Durham International Manufacturing Company (DIMC) manufactures electronic products and supplies them to the customers worldwide. The company wishes to implement the supply chain management system by involving both external distributors and external suppliers in its supply chain system. Since the company uses 1350 products in the manufacturing of electronic products, it will have to involve tier one supplier, tier two supplier and tier three supplier in order to acquire all the raw materials required to manufacture their products. There are also 375 different companies that supply DIMC with raw materials from all over the world. The company sends its finished products to 10 central stores that later-on distribute its products to the customers worldwide.
From the above figures of DIMC, it is clear that the company has a complex supply chain operation system that requires high level of management, technical expertise and collaboration with both suppliers and distributors worldwide to achieve its targets. Since DIMC sources its raw products from all over the world, it is most probably using e-commerce system to communicate and transact with its suppliers. Similarly, the company relies on e-commerce mode of transaction to contact, transact and keep in touch with its distributors. It is essential for the company to maintain the supply chain in order to access the raw materials. Since it relies on 375 companies to access 1350 types of products that aid in the manufacture of its products, such transactions cannot take place through the use of traditional modes of transaction.
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The company is in good position to gain a number of advantages by initiating the supply chain management. First, chain management will facilitate the process of production by maintaining the flow of production process from the initial electronic requisition stage to the final stage of closing the deal with customers. All the stages involved in the management chain are important and unless the management chain is initiated and maintained, the company cannot benefit from an organized production process. Instead, such a company is likely to stagnate at one stage or another.
As to whether the company should start by integrating external suppliers or external distributors, it would be easier if the suppliers are integrated first. Since DIMC has already undertaken its internal functions such as processing of the hair dryers, humidifiers and massagers, the most appropriate step to take next is to distribute the already manufactured electronic products to the ten central warehouse stores for worldwide distribution to the potential customers. Therefore, DIMC should consider integrating external distributors before they can engage external suppliers. The need to remove the already manufactured electronic products in order to create room for other products to be manufactured is another reason why the company should begin by engaging external distributors.
Upon distributing all the products from the office, the company can now initiate transactions with external suppliers to in-source the required raw materials necessary to facilitate the company’s manufacturing process. This step-by-step supply chain ensures proper elimination of complexities and ambiguities from the company’s distribution chain.
In a nutshell, DIMC is a potentially productive company since it has the capacity to benefit from a variety of resources all over the world. However, its complexity requires investment of a high level of technology, technical expertise, experienced personnel among other requirements. The management should also consider integrating all the remaining elements of supply chain management so as to achieve both efficiency and effectiveness in the production process.
References
Reid, R. D., & Sanders, N. R. (2016). Operations management: an integrated approach . Hoboken, NJ: John Wiley.
