Jct Task 3
There are several options when it comes to a supply chain strategy including the Keiretsu network, virtual company, a vertical integration, and joint venture. After analyzing all of these programs, it is my opinion that the virtual company supply chain strategy be adopted.
The virtual company supply chain strategy is the best option for several reasons. One reason is that it keeps the overhead low. Unlike vertical integration where the parent company actually buys and runs other aspects of the supply chain, each segment relies on multiple types of relationships to streamline the supply chain. Another reason that the virtual company strategy is the best option is because of the autonomy that each …show more content…
All of these issues can cause the “bullwhip effect”. The bullwhip effect is when the product order is relayed from retailers, to distributors, to wholesalers, to manufactures when each time the order gets passed down the sequence it increases thus increasing the cost associated with the inventory.
It is my recommendation the investors that the lots sizes are monitored to keep them efficient, the incentives be kept to a minimum and keeps communication with the manufacturers and suppliers to maintain local optimization under control. All of these factors will help maintain the true unit cost and reduce fluctuation.
There are three concepts and methods for effective management in an integrated supply chain including mutual agreement on goals, trust and compatible organizational cultures.
One of the concepts for effective management in an integrated supply chain is mutual agreement on goals. To ensure effective management partners must agree that the only entity that really matters is the end customer. Establishing a mutual understanding of the mission, strategy and goals of the organizations is essential in effective management.
Trust is a crucial concept in effective management of an integrated supply chain. All members of the supply chain must agree to share information and maintain visibility though the entire length of the supply chain. Supplier relationships will be more