Singapore Institute of Materials Management
Diploma in Supply Chain Management
Case Study: Double D Trucking
Jesmin Chen Shujun
Mr Mystafa Sutan
03 July 2011
Q1: Assess the conclusion reached by Douglas Dean regarding the nature of today's trucking industry and shipper demand characteristics.
A1: The conclusion reached by Douglas Dean is “to become a full-service logistics provider” to fight against the competition and survive. Today the nature of the trucking industry is a strategy of vertical integration. The current transportation services of the Double D Trucking is said to be non sufficient with regards to the demands of the customers. The customers are demanding or having a need for more intensive logistic services rather than the transportation only.
Q2: Do you agree that the logical strategic thrust that Double D is to vertically integrate and provide other logistics services? Why and why not?
A2: Personally I do not agree, the logistical strategic thrust for Double D isn’t a vertically integrated. In this case, the main powerful point of the company is the high rate customer satisfaction. “a company that has never lost a customer and never lost a day to labor disputes.” Vertically integrated companies in a supply chain are united through a common owner; moreover, it is one method of avoiding the hold-up problem.
In economics, the hold-up problem is a situation where two parties (such as a supplier and a manufacturer or the owner of capital and workers) may be able to work most efficiently by cooperating, but refrain from doing so due to concerns that they may give the other party increased bargaining power, and thereby reduce their own profits. It has been described as the "most influential work" in recent decades on why firms exist and what determines their boundaries. For example,...
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