Supply Chain Power Tool T3

Power Tool Proposal – Task 3 In order to operate at maximum profit levels, a business must have lower operational costs than the competition. The means to satisfying lower operational costs is Supply Chain Management. Supply Chain Management is a cross-industry wide philosophy to improve operational efficiency by integrating activities of obtaining goods and services to create a product. When implementing a supply chain strategy, consideration must be given to the approach given to suppliers, metrics to measure success of the plan, risk and risk mitigation. In this paper we will discuss the best supply chain management strategy for a newly formed company called Tyson Tools. The organization plans to manufacture electric drills, saws and sanders. Tyson’s business mission is to be the number one provider of power hand tools and deliver superior customer service to its defined market segmentation.

Recommend the adoption of one of the following strategies by the power tool company: a Keiretsu network, a virtual company, vertical integration, or a different supply chain strategy.

After reviewing Tyson’s manufacturing goals and supply chain management strategies it is recommended that a long term partnering strategy be used. This strategy can offer the organization competitive gains by lowering costs and increasing profits, reducing delivery time of inventory, and the opportunity to create a more innovative product. Partnering with a few strong suppliers can contribute to performance and productivity goals: • Suppliers have core competencies that can contribute to product design. • Suppliers can make reliable suggestions on how to improve a product by changing the material. • Streamlining of work processes of product design or inventory. • Suggestion of replacing expensive materials with inexpensive material of same like quality. • Partnered suppliers are more willing to

References: Heizer/Render Operations Management 10th edition, pg. 5, 438 Copyright © 1995 - 2013, .