After reading Chapter 11 Supply Partnerships and and Supply Chain Power and discuss the Case #7, Butler System and how it relates to the chapter. 500 words.
Butler system is a manufacturing company that manufactures the control systems and power conditioning equipment. They are known as the world’s leading supplier of the computer support system, and they are the largest supplier of the precision air-conditioning and power protection systems. Recently, their sales are exceeding $1 billion. The primary component of their emergency power supply system is the HD-5 battery.
The Butler company vice president of operations is more concerned about the low HD-5 battery inverter. They have a 20-day supply of batteries. A 90-day supply is normal inventory level, but the company has not received the battery shipment in the two months. When the buyer discussed this problem with SDX then batter supplier decided to double the contract price and the current contract with butler is void and null.
The current problem faced by the Butler Company is the battery shortage problem. The supply of battery from the current vendor is a major concern for their company. The delivery of battery from the current supplier is not meeting the company targets. The main common concern for the company is on time delivery of battery from the current supplier. Another major concern of the company is the supplier flexibility. Due to this the contract rates from the current battery suppliers are revising quickly which also impact the company profits levels. The Butler company had a long association with the current battery supplier. So, they do not get major benefits regarding business.
Due to the above major concerns of the company, the operation head of the company needs to take some quick action which can improve their supply delivery of products. The first action which is needed to take is to manage their current needs of the business with the current battery vendors. The other action that the company needs to take is the purchasing departments or supply chain management to explore new battery supplier for the future management. They should use the two supplier strategy to avoid the issue that they faced in delivery of batter process, i.e., they receive the late battery due to which they face several losses. They should also open the point for future review and trace for completion. These actions are helpful in the current business need management and to improve the action for future easy support. It also helps in avoiding the issue which is occurred due to the current vendor supports.
For achieving the goals of a company and to make a company successful, it is essential to improve the supply chain power of the company so that they can deliver the right product to the right customer at a right time so that they can satisfy their customers and make their company better as compared to their competitors. The company should look to those type of supplier which can provide them better products that have high quality and deliver them products quickly when they required those products. The company should also look to some other alternative supplier who can deliver the products faster and in better quality.