Assuring Your Learning DISCUSS: critical Thinking Questions Consider the followi

Question

Assuring Your Learning DISCUSS: critical Thinking Questions Consider the following scenario: In the 1990s, hard disk drive (HDD) makers were among the first industries to move production to lower-cost coun- tries. Beginning in Singapore, these companies shifted manufacturing operations to China and Thailand, in search of ever-lower labor costs. Since then, Thailand has become the second-largest maker of hard drives and a major supplier of parts to the industry worldwide. With the catastrophic Thai floods in the fall of 2011, the industry faced shortages of over 30 million drives per quarter. Some executives at HDD companies were forced to explain a glaring oversight: Why had they had relied so heavily on a supplier in a country located in a high-flood risk area Also consider that: By the end of the 1990s, most supply chains had become lean by minimizing their inventories and reducing waste, and could schedule Review Assuring Your Learning 363 deliveries across the globe with incredible precision. supply chain speed and flexibility were impressive. Products that should take months to procure and manufacture were promised within days of customer requests. a. What supply chain management lessons can be learned from the experiences of HDD makers? b. What are the risks of highly efficient and lean supply chains? c. Could one catastrophic supply chain event wipes out years of profits or market share? Explain your answer. d. In your opinion, when do cost savings outweigh the risks? e. In your opinion, when are cost savings out- weighed by the risks?

Explanation / Answer

a) The lessons that should be learnt is that one must not completely depend on a single thing like it was in case of depencdency on the production from Thailand only. If that source gets failed or damaaged or becomes temporarily unavailable than the whole of the production system can get misbalanced. Therefore the work should be splitted amongst various parts.

b) There can be various risks in that, as the chain is highly efficient and fulfilling the demands of the customers properly, the customers get used to of such services, if any drop or failure occurs than there can be problems like dissatisfaction of customers, delayed production etc.

c) No, this is not possible, because nowadays the comapnies are not dependent on a single firm only, they have so many firms located in different areas. Though the catastrophic supply chain event in a particular firm can affect the production and supply of products but not for a longer time, as the company has backups in the other areas as well, the production speeds in the other areas can be increased to overcome the losses that took place in the damaged areas. So the losses or the drop in shares are for a very shorter duration and doesnt affect the funtionaing of a company that much.

d) When the demands are high and the cost of manufacturing is low, it is that period of time, when we dont worry about the risks whhich are likely to happen because we know that with such good cost savings, we can overcome some of the damages which are likely to occur in future.

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