Name of book: Management of Information systems 10 edition 1. Write a brief syno
ID: 348787 • Letter: N
Question
Name of book: Management of Information systems 10 edition
1. Write a brief synopsis of the case discussing the main points.
2. Comprehensively answer the case questions below.
3. Identify 5 concepts (terms) from the chapter that relate to the case. Define the concepts in your own words. Discuss how each concept relates to the case.
Cbapter 8 / Enterprise Business Systems 53 Cisco Systems, Black & Decker and O'Reilly Auto Parts: Adapting Supply Chains to Tough Times REAL WORLD CASE hether it's a truck, a tsunami, or an economic downturn, the same general rule applies You're better off if you can see it coming from preservation will be how well they can reduce their inven Largely, companies are in survival mode, and they're looking to their supply chain management team to free up precious capital to help them do that. While it may not a safe distance There aren't many companies that understand this notion the company was pummeled after its vaunted inventory fore casting system could not-or did not-predict the dot-com the equation is very strategic. With globalization, outsourcing, and increased compliance and security concerns, managing supply chain operations be- comes increasingly complex. And shorter, more frequent prod The result of this miscalculation was that sales were matter of weeks, and it ultimately wrote off more than $2 bil- team vowed that it would never get blindsided again. to manage more products and parts from remote locations. Add lion in inventory. After that experience, Cisco's supply chain the pressure of shorter cash-to-cash cycles-the time from when a business extends credit to build inve ntory until the time There is a huge difference cutting head count between it gets paid-into the equation, and the need for an intelligent, customer value chain management. To have visibility as well as command and control, sup Back then, Ciscos supply chain model was built on a ply chain operations must be tightly integrated with the IT built up in anticipation of market demand based on best-gue et it may be the factor that determines success or failure recasts. "Then, when demand dropped, the supply chainhey endure and emerge from this downturn froze. Nothing happened," Braitberg says. "We knew we had to build a new system that reacts better than just 'push Like bloodletting, reducing inventory is a delicate mat ter that most people would prefer to avoid. Inventory can sumer demand. In a normal business cycle, how well that jobNobody wants to run out. If there's too little, customers ether the company is profita accomplished determines mal, and businesses are struggling to simply stay liquid capital, including cutting head count, outlets, and manu orders in a timely manner and market opportunities s w ble. But this current economic downturn is anything but nor will be missed. Yet if a company carries too much and demand drops, then the inventory must be "bled down," or reduced in OS- facturing lines. But for most companies, the key to capital ened, many companies can get by without rigorous inventory management practices, says Larry Lapide, director of de FIGURE 8,14 mand management at the MIT Center for Transportation &Explanation / Answer
Answer 1-
“Push” to “Pull” approach –
Push – A push-model supply chain is an approach where projected or estimated demand determines what and how much (quantities) needs to be produced. For example, Umbrella gets pushed to shops as the rainy season starts. In this approach, customer do have the predictability in terms of magnitude of order. They know what is coming their way. They plan their production cycle and inventory holding as per their estimation.
Cons:
Pros:
Pull - A pull strategy is quite similar to just-in-time approach to inventory management. It emphasizes on minimizing stock on hand, reducing credit to cash cycle and fulfilling last-second deliveries. Under this approach, products enter the supply chain only when firm reach to conclusion that demand is certain. To forecast the demand accurately or precisely all the stakeholders like IT, Marketing, Finance, Supply Chain operation work in tandem.
Pros:
Cons:
2. Following stakeholders are involved.
IT Role – The one and major role of IT is to have smoother and quicker flow of information across all involved teams. To precisely predict demand, every stakeholders needs to be on the same page. For E.g. If a salesperson brings a order whose lead time to deliver the order is very less. You want this information with all the details to be passed to all department on a real time basis so that they can plan and start the production.
3. O’ Really Auto Parts – As stated in the case, this firm was mainly focused on improving service level and replenish inventory on a nightly basis. As a result, O’ Really was able to increase the inventory turns by 44 percent and It still manages to fulfill 97 percent of customer request immediately
Black & Decker and Cisco – They heavily rely on their integrated inventory management system. They are very proactive with any sudden change in the market and they also quickly respond to those changes and make sure their planning are in synchronization with demand.
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