CASE DESCRIPTION:-

Crazy Teddy Electronics is an MNC that is involved in the manufacture and distribution of Fast Moving Electronic Goods (FMEG). The company has suffered from supply chain issues for many years resulting in higher costs, delayed delivery, loss of equipment, and customer dissatisfaction. You, as a Management Consultant, have been tasked with optimizing the company’s supply chains and improving its business.

 

ISSUES:-

The FMEG market is very competitive with several large players competing against Crazy Teddy. Crazy Teddy sources its raw materials from offshore suppliers, has multiple manufacturing plants across the globe, and distributes its products to its clients all over the world. However, the company is currently facing the following difficulties:

  • Ineffective Inventory Management: The company has excess and outdated inventory which increases its carrying costs and reduces working capital availability. 
  • Production Delays: Frequent production delays have hampered the company's ability to meet deadlines, resulting in missed sales opportunities and loss of clientele.
  • Transportation Costs: Incorrect transportation routes and reliance on inefficient carriers have resulted in higher transportation costs.
  • Lack of Visibility: Its lack of end-to-end supply chain visibility has made the company prone to uncertainties, making its business vulnerable to sudden shocks.

How will you tackle these issues?

 

SOLUTION:-

  • Inventory Optimisation: Reduce excess inventory by using demand forecasting practices and inventory planning software. This will reduce the carrying costs, improve the availability of working capital, and prevent obsolescence. To reduce product variants, develop a robust SKU rationalization strategy.
  • Improving Manufacturing Processes: Use lean manufacturing techniques to streamline production processes, reduce lead times, and increase production efficiency. This will help the company prevent the delays it faces and meet the deadlines clients expect.
  • Transportation Efficiency: Examine transportation routes and providers thoroughly to discover the most cost-effective options. Implementing a Transportation Management System (TMS) can also help the company tackle its logistics issues.
  • Supply Chain Visibility: Invest in a powerful supply chain management system (SCMS) that provides end-to-end visibility and real-time inventory and order status tracking. This would help the company be more reactive to surprises.

 

IMPLEMENTATION PLAN:-

 

  • Form a multi-functional supply chain optimization team.
  • Invest in the required technology and software.
  • Train employees on new processes and systems.
  • Pilot the modifications in a small area before implementing them generally.
  • Monitor key performance indicators (KPIs) on a regular basis and alter strategy whenever needed.

CONCLUSION:-

The following results can be observed after the successful implementation of the steps proposed above:-

  • Decline in inventory carrying costs by 10-20%
  • Fall in manufacturing lead times by 25-30%.
  • Transportation cost savings of up to 15%.
  • Shorter response time to interruptions due to greater supply chain visibility.
  • Better quality control and timely deliveries due to improved relations with suppliers.

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[Disclaimer: This case study is entirely hypothetical and unrelated to real-world situations. It's designed for educational purposes to illustrate theoretical concepts and potential scenarios within a given context. Any similarities to actual events or individuals are purely coincidental.]