961 words 4 pagesI. Executive Summary: With the emergence of a booming information industry, Taiwan was declared the world’s market leader in numerous high-tech products and offered explosive growth and fertile grounds for businesses in the information industry. Eager to participate in Taiwan’s technology commons, many high-tech companies were attracted to the fertile region in an effort to benefit from the easy market entry and rapid growth opportunities, thus defining the role of distributors with vital importance. Many high-tech suppliers opted to use small, indigenous firms with weak capabilities to lead product distribution for multiple reasons. Due to the unfamiliarity of the local environment as well as the fragmented and dynamic state of the …show more content…
Synnex became a “one-stop distributor” by bundling multiple items into one shipment. Although the quantity of each item was small, bundling items together caused the overall order size to be substantial and justify the service costs. Synnex’s creation of their MIS allowed them to efficiently service their extensive client base with their telephone sales and customer management. 2. No push for volume sales: Synnex was able to reduce inventory risk and lower bad debt through its increased delivery frequency. Synnex’s creation of logistic centres and in-house trucking operations promoted centralized inventory control (providing tighter control of shipping processes, reduction of errors and damage, and more rapid and frequent delivery). Synnex’s MIS also contributes to the overall efficiency of their distribution chain by promoting inventory control and express delivery. 3. No reimbursements for unsold stock: Despite the short-term life cycle of high-tech products, the increased delivery frequency and decrease of volume sales caused retail outlets to rarely lose sales on out-of-stock items. With fewer inventories in retail outlets, there were fewer inventories affected by rapid price decline, helping manufacturers to avoid over production and reduce subsequent inventory risk.
IV. Overseas Expansion: Synnex’s operational model can efficiently be replicated in foreign markets, however minor adjustments are required to tailor the operations template to