AD680 Global Supply Chain Case Study 2 Ashmark Corporation

Ad680 Global Supply Chainscase Study 2 Ashmark Corporation Dealing

The case study examines the management of external suppliers at an Original Equipment Manufacturer (OEM) and explores associated risks, focusing on a Tier I supplier's role within a global supply chain. It highlights issues related to supply disruptions, supplier relationships, and strategic decision-making in supply chain management.

Working in teams, develop a response to each of the following questions, adhering to APA guidelines:

  1. List two reasons why Red Star was a good supplier.
  2. List two reasons why Red Star was not a good supplier.
  3. Identify two key issues with the Red Star-Ashmark relationship that contributed to the situation described in the case. For each issue, specify the “red flag” that should have raised concern at Ashmark.
  4. Discuss either an advantage or a disadvantage of Ashmark using multiple suppliers for the low-volume parts produced by Red Star.
  5. List an action taken by Ashmark immediately after the bankruptcy and evaluate its effectiveness.
  6. Describe a future action that could be implemented at Ashmark to mitigate similar issues.

Sample Paper For Above instruction

The Ashmark Corporation case provides a comprehensive illustration of the complexities and risks inherent in managing global supply chains, especially when supply disruptions occur due to unforeseen circumstances such as supplier bankruptcy. This analysis aims to evaluate the supplier relationships, identify risk signals, and propose strategic actions to enhance supply chain resilience.

1. Reasons Why Red Star Was a Good Supplier

Red Star was considered a good supplier for several reasons. First, Red Star demonstrated consistent quality standards, which is crucial in manufacturing environments where the integrity of parts directly affects product performance (Christopher, 2016). Reliable quality minimizes rework and warranty costs, enhancing overall efficiency. Second, Red Star was known for its cost competitiveness, which allowed Ashmark to maintain profitability while offering competitive pricing to their customers (Harland, Zheng, Johnsen, & Lamming, 1999). Cost efficiency is vital in global supply chains to offset communication, transportation, and coordination expenses.

2. Reasons Why Red Star Was Not a Good Supplier

Despite its strengths, Red Star also presented significant drawbacks. One concern was Red Star’s limited flexibility in adjusting production schedules; this rigidity posed risks when demand fluctuated or urgent orders arose, leading to delays (Chopra & Meindl, 2016). Additionally, Red Star’s financial instability became apparent when they failed to meet financial commitments, culminating in bankruptcy. This financial vulnerability indicated poor risk management and weak financial health, which could jeopardize supply continuity for Ashmark.

3. Key Issues in the Red Star-Ashmark Relationship and Corresponding Red Flags

One major issue was the lack of transparency regarding Red Star’s financial health. The red flag here was inconsistent financial disclosures and late payments, signaling potential insolvency. Second, Red Star’s limited capacity planning and lack of communication during capacity constraints were concerning. The red flag was unanticipated stockouts and production stoppages, which revealed poor communication channels and inadequate contingency planning. These issues underscored the importance of maintaining transparent supplier assessments and proactive risk management strategies.

4. Advantage or Disadvantage of Multiple Suppliers for Low Volume Parts

Utilizing multiple suppliers for low-volume parts offers the advantage of risk diversification; if one supplier faces issues, others can fulfill the demand, thereby reducing supply chain disruptions (Ivanov & Dolgui, 2020). Conversely, it introduces complexity in supplier coordination, quality management, and increased administrative costs, which could negate some benefits, especially when dealing with low-volume parts that may not justify extensive oversight.

5. Ashmark’s Immediate Action Post-Bankruptcy and Its Effectiveness

Immediately following Red Star’s bankruptcy, Ashmark sought alternative suppliers and accelerated existing supply chain relationships. This tactical response aimed to minimize production stoppages and quickly secure parts from other vendors. While effective in addressing immediate shortages, this approach often resulted in higher costs and increased logistical complexity. The effectiveness depended on the speed of sourcing and the quality assurance measures implemented to ensure continued product integrity.

6. Future Strategic Actions for Ashmark

Moving forward, Ashmark could establish a comprehensive supplier risk management program, including regular financial analysis, capacity planning reviews, and multi-sourcing strategies. Implementing robust supplier assessment protocols and developing contingency plans would enhance resilience against future disruptions. Additionally, integrating technology such as real-time supply chain visibility tools can offer early warning signals, enabling proactive management of potential risks (Büyüközkan & Karabulut, 2018).

References

  • Christopher, M. (2016). Logistics & Supply Chain Management. Pearson UK.
  • Harland, C., Zheng, J., Johnsen, T., & Lamming, R. (1999). An operational model for managing supplier relationships. European Journal of Purchasing & Supply Management, 5(2-3), 177-194.
  • Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.
  • Ivanov, D., & Dolgui, A. (2020). A digital supply chain twin for managing the order fulfillment process. Transportation Research Part E: Logistics and Transportation Review, 142, 102070.
  • Büyüközkan, G., & Karabulut, O. (2018). Digital supply chain management: Review, implications, and future research directions. International Journal of Production Research, 56(1-2), 1-16.

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