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Supply Chain Management for Kinley Project

Extracts from this document...

Introduction

2010 PROJECT ANALYSTS ALTAYE TEKELMICHAEL DIAN VEGAWATI MERRY OKTARINA TABLE OF CONTENTS 1. INTRODUCTION 2 2. DISTRIBUTION CENTRE LOCATION 2 2.1 United Kingdom 3 2.2 Slovakia 3 2.2 Germany 3 3. MAKE OR BUY ANALYSIS 4 3.1 Capacity and Knowledge 4 3.2 Product 4 3.3 Cost Perspectives 4 3.4 Benefits 4 3.5 Disadvantages 5 4. TYPE OF RELATIONSHIP 5 4.1 Procurement Strategy 5 4.2 Retailer Supplier Partnership 6 5. RISK MANAGEMENT 7 5.1 Natural Disaster 7 5.2 Terrorist Attack 8 5.3 Market Change 8 5.4 Port Delays 8 5.5 Supplier Performance 8 6. RISK MITIGATION STRATEGIES 8 6.1 Dealing with Unknown-Unknown Situation 8 6.2 Global Risk 8 6.3 Control 9 7. RECOMMENDATION 9 APPENDIX 1 10 APPENDIX 2 13 APPENDIX 3 14 SOURCES 15 1. INTRODUCTION Kinley is one of the leading manufacturers in peripherals and connectivity solutions for users of computers and consumer electronics in the world. Since its establishment, Kinley has become the market leader across its production line. Nowadays, with a single European distribution centre in United Kingdom, where it was largest market in Europe and meets market demands for 2.000 to 3.000 ships to send to Europe. However, as one of the fastest growing companies in the world, Kinley Management's forecast of market demands will be higher in the future. In order to response market needs, Kinley would anticipate future growth in Europe continent by expanding its existing strategy and cost budgeting. Acting as consultant, we propose most effective and efficient way of doing this. The purpose of this proposal is therefore to explain the process of management consulting activities by A & A consultant. Finally, this proposal gives the views and input to Kinley to obtain an appropriate solution in answering the challenges in the future. 2. DISTRIBUTION CENTER LOCATION Since first and main costumer is in European region and facing future development in the business, an additional distribution centre should be located in European country and keep the existing one in United Kingdom which covers the demand in UK. ...read more.

Middle

Best practices also would include defined standard operating procedures, cost and service baseline development, and common scorecard and data measurement strategies. * Migration Plan Toward Advanced Service Offerings This strategy should focus not only on functional services, but also on value added services. * Strategic Plan for Succession of the Relationship When the termination or dissolution occurs, it is of great importance to modify the relationship as may be needed, or even to transform the relationship to include a new 3PL provider. 5. RISK MANAGEMENT Global supply chains are exposed to similar risks to those faced by domestic supply chain, as well as other risks that are more global in nature. Distribution Centre and warehouse located in Germany ( as recommended ) will face some risks whether it is uncontrollable or controllable. Potential risk that may occur in Germany such as: 5.1 Natural Disaster Nobody knows when and where it will occur, even though many expert and science can read and forecast some of natural disaster. Historical data shows some natural disasters during 1990-2008 in Germany. No of events : 52 No of people killed : 9,635 Average killed per year : 507 No of people affected : 569,673 Average affected per year : 29,983 Economic Damage (US$ X 1,000) : 33,302,130 Economic Damage per year (US$ X 1,000) : 1,752,744 Flood and storm are mostly occurred. Although no significant numbers in victim reported (compared with disaster victim in other country), it will affect to business environment since infrastructures and transportation mode in damaged. Special strategy required like invest in redundancy, having plan A and plan B for emergency, put two warehouses in different locations for instance. Off course it will cost more but the benefit will be more than first investment if unpredicted situation happens. If only a disaster hit one chain, another chain will cover. 5.2 Terrorist Attack It has been a global threat for terrorist, it can happen anywhere unpredictedly. ...read more.

Conclusion

9.417,96 � 14.788,53 Hungary � 26.483,35 � 52.532,55 � 82.489,12 Italy � 159.454,73 � 406.189,93 � 637.818,90 Luxembourg � 2.195,75 � 2.516,48 � 9.375,13 Netherlands � 580.531,96 � 665.328,76 � 2.478.675,77 Norway � 650,22 � 817,09 � 2.186,58 Poland � 26.514,82 � 52.594,97 � 82.587,14 Portugal � 55.578,65 � 119.026,84 � 186.901,65 Slovakia � 6.102,14 � 12.104,24 � 5.001,75 Slovenia � 5.487,79 � 10.885,61 � 12.594,92 Spain � 110.867,85 � 237.433,80 � 372.829,94 Sweden � 78.202,84 � 98.272,59 � 262.982,99 Switzerland � 7.779,07 � 12.411,55 � 33.214,00 Ukraine � 8.250,78 � 10.034,12 � 3.466,33 United Kingdom � 210.852,40 � 115.413,95 � 843.409,60 TOTALS in 2 months � 2.111.926,05 � 3.230.078,90 � 9.015.277,68 TOTAL in a year � 12.671.556,28 � 19.380.473,38 � 54.091.666,08 APPENDIX 3 PERFORMANCE INDICATOR UNITED KINGDOM SLOVAKIA GERMANY Transport infrastructure 3 2 3 Wages and benefits 2 5 1 Proximity to seaports 4 0 3 General business environtment 4 1 3 Proximity to airports 4 1 3 Proximity to railhubs 3 2 4 Labour availability 1 4 2 Labour flexibility 5 3 2 Proximity to customers 4 1 5 Proximity to suppliers / sources 4 1 5 Real estate costs 1 5 2 Incentives 3 2 4 Corporate taxes 1 4 3 Multilingualism 2 3 4 Congestion risk 1 4 2 Utility Infrastructure 5 2 4 SCORE 47 40 50 LOCATION SELECTION CRITERIA SOURCES * Developing and Improving Relationships with 3PL Providers Being a good partner has become a key corporate asset in the global economy, C. John Langley Jr., Ph.D. * Designing and Managing The Supply Chain : Concepts, Strategies, and Case Studies, Simchi Levi-Kaminski-Simchi Levi * EU Enlargement : European Distribution Centres On The Moves?, A Cap Gemini Ernst & Young Production * Europol Report 2006-2010 * Germany : Europe's Logistic Hub, Germany Foreign Investment * http://www.preventionweb.net/english/countries/statistics/?cid=66 * http://www.moneyweek.com/investment-advice/share-tips-stockmarkets-germany-49925.aspx * http://www.chicago-consulting.com/articles/designWarehouseNetwork.shtml * International Logistics, Donald F. Wood-Anthony P. Barone-Paul R. Murphy-Daniel L. Wardlow * Kinley Company Profile * Slovakia The Gateway to Enlarge Europe ?? ?? ?? ?? KINLEY PROJECT ...read more.

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