Durham International Manufacturing Company
DIMCO currently has 375 external suppliers and provide approximately 1,350 various components and raw materials in manufacturing its products. A recommended strategy would be to integrate the suppliers. DIMCO should take steps to reduce the number of suppliers and encourage a partnership with key suppliers. The recommended strategy can be accomplished through backward integration. In addition, DIMCO can reduce cost by sending out a larger portion of components and raw materials to a smaller number of suppliers. The recommended strategy will expedite supply chain velocity, increase efficiency, decrease inventory and cost of goods sold. (Reid & Sanders, 2010) Another recommend strategy would be for DIMCO to research the possibility of establishing suppliers closer to its location, or consider making some components internally thus reducing time and shipping costs. It is possible that local suppliers would be more efficient and flexible than some of the foreign suppliers. As a result this strategy would improve quality of service, inventory management, and allow for a quicker response to the customer demand. Overall, streamlining the number of suppliers will drive efficiency and reduce costs.
Recommend a strategy for DIMCO related to external distributors.
Currently DIMCO external distributors consist of 10 regional RDC which supplies an average of 12 local distributors that each supplies an