Dimco

Durham International Manufacturing Company Discuss the current supply chain system at DIMCO. Durham International Manufacturing Company utilizes the traditional supply chain management system. “Supply chain management is the vital business function that coordinates and manages all the activities of the supply chain linking suppliers, transporters, internal departments, third-party companies, and international systems.” (Reid & Sanders, 2010, p. 100) The activities at Durham International Manufacturing are directed toward the delivery of a finished good to its customers. Durham International Manufacturing uses 1350 components, which they purchase from 375 different suppliers globally. These finished goods go to a central warehouse which supplies 10 regional distribution centers. Of these 10 regional distribution centers, 6 are domestic and 4 are international. The regional distribution centers then forward the products to an average of twelve (12) local distributors, who supply 350 retailers. DIMCO doesn’t use the supply chain management system for manufacturing its worldwide product line of various consumer electronic items, which range from humidifiers to massagers. The CEO, Lucille Jenkins, believes that the implementation of supply chain management would be profitable, and DIMCO is ready to integrate the suppliers or distributors. Discuss the advantages that DIMCO can gain by implementing supply chain management. By implementing supply chain management at DIMCO, they will have the ability to strengthen their partnerships with suppliers and distributors by building a team focused on trust through the process of management. With an established network, relying on open communication, positive feedback, and the encouragement of creative suggestions, they can increase productivity and decrease costs. Another advantage of implementing supply chain management would be to gain a better understanding over internal operations, having the ability to respond to different circumstances, and also to monitor as well as track customer needs, demand levels, and their purchasing trends. “Companies using an SCM system enjoy easier purchasing activities, lower costs, improved collaboration and improved cycle times.” (VanBaren, 2010) Recommend a strategy for DIMCO related to external suppliers. The external supplier for DIMCO provides approximately 1350 various components in the manufacturing of its products. If they decrease the number of suppliers, require those remaining to deliver a larger quantity of components, they can reduce the costs of shipping. This strategy would also increase the efficiency of production, as well as decrease inventory and the cost of goods sold. The quality of these components must be high, and if DIMCO conducted random inspections, checking for quality and efficiency. If DIMCO strategically streamlined the number of suppliers, this will allow for larger shipments. “Successful SCM can result in lower system inventories, a network of firms that responds more quickly to market changes, and products that more closely match customer expectations. Thus, firms pursuing differentiation, cost leadership, or quick response strategies, or combinations of these can all find benefits from value system or supply chain management. (Porter, 1985)” (Wisner, J., 2003) Recommend a strategy for DIMCO related to external distributors. The recommended strategy for DIMCO in relation to external distributors would be to ensure crossdocking is being utilized. “Crossdocking eliminates the storage and order-picking functions of a distribution warehouse while still performing its receiving and shipping functions.” (Reid & Sanders, 2010, p. 130) They should also assess the opportunities to improved warehousing, perhaps with the consolidation of transportation. Another recommendation would be to incorporate a quick scan system, which would verify the accuracy of the shipment and communicate this information using radio frequency identification. “Radio frequency identification (RFID) is an automated data collection technology. It uses radio frequency waves to transfer data between a reader and an FID tag. The information is transmitted automatically so no one needs to unpack or scan individual bar code labels, yet it provides accurate data transmittal.” (Reid & Sanders, 2010, p.131) A two-tier distribution is another recommended strategy related to external distributors. This would allow delivery direct from the regional distributor’s location directly to the retailer, without the usage of local distributors. Efforts to decrease costs, increasing profit, with a just in time delivery, is based upon the supply chain management process. Analyze the consequences of all your recommendations by identifying who is affected and how. When organizations consider implementing a supply chain management system, the suppliers and distributors are affected as well as the organization. Supply chain management will make it easy for the company to manage purchasing and production. The organizations that will use this system will develop a set of metrics. This metric system will monitor the supply of goods. By collaboration, supply chain management will develop groups of businesses to work with. This group will work toward the common goal, which is to provide their customers with the goods based on the demands of the customer. Having lower amounts of inventory on hand will allow companies to plan the amount of raw material that is needed to meet the customer’s demand. The cycle time refers to how long it takes a business to complete the process. The most efficient means of operations is discovered when the methods of supply chain management is used. This would also improve the time it takes to complete a cycle. DIMCO must remain as efficient and competitive as possible. There should be random as well as scheduled inspections of shipments to ensure that the manufacturing process remains efficient, thus resulting in the elimination of bottleneck and bullwhip issues. Durham International Manufacturing must share its vision of the future and also convince the suppliers and distributors that their plan is favored toward the interest of all those involved. If some of the suppliers and distributors were eliminated, those who may no longer have contracts with DIMCO would be free to explore other DIMCO competitors. “Those who have successfully implemented strategic plans have often reported that involving teams at all levels in strategic planning helps to build a shared vision, and increases each individual’s motivation to see plans succeed.” (Ott, KZatz, & Thomas, 2011) References Ott, C., Kzatz, David A., & Thomas, Joe G. (n.d.). Strategy Implementation. Retrieved July 16, 2011, from: http:www.referenceforbusiness.com/management/Sc_Str/Strategy_Implementation.html Reid, R. D, & Sanders, N. R. (2010). Operations Management: An Integrated Approach (4th ed.) Hoboken, NJ: John Wiley & Sons. VanBaren, Jennifer (December 10, 2010). What are the Advantages of Supply Chain Management' (2010). Retrieved July 16, 2011, from http://www.ehow.com/list_7628455_advantages-supply-chain-management.html Wisner, Joel D (January 1, 2003). A structural equation model of supply chain management strategies and firm performance. (2003). Retrieved July 17, 2011, from: http://www.allbusiness.com/marketing-advertising/relationship-marketing