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Tarun Talwar

Cohort Gamma

Q1. Consider the supply chain involved when a customer purchases a book at a
bookstore. Identify the cycles in this supply chain and the location of the push/pull
boundary.

When a customer purchases a book from the book store, a complete supply chain
cycle which involves procurement, manufacturing, distribution, replenishment and
customer delivery takes place. The different supply chain cycles are quite
separated in this case because each cycle occurs at the interface between
two successive stages of the supply chain. The five supply chain stages
reflect the work and involvement of five individual parties however the
bookstore accounts for only the retailer stage because it serves no other
functions within the supply chain. Pull processes mean a process is initiated
in response to a customer order. Push processes, on the other hand, mean
process is initiated in anticipation of customer orders. The push/pull
boundary in any supply chain separates push processes from pull processes.
The push/pull boundary for the bookstore occurs between the customer order
cycle and the procurement, manufacturing, and replenishment cycles. The
customer order cycle is a pull process because all processes the customer
order cycle are executed only after the customer arrives. The remaining
processes all take place prior to the customer arriving so that all products are
already in inventory built up in anticipation of customer orders.

Procurement,Manufacturingand Customer
Customer
Replenishment Cycles Order
Order Cycles
Arrives

Push Process Pull Process

Procurement Manufacturing Replenishment Customer


Cycle Cycle Cycle Order Cycle

Supplier Publisher/ Distributor Bookstore/ Customer


Manufacturer Retailer
Tarun Talwar
Cohort Gamma

Q2. Give arguments to support the statement that Wal-Mart has achieved very
good strategic fit between its competitive and supply chain strategies.

Wal-Mart Stores, Inc. is an American public corporation that runs a chain of large,
discount department stores. It is the world's largest public corporation by revenue
and is founded by Sam Walton in 1962. It is the largest private employer in the
world and the fourth largest utility or commercial employer. Wal-Mart works on the
principle of maximization of value through innovation. As per Wal-Mart the key
competitive strategies are information sharing, faster replenishment, availability of
various products at low price, prodigious infrastructure and service differentiation
whereas the supply chain strategies of Wal-Mart include customer satisfaction,
coordination between supply chain stages,avavilability of various products at low
price, value generation through marketing and sales, services ,lower inventory
levels and facility location. We can see that many of the chief competitive strategies
and supply chain strategies actually overlap. Hence Wal-Mart has achieved good
strategic fit between the two.

Customer
Order Activities

Procurement,distribution & Replenishment Customer Order Cycle


cycle

Push Processes Pull Processes

Distributionand
Procurement Replenishment Customer
manufacturing
cycle Cycle Purchase Cycle
cycle

Supplier Manufacturer Wal-Mart Customer


and Distributor
Tarun Talwar
Cohort Gamma

Q3. How can the full set of logistical and cross-functional drivers be used to create
strategic fit for a PC manufacturer targeting both time-sensitive and price –
conscious customers?

We know that the major logistical and cross-functional drivers to be used for any
strategic fit are facilities, inventories, transportation, information, sourcing and
pricing. For a PC manufacturer the appropriate strategy for targeting both time-
sensitive and price-conscious customers would include the following factors:

1. Facilities: are the major indicators of supply chain performance in terms of


responsiveness and efficiency. For a computer manufacturer it would be wise
to locate the facility in a centralized location and having a very good
distribution network.
2. Inventory: The firm should keep High responsiveness by keeping the
inventory close to the customer. This will help in attracting the Time-sensitive
customers and would come as value adds for the price conscious customer.
3. Transportation: it has impact on both responsiveness and efficiency. The firm
should use a transport that caters to both the segments of customers that
the firm is targeting.
4. Information: The firm should make use of the latest technology and
information present to reduce the cost and improve the responsiveness
within a supply chain.
5. Sourcing: The firm should outsource few of the manufacturing processes. It
will increase the efficiency and the company can achieve significant
economies of scale.
6. Pricing: Differential pricing strategies should be used for the two types of
customers. The Time sensitive customers should be charged more for the
extra value being provided.