Kuiper Leda Supply Chain Defense Essay

3093 words - 12 pages

Organizations of today understand the need for efficient supply chain management (SCM) to gain an advantage in this highly competitive business environment. In order to create an effective SCM system, an understanding of the various interactions between suppliers, manufacturers, distributors, and consumers is needed. Furthermore, these organizations/entities must work together to establish a committed contractual relationship. Ultimately, doing so would provide each entity opportunities for success and increase the shareholders' wealth.This paper will attempt to educate the readers on the importance of supply chain management. This paper will identify some of the SCM practices or strategies organizations use, specifically those used by Kuiper Leda (Kuiper), the subject of the case study. Moreover, this paper will provide recommendations on how to further improve Kuiper's supply chain which will help reduce costs, minimize wastes, and maximize value. Readers are encouraged to carefully evaluate Kuiper's operations, current position, and objectives, which would help in determining the best SCM practices the organization must adopt.Kuiper Leda, an electronic components manufacturer, is faced with a growth opportunity. A small but highly respected organization, Kuiper has spent the last decade producing Electronic Control Units and more recently, Radio Frequency Identification Systems (RFID). Kuiper's daily production capacity is 1,250 units of ECUs and 250 units of the RFIDs. Midland Motors (Midland), an American Original Equipment Manufacturer (OEM), received a large order for powertrain assemblies to a leading car manufacturer. As a result, there is an increased demand for Kuiper's products. Midland placed an annual order of 250,000 ECUs, a necessary component for powertrain assemblies (direct demand). Additionally, Midland placed an annual order of 35,000 RFID tags to help with inventory control (indirect demand). With this increased demand for Kuiper's products, Kuiper needs to reevaluate the company's existing supply chain. The company needs to ensure that the existing SC is streamlined. "A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers." (Infoscaler, n.d.) Currently, Kuiper acquires all necessary materials to produce both ECUs and RFIDs in-house; however, with such a large order from Midland producing in-house would be inefficient for Kuiper. Furthermore, Kuiper is not geared to produce large quantities. Kuiper needs to decide whether to accept Midland's order and how Kuiper would manage to manufacture and supply a higher volume order. Kuiper needs to evaluate whether outsourcing or in-house production would be most advantageous to the organization. Kuiper also needs to consider how outsourcing would impact the supply chain and customer...

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