Automotive Vs. Computers - Essay Example

of Learning: Automotive Vs. Computers There are numerous types of business and they all call for different supply chains. This mainly depends on a number of features such as the target market size, nature of the product, source of assembly or raw material among others. In order for one to get a better understanding of the various supply chains and feature causing the variance in the supply chain, this paper in going to evaluate two products in different industries. The subject industries are the automotive and the computer producers. In addition, to narrow these industries, he paper is going to focus on Toyota and Dell as the products of these industries. Toyota has in the past been depending on its o its major supplier in Japan. However, Toyota being the current leading automotive supplier of cars in the world embarked on a competitive strategy that involved the production of quality cars hence utilized a reliable approach. In addition, Toyota’s supply chain called for responsiveness and efficiency. Moreover, its supply chain necessitates decentralization therefore many production units in various locations all over the world. However, these decentralized units must also the interlinked. This ensures that information flows consecutively throughout all available units. In fact there are four key feature of Toyota’s supply chain. These features include, inventory, transportation, facility and information. Therefore, it is prudent to conclude that Toyota involves numerous production plants; a number of storage facilities, a well-defined transportation mechanism, and reliable information relaying procedures ( Dudovskiy). This chain ensures that the end consumer gets a quality product and on time regardless of their location since decentralization takes care of it. On the other hand, Dell relies on an exceptional supply chain whose strategy depends on information gathering from its large customer capacity. As such, Dell uses a direct- sale strategy and the information attained are passed on to both the sales and the procurement sections in addition to its external suppliers. The advantage of an information approach strategy is that it allows for timely supply of the product. More so Dell has identified two channels, through which information is acquired such as amongst the customers and the sales personnel’s, and equally, amidst the sales, procurement and suppliers departments. Hence, this approach has helps the company to sell its products in large quantities and with required quality since there is information flow (Gilmore). The automotive industry can be said to stick to its unique supply chain because of the nature of its product. Automotive is bulky, this makes expensive to assemble in a single location. Moreover, car models are rigid to change because there are a variety of models that a customer can chose from. More so, car parts are expensive to make hence changing any part will most likely result to recalling all previously produced vehicles. Therefore, an automotive industry remains competitive only if it produces different car model that suits the needs of its many customers. In addition, the quality, engine performance and fuel consumption are the factors that customers are after in any car mode. Therefore it is only through decentralization that an automotive producer can understand well the needs and requirements of the market. On the contrary, computer producers are better place to use an interactive supply chain approach because their products can be produced from a central location and easily transported to the consumers. Hence, such companies will invest more in both the sales and procurement teams to get the market requirements and they will deliver easily on such demands. Consequently, this is an industry that deals more with technology hence they are aware that technology is dynamic. When it comes to the product, the producer mainly evaluates the production cost. In this regards, automotive producers face very high production costs. They are therefore unable to prolong their supply chain because costs will trickle down to the consumer. Consequently, supplies are limited to the assemblers who my engage or contract wholesale suppliers who sells directly to the consumers. Further, the cause of this is nature of the product. Cars do not require inexperienced retailers who are not conversant with various engine specifications and performances. They require a sales team that has technical knowledge about specific models as these are the interests of customers. However, computers do not attract high production costs per unit; therefore, they can attract a longer supply chain. In addition there are very little technicalities involved and therefore this product can maintain an information based approach. Consequently, the longer the supply chain the more the information acquired since there is adequate staff to interact with the consumers. Indeed, there are factors that manufacture consider when setting up, their production plants. One such factor is the availability of raw material. However, in the automobile industry, availability of skilled workforce and close proximity to a big customer base are the key factors. This is the main reason many automobile producers avoid the third world countries. Third world countries purchase a very small fraction of the total produced vehicles. However, Europe, America and part of Asia provide a god market hence these are the locations that many automobile producers are located Toyota included. Likewise, as has been highlighted earlier, Computer companies falls categorically under the technology sector. This sector has only been embraced well in the first and second world countries. Equally, these industries require well educated and highly skilled workforces to develop quality and up to date equipment. Thus, they will locate themselves in locations that they will not have to import labor. Additionally, these industries will base their plant location in areas that cut their transportation costs that is near their chief consumers (Hines 120-150). To conclude, supply chains are very important to any producer because it defines their marketing strategies. Besides, it would be impossible to produce, transport and sell single handedly. Therefore, supply chains play a very crucial role enabling the consumer to purchase a product timely and with the same quality. Nevertheless, there is no standard supply chain because the moving goods require different handling mainly because they have different feature. Goods that are bulky, perishable or with high production costs require shorter supply chain. Works Cited Dudovskiy, John. "Supply chain management in Toyota Motor Corporation." 24 June 2012. Research Methodology : Necessary knowledge to conduct a business research. 21 April 2013 . Gilmore, Dan . "The Lessons from Dell's Supply Chain Transformation." 18 March 2011. Supply Chain Digest. 21 April 2013 . Hines, Tony . Supply Chain Strategies: Customer Driven and Customer Focused. New York: Routledge, 2012, Print. Read More