DIMCO has a traditional or basic supply chain with all activities directed at delivering a finished product to customers. DIMCO uses 1350 components which are sourced from 375 suppliers. •The finished goods go to a central warehouse;
•From the Central warehouse the finished goods go to regional distribution centers: 6 domestic and 4 international (outside the United States). There are 10 in total. •Each of these regional distribution centers then forward product to an average of twelve (12) local distributors : (10x12 = 120 local distributors) •Each local distributor forwards finished goods to an average of thirty five (35) retailers: (120 x 35= 4200).
2.What advantages can DIMCO gain in implementing supply chain management? •Operational Efficiency: Better understanding and control over internal operations; •Adaptability: Ability to respond faster to circumstances; and •Monitoring and Tracking: Insights into customer needs and purchasing trends as well as demand levels that affect your supply chain; •Reduced Costs – Operational expenses will be better managed; •Increased Profitability
•Improved Customer Service
•Better positioning as it relates to the competition
•Increased market share – through insights into the internal, external and customer dimension of the business
3.What would you recommend DIMCO attempt next? Should it work on integrating the suppliers or the distributors first? Or should it work on both simultaneously? The suppliers should be integrated first. In light of the number of the large number of the components and suppliers utilized by DIMCO, I recommend that the company seeks to streamline processes and reduce the number of suppliers. This can be achieved through backward integration. DIMCO should strive to own or control the external supply sources. Failure to do so threatens the...