Avion Case Study

AVION, Inc.

Answers:

1. The parts of supply chain which are closely involved in this situation are

Purchasers and

Suppliers

There was a miscommunication between the purchasers and suppliers. The purchasing company (Avion Inc.) should have told the supplier company (Foster Technology) that there is an additional requirement of goods. Is it possible to supply additional goods? Or else the purchasing company would have found an alternate solution like bringing in an additional supplier.

The forecasting department is also responsible for this cause. If they had already forecasted that there would be a requirement then an alternate solution could have been found.

In order to maintain a smooth flow of material each and every department in the supply chain namely Transportation (inbound and outbound), procurement, Inventory management, operations, marketing, forecasting team & sales team should have a nice communication between them. A periodic analysis on each and every department is also required.

2. The initial problem was that the qualities of goods delivered were low and the goods delivered were late. This made the procurement managers to blame that the supplier company is showing a poor performance.

But, the actual problem was that the original procurement order was different from the actual order i.e. the original order was 2000 units per month, but the actual order was increased to 4000 units per month. The company had production unit, which can produce only 3500 units per month in maximum. So they were not able to deliver goods on time.

3. It is not easy to switch to a new supplier because if there is a requirement to switch for a new supplier then the company should arrange a meeting with new suppliers and get know more details about the company. Once the new supplier is decided then a team of members is assigned to audit the company so that the quality, process and quantity can be analyzed. It is bit-complicated process, it takes a...