CONFIDENTIAL BA/DEC 2022/OPM560

UNIVERSITI TEKNOLOGI MARA

TEST

COURSE : SUPPLY CHAIN LOGISTICS MANAGEMENT

COURSE CODE : OPM560
EXAMINATION : DECEMBER 2022
TIME : 3 HOURS

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of two (2) case studies.

2. Answer ALL questions in the Answer Booklet. Start each answer on a new
page.

3. Please save your answer as a pdf file using the following format
“Name_Student ID_Group” and upload the file in the “20224 OPM560
KBA2444A Oct 22 - Feb 23” folder in the MS TEAMS.

4. Fill up the Final Assessment/Test Declaration Form and upload it in the MS

TEAMS.

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CASE STUDY 1

NAVIGATING THE CURRENTS IN THE SEMICONDUCTOR SUPPLY CHAINS

The global semiconductor chip shortage has come into sharp focus in the past two years.
Industry megatrends such as remote working, and development in the Internet of Things
(IoT) and artificial intelligence (AI) technologies are creating critical demand for leading-
edge semiconductor chips. On the other hand, supply chain shocks from the pandemic
and unprecedented demand have led to shortages across the world, and in several key
industries. Combining these factors, tensions in the Taiwan Straits and the ongoing chip
war between US and China are worsening the current chip shortage. Even with the worst
of the shortage for some chips coming close last this year, some industries will remain
short of chips until 2024 and it is critical that firms act quickly to mitigate this shortage.
With about 75% of semiconductor manufacturing capacity and supply of key materials
concentrated in China and East Asia, it has become clear that geopolitics in Asia have a
direct impact on the global semi-conductor supply chain. The effects can be disastrous,
with the potential to send shockwaves through more than 200 downstream sectors
including electric vehicles, 5G technologies, and data processing equipment.

Southeast Asia is uniquely positioned as a neutral region with a well-established and

diverse semiconductor ecosystem, as well as being deeply integrated within global value
chains. Multinational corporations are waking up to their competitive advantages as part
of the regional semiconductor supply chain. The Philippines, Malaysia, Thailand,
Vietnam, and Indonesia have proven to have proficient labour force and talent base to
provide support for the backend manufacturing of complex chips. Future-proofing the
semiconductor supply chain will require firms to take a long-term view of disruption and
instability. Efforts to implement logistics improvements and build long-term relationships
with trusted local and regional distributors as well as developing tech talents are crucial
to strengthening supply chain resilience in Asia. This is especially critical since it is
forecasted that by 2030, 62% of the world’s semiconductor market share will come from
the Asia pacific, surpassing that of the US and Europe. Increasing demands from wireless
communications, the IoT, electric automotive technology, cloud computing, and artificial
intelligence/deep learning are the very innovations that will shape industrial
transformation and drive future economic growth.

Source: https://techwireasia.com/2022/10/navigating-the-currents-in-semiconductor-supply-
chains/

Questions

(a) Explain two (2) reasons for the global semiconductor chip shortage based on the
case above.
(10 marks)

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 CONFIDENTIAL BA/DEC 2022/OPM560

(b) Discuss two (2) competitive advantages of the Southeast Asia in the semiconductor
supply chain.

(10 marks)

(c) Explain three (3) ways to strengthen supply chain resilience in Asia.

(15 marks)

(d) Time compression has become a critical management issue due to the globalisation
of industry and supply chains. Discuss three (3) reasons why ‘time-based
competition’ is important.
(15 marks)

CASE STUDY 2

TRANSFORMING THE AUTOMOTIVE SUPPLY CHAIN FOR THE 21ST CENTURY

When the COVID-19 pandemic hit in early 2020, manufacturers of automobiles,

electronics, and other tech product expected sales to decrease and so they reduced
semiconductor orders. Two years later, the industry is still reeling from that decision.
Reducing semiconductor orders resulted in a global shortage of chips that are used to
power everything from artificial intelligence to medical equipment, causing some
manufacturers to have to pause production. Now companies are seeking new ways of
managing their supply chains that offer greater flexibility and transparency. In the
automotive sector, some companies including Nissan and Toyota are increasing chip
inventory levels, while others including Volkswagen and Tesla are trying to secure their
own supplies of rare materials. But technologies, including Internet of Things (IoT), 5G,
and business applications are also offering companies new ways to avoid disruption and
respond to unforeseen circumstances. Automotive manufacturers are moving away from
internal combustion engines and large-scale manufacturing to zero-emission, carbon-
neutral electric or autonomous vehicles with a focus on electric or hydrogen as energy
sources. In recent months, Nissan has unveiled its “Intelligent Factory” initiative in its
Tochigi plant in the north of Tokyo, which employs artificial intelligence (AI), IoT, and
robotics to manufacture the next-generation vehicles in a zero-emission environment.

Ever more connected consumers, factories, automobiles, and supply chains generate a
wealth of data. Gathering and analysing this data can help manufacturers to reduce

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business risk and become more agile by identifying potential supply issues, increasing
efficiencies, and giving customers more accurate timelines. Predictive analytics, for
example, can help manufacturers answer the “What if?” questions and proactively reduce
the impact of potential supply chain disruptions. Digital traceability enables companies to
follow products and goods as they move along the value chain, providing them with exact
information on the source of inputs, supplier sourcing practices, and conversion
processes. “On the demand side, customers expect real-time visibility of when an
automobile will be delivered to them, and the status of service, spare parts, and
accessories,” says Mohammed Rafee Tarafdar, Senior Vice President (SVP) and Chief
Technology Officer (CTO), Infosys. Paired with cloud services, the right business
applications can give organizations greater access to cutting-edge technologies, which
can then be managed at scale and can address the need for visibility, analytics, and
cybersecurity. To drive production efficiency and accelerate time-to-market, attaining
optimal supply chain visibility is key. And automakers may need to adopt and adapt to
new technologies in cloud, AI, data analytics, machine learning, and IoT to ensure that
the new ecosystem of their suppliers will be transparent, agile, and resilient to global
volatilities.

Source: https://www.technologyreview.com/2022/05/12/1052201/transforming-the-automotive-
supply-chain-for-the-21st-century/
Questions

(a) Specify two (2) actions taken by automotive manufacturers in managing their supply
chains to be more flexible and transparent.
(10 marks)

(b) Describe two (2) advantages of technology-based solutions to companies in this

sector.
(10 marks)

(c) Explain three (3) characteristics of an agile supply chain.

(15 marks)

(d) Discuss three (3) ways how real-time visibility drives supply chain responsiveness.

(15 marks)

END OF QUESTION PAPER

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