Case Study: Alpha Electronics Global Strategy

ADVANCED SUPPLY CHAIN MANAGEMENT PRESENTED BY:

AMIT JAIN ANIRUDDHA BHATTACHARYA ANUSHREE KHANDALKAR ARNAB KUMAR ROY (01) AUMKAR WAYKER

SWOT Analysis
Strengths:

Being the most successful consumer electronics firms, it has a strong brand name & is well established. The customers base of Alpha is also very wide. Executives are passionate & open to try new things. Learning tours to build competency and apply the global learning knowledge to strengthen its supply chain. Employee training for quality enhancement.

 Weaknesses:

Low employee training, motivation & morale. Overall quality of its products, and business practices is very low. Their products seem to have high numbers of defects.

 Opportunities:

Learn from the Japanese firms. Improvements in products, in terms of better quality. Introducing brands in new markets with improvements and innovations.
Threats:

Japanese firms have flooded the market with lowprices high quality products.

How Alpha Electronics might have arrived at its current strategy

Pressure to be responsive and cost-effective due to

the entry of Japanese firms forced Alpha Electronics to makeover. Increased availibility of new product at cheaper price & of high quality motivated Alpha Electronics to focus on quality. The changing market forces towards high speed, flexibility, reliability , rising expectation of endusers, retailers made Alpha Electronics to revamp their business strategy.

Similar Indian firms: M&M

Mahindra Top Gear Programme: Aim to boost

productivity by 50% in a year. Six principles followed by M&M are: Build Product Units Create Cellular Systems Deploy Flexible Processes Try to Cut Cycle Times Customize Your Shop Floors Let Your Workers Own the Factory

Primary Business Strategy

Principal Business strategy Global expansion of

the firm Reducing costs Leveraging competitive advantage through diversification of Business Evolving through procurement and sourcing in domestic markets followed by cross - border procurement Launching newer products

Supply Chain - Business Strategy Fit

Emphasis on low costs and quality products Procurement from strategic locations where cost is low

and consumerism high Asia, Africa Sourcing from multiple locations, not only from Japan to mitigate risks Developing an integrated supply chain co-ordination and information sharing from design to delivery Outsourcing to contract manufacturers/EMS Leverage their economies of scale

Implications for the SC strategy above

Overcoming Material Shortages Regular Availability of critical components & parts Procurement at low cost

Good relationship with suppliers and distributors

with a willingness to share information at every stage Faster product development Making design in house Outsourcing Manufacturing - Lower costs, lesser investment in fixed assets & inventories, concentrating at core competencies

Efficient vs. Responsive Supply chain

Efficient Supply Chain
1. Main objective is of pursuing efficiency goals w.r.t Supply chain operations 2. Predictable demand for the product - functional 3. Cost optimization & maximum utilization of resources 4. Generate high turns and minimize inventory 5. Long term relationships with suppliers and better information sharing across the supply chain needed 6. Standardized production process with minimal differentiation

Responsive Supply Chain

1. Need to develop capability to respond faster to market requirements 2. Demand is uncertain for the product innovative 3. Reducing time to market/lead time 4. Deploy significant buffer stocks 5. Capturing POS data and immediate updating of the system using EDI and web linkages necessary 6. Postponement of differentiation

Real Life Examples

Efficient Supply Chain Responsive Supply Chain Fashion Apparel Nike, Zara

Toothpaste manufacturer - Colgate

Steel Producer SAIL, TSL

Personal computers - Dell

Oil Companies HP, BPCL

Fast Food - McDonalds

RnD Financial

Operational

Measures To Evaluate Success Of Strategy

Operational Measures

Quality Productivity Flexibility

1. RFTR 4. Customer Complaints 2. No of Processes validated 5.Cost of quality failures 3. Quality awareness training

1. Automation 2. Material Handling 3. Removal of Bottlenecks 4. Reduction in cycle time

1. Time required to setup processes for new products 2. Capability to adjust processes according to changing volumes 3. Allowing variations in process sequence

Time

1. Time for NPD 2. Time required to source new raw material / parts from supplier 3. Time to market for new products 4. plc time

Financial Measures

Total sales

Turnover of capital

Value added

Profit Margin

Measures To Evaluate R&D Department

Financial Revenue growth R & D spending Percentage of sales from new products ROI Profit growth Changes in market share Operational Number of ideas or concepts in the pipeline Number of New products or services launched Number of R & D projects Number of people actively devoted to innovation Others Customer satisfaction Potential of entire new product / service portfolio

SC strategy
Supply chain management - supply chain operations

are controlled to reduce costs Supply chain strategy is an iterative process that evaluates the cost benefit trade-offs of operational components.

External Considerations For SCM Strategy

Customer Demand Market structure Customs clearances and duties

Vendor selection
Terms of purchases in international markets Performance of competitive firms Cross border taxes