Case Study: Avion, Inc.

Topics: Supply chain, Customer, Supply chain management Pages: 4 (1013 words) Published: July 10, 2014

1. What parts of the supply chain are most closely involved with the situation in this case? What is the responsibility of each part in order to maintain a smooth flow of material? It is no doubt that the ultimate problem rising in the case is miscommunication. Communication is utmost vital for both parties – purchasers and suppliers- to interact effectively, hence, to conduct business smoothly. On the other hand, it is also a lack of competency of Avion, Inc.’s procurement managers as they were unaware of such obvious changes in volume and delivery time required for operation though they deal with the flow of material on a day-to-day basis. They could not identify the problem, but also did not even bother initiating inquiries with Foster Technology sooner. To maintain a smooth flow of material, every aspects of value chain, including inbound, outbound logistics, operations, marketing and sales, and customer services must be fulfilled. In the case of Avion, Inc., the volume of goods shipped and its delivery lead time are far beyond the actual ability and capacity that Foster Technology could handle. The inbound logistics was hence affected, slowing down operations and outbound logistics, causing frustrated customers.

2. What initially appears to be the problem? What really is the problem(s) in this case? Delayed shipment initially appears to be the problem causing the whole mess of the supply chain. Avion, Inc’s procurement managers quickly blamed it on their supplier. However, the root of the problem is from the inconsistence from the buyer in terms of initial and actual ordering. Follow up is the unresponsiveness of the buyer regardless of multiple attempts were made by the suppliers regarding the rising problem.

3. How easy is it to switch suppliers? What could complicate a firm’s ability to switch to a new supplier? It is easy to switch suppliers; however, it would take a lot of time, money, and effort. Also, Avion, Inc. had already had pending...
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