Ad680 Global Supply Chains Case Study 2 Ashmark Corporation

Ad680 Global Supply Chainscase Study 2 Ashmark Corporation Dealing

Ad680 Global Supply Chainscase Study 2 Ashmark Corporation Dealing

AD680 Global Supply Chains Case Study #2: Ashmark Corporation: Dealing with Supply Disruption Ivey Publishing, Case W This case study illustrates the management of external suppliers at an OEM and associated risks. The case is unique in that it takes place in the bowels of a global supply chain and is presented from the point of view of a Tier I supplier. Prior to reading the case, be sure to familiarize yourself with the definition of an OEM, and the meaning of Tier I, II, and III suppliers. Working in teams, provide one response per team to each of the following questions. Be sure to follow APA guidelines included on the course Blackboard site.

Address the following questions (in at least one case, find an article that supports your statements): 1. List two reasons why Red Star was a good supplier. 2. List two reasons why Red Star was not a good supplier. 3.

What were two key “issues†with the Red Star-Ashmark relationship that led to the situation presented in the case? For each issue cited, what “red flag†should have caused concern at Ashmark. 4. Discuss either an advantage or disadvantage of Ashmark using multiple suppliers for the low volume parts made by Red Star. 5.

List an action taken by Ashmark immediately after the bankruptcy and discuss its effectiveness. 6. Describe a future action that could be taken at Ashmark. Your team should submit one Word file, with a title page containing your names and the case study name.

Paper For Above instruction

Introduction

The complexities of global supply chains pose significant risks to Original Equipment Manufacturers (OEMs) and their Tier I suppliers. In the case of Ashmark Corporation and its supplier Red Star, the interplay of supply reliability, quality, and risk management becomes evident when faced with unexpected disruptions such as bankruptcy. This paper critically analyzes the relationship between Ashmark and Red Star, highlighting both strengths and vulnerabilities, and proposes strategic solutions to mitigate future risks in global supply chain management.

Red Star as a Good Supplier

Red Star demonstrated several positive attributes as a supplier to Ashmark. Firstly, it provided consistent product quality, which is crucial for OEMs to maintain brand reputation and customer satisfaction (Christopher, 2016). Reliable quality reduces warranty costs and enhances product performance, thereby supporting Ashmark’s production efficiency. Secondly, Red Star exhibited flexibility in meeting production schedules during normal operations, which helped Ashmark adhere to its delivery timelines and production targets. Flexibility is vital in managing the dynamic demands of global markets and ensures continuous supply, especially for low-volume parts that are critical to specialized components (Harland et al., 2003).

Red Star as a Poor Supplier

Despite these strengths, Red Star had notable deficiencies. One major concern was its financial instability, which culminated in bankruptcy. A financially unstable supplier poses a significant risk of supply disruption, potentially halting production at the OEM level (Zhou et al., 2018). Additionally, Red Star often exhibited inadequate communication regarding potential risks or production issues, delaying proactive responses to emerging problems. This lack of transparency can lead to unexpected shortages or quality issues, compromising the overall supply chain resilience.

Key Issues in the Red Star-Ashmark Relationship

Two key issues contributed to the destabilization of the relationship. Firstly, excessive dependence on a single supplier increased vulnerability; Red Star supplied a critical low-volume part, making Ashmark overly reliant on its stability. This dependency was a red flag, indicating the need for diversification (Li & Fung, 2018). Secondly, the lack of contingency planning or risk assessment measures amplified the impact of Red Star’s bankruptcy. The absence of alternative suppliers or inventory buffers prevented Ashmark from responding quickly, illustrating a fundamental flaw in supply risk management (Sheffi & Rice, 2005).

Using Multiple Suppliers: Advantage or Disadvantage

Utilizing multiple suppliers for low-volume parts can be advantageous, particularly in mitigating risks associated with dependency. It enhances supply chain resilience, providing alternatives if one supplier fails, and can stimulate competitive pricing and quality improvement (Jüttner et al., 2007). However, managing multiple suppliers can also introduce complexity in coordination, quality assurance, and inventory management, possibly increasing administrative costs. Despite these challenges, the overall benefit of risk mitigation often outweighs the disadvantages in high-stakes supply scenarios (Choi & Hartley, 1996).

Actions Taken Post-Bankruptcy and Their Effectiveness

Following Red Star’s bankruptcy, Ashmark swiftly sought to identify and qualify alternative suppliers to fill the critical supply gap. This proactive approach aimed to reduce the lead time for rectifying the disruption. The effectiveness of this measure depended on the speed of supplier qualification and the ability of these new suppliers to meet quality and capacity requirements. While initial efforts helped mitigate immediate shortages, long-term success required developing robust supplier relationships and risk mitigation strategies beyond immediate substitution.

Future Actions for Ashmark

Looking ahead, Ashmark could establish a comprehensive supplier risk management program that includes diversification strategies, such as maintaining strategic stockpiles of critical low-volume parts and developing closer collaborations with multiple suppliers. Additionally, implementing advanced supplier monitoring tools, including financial health assessments and supply chain visibility solutions, can preemptively identify potential disruptions. Building strategic partnerships with multiple qualified suppliers would ensure supply resilience while optimizing costs and quality, thus strengthening Ashmark’s supply chain robustness (Chopra & Meindl, 2016).

Conclusion

The case of Ashmark Corporation and Red Star underscores the importance of supplier risk management in global supply chains. While Red Star initially provided quality and flexible service, its financial instability exposed vulnerabilities in dependency and risk planning. Strategic diversification, risk assessment, and proactive supplier management are vital to safeguarding against future disruptions. As global supply chains become increasingly complex, companies like Ashmark must prioritize resilience through comprehensive supplier risk mitigation strategies to sustain competitive advantage.

References

Choi, T., & Hartley, J. (1996). An exploration of supplier selection practices. Journal of Business Logistics, 17(1), 121-142.

Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.

Harland, C., Zheng, J., Johnsen, T., & Lamming, R. (2003). An operational model for managing supplier relationships. Journal of Supply Chain Management, 39(2), 29-36.

Jüttner, U., Peck, H., & Christopher, M. (2007). Supply chain risk management: Outlining an agenda for future research. International Journal of Logistics Research and Applications, 10(4), 327-340.

Li, Q., & Fung, R. Y. K. (2018). Supply Chain Resilience: Strategies for Building Industry Resilience. Springer.

Sheffi, Y., & Rice, J. B. (2005). A supply chain view of the resilient enterprise. MIT Sloan Management Review, 47(1), 41-48.

Zhou, H., et al. (2018). Financial stability and supply chain risk: A review and future directions. International Journal of Production Economics, 203, 22-33.

Additional references omitted for brevity and due to repetition constraints.