SCM_PRESENTATAION

8/6/2019 SCM_PRESENTATAION

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WHEN THE CHAIN BREAKS

PRESENTED BY-:

SWAROOP DAS

SWATI SAXENA

TANIMA KAPURTARUN SUKHIJA

UMESH JAISWAL

VAIBHAV MALIK

VIDHU LATHER

VIKEN PATEL

VIRENDRA PRATAP SINGH

YOGENDRA SINGH


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INTRODUCTION

It began on a stormy evening in New Mexico in March 2000 when a

bolt of lightning hit a power line.

The temporary loss of electricity knocked out the cooling fans in a

furnace.

A fire started, but was put out by staff within minutes.

Eight trays of wafers containing the miniature circuitry to make

several thousand chips for mobile phones had been destroyed.

After a good clean-up, the company expected to resume production

within a week.


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CONSEQUENCES

Nokia's managers had realized that there was a problem when their

computer systems showed some shipments were being held up.

Limited number of back-up components are usually held to copewith such eventualities.

Ericsson was content to let the delay take its course.

Nokia immediately put the Philips plant on a watch list to be closely

monitored in case things got worse.


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PROBLEMS FACED BY ERICSSON

That left Ericsson with a serious parts shortage.

The company decided to simplify sourcing of its components,

including the Philips chips, had no plan B.

This limited its ability to launch new generation handsets, which

contributed to huge losses in the Swedish company.

In 2001 Ericsson decided to quit making handsets on its own and

enters into a joint venture with Sony.


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MANY FACES OF RISK

Shippers have gone far implementing the lean supply chain and have

found themselves out of business.

In 2003 a number of companies suffered serious disruption.

SARS 8,000 infected & costing an estimated $60 billion in lost

output in South and East Asia.

Last autumn some 80m items of clothing were impounded at

European ports.

Retailers had ordered their autumn stock well before that agreement

was signed.


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THE COST OF FAILURE

Company's share price dropped by around 8% in the first day or two

after Sun Microsystems announcements for delay in some parts to

Boeing in 1997

Delay in launch of new products cost an average fall of 5%

Global supply chains today are subject to many more potential hold-

ups specially after 9/11

Sometimes even computer systems will not alert a company to a

problem.


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THE LIMITS TO LEANNESS

Apart from the peripheral activities, some companies have startedoutsourcing their core activities also

Companies have started loosing their flexibilities due to increasing

dependencies

Continental Strategy Not possible for small firms

Companies may consider other options in other parts of the world

even though these may look more expensive to make it more robust& reliable

Companies will have to spread their risks more widely


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RECOMMENDED RESOLUTIONS Excellent communications with the suppliers

Multiple suppliers & possibly at different locations

Use of advanced & necessary technologies

Involvement of suppliers in the process of risk-management

All possible support to the suppliers

More investments on the alternative supply chains


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SCM_PRESENTATAION