Supply Chain Reengineering: A Case Study

Supply Chain Reengineering: A Case Study

David J. Newlands (IÉSEG School of Management (LEM-CNRS), France)
DOI: 10.4018/978-1-4666-0155-0.ch010
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Abstract

This chapter describes a debacle that occurred when a large assembler of fast moving consumer electronics commissioned the set up of a new supply chain. Four key players undertaking five processes were involved. These companies planned to operate sell-buy relationships. Upon starting to ramp-up of the first product component sets, it became clear that companies did not trust their successors to pay for all goods delivered. Similarly, suppliers were not trusted to deliver perfect goods. Companies receiving component sets refused liability for damage or defects introduced by companies further up the supply chain. A remedial quick-fix using centralised inspection at the principal supplier soon was adopted to facilitate supply of complete sets of mechanical parts to the assembler. Significant similarities exist between the case study supply chain and the concepts used in business process reengineering. The chapter identifies stages undertaken to improve an inbound supply chain for complex plastic mouldings assemblies. The principal research methods used were participant-observer and action orientation. All company names have been disguised to comply with confidentiality agreements. The author was a Logistics Project Leader during the period of this research. He acted as an internal consultant for Alpha Co, with responsibilities for encouraging new product development teams to modify the products to take into consideration ‘design for logistics’ concepts.
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Introduction

Many writers suggest corporations are moving to procuring the majority of the value added manufacturing activities for their products. Large corporations focus on designs, process technology verification, designing for late configuration, undertaking assembly, testing, packing and distribution. High volume assemblers are reliant on predictable responsiveness to supply material sets to schedule. Failure of any one in-bound supply chain to deliver goods on-time and in the correct quantities jeopardises production.

Assemblers may have alternative products that can be produced, supplied by alternate in-bound supply chains. Materials management at plants are using suppliers and supply chains that have been specified by new product development programmes. Procurement project leaders (PPLs) shall specify which companies shall be awarded which value-adding activities. PPLs typically track progress during ramp-up of production, working with materials management when in-bound flow or quality problems become apparent. As product ramp-up reaches full flow, PPLs may reduce their activities, in preparation of moving to new product development projects. However, if problems persist, PPLs must either move to expediting mode or focus on managing supplier’ quality and response improvement. PPLs will have co-ordinated with operations process leaders (OPLs) individual company processes verified during prototype and pre-production runs. However, when the supply chains go live, each company that participates is dependent on their predecessors to produce high quality goods and in sufficient quantity that are delivered on-time.

Materials managers must feed their assembly plants. Plant managers may be offered a range of products to produce. Since their performance metrics focus on of manufacturing operations’ productivity (efficiency, utilisation and downtime) and contribution to profit, assembly plant managers may choose which products they would like to produce – forcing new product development teams to sell internally their designs and process solutions to plant management. This choice is complicated by the rapid change in process capabilities of new and future products, by the product volume and by the frequency of line set-ups.

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