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Value Chain Strategies Case Analysis

1379 words - 6 pages

Global Value Chain Logistics Case Analysis: Case 8-3: ISOLXXXXXXXXXXISCOM/383August 11, 2014Bruce BettsGlobal Value Chain Logistics Case Analysis: Case 8-3: ISOLThe intent of this paper is to identify, analyze, explain, and recommend the most appropriate solutions to the issues raised in the Case 8-3: ISOL+ from the perspective of global value chain strategies.ISOL+ Group is an organization that produce and sell a number of items, such as "building industry, tough boards blanket padding, and sheathing for pipes" (Burt, Dobler, & Starling, ...view middle of the document...

Regrettably, these 2 modifications will considerably enhance the logistics expenses for the organization. As of at this time, the minimum order possible is 8 pallets. But, research and predictions demonstrate that during the coming next 5 years, roughly 47% of sales in France only will be of 4 and 6 pallet sizes (Burt, Dobler, & Starling, 2003). For that reason, for the ISOL+ Group to increase its earnings and lower its logistics expenses it must reduce the minimum order pallets to 4 or 6 if more research points to it. In addition to that, the delivery time for the ISOL+ items must be reduced, particularly to just 2 days (48 hours). The production to order must be taken off the company's logistics, however subsequently also enhancing stock expenses because more items would be kept at the factory at any given moment in time. Therefore, as previously discussed the general logistics expenses will go up and is the opposite of the restriction on enhancing the logistics expenses. For that reason, these two modifications must be taken into account although not applied.The logistics goal and objective for any organization, especially ISOL+ is to boost the manufacturing efficiency and speed up the production procedures. This objective can be achieved by setting up a manufacturing unit on a production line within France as previously referred to. This factory will not solely boost the production efficiency and speed up the production process, but will broaden the reach of the ISOL+ to its markets. But, the 2nd most significant objective of logistics is to have the minimum possible logistics expenses, but nonetheless increase earnings and output the best product sales. By using the 2 modifications talked about earlier, the earnings may possibly be enhanced however the logistics expenses will go up too.One of the new modifications will reduce the minimum order volume to 4 or 6 pallets from its existing 8 pallets. Research shows that 98% of the buyers buy the 8 pallets combination, however in the coming 5 years this ratio will reduce. When the organization begins to provide smaller packet packages, organizations may wish to buy the smaller order sizes and this will satisfy the tendencies of the coming market. The 2nd modification is to decrease the delivery period to 2 days (48 hours). Presently, the delivery process requires a massive 7 to 14 days (one to two weeks). Decreasing delivery period has a benefit because it offers customer value, but regrettably this will significantly enhance the idle stock of finished products waiting at ISOL+ sites. This will require ISOL+ to establish distribution centers or retailers for their items. The extra expenses of having distribution centers as well as idle finished product stock will eventually increase logistics expenses. As of at this time, these 2 modifications are not appropriate for Mr. Dupont's purposes.When the new delivery change was put into practice, the present transportation planning would prove...

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