Supply Chain

Management
GROUP:

MARIA ULPHA

R A C H M A U TA R I A .

A D R I M A J U S ATA N I C H O L A S TA R I G A N

D E F I TA S E P T I A R I N I
What Is a Supply Chain?
A collection of companies and processes involved in moving a product
from the suppliers of raw materials to the suppliers of intermediate
components, then to final production, and, ultimately, to the customer
Referred to as a “chain” as one supplier feeds into the next, then the
next, then the next
A “network” is more accurate because businesses have multiple
suppliers, who have multiple suppliers
Case study
In 2011, Thailand witnessed its worst flooding in half a century, leaving
severe impairments to the country’s economy, industrial sector, and society.
Factors that contributed to flood crisis range from natural to manmade.
Western Digital said that flooding in Thailand, which affected its ability to
manufacture hard disk drives, cost the company $199 million. WD also said
that it won't be back to pre-flood production levels until the third calendar
quarter.
WD, one of the large disk-drive maker, nevertheless reported a profit of
$145 million on revenue of $2 billion for its second fiscal quarter. Profits fell
from $225 million for the same period a year before, when WD reported
revenue of $2.5 billion.
WD shipped just 28.5 million hard drives, just over half of what it shipped a
year before flood, or 52.2 million.
A Typical Supply Network
Benefits of Effectively
Managing Supply Chains
Just-in-Time Production
◦ Inventory delivered just as it is needed
◦ Minimizes stock and handling costs
◦ Reduces obsolescence charges
Vendor-Managed Inventory
◦ Vendors track usage and replenish supplies
◦ Reduces procurement and inventory replenishment costs
Benefits of Effectively
Managing Supply Chains
Reducing the Bullwhip Effect
◦ Ripple effects due to forecast errors
◦ Coordinated supply chain helps mitigate this
Corporate Social Responsibility
◦ Product recalls
◦ Sustainable business practices
Impact
The electronics sector was also severely impacted. Before the 2011
floods, Thailand produced approximately 43% of the world’s hard disk
drives. Western Digital Corporation, which produced one-third of the
world’s hard disks, lost 45% of its shipments because their factory in
Bang Pa-in Industrial Estate, Ayutthaya was inundated. The Toshiba
factory, one of the four major makers of HDD, was also inundated.
Toshiba was able to execute alternate production in the Philippines.
While factories of Samsung and Seagate Technology, other two makers
of the four major manufactures, were not inundated, they were forced
to reduce production due to the lack of parts from suppliers who were
impacted.
Relation between the case and
the chapter
The floods that happened back in Thailand 2011 gave such impacts to
supply chain management in many companies. Flooding disrupt
economies far beyond local damage, as the effects trickle through
supply chains causing uncertainty and chaos.
Chapter 8 discuss about supply chain management which explain about
managing complex supply networks, optimizing the supply chain
through supply chain management, and also developing SCM.
The case and the chapter related because both discussed about SCM.
Because of the floods, supply chain be chaos, gave a such negative
impact to many companies and to fixed it, some material contained in
chapter 8.
Question
What are the benefits of a global supply network?
It's contributed tremendously to improving inter-organizational
business processes, such as by allowing to build highly efficient supply
chains that minimize inventory levels and also short products cycles that
can lead the company to get the better supply chain management and
also profit because the maximize of efficiency and effectiveness of their
global supply chain.
Question
What are the trade-offs when developing a supply chain strategy?
Trade-offs when developing a supply chain strategy are efficiency and
effectiveness. A company that uses a low-cost provider competitive
strategy would probably focus more on supply chain efficiency, while a
company using a superior customer service differentiation strategy
would probably focus on supply chain effectiveness.
Question
Who do you think should be held accountable for worker conditions in
overseas factories? Thelocal government? The factory owners? The U.S.
based business that purchase from the factories? The consumers who
purchase the end products?
It should be held by the Local Government and also the factory owners
because both of it has contributed/affecting this kind of situation about
workers conditions in overseas factories.