OPER8340

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School

Conestoga College *

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Course

BUS8375

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Industrial Engineering

Date

Jun 13, 2024

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pdf

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12

Uploaded by JudgeParrotMaster992

OPER8340 Global Supply Chain Management Term Project: An-Kee Electronics Corporation Objective: This Term Project will provide OPER8340 students with an opportunity to apply supply chain management tools & knowledge from the course to a real-world business scenario. Grading: This Project is a group assignment. Each group will submit a Project report with their own responses to six questions covering highlights from the first half of the course. The Term Project is marked out of 100 points, accounting for 25% of the overall course grade. Due Date: The Term Project is due by 11:59 pm on your class day in week 7 of the course (or as advised by your professor). Project Scenario: The scenario for this Term Project involves your decision to import an inventory of semiconductor chips for sale to automobile manufacturers in southwestern Ontario, Canada. Your supplier in this scenario is An-Kee Electronics, a semiconductor manufacturer located in Taiwan. Project Instructions: Students have either formed their Project groups or have been randomly assigned to Project groups by their professor to work together to research, review and discuss course material related to the Term Project. All group members are expected to contribute equally to completing the Term Project. Each group should decide on individual student roles among themselves; every group member must prepare their own research following the Project Report requirements. Each group must appoint one member to consolidate the other students’ research material into the completed Term Project Report. The same group member must submit the Term Project Report as a Word document to the Project Dropbox. Turnitin will evaluate all submissions. The same group member can submit your Project Report to the Dropbox multiple times to reduce your Turnitin score. DO NOT submit your Project report to any Dropbox other than the Dropbox your professor has established for this course.
A deduction of up to 30 points for not following any element of the Project instructions herein may apply at your professor’s discretion. Contact your professor if you have any questions on this section or problems assigning work roles or collecting research from individual group members. Plagiarism : “Submitting any work produced by someone other than yourself without acknowledging that source may be considered plagiarism. This includes writing, mathematical solutions, data, code, images, graphical designs, and more” ( About Academic Integrity, 2021). ( https://lib.conestogac.on.ca/academic-integrity ). Your Term Project Report should include appropriate citing and referencing based on the current version of “APA@Conestoga” (See https://lib.conestogac.on.ca/apa-getting- started/introduction .) For example, your Term Project Report should adhere to the following guidelines: • Q uoting & Paraphrasing ( https://apa.conestogac.on.ca/Sections/Quoting ) • C itations in Text ( https://apa.conestogac.on.ca/Sections/Citations ) • Reference List ( https://apa.conestogac.on.ca/Sections/ReferenceList ) Please ensure that all group members read and understand their obligations and responsibilities regarding academic integrity. All students must participate and contribute to receive credit for the Term Project. Keep a copy of your work for your files. Students may be asked to submit their contributions to the group Report. Term Project Report marks, whether assigned to all participants as a group mark or to students individually based on their contribution, are at the professor’s discretion. All Project Reports submitted to the course Dropbox will be evaluated by Turnitin. A deduction of up to 25 points for excessive Turnitin scores may be applied at your professor’s discretion. The unauthorized use of artificial intelligence technology to complete this Project Report is not permitted and may result in a zero mark. Contact your professor if you have any questions on this section. Formatting: A significant portion of the mark for your Term Project is based on Report formatting (layout, grammar/spelling, presentation, citing, referencing, clarity, cohesion, etc.). Report submissions should be a MAXIMUM of twelve (12) pages in length (excluding the Cover page, Appendices, Exhibits and References page), single- sided, with 1” margins, in 12-point Arial font. Reports may contain up to five (5) pages of relevant Appendices and supporting Exhibits. See the Marking Scheme for more information.
Assemble your Word document Term Project Report in the following order: • Cover page (listing the Report title, course name, course number and section number, professor’s name, group number, and participating students’ names) • Table of Contents • Answers to questions (Maximum twelve pages) • References page • Appendices & Exhibits (if applicable) (Maximum five pages) Contact your professor if you have any questions on this section. Source Material: Information for completing this Term Project can be found within (but is not limited to) your eText: “FITT. (2021). Global Value Chain (7.2 ed.) . FITT”. Students are expected to augment their knowledge of the relevant issues in this Term Project by researching online resource material as necessary and where applicable. You may also consult the references at the end of this Project assignment (recommended) . Contact your professor if you have any questions on this section. Marking Scheme: See page 9. Contact your professor if you have any questions on this section. Project Description: By 2020 increased demand for semiconductor chips in consumer electronics resulted in a chip shortage for many other manufacturing industries (Straughan, 2023). Many North American automobile manufacturers viewed this shortage as a significant risk since most semiconductor chips are produced in Asia (“Semico nductor Manufacturing by Country 2023”, n.d.). Many countries have announced subsidies to encourage domestic production of semiconductor chips. For example, the United States government “passed the CHIPS Act, which includes $52 billion in government subsidies for research and production of semiconducto rs in the US”, and similar initiatives were announced in the EU, South Korea, and Japan (Scott, n.d.). Meanwhile, federal and provincial government subsidies in Canada have already encouraged General Motors, Honda, Ford, Stellantis and Toyota to establish or expand manufacturing operations here. And recent subsidy announcements related to electric vehicles and battery production could further stimulate automobile production in Ontario (Mai, 2023). Ontario is a popular choice for automobile manufacturers for many reasons. Regarding logistics, the province is in the middle of the country. It has an excellent network of highways, railways, airports and ports, and land border access with four US states. Ontario has the country’s largest population and a skilled workforce for the automobile industry (“Canadian Provinces by Population 2023”, n.d.).
What the province does not have, however, is semiconductor chip manufacturers. This is problematic for automobile manufacturers since modern cars incorporate about 100 distinct electronic modules. These modules collectively include as many as 1,400 individual semiconductor chips that control various electronic systems and account for as much as 40% of an automobile’s cost (Buchanan, 2022) (See Appendix A). Shortages in semiconductor chips can be traced to the origins of the COVID-19 pandemic. As more people began working from home, demand for cars declined while demand for smartphones, computers and other electronic devices increased. The semiconductor industry quickly pivoted to meet this new demand and could not resupply the automotive sector when market demand returned in 2020-2021. Adequate production capacity may be available by 2025, but the risk of another pandemic or shortages due to geopolitical tensions are real possibilities ( McKinsey & Company, May 2023). You have identified a business opportunity in this environment and started a company to provide semiconductor chips for automobile manufacturers in southwestern Ontario. Recognizing that automobile OEMs will purchase semiconductor chips in large volumes directly from the chip manufacturers, your business plan involves holding inventory of several varieties of “infotainment” chips. Infotainment chips are located in the driver’s cockpit area of a car. They are required for the digital display (e.g., calculation and visual display of speed, mileage, fuel level, etc.) and audio/visual connectivity of navigation systems (e.g., verbal commands and directional map displays) (See Appendix A). Your company, Ancaster Automotive Supply, is located in Ancaster, west of Hamilton, Ontario (See Appendix B). You source, import, and warehouse inventory of infotainment semiconductor chips from this location. When automobile OEMs in southwestern Ontario cannot obtain the applicable infotainment chips from overseas suppliers, they can order them from Ancaster Automotive Supply on a JIT delivery basis. An-Kee Electronics Corporation During your online research for a supplier of semiconductor chips, you contacted An-Kee Electronics Corporation, located in the Qidu (“chee - doo”) District of Keelung City, a port city near Taipei, in northern Taiwan (See Appendix C). Your initial inquiry drew a response from Hana Chen, International Sales Manager for An-Kee Electronics. She told you An- Kee had been in business for ten years, and most of its sales were to automotive manufacturers in China. So far, she has been unable to develop business in North America because other Taiwanese companies like TSMC and ASE Technologies have already dominated the global chip market. In follow-up discussions, it seemed clear that the potential existed for your two companies to work together. Your business model and proximity to automobile manufacturers in southwestern Ontario was exactly the market opportunity An-Kee Electronics was looking for. Hana provided references and samples of several infotainment chips. After showing these samples to your contacts in the automotive industry, you were satisfied An-Kee manufactured the type and quality of products you wanted to hold in inventory.
As an incentive to commence the business relationship, An-Kee offered to ship your first order of semiconductor chips upon receipt of an LC for 50% of the invoice value. The remaining 50% would be payable as follows: 25% would be payable in 120 days by bank wire transfer, and the remaining 25% would be on consignment (i.e., payable when you sold the chips to your customers in Ontario) plus a simple interest rate of 2% on the outstanding consignment balance. These were favourable terms for a first-time customer, and Hana explained that An-Kee wanted to acknowledge that you were starting a new business venture. At the same time demonstrate its commitment to developing a market for its products in the Canadian automotive sector. She also provided a price list of various products with progressive discounts based on order quantities. An-Kee would purchase trade credit insurance to protect its receivables and only requested that you arrange to pick up and transport your shipment from An- Kee’s plant in Qidu District , Taiwan, to Canada. Ancaster Automotive’s Opening Order Over the next few weeks, you held discussions with the procurement and production teams at the major automobile OEMs in southwestern Ontario. You identified three types of infotainment semiconductor chips produced by An-Kee Electronics for inventory. Your opening order to Hana Chen consisted of the following three items: An-Kee Semiconductor Chip An-Kee Part No. Qty Ordered Visual Display Chip* AK-3895733 250,000 AV Connectivity Chip* AK-9937194 300,000 NAV System Chip* AK-4274095 200,000 (*See Appendix D) When placing your order with Hana Chen, you informed her that your freight forwarder, Yusen Logistics, would contact her to confirm shipment availability. You also asked her to ensure that An- Kee’s shipping department assembles your order on North American GMA pallets for storage in the automotive OEM warehouse racking systems (iContainers, 2020, November 23). Once Hana confirmed receipt of your order, you contacted Charles Wu, a sales representative with Yusen Logistics. You asked him to have his office in Taiwan contact Hana Chen and arrange a pickup at An-Kee Electronics, No. 18, Dahua 3 rd Rd., Qidu District, Keelung City, Taiwan 206589 (Taiwan Postal Code, n.d.) for delivery to Ancaster Automotive Supply , 569 Jerseyville Rd. W, Ancaster, ON Canada L9G 5A2. You also told Charles you would send him a copy of your purchase order to An-Kee Electronics for import Customs purposes, but Yusen would have to get the shipment size and weight information from the shipper. You expected An-Kee would be ready to ship your order within 10- 15 days, “FCA, An -Kee Electronics, No. 18, Dahua 3rd Rd., Qidu District, Keelung City, Taiwan 206589, Incoterms 2020”.
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