Name of book: Management of Information systems 10 edition 1. Write a brief syno
ID: 348446 • Letter: N
Question
Name of book: Management of Information systems 10 edition
1. Write a brief synopsis of the case discussing the main points.
2. Comprehensively answer the case questions. Do not answer the real world activities.
3. Identify 5 concepts (terms) from the chapter that relate to the case. Define the concepts in your own words. Discuss how each concept relates to the case.
Cbapter 8 / Enterprise Business Systems 53 Cisco Systems, Black & Decker and O'Reilly Auto Parts: Adapting Supply Chains to Tough Times REAL WORLD CASE hether it's a truck, a tsunami, or an economic downturn, the same general rule applies You're better off if you can see it coming from preservation will be how well they can reduce their inven Largely, companies are in survival mode, and they're looking to their supply chain management team to free up precious capital to help them do that. While it may not a safe distance There aren't many companies that understand this notion the company was pummeled after its vaunted inventory fore casting system could not-or did not-predict the dot-com the equation is very strategic. With globalization, outsourcing, and increased compliance and security concerns, managing supply chain operations be- comes increasingly complex. And shorter, more frequent prod The result of this miscalculation was that sales were matter of weeks, and it ultimately wrote off more than $2 bil- team vowed that it would never get blindsided again. to manage more products and parts from remote locations. Add lion in inventory. After that experience, Cisco's supply chain the pressure of shorter cash-to-cash cycles-the time from when a business extends credit to build inve ntory until the time There is a huge difference cutting head count between it gets paid-into the equation, and the need for an intelligent, customer value chain management. To have visibility as well as command and control, sup Back then, Ciscos supply chain model was built on a ply chain operations must be tightly integrated with the IT built up in anticipation of market demand based on best-gue et it may be the factor that determines success or failure recasts. "Then, when demand dropped, the supply chainhey endure and emerge from this downturn froze. Nothing happened," Braitberg says. "We knew we had to build a new system that reacts better than just 'push Like bloodletting, reducing inventory is a delicate mat ter that most people would prefer to avoid. Inventory can sumer demand. In a normal business cycle, how well that jobNobody wants to run out. If there's too little, customers ether the company is profita accomplished determines mal, and businesses are struggling to simply stay liquid capital, including cutting head count, outlets, and manu orders in a timely manner and market opportunities s w ble. But this current economic downturn is anything but nor will be missed. Yet if a company carries too much and demand drops, then the inventory must be "bled down," or reduced in OS- facturing lines. But for most companies, the key to capital ened, many companies can get by without rigorous inventory management practices, says Larry Lapide, director of de FIGURE 8,14 mand management at the MIT Center for Transportation &Explanation / Answer
In push strategy, the idea is of like hardcore sales/ promote products by pushing/ pressurizing them onto people. In push strategy, the theme is to draw consumers/ drive their attention/ lure to the products and establish a loyalty and brand advocacy for retention and further sales.
Yes, it will depend on state of economy too. If economy is weak, that is, people have less buying power or reduced purchase power parity, Sales would reduce, so a company may have to lower prices/ adopt a push approach to convince/ insist beyond limit to sell/ cross sell/ up sell their products. While if Economy is stronger, consumer have power to pay higher prices or buy more quantities, company can eve increase their prices, add more product benefits, adopt a pull strategy by new marketing campaigns, high volume discounts etc. lure more incoming customers.
Companies will need end to end Supply Chain optimization- a strong as well as responsive one. They need to spend minimum money as much as possible – on Fixed and variable cost of goods/ raw materials/ work in progress and finished inventory/ on shipping/ warehousing/ labour/ any overhead.
Inbound and outbound logistics, that is, to and fro inventory movement in and out of factory, also constitutes time and money. Hence, it should be of critical importance, how to minimize this, by using- automated gantry/ robots/ conveyor belts etc. or use third party logistics and an integrated vendor like fourth party logistics to make supply chain effective enough for all involved elements.
Supplier Management, different suppliers of tier-1/ tier-2 categories to maintained or use an integrated supplier for all, is the decision to be made.
While Cisco, worked as if there is pull demand, then only it will act on it with a push strategy, to sell inventories accordingly. They stopped piling inventories, to avoid any inventory holding and storage costs. As the demand came from customers, they acted to supply with the required responsive level.
Black & Decker played smart by addressing and making use of their piling inventories, by selling them at lower price. So that there are no extra inventory holding costs, more space for new and fresh inventories. It is called rotation of inventory. IT system well enabled them to do so. Lowering prices, gave them edge on competitors, though profit margin per unit decreased, but volume of inventory sold rapidly increased.
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