Case Study: Michelin's supply chain strategy

Topics: Supply chain management, Supply chain, Goodyear Tire and Rubber Company Pages: 15 (3138 words) Published: July 20, 2008
----Global Logistics & Supply Chain Management---- Case Study: Michelin's supply chain strategy-----

_Case Study:_

Michelin's supply chain strategy

SUBMITTED FROM

: DUNCAN HO

_CONTENT_

_INTRODUCTION P.3_

_Q1. THE MANUFACTURING STRATEGIES ADOPTED BY MICHELIN IN ORDER TO GAIN COMPETITIVE ADVANTAGE IN GLOBAL MARKET._

_P.4_

_Q.2 EVALUATE MICHELIN'S GLOBAL SUPPLY CHAIN MANAGEMENT STRATEGY (GSCM), ANY ISSUES THEY NEED TO COPING WITH AND PROVIDE RECOMMENDATIONS FOR THE FUTURE DEVELOPMENT. P.6_

_Q 3. COMPARISON AND CONTRAST THE GLOBAL OPERATIONS BETWEEN MICHELIN AND BRIDGESTONE P.9_

_CONCLUSION P.11_

_REFERENCE P.12_

_INTRODUCTION_

Michelin is the forefront of the radial tire as well as a leader on the world tire market; they occupied almost 20% market share in the world. It's realized that the trend towards globalization as more intense competitions that obtain to lower cost and improve the efficient operations. Meanwhile, Michelin have its strong vision, because they have already established a global mission since 1900s, and built 35 factories around the world between 1960 and 1975.

Michelin can be gain the competitive edge in the global market through various manufacturing strategies, refer to (2000, Geoff Buxey) indicates that it's generally classify into a several evolve levels, _Domestic, Market access, Low cost and Global ._Furthermore, in order to cope with the challenges under several competitions such as Goodyear and Bridgestone, they have setting a position as successful in the ''Quality assurance.'' Also there are comparison and contrast the global operations between Michelin and Bridgestone in the latter sector.

TABLE 1, 2006 SALES BY GEOGRAPHICAL AREAS IN MICHELIN

Source: Michelin Annual Report 2006, pp. 16

Q1. _THE MANUFACTURING STRATEGIES ADOPTED BY MICHELIN IN ORDER TO GAIN COMPETITIVE ADVANTAGE IN GLOBAL MARKET._

Michelin have 69 production sites in19 countries and their commercially available in 170 countries. This successful is not only base on the ability to coordinate the whole entities in the global supply chain network, but also depends on their manufacturing strategies to obtain Michael Porter (1985) a sustainable Competitive advantage.

GLOBAL

In 1906, Michelin built its first plant outside of France in Turin, Italy and United States, that's implicated that they begin to develop and access to the international market. More recently, Michelin have dispersion to six target markets: Europe, North America, South America, Asia Pacific, China, Africa and the Middle-East.

TABLE 2, THE CHART OF THE RELATIONSHIP BETWEEN COMPETITIVE ADVANTAGE AND MANUFACTURING STRATEGY IN MICHELIN



MICHELIN'S MANUFACTURING STRATEGIES TO SUPPORT THE COMPETITIVE ADVANTAGES

Michelin's Tire manufacturing is consist the nature of labor-intensive and capital-intensive, therefore they need to adopting different strategies between advanced countries and emerging countries, mix of _low cos_t and _market access_ strategies to enter into the global market, as (2000, Geoff Buxey) points out that the _global manufacturing strategy_ is consist of low cost and market access strategy.

DOMESTIC

Europe is the industrial base of Michelin, their products are provides to two main markets to the world: Original Equipment Market and Replacement market. In Europe, they keen to keep its competitive advantage in providing high technical products and offer a high-quality and innovative products and services; also a R&D department act as a major role in providing a continuous support to their manufacturing strategy. Besides, Increase the productivity can be directly reduce their operation cost, as the case mentioned, Michelin tend to be through reduced the production size to increase the productivity in Europe.

FOCUS ON HIGH QUALITY & TECHNICAL PRODUCTS PRODUCED IN EUROPE.

This is no doubt that, Michelin is leadership in advanced technologies, not only in _Safety_,...

References: Vollmann/Berry/Whybark/Jacobs( 2005), 5th Edition ' ' Manufacturing Planning and Control for Supply Chain Management ' ' McGraw-Hill/Irwin: The McGraw-Hill Companies, Inc., p.20-21
Porter, M
Steermann, H (2003) "A practical look at CPFR: the Sears - Michelin experience." _Supply Chain Management Review_, July/ august 2003, pp. 46-53.
Fisher, M. L. (1997). "What is the right supply chain for your product?" _Harvard Business Review_ (March-April 1997), p.105-116.
Donald F. Wood Anthony P. Barone, Paul R. Murphy, Daniel L. Wardlow (2002) International Logistics 2nd Edition. AMACOM: American Management Association p.368-371
Huang, S.H., M
Fortune Global 500, 2006. From the July 24, 2006 issue [online] Available at: http://money.cnn.com/magazines/fortune/global500/2006/full_list/ [Accessed 5th November 2007]
Charles J
Thomas A. Foster (2004) The Trends Changing the Face of Logistics Outsourcing Worldwide [online] Available at:
http://www.supplychainbrain.com/archives/06.04.3pl.htm?adcode=90 [Accessed in 8th November 2007]
Neil Shister (2007) Manufacturer of the Year for Global Supply Chain Excellence [online] Available at:
http://www.worldtrademag.com/CDA/Articles/Cover_Story/BNP_GUID_9-5-2006_A_10000000000000095846 [Accessed in 11th November 2007]
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