The Great Products on hand Correction Research Paper

The fantastic Inventory Static correction

2001 Edward Teach

Group member: Huynh Quang Vu Le Huu Dien Votre Thi Phuong Tu Pham Duc Hai Tran Ho Thanh Dong

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•  Brief summary •  Answers to circumstance questions •  Conclusion •  Q& A

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Circumstance summary We

•  the remedy = rethinking of supply chain management in particular networking, phone system equipment, PERSONAL COMPUTER and chipmakers •  Implications: huge amount of write-off or perhaps write-down of inventory + at Cisco: 2 . 25 billion money + for Altera: 115 million dollar •  the problem trigger •  conversation gaps between partners with the supply cycle •  unpredictable demand à� forecast concern à inventory extra = mountains of unsalable inventory

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Case summary II

ALTERA •  California-based chipmaker (Programmable Logic Devices) •  Source to a big Taiwanese organization •  Picotazo in income due to decreasing customer demand •  Write-down 115 mio. worth of inventory FLEXTRONICS •  Among world's most significant EMS (electronics manufacturing services) •  Makes everything: coming from printed signal boards to cell phone •  Customers: Barullo, Lucent, Ericsson •  Inventory growth 2150: from 470 mio. to 1. 7 lastbil. dollars IBM •  Giant, diversified risk •  no exception in the dotcom crash •  Flat product sales

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Concerns on Altera I

1 ) How provides Altera revised its technique? Why? PRIOR TO •  build-on-spec(ulation) àbuild finished products à stock inventory in distributors, sub-contract manufacturers •  PUSH strategy?   to acquire product designed for delivery after order

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a few

Questions on ALTERA 2

1 . How has Altera modified it is strategy? How come?

AFTER THE BUST A. put off adding value to pass away bank inventory •  build-on-order •  PUSH-PULL strategy à� push to die lender inventory (stores of potato chips before the labels & testing) à� take to consumer specific buy B. needing more client's input regarding their stocks à� to make Altera's ideas C. making use of SCM computer software i2 à� 85% automatically production booking à� to shrink preparing cycle period from some to 1 week.

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Questions on ALTERA III

2 . Do you think Altera's new technique will be good? Advantages and disadvantages on this new technique. •  a fantastic strategy à� the exchange of information between Altera as well as its customers •  if Altera is able to build a trustful effort with associates

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Inquiries on ALTERA IV

Positive aspects •  decrease of products on hand cost à� reduction of COGS à� improve bottom-line •  maximize of consumer value: & optimal meet product-customer's need •  well-matching supply-demand •  reducing risk of huge out of date inventory Disadvantages •  lead time – long in the case of sudden raising demand •  customer's preparedness and ability (organisation, finance) •  just how well really does such technique reflect adversity? •  dependence of the sequence on this sort of software because i2 à� what is plan B if this falls flat?

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Questions on ALTERA V

3. Altera's buyer reaction to the brand new strategy. Benefits and drawbacks for the consumer. Reluctance in the beginning

Advantages •  close-tie collaboration à� shared benefits •  ability to get better customised products to the fresh trend in market •  in a well-informed lead time à� to raised plan their particular production and time-to-market

Drawbacks •  Disclosure of ideal information esp. big significant customers •  Lock-in with Altera •  Limited ability (finance, organisation) and fascination

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4. What information will Flextronics possess that the clients tend not to? •  great track of historical data, organization cycle and product life periods •  good record of demand by means of aggregated supply that Flextronics and other EMScs were producing à� advantage both their particular suppliers (for Vender – Managed Inventory) and their consumers (for better knowledge of industry demand)

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Question about IBM I actually

5. How does it manage suppliers and make the pull...


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