Another solution for Supplier delay problem & transportation costs

Question

Since the transportation costs are caused by the Chinese suppliers' delay problem, I wonder why we are paying more for the delay instead of forcing the suppliers on time (to solve the delay problem). So firstly, I would like to suggest to charge a fine or discount of goods on the delay in transportation. I do not think it is reasonable to delay and solving this problem could lead to a more efficient supply chain.

Then, what about investing in an advanced working-in-process inventory management system? If the company does not have an efficient inventory system, I would recommend to upgrade it instead of using expensive airline transportation. If the system is working well (counting in the occasional delay & order in advance) and we solve the delay problem, then we will never worry about the delay problem. And I would like to change to shipping transportation(if it is cheaper) to save more costs.

Answer 1

Hi,

I have a feeling you are the same person who asked the other "Price differentiations & brand development" question?

I think you're forgetting the point of a case here!

The goal is not to come up with all of the possible solutions in the world. It is not to sound smart and talk about how wrong the current approach is. Yes, you need to come up with many options/ideas in the framework, but, fundamentally, you need to go down the course the case takes you.

There are always multiple options/solutions to any problem....we can't simulate that in 30 minutes! So, make sure you follow the flow of the case, take the guidance given, use the information provided, and don't let tangental thoughts distract you. If you must, you can lightly mention them during your risks portion of the recommendation.

Answer 2

Hi Felix, in table 1 you can find the revenue of 590M and in diagram 1 the split by segment is given, stating 15% f... (read entire answer)

Hi Felix, in table 1 you can find the revenue of 590M and in diagram 1 the split by segment is given, stating 15% for <€5. €590M *0,15 = €88,5M Best, John

Answer 3

Hi Navid, I agree. Even if you could not reduce labor expenses and other operating expenses, you would still close... (read entire answer)

Hi Navid, I agree. Even if you could not reduce labor expenses and other operating expenses, you would still close the business as the price just covers the cost of raw materi... (read entire answer)

Answer 4

Since the profit margin keeps constant over years, I doubt the client did not have a proactive plan for supplier mana... (read entire answer)

Since the profit margin keeps constant over years, I doubt the client did not have a proactive plan for supplier management. What they are selling can likely be found from many... (read entire answer)