Supply chain in practice | supply chain management

This is a fictional case study and the company does not exist

Zeta Spin – Social media explosion 

Zeta Spin is a family run business operating in the Stuttgart region for over ten years, developing electronic educational learning tools for junior children. The business is small-scale using local manufacturing companies and typically products been assembled in an ad-hoc manner to meet demand. The company has been selling it’s product mainly in Germany, via direct sales and trade shows. Family members have hand delivered the products to customers, as past experience of logistics companies has caused products to be lost, damaged and late.

A new product for helping children learning at home, has caused a considerable amount of interest from schools and parents around the world. Even though the product is in early concept phase, it was demonstrated on a YouTube channel by a German social media star. The company has received a high volume of sales requests from around the world and several multinational companies are willing to invest in the product to sell it globally.

The company board members are overwhelmed with the potential and opportunities for the product and potential growth of the company. History of the company is of micro manufacturing and poor experience of logistics and supply chain management, so they have decided to bring on a supply chain consultant to define a strategy to launch this product globally. To this end, they have provided the following description of the project:

Zeta Spin has the potential to move our family based brand into a new global footprint, the core knowledge and experience of the company is designing and developing electronic learning tools. To move our product forward we need to fully consider and understand all the potential options i.e. manufacture, logistics and distribution of our products globally. As a company we maintain the highest standards of quality and customer satisfaction, and this remains core to our brand.

A supply chain strategy must be defined that clearly states how Zeta Spin as a company must be organized to support the global opportunities for their new products. The board are keen to understand any potential organizational structure and departments, moving from micro manufacturing to being a global supplier.

Our products will be based on the use of recycled plastics and components (were possible) and Zeta Spin drive to use a complete net-zero supply chain. The net-zero may not be possible in the short term, but a net-zero supply chain strategy must be provided as a long term goal. 

Zeta Spin’s company policy is all products carry a three year fully warranty, which means the customers can return the product any time for a replacement or refund if faulty. Currently as the company operates manly within Germany, the board would like to understand how they can achieve this on a global scale.

Due to the global surge in demand for our product, we are starting an on-line sales channel via our company web site and are in negotiation with resellers in England, Spain, North America, Canada and Australia. Our sales team predication is high demand in North America and Australia, with potential volumes at or above 100k products per year for each region.

Manufacturing of the product is under investigation and Zeta Spin CTO is currently reviewing the following options:

  • Germany
  • China
  • South Korea
  • India

The CEO would like to understand the supply chain implications of manufacturing in one part of the global and shipping to different countries to support the end customers. Can the company provide one strategy for all potential markets or should they look at multiple manufacturing locations?

The board are keen to understand the advantages and disadvantage of out-sourcing the complete supply chain and how this could benefit the overall strategy for the company. As the company expands its global sales, will out-sourcing help or cause more problems for the manufacturing, resellers and end customers?

With the introduction of on-line sales via the company web site and potential resellers in different countries, the board would like to understand how they can manage and control the overall manufacturing and supply chain logistics. They product is highly complex and involves multiple components from various suppliers, each with different lead time and volumes (see appendix A)

External investors have enquired to establish a finical stake of the company and help to raise capital to support expansion of this new product line. Feedback from external audit review is the Zeta Spin does not use any modem technology to support any linkage from sales to manufacturing. This is seen as a very high risk by any external investor and the board would like to investigate current and future technology products to aid information share across it’s complete supply chain. 

The report will be presented to the board and it must clearly state a framework to establish a suitable supply chain strategy including the above content.  

Assignment structure 

Please see Canvas for details of the assignment structure and marking criteria.

Appendix A – BOM

   

Part

Quantity

Supplier

Notes

 

Main PCB

1

High Tech PCB Koln

 

Display PCB Low

1

High Tech PCB Koln

Used for the low variant

 

Display PCB High

1

High Tech PCB Koln

Used for the high variant

 

Motor PCB

4

High Tech PCB Koln

 

Plastic housing A1

3

Inject PLC (Germany)

 

Plastic housing A2

9

Inject PLC (Germany)

 

Plastic housing A3

1

Inject PLC (Germany)

 

Plastic housing A4

10

Inject PLC (Germany)

 

Plastic housing A5

2

Inject PLC (Germany)

 

Plastic housing A6

3

Inject PLC (Germany)

 

Wiring harness L1

2

EDS tech (Stuttgart)

Minimum order is 500 parts

 

Wiring harness L2a

12

EDS tech (Stuttgart)

Minimum order is 500 parts

 

Wiring harness L2b

8

EDS tech (Stuttgart)

Minimum order is 500 parts

 

Wiring harness L3

1

EDS tech (Stuttgart)

Minimum order is 500 parts

 

Battery tray

1

eBay

Unknown supplier

 

Main bracket LHD

1

Metal direct (Madrid)

Lead time 6 weeks

 

Main bracket RHD

1

Metal direct (Madrid)

Lead time 6 weeks

 

Low fixing bracket

4

Metal direct (Madrid)

Lead time 6 weeks

 

Upper fixing bracket

2

Metal direct (Madrid)

Lead time 6 weeks

 

M3 Screws

12

Ebay

Source from any supplier

 

M2 Screws

62

Ebay

Source from any supplier

 

M5 Screws

28

Ebay

Source from any supplier

 

Package

1

Plastic direct (Koln)

 

Instruction manual

1

Internal

Only printed in German

 

USB programming cable

1

eBay

Unknown supplier

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