Institute of Management

Nirma University
MBA (FT) 2015-17
Operation Management-1
Individual Assignment-1
Case Analysis

SCM at BioAg
Submitted By

Course Faculty

Debadatta Ratha
151222
Div:B

A.B Raju
CEO
Biztrans

Supply Chain Management

at BioAg
Reference:
Supply Chain Management: A Case study of Issues for BioAg. By

Dr. Frank, J Dooley, Dr.Jay, T. Akridge Purude University

BioAg is a midwestern firm manufacturing agricultural chemicals that are

environmentally sensitive. One of the major stakes of the company are
the patents which give BioAg a 60% market share. Even though it is a
small company but it was growing rapidly. BioAg had no retail outlets and
had to sell their products through supply firms. It had 420 supply firms in 21
states selling its products. One of the largest customers of BioAg and a
reseller of the BioAgs product Framco announced their strategy for
supply chain management initiatives.
Framco was banking upon key parameters for this initiative, they felt that
partnership, coordination in logistics & information sharing are the key to
the successful implementation of SCM initiatives. The top management of
BioAg discussed this initiative by Framco, they also take up this issue with
four key managers of BioAg. Now they are split upon the decision
whether to go ahead with the SCM initiative as Framco has planned to.

Problems at BioAg
One of the key risk area in implementing SCM and sharing the
R&D information and technology is loss in the intellectual property
for BioAg.
The mitigation strategy for the Y2K issue had taken up most of the
IT resources of BioAg.
BioAgs supplier base expansion strategy will get hampered.
Along with that their strategy to expand to 1000 dealers with
limited forecasting ability would backfire for SCM implementation.

Causes of problems at BioAg

Sharing the R&D information might cause a shift in power and
control. As BioAg lives on proprietary rights which gives it a 60%
market share.
The IT department had taken up the Y2K issue and made it a
liability, instead of upgrading the systems they were more involved
in fixing the issues. For this reason the IT department was
complacent about the competition.

As BioAg never had a retail outlet and solely relied on the supply
dealers, it had no experience in inventory management,
reduction of inventory and increasing customer service.

Solutions to the issues faced at BioAg

Implementation of SCM
Sharing of R&D information and technology

IT system upgrade

Implementation of SCM

ADVANTAGE

SCM initiatives differ in the fact that they are dependent upon the
information sharing between the buyer and the seller. This sharing of
information solves a host of problems.
Information sharing is only possible once both the parties make commitments
with information technology. Specific information developments including
the electronic data interchange, bar coding, scanning, data warehousing &
internet are of great help in coordinating and helping in SCM.
Strengthening the IT systems of BioAg would also help in handling even more
data regarding the customer and sales. This helps in getting a reliable
forecast.
Forecasting helps in reducing the uncertainty in the SCM and thus inventory
cost is brought down.

Implementation of SCM

ADVANTAGE

Reliable Forecasting and information sharing streamlines the logistics and

distribution systems.

Sharing cost information to the customer and the supplier helps in

identification of the redundant cost and hence minimize them.
Biggest of all SCM helps bridging the gap between the customer and the
manufacturer. This enhances the level of trust and relationship between
them. It also helps in better product design and reduced product defects.

Hurdles in Implementing SCM in BioAg

Systemic change in the organization and its behavior to implement SCM
Centralized decision making takes up major role in SCM.
Strong bonds of relationship and trust must be there between the parties.

SCM provides organization with quantitative data which in turn helps

a great deal in inventory management, logistic management,
forecasting and production scheduling. However the qualitative
aspect of the SCM are still heavily reliant on human elements.