...Task 3 A. Analyze whether a Keiretsu network, a virtual company, a vertical integration, or a different supply chain strategy should be adopted. Identifying a strategy is the first step in a supply chain management strategy so that is where we start. There are many options when selecting a strategy that will work best for our market and each strategy has advantages as well as disadvantages. No matter what type of strategy we chose we will face the same main question of if we should make the parts for our product or buy them. By choosing to make them we would chose a vertical integration strategy where we buy the suppliers and take over the management of more or perhaps all of the supply chain. This strategy could lower our cost of each product but we would take on more risk in owning the additional infrastructure as well as losing flexibility in changing the product by changing suppliers. In my opinion we would only want to use this strategy if we could not find suitable suppliers that we could be assured could meet our desired quantities and quality. Another option would be a sort of hybrid called a Keiretsu network where we would help fund our suppliers or work very closely with them and in turn be part of a network that is interdependent and works together to achieve the best result for all. This seems like a clear winner but again depending on the level of commitment to the suppliers we lose flexibility and take on added risks if the supplier fails. In turn...
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...1. How does Mr. Honda’s history with suppliers relate to Honda’s current supply management strategy? The current supply chain management strategy reflects Honda’s long-term goal of manufacturing products where they are sold, and its determination of buying parts where it manufactures vehicles. A. Increased local content is due largely to purchases Honda makes from many of the other 3 Japanese automobile firms that were established during the late 80’s. B. Focusing on 4 regional markets has allowed Honda to develop strong sales, research and development, and manufacturing operations in each region to ensure that the product mix in each region is appropriate to the needs of the region. C. Suppliers are involved in the development process to the extent that they are asked and invited to submit suggestions about how certain designs could be made better, faster, with less weight, or less expensively. Today, purchasing is done by the Honda research and development department. 2. Why is purchasing so important to Honda? The International Purchasing Division of Honda Corporation has full responsibility for coordination between Honda and its overseas plants. Honda’s purchasing department carries out the localization strategy. This strategy involves: A. Finding and qualifying local suppliers B. Developing a second source when volume doubles, or when quality or on-time delivery problems occur. C. In situations in which the goals or the philosophies of the...
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...Task 3 Supply Chain Strategy by Daniel Alcaraz 11-7-11 A) Keiretsu Network: There are several choices of strategies we can adopt when we are talking about the supply chain of a company. The first strategy I would recommend and adopt over vertical integration or a virtual company which I will explain later is the strategy of a Keiretsu Network. It was founded by Japanese manufactures in which its part of a collaboration and part purchasing from suppliers and its also part vertical integration. The manufactures are major financial supporters of the suppliers through their ownership or loans. The suppliers become a major part of the company's coalition called Keiretsu. Any members of this network are assured long term relationships and are expected to to behave as partners and provide their expertise on quality production to the manufacture. Members can also have Keiretsu father down the supply chain which makes second and even third suppliers apart of this coalition. Finding the right strategy for our company will be the start of our supply chain strategy. The main three are the Keiretsu network, virtual company, vertical integration. All three have their advantages and disadvantages. An example of a Keiretsu network would be our company working closely with a supplier, such as a motor manufacturer but not necessarily owing their company. A virtual company is network of independent companies—suppliers...
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...run smoothly and make us money. A. Recommend the adoption of a business strategy: a. Keiretsu Network. B. Discuss metrics for measuring performance of the supply chain. C. Discuss three issues that could complicate the development of an efficient integrated supply chain. b. Local optimization c. Large lots d. Bullwhip effect D. Recommend two tactics or methods which are opportunities for effective management in an integrated supply chain. E. Explain the actions that should be taken to mitigate one clearly identified possible risk for each of the following areas. e. Process f. Control g. Environmental F. Recommend a hierarchical functional organizational structure. h. Discuss what departments might be included in the operations function of the company. G. Discuss strategic operations management discussions related to three concepts that would support the implementation of the company’s mission and strategy i. Quality j. Location k. Maintenance H. Recommend actions to improve cost effectiveness for each of the following. l. Manufacturing facility m. Supply Chain A. When we started to looking at a business strategy for JB Power Tools, we looked at a few different options. These options were a Keiretsu network, a virtual company, and a vertical integration. A virtual company strategy is a company that uses computer and telecommunications to work regularly with...
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...challenge from the top of their supply chain operations to the bottom. Effective supply chain management of an enterprise reduces costs, lead times, and inventories throughout the entire supply chain. Customers want the ‘perfect orders’ and expectations to reduce manufacturing costs put corporate supply chains under immense pressure. As a result, supply-chain management and infrastructure plays a significant role in organizational strategy and how a facility chooses to set up their operation. A. Analyze whether a Keiretsu network (Keiretsu: a Japanese term that describes suppliers who become part of a company coalition), a virtual company, a vertical integration, or a different supply chain strategy should be adopted. A virtual company strategy would not work for this type of operation because “vertical integration is counter to the benefits of specialization” (Heizer and Render, 2010). In this model of supply chain, the demands of more specialized products exist and there is more flexibility to waiver from centralized suppliers than Keiretsu or vertical integration offers. Much of This “fluidity” may allow for too much variability within and there is no sustainability as contracts can be short lived. Most of the transactions are done electronically and today’s customers, although many purchase online, still like to touch, feel and smell their products – especially hand tools. In addition, virtual companies employ suppliers who may have to perform all facets of the...
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...| | | A. Supply Chain Strategy Supply chain Strategies: Vertical integration | * Developing the ability to produce goods or services previously purchased * Buying a supplier or distributor | Few suppliers | Long term relationship with few dedicated suppliers | Many Suppliers | A supplier responds to the demands and specifications of “request for quotation”, with order going to the lowest bidder | Joint Ventures | Formal collaboration | Keiretsu Network | A Japanese term that describes suppliers who become part of a company coalition | It is recommended that KG tools select the Keiretsu network as the company’s supply chain strategy. The strategy is recommended because of its versatility. The tool company need to be able to respond quickly to the need of their customers. Keiretsu is a hybrid of purchasing from a few suppliers approach and vertical integration. The Japanese Word Keiretsu describes suppliers that become part of the company’s coalition. There are two different types of Keiretsu. Horizontal keiretsu are usually organized around a bank and consist of a variety of companies that perform different functions. Vertical keiretsu, are composed of a major industrial corporation and its suppliers in a particular industry. These vertical keiretsu are "held together by fairly predictable transaction patterns and based on implicit long-term contracts, financing and equity ownership. In a vertical keiretsu, the corporation is at the center of...
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...Recommend, with sufficient support, the adoption of one of the following strategies by the power tool company: a Keiretsu network, a virtual company, a vertical integration, or a different supply chain strategy. An efficient supply chain is fundamental to the success of any organization. The expense of the supply chain is usually an organizations largest cost therefore implementing a strategy that effectively minimizes costs while maintaining product quality is an effective way to increase profits. The best way to minimize costs and maximize product quality is to adopt a lean operations strategy that includes just in time (JIT) initiatives. Central to the JIT technique is continuous problem solving. JIT requires that items and materials are ordered only when needed minimizing inventory. When inventory is minimized wasted costs in layout, quality, and procurement are easily spotted and immediately dealt with. With JIT very few suppliers are chosen creating large commitments to the organization. The suppliers should also use JIT and offer their expertise in design and quality control to the supply chain. Since the owners of the power tool company are willing to own or invest in any component of the supply chain I would recommend they initiate a Keiretsu. A Keiretsu is a company coalition which includes few key suppliers and secondary suppliers. The power tool company would support key members of the Keiretsu through ownership or loans. The suppliers are assured stability...
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...Keiretsu Translated literally, it means headless combine Keiretsu is a Japanese word which, translated literally, means headless combine. It is the name given to a form of corporate structure in which a number of organisations link together, usually by taking small stakes in each other and usually as a result of having a close business relationship, often as suppliers to each other. The structure, frequently likened to a spider's web, was much admired in the 1990s as a way to defuse the traditionally adversarial relationship between buyer and supplier. If you own a bit of your supplier, reinforced sometimes by your supplier owning a bit of you, the theory says that you are more likely to reach a way of working that is of mutual benefit to you both than if your relationship is at arm's length. American trade officials, however, disliked Japan's keiretsu because they saw them as a restraint of trade. Jeffrey Garten, once under-secretary of commerce in charge of international trade and then dean of Yale School of Management, said that a keiretsu restrains trade “because there is a very strong preference to do business only with someone in that family”. Despite its government's disapproval, corporate America liked the idea. Jeffrey Dyer wrote in Harvard Business Review in 1996 that Chrysler had created “an American keiretsu”. The company's relationship with its suppliers, which were reduced in number from 2,500 in 1989 to 1,140 in 1996, had improved to such an extent, claimed...
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...WGU - Supply Chain - The Entire Course - All 3 Tasks http://www.homeworkminutes.com/question/view/41072/WGU-Supply-Chain-The-Entire-Course Task 1 Supply Chain Management Simulation Analysis (B): Utilizing pro-forma balance sheets revealed that I was too conservative in my initial approach. My market share was 98% in the traveler series but dismal in the workhorse line. My decision to invest $400,000 into a certificate of deposit was a critical error. I should have opened an office in Europe sooner to maintain market share. Pro-forma financial statements are critical to determine the outcome of previous decisions. After my third quarter my error was to not completely analyze my financial statements. Earlier, in the second quarter, I had went from a negative $394,000 to a positive $493,749. This gave me confidence in my traveler line and since I was only at 4% market share with the workhorse line – I dropped the line completely. I made the decision after reviewing analysis of my profit and loss statements. I viewed this as a low profit item that was taking away from our cash assets that could be best used to catapult our traveler line My initial goal was to gain market share and defend it. I gained market share but did not keep it. My conservative approach early in the simulation did not allow me time to defend my 98% market share. I analyzed competitors and they were gaining...
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...electric drills, saws, and sanders, have requested a supply chain strategy which is outlined below. A.) In considering options for supply chain strategy, the pros and cons of various methods should be considered. In this section, the Keiretsu networks, Virtual Company, and Vertical Integration methods will be discussed. Keiretsu networks are business networks composed manufacturers, distributors, and financiers. In this model, the manufacturers may choose to be partial owners of the suppliers and the suppliers become part of the company coalition (Heizer & Render, 2011). The benefit of a Keiretsu strategy is the mutually beneficial relationship through shared goals which provides a level of trust. This network strategy is compelling in that the risk that is normal in supply chains is spread somewhat. Also, the flexibility provided by this strategy is impressive. Short-term relationships can be developed with multiple vendors which assist in negotiating reduction of costs paid to these vendors. Long-term relationships will be developed over time with a few key vendors which provide security in the delivery of high quality products. A few disadvantages to consider are costs involved in maintaining the network when multiple vendors are involved. It is important to actively manage these relationships to avoid increased costs of goods or services and to monitor quality. A virtual company is formed by a network of independent companies. A virtual company has a large number...
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...Case: Toys R Us Japan 1. Key features of the Japanese distribution system The distribution channel in Japan has a high number of intermediaries when compared to the United States. Nintendo, for example, uses a network of 70 affiliated distributors to distribute its products. It is based on long-term personal relationships. This system developed because in Japan “the merchants were restricted by law to their local patch, and retailers were encouraged to mop up labor from the land”. An additional reason is the preference for fresh food and small quantities due to small kitchens and little storage space. Even until today, the small mom and pop shops are higher valued by society than the mass discount retailers. Profit is not the highest priority of a shop owner but rather personal loyalty to his or her distribution keiretsu. 2. Japan as a market for Toys “R” Us Given the differences of doing business in Japan from the United States and the specific business strategy that Toys “R” Us uses in all of its worldwide markets, I would not consider Japan a good market. The company’s strategy and objectives do not agree with the values of Japan’s society. First of all, Toys “R” Us is a foreign company and therefore, does not have any long-standing personal relationship with Japanese businesses. Secondly, it is able to sell toys at a discounted price because it buys these in bulk. Due to the high rents in Japan, it might not be able to have a large selling space as it is available...
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...production unit, reduce the problem of excess inventories and reduce the cost of production errors (Supply Chain Logistics Management, Current Trends section). However, prior to implementing a successful supply chain, it is necessary to determine which strategy is best for your particular industry. A. Recommend with sufficient support, one of the following strategies: a Keiretsu network, a virtual company, a vertical integration, or a different supply chain strategy A Keiretsu network is a Japanese strategy where a group of members in the chain work together to ensure the success of all of its parts. This strategy relies on collaboration from its members to make a long term commitment to its members. The suppliers and manufacturers form a type of partnership where they work together to gain advantages and a competitive edge in the market. The underlying agreement is that the suppliers are willing to form a longterm relationship with each other. The keiretsu network is integrated horizontally and vertically. They are organized around their own banks and trading companies. In some instances, they are capable of controlling nearly every step of the economic chain in a variety of industrial, resource and service sectors. This strategy usually involves large manufacturers and its suppliers of raw materials and components. The relationships established can be beneficial and stable; however, they can also cause a company to be in a position where it is unable to have the flexibility needed...
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...GriffCh15v3.qxd 10/27/06 08:12 PM Page 439 CHAPTER 15 • LEADERSHIP AND EMPLOYEE BEHAVIOR IN INTERNATIONAL BUSINESS 439 Part 3 Closing Cases Ben & Jerry’s—Japan On an autumn evening in Tokyo in 1997, Perry Odak, Angelo Pezzani, Bruce Bowman, and Riv Hight gratefully accepted the hot steaming oshibori towels their kimonobedecked waitress quietly offered. It had been just over nine months since Odak had committed to resolving the conundrum of whether to introduce Ben & Jerry’s ice cream to the Japanese market and, if so, how. The next morning would be their last chance to hammer out the details for a market entry through 7-Eleven’s 7,000 stores in Japan or to give the goahead to Ken Yamada, a prospective licensee who would manage the Japanese market for Ben & Jerry’s. Any delay in reaching a decision would mean missing the summer 1998 ice cream season, but with Japan’s economy continuing to contract, perhaps passing on the Japanese market would not be a bad idea. Perry Odak was just entering his eleventh month as CEO of the famous ice cream company named for its offbeat founders. He knew the 7-Eleven deal could represent a sudden boost in the company’s flagging sales of the past several years. He also knew that a company with the tremendous brand recognition Ben & Jerry’s enjoyed needed to approach new market opportunities from a strategic, not an opportunistic, perspective. imported ice cream, and expectations of falling tariffs on dairy products suggested new opportunities...
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...Operations Improvement Plan University of Maryland MBA 6022 February 17, 2012 Instructor: Dr. Ben Thompson Tracy Moore MBA 6022 2237 Gateway Blvd Baltimore, MD 21202 Abstract: Toyota is faced with an Accelerator crisis after allegedly faulty accelerator pedals in some of their vehicles caused the pedals to depress get stuck or cause them to accelerate. This lead to a massive recall and lead to penalties and fines from the US government and consumer confidence diminished. There are several processes that can be identified that will benefit Toyota and lead to improvement which is what will be discussed in this paper. Toyota Motor Corporation was founded by Kiichiro Toyoda. Its headquarters is in Japan and was established in 1933. According to by Greto, Schotter, and Teagarden (2010), “In 1934, the company produced its first Type A engine at the encouragement of the Japanese government, and two years later the company produced its first passenger car, the Toyota AA” (p. 2). After going through financial turmoil the 1950’s but helped out by the US government for the war effort in Korea, Toyota started a subsidiary in the US in 1957. In 1982 Toyota formed a joint venture with General Motors in the US at a plant in California. In 2009, a new president was named a Toyota, Akio Toyoda who was a member of the founding family. Akio Toyoda was at the helm of the company when the Toyota accelerator crisis hit and had to answer to a question and answer session before the...
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...ORIGINAL ARTICLE Yousin Park · Yunju Chen A centrality analysis of the transaction relationships in Panasonic Received: April 16, 2010 / Accepted: April 30, 2010 Abstract Panasonic initiated a reform strategy called “Value Creation 21” in 2001. This strategy had a strong impact on its transaction relationships. This research covers one of the important issues in analyzing how the transaction network in Panasonic has changed during the period of “Value Creation 21.” In order to make Panasonic’s transaction relationships visible and countable, we have introduced graph theory and a measure centrality index from the viewpoints of degree, closeness, and betweenness by using data collected in 2002 and 2005. Our findings are reported here. First, the number of firms in Panasonic’s transaction network in 2005 was smaller than in 2002. Second, not only the degree, but also the closeness and betweenness, of the main firms in the Panasonic Group and their suppliers decreased a little more in 2005. Third, the number of in-degree firms declined, whereas the relative importance of Panasonic in the transaction network was more significant. Fourth, Panasonic’s affiliated firms in components & devices and the digital AVC network domain ranked higher than other firms in the transaction network. Last, its out-degree suppliers dropped more in 2005 than in 2002. With these findings, we finally concluded how Panasonic arranged its transaction relationships during the turnaround. Key words Centrality analysis...
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