not believe that the COCMs will interfere with Caffissimo's sales volume that is
Caffissimo's volume is projected to remain the same The COCMs will be assembled using over
components that are found in a range of Primo Cafs products. The engineering and manufacturing
departments believe that they can meet COCM's unique product designs. They will build flexible
manufacturing systems that can use realtime customer order data that is fed into the assembly process.
Based on the customer order data, the assembly machines automatically adjust to the unique
specifications and rapidly produce custom coffee makers that meet the exact design specifications that
the customer ordered. Additionally, Primo Cafs logistics department can procure contracts with several
thirdparty logistics companies such as FedEx and UPS that can quickly deliver products to customer's
home addresses.
Marco and you have an excellent relationship with new product development team, and they have asked
for your opinions on developing the supply chain strategy for these new custom order coffee makers.
Given your past success with changing the supply chain strategy for Primo's other products, Marco asks
for your recommendations on the supply chain strategy for the COCMs.
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