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Discuss why the key to the success of a supply chain is the speed
at which the activities in the chain can be accomplished.
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Research into supply chain management by Chrysler and Ford suggests
that the most effective alliances with external suppliers are built
on four pillars, one of which is “power balancing”. Power
balancing involves balancing contracts so that neither the manufacturer
nor the supplier is highly dependent on the other. If you were a logistics
manager at Ford, why would you not want the supplier of a part like
the windshield to be highly dependent upon the business it does with
Ford?
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Another one of the pillars identified by the Chrysler and Ford research
is “co-specialization”. Co-specialization means that as
they try to balance power, logistics managers also try to achieve
a degree of mutual dependence in their alliances. Explain why this
concept is not contradictory to the “power balancing”
concept.
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The third pillar identified by the Chrysler and Ford research is
“target costing”. Instead of the adversarial system of
competitive bidding for contracts, logistics managers set target costs
based on the manufacturer’s goal for the final selling price
of the car. If you are a windshield manufacturer whose standard windshield
products are priced above what Ford is targeting to pay for this part,
what are your options for pursuing the Ford business?
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The final pillar identified by the Chrysler and Ford research is
“personal ties”. One way these can be created is through
establishing joint teams to solve problems. What other means do you
think might be commonly used by, say, Ford and our windshield manufacturer,
to create personal ties between the two companies?
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Compare the activities included in the supply chain and the activities
includes in a logistics system. Which activities overlap, which are
exclusive to the supply chain and which are exclusive to the logistics
system?
