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BADM378 | Logistics and Supply Chain Management

You are consulting a company that is looking to launch a new line of televisions. They are in the beginning stages of identifying their supply chain which will need to account for the production of parts and assembly of the televisions to final delivery to the customer. The primary suppliers are located in Xian, China. The televisions are going to be sold through retailers throughout the US. The company does have its own distribution network, but is willing to consider other options.

Part 1. How would you advise them on sourcing (including INCOTERMS), transportation, customs, and distribution?

Part 2. Explain your recommended strategy, the advantages and disadvantages for each topic, and the plans for measuring the supply chain.

Answer:

Part 1

As a consultant I recommend the company to start by developing a supply chain strategy to enable the company achieve its commercial goals as well as support the overall strategy of the company. The comp


any can do this by choosing a competitive and safe incoterm. This is achievable if the primary suppliers in Xian China consider logistic factors such as cost, insurance and freight for shipping the televisions to the retailers in the United States and a shipping company with good freight rate. Suppliers should also be aware of the delivered duty paid to be in control of everything happening in the United States as well as contemplate on other Incoterms such as freight on board and ex-works.

Transport is an important factor contributing to the success of any business (Christopher, 2016)). As a consultant, I would advise the company to look for transportation that is responsive and economical in supplying the televisions to the United States. The company should make sure that all exports and imports comply with laws and regulations of both countries. I recommend the company to balance locations and numbers of distribution channels needed and also creating a good brand image.

Part 2

By choosing a competitive and safe incoterm will increase perception of the shipping liability to be supplied to the United States. This will encourage comparison of shipping companies to get good rates and also decide transit times that suit the company. Possible complexities that happen such as delays at custom or additional costs can be managed by looking at delivered duty paid (Buurman, 2012). It is also important to consider freight when choosing the incoterm as it may lead to a change in prices especially if the shipping costs rise. I recommend the use of a transport that is responsive as it gives an end to end network visibility. The use of an economical transport system such as proper warehousing for the televisions, this will prevent televisions from getting damaged.

Efficient flow of the televisions to the United States will be achieved by complying to customs. Incoterms expose buyers to inflated costs for freight and insurance costs. The company can also measure its success by looking into models and frameworks for logistics, operation and its supply chains such as SCOR model and balanced scorecard.

References

Buurman, J. (2002). Supply chain logistics management. McGraw-Hill.

Christopher, M. (2016). Logistics & supply chain management. Pearson UK.

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