QUESTION ONE [50]

Read the scenario below and answer the questions that follow:

ModusLink Global Solutions ModusLink provides the client with 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 client to focus on its core competency creating innovative new technology. ModusLink centralized global supply chain management, leveraging key functional resources, integrated technologies and standardized 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, following a review of global production processes and export costs, ModusLink implemented a new global production model. Leveraging its Optimized Configuration Solution, ModusLink 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 client greater flexibility to better accommodate forecast inaccuracies and ensure channel satisfaction. In addition to ensuring 99 percent on-time order completion, ModusLink 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. ModusLink noted inefficiencies in the client'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. ModusLink leveraged Vendor Managed Inventory (VMI) techniques and implemented supplier hubs to minimize E&O risk, while ensuring consistent component availability to meet growing global demand. ModusLink also created supplier portals to better manage supplier relationships, track performance, improve visibility and assert quality control measures. The results were dramatic. ModusLink reduced inventory levels by 50 percent, lowered sourcing expenses by 15 percent and materials cost by 5 percent for the client. 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 ModusLink to deliver the highest levels of service and to leverage the most cost-effective solutions for solving a client's specific challenges on an on-going basis. It's not just about global presence it's about global integration!

1.1 Examine the impact of integration on refining Moduslink's global logistics efficiency and growth. (20)

1.2 Explain the essential role of developing a logistics strategy to meet highest service levels on ModusLink' s growing global demand. (15)

1.3 Discuss the elements that ModusLink needs to examine when developing logistics strategy.