Case study 1 (Week 6)
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Niagara College *
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1503
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Industrial Engineering
Date
Feb 20, 2024
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docx
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6
Uploaded by MinisterKingfisher4125
Baljinder Nirmaan
Niagara College
OPER 1503: Supply Chain Management
Professor D
r. Hiren Chavda February 18, 2024
Case study 1 (Week 6)
1.
What parts of the supply chain are most closely involved with the
situation in this case? What is the responsibility of each part in
order to maintain a smooth flow of material?
In this case study, several parts of the supply chain are involved, and each
has its responsibility in maintaining a smooth flow of material:
Procurement Managers (Susan, Bill, Kevin)
: Procurement managers are
responsible for sourcing suppliers, negotiating contracts, and managing
supplier relationships. In this case, Susan, Bill, and Kevin are responsible for
overseeing the relationship with Foster Technologies. Their responsibility
includes ensuring supplier performance meets the company's requirements,
addressing any issues that arise, and making decisions regarding supplier
retention or replacement.
Supplier (Foster Technologies)
: Foster Technologies is a key player in the
supply chain as they provide materials required for Avion Inc.'s production.
Their responsibility includes maintaining quality standards, meeting delivery
deadlines, and communicating effectively with Avion Inc. about any
challenges or changes that may impact on their ability to fulfill orders.
Production Group
: The production group within Avion Inc. is responsible for
managing the manufacturing process. They determine production volume
requirements, scheduling, and material release quantities. In this case, there
was a lack of communication between the production group and the
procurement managers regarding changes in production volume and
scheduling requirements, which led to issues with the supplier.
Materials Management Team
: The materials management team is
responsible for coordinating the flow of materials within the organization.
They are the point of contact for operational issues or inquiries from
suppliers. In this case, the materials management team did not effectively
communicate changes in production requirements to the supplier or address
their inquiries promptly, leading to misunderstandings and disruptions in the
supply chain.
To maintain a smooth flow of material, each part of the supply chain must
fulfill its responsibilities effectively:
Procurement Managers
: They should regularly monitor supplier
performance, communicate effectively with suppliers, address any issues
promptly, and make informed decisions regarding supplier selection or
replacement.
Supplier
: Foster Technologies should maintain high-quality standards,
adhere to delivery schedules, and communicate openly with Avion Inc. about
any challenges or changes that may affect their ability to meet
requirements.
Production Group
: The production group should communicate changes in
production volume, scheduling requirements, and material release quantities
to the procurement managers and ensure alignment with supplier
capabilities.
Materials Management Team
: The materials management team should
act as a liaison between the production group and the supplier, promptly
address any inquiries or issues raised by the supplier and ensure effective
communication and coordination within the supply chain.
Overall
, effective communication, collaboration, and proactive management
are essential for maintaining a smooth flow of material and resolving issues
in the supply chain.
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2. What initially appears to be the problem? What really is the
problem(s) in this case?
Initially
, the problem appears to be the deteriorating performance of Foster
Technologies, a key supplier for Avion Inc., in terms of material quality and
on-time delivery. This issue is causing delays in Avion's product delivery to
its customers, which is concerning for Susan Dey and Bill Mifflin,
procurement managers at Avion Inc.
However
, the real problem in this case stems from miscommunication and
unrealistic expectations between Avion Inc. and Foster Technologies. Avion's
production volume requirements have increased significantly from the
initially projected 2,500 units per month to over 4,000 units per month.
Additionally, Avion's production group has demanded shorter lead times for
materials and frequently changed final material release quantities, which
Foster Technologies struggled to accommodate with their existing production
capabilities and lead times.
Furthermore
, Avion's materials management team failed to effectively
communicate these changes to Foster Technologies or adequately address
the issues raised by the supplier regarding the impact of Avion's production
and scheduling changes on their operations. Foster Technologies made
several attempts to communicate these challenges to Avion, but their
inquiries were largely ignored or received little attention from Avion's
materials group.
As a result
, the root problem lies in the breakdown of communication and
collaboration between Avion Inc. and Foster Technologies, exacerbated by
unrealistic expectations and insufficient support from Avion's materials
management team. This has led to a strained relationship between the two
parties and a significant decline in supplier performance, ultimately
impacting Avion's ability to deliver its products to customers on time.
3.
How easy is it to switch suppliers? What could complicate a firm’s
ability to switch to a new supplier?
Switching suppliers can vary in difficulty depending on various factors such
as the complexity of the product, the level of integration with the current
supplier, the availability of alternative suppliers, and the existence of
contractual obligations. In the case of Avion Inc., several complications could
arise in switching to a new supplier:
1.
Product Complexity:
If the product requires specialized manufacturing
processes or materials, finding a new supplier capable of meeting these
requirements might be challenging.
2.
Integration:
Avion Inc. may have integrated Foster Technologies deeply
into its supply chain, making it difficult to replace them without disrupting
operations.
3.
Contractual Obligations:
If Avion Inc. is under a long-term contract with
Foster Technologies, terminating the contract prematurely might incur
financial penalties or legal consequences.
4.
Tooling and Equipment:
Transitioning to a new supplier might require
investment in new tooling and equipment, which could be costly and time-
consuming.
5.
Quality and Reliability:
Ensuring that the new supplier can consistently
deliver high-quality products on time is crucial. Avion Inc. would need to
conduct thorough assessments and audits of potential new suppliers to
mitigate this risk.
6.
Supplier Relationships:
Switching suppliers could strain relationships
with existing suppliers and may impact future negotiations with other
suppliers.
7.
Supply Chain Disruption: Any disruptions during the transition period
could lead to delays in production and ultimately affect customer
satisfaction and profitability.
Given these complications,
Avion Inc.
needs to carefully evaluate its options
and develop a comprehensive transition plan that minimizes disruptions to
its operations and ensures the continuity of the supply chain. This plan
should include identifying potential alternative suppliers, negotiating new
contracts, assessing quality and reliability, managing inventory levels during
the transition, and communicating effectively with stakeholders both
internally and externally. Additionally, Avion Inc. should learn from the issues
faced with Foster Technologies to improve its supplier selection and
management processes in the future.
References
1. Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy,
Planning,
and
Operation
(6th
ed.).
Pearson
Education.
https://www.amazon.com/Supply-Chain-Management-Strategy-Planning/d
p/0133800202
2.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015).
Purchasing and Supply Chain Management (6th ed.). Cengage Learning.
https://www.cengage.com/c/purchasing-and-supply-chain-management-
6e-monczka/9781285869681/
3.
Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of Supply Chain
Management: A Balanced Approach (4th ed.). Cengage Learning.
https://www.cengage.com/c/principles-of-supply-chain-management-4e-
wisner/9781285428314/
4.
Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2014). Designing and
Managing the Supply Chain: Concepts, Strategies, and Case Studies (3rd
ed.).
McGraw-Hill
Education.
https://www.mheducation.com/highered/product/designing-managing-
supply-chain-concepts-strategies-simchi-levi-kaminsky/
M9780078024023.html
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