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Solectron Electronics & Others: Failures in Supply Chain Management

Solectron Electronics & Others: Failures in Supply Chain Management. Chapter 4 Case 3. Piling up of Inventory. Just-in-time delivery and e-business technology in many cases has not reduced the pile-up of inventory.

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Solectron Electronics & Others: Failures in Supply Chain Management

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  1. Solectron Electronics & Others: Failures in Supply Chain Management Chapter 4 Case 3

  2. Piling up of Inventory • Just-in-time delivery and e-business technology in many cases has not reduced the pile-up of inventory. • Who takes responsibility/ownership for the massive buildup of inventories (seller or buyer).

  3. Reasons for Inventory Build-Up • Flawed flows of information. • Software tools that are too difficult and costly to use. • Confused lines of responsibility • Problems to integrate the plethora of software used throughout the supply chain.

  4. Supply Chain Management Theory • Technology improvements in inventory management systems would prompt increased efficiency and allow managers to tailor output to exactly match demand. • Thought that technology improvements would increase working capital, boost margins, and help companies smooth out the ups and downs in the business cycle.

  5. Lesson to be Learned • Software applications cannot compensate for old-fashioned business judgment. • Technology cannot synchronize every party in the product chain by providing a transparent view of supply and demand. • Sloppy management and forecasts are a major problem.

  6. Conclusion: • Efficient supply chains cannot cure unreal demand forecasts. • People are still the driving force in an organization.

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