Chain Management at Durham International Company (DIMCO)
BUS515 – Operations Management
Dr. Travis O Davidson
25 July 2012
Determine whether integration efforts should start with suppliers, distributors or both. Explain the rationale for your decision.
By definition, a supply chain “is the network of activities that deliver a finished product or service to the customer” (Reid and Sanders, 2010, p. 99). Aspects of the supply chain include raw materials or parts, manufacturing, storage, tracking, distribution and, ultimately, delivery of the product or service to the customer. The effectiveness and efficiency of the ...view middle of the document...
Integration efforts that begin with both the distributor and supplier not only provide a company with greater control, but also help a company determine which services to outsource or insource.
Recommend ways that DIMCO could benefit from leveraging B2B e-commerce.
One of the modern trends within the supply chain is the use and implementation of e-commerce, i.e., e-distributing and e-purchasing. “The past few years have seen increased use of electronic marketplaces that bring thousands of suppliers together with thousands of buyers” (Reid and Sanders, 2010, p. 138). Businesses who’ve embraced e-commerce, often acquire a competitive advantage over others within their industries. The use of e-commerce is often less expensive than conventional ways of supplying and distributing. Companies could choose to use these methods or they can use a more efficient way of getting their products or services into the hands of their customers.
In the case of DIMCO, the company could benefit from leveraging B2B e-commerce in the following ways: lowering costs related to the distribution of its goods, reducing or possibly eliminating the costs associated with warehousing, and reducing inefficiency related the its sales channels. By leverage B2B e-commerce, DIMCO could reduce significantly all costs associated with supplying its ten regional distribution centers, six being domestic and another four outside the US. The use and implementation of B2B e-commerce would virtually eliminate the necessity of its many distribution centers. Leveraging B2B e-commerce would also reduce or eliminate the need for its 12 local distributors and 35 retailers. This would also affect and/or reduce the costs associated with sales channels and personnel.
Determine what steps DIMCO could take to improve its relationships with its suppliers.
In Bob Reiss’ article, Build a Good Relationship With Suppliers, the case for the need of developing a good relationship with suppliers is argued: “Many business owners seem to get this supplier issue backwards. They think that because they write the order, they’re in the dominant position and can exploit it with unreasonable demands, including personal perks” (Reiss, 2010). The article further suggests that it is necessary for companies to build good relationships with suppliers in the same way that they build good relationships with their customers. To this end, DIMCO could approach improving relationships in the same way it approaches improving those with respect to its customers by providing adequate lead times, sharing pertinent information, paying on time, and personalizing the relationship with its suppliers.
By providing adequate lead times, DIMCO would provide its suppliers with optimum time to complete its orders. It is also important that DIMCO provides its suppliers with any changes in demand or other...