Twenty-five years after its founding by potato farmer Paul Kuck, Regal Marine has become one of the powerful forces in the marine industry. The worlds third-largest boat manufacturer (by global sales), Regal exports to 30 countries, including Russia and China. Almost one third of its sales are overseas.

Product design is critical in the highly competitive pleasure boat business: We keep in touch with our customers and we respond to the marketplace, says Kuck. Were introducing six new models this year alone. Id say were definitely on the aggressive end of the spectrum.

Supply Chain Management at Regal Marine:

Like most manufacturers, Regal Marine finds that it must spend a huge portion of its revenue on purchases. Regal has also found that the better its suppliers understand its end users, the better both suppliers product and Regals final product. As one of the ten largest U.S. powerboat manufacturers, Regal is trying to differentiate its products from the vast number of boats supplied by 300 other companies. Thus, the Orlando firm works closely with suppliers to ensure innovation, quality and timely delivery.

Regal has done a number of things to drive down costs while driving up quality, responsiveness and innovation. First, working on partnering relationships with suppliers ranging from providers of windshields to providers of instrument panel controls, Regal has brought timely innovation at reasonable cost to its product. Key vendors are so tightly linked with the company that they meet with designers to discuss material changes to be incorporated into new product designs.

Second, the company has joined about 15 other boat manufacturers in a purchasing group, known as American Boat Builders Association to work with suppliers on reducing the costs of large purchases. Third, Regal is working with a number of local vendors to supply hardware and fasteners directly to the assembly line on a just-in-time basis. In some of these cases, Regal has worked out an arrangement with the vendor so that title does not transfer until parts are used by Regal. In other cases, title transfers when items are delivered to the property. This practice drives down total inventory and the costs associated with large-lot delivery.

Finally, Regal works with an Orlando personnel agency to outsource part of the recruiting and screening process for employees. In all these cases, Regal is demonstrating innovative approaches to supply chain management that help the firm and ultimately the end user.

B. Analyse the merits and demerits of the approaches adopted by Regal Marine for its supply chain management. What other strategies might be used by the company to improve supply chain management? (20 Marks)