Lucille Jenkins, CEO for Durham International Manufacturing Company (DIMCO), thinks that the company can considerably raise its operating profit by performing supply chain management.
DIMCO manufacturers the variety of consumer electron products (from hair dryers to humidifiers to massagers) for world market. Lucille thinks that DIMCO has already incorporated its internal processes and is ready to proceed with external integration. But, she is sure as to which direction to take. Must the company work on integrating the suppliers of the distribution first? At present, DIMCO uses about 1350 dissimilar components and/or raw materials in manufacturing its product line. Those components and raw materials are bought from approximately 375 dissimilar suppliers around the world. In terms of the distribution, DIMCO currently sends it’s completed products to a central warehouse which supplies 10 regional distribution centres (RDC); 6 are domestic and 4 are situated outside of United States. Each RDC supplies an average of 12 local distributors that each supplies average of 35 retailers. Lucille is looking for advice.
1. In brief illustrate DIMCO’s supply chain
2. Write down the advantages which DIMCOO can gain by performing supply chain management?
3. What would suggest DIMCOO attempt next? Should it work on integrating suppliers or its distributors first? Or should it work on both concurrently?
4. What are your recommendations with regard to the external suppliers?