Kuiper Leda Problem Solution

Kuiper Leda Problem Definition Paper

Supply chain management is "the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible" (Wikipedia, 2006). Thousands of activities are performed and coordinated within an organization, and every company has at least one supply chain relationship with another organization. Research has led to the conclusion that the structure of activities within and between companies is a critical cornerstone of creating unique and superior supply chain performance.

In today's constantly changing business world, organizations can no longer compete individually. They must rely on effective supply chains and networks to successfully compete in the global market (Wikipedia, 2006). Successful supply chain management requires integrating business processes with key members of the supply chain, because valuable resources are wasted when supply chains are not effectively managed.

This paper will discuss the impact of supply chain management at Kuiper Leda, Inc. It will address the company's issues and opportunities as well as develop a problem statement which realizes its most significant opportunities. It will discuss the company's desired end-state and list its end-state goals. It will then employ a team-based approach to effectively conduct generic benchmarking research and recognize potential solutions to Kuiper Leda's problem statement and end-state goals. And, it will assess the risk of the discovered alternative solutions, leading to an optimal solution. Tables and charts will be included, where appropriate.

Situation Background

Kuiper Leda, Inc (KLI) is an electronic components manufacturer from the Republic of Novamia, specializing in the production of Electronic Control Units (ECUs) and sensors for the automotive industry. After 10 years of business and an initial investment of $100 million, KLI is now a $400 million revenue company. Within the last 6 months, it has started a new product line: Radio Frequency Identification Devices (RFIDs).

Issue Identification

With KLI's competitive advantage being its strong technology base, other companies have begun to take notice. Midland Motors, an American Original Equipment Manufacturer (OEM), has placed an annual order of 250,000 ECUs and 35,000 RFID tags to facilitate inventory control in their factory. Receiving such a large and unexpected order has created a few issues for KLI.

As the order is large and urgent, KLI's existing capacity is insufficient. The company must find a way to meet the sudden increase in requirements and decide on manufacturing both products in-house or outsource any products completely or partially. KLI must also develop a new Inventory Management Plan to deal with excess stock and production as well as develop an alternate distribution strategy to handle any fluctuating demand patterns. Another issue KLI faces is streamlining its supplies - possibly dropping some suppliers. All of the issues faced by Kuiper Leda are summarized in Table 1.

Opportunity Identification

Though many challenges lay ahead for Kuiper Leda, so too do many opportunities. With a large order, KLI has the opportunity to prove its quality and show its delivery responsiveness. Given such an opportunity to do business with a large auto major increases KLI's potential to expand its business and customer base as well as increase its market share and profitability. By responding with a strong inventory management plan, KLI has the opportunity to save considerably on its inventory carrying costs. Reducing costs and increasing margins are all within reach with the right strategic plan. Opportunities are further summarized in Table 1.

Stakeholder Perspectives/Ethical Dilemmas

In Table 2, the ethical dilemmas faced by Kuiper Leda's situation can be found. The major players in KLI's quest to optimize inventory are management, the employees, the suppliers, the customers, and the shareholders.

Problem Definition

Based on the challenges and opportunities for Kuiper Leda, the following problem statement can be made:

Kuiper Leda, Inc. can achieve business profitability by making appropriate adjustments and careful management decisions in its supply chain management to implement a strategic plan to optimize inventory while remaining competitive.

End-State Goals

By realizing the opportunities and addressing the challenges, KLI's desired end-state would be to obtain technology leadership in critical areas of electronic components manufacturing and to obtain a wider market presence. Providing qualitative research and a complete analysis of the impact of its supply chain management are vital to the success of KLI. Goals that can measure whether or not this desired end-state has been achieved are:

1. Increase market share and profitability - Meet or exceed financial targets.

2. Strong Inventory Management Plan - Reduce carrying costs and meet demand efficiently.

3. Globalization - Expand the business. Access new customer bases.

4. Retain key talent - Employees and suppliers. Increase technical sophistication.

5. Alignment of stakeholders - Have each business partner's interests in mind when implementing any strategic plan.

Alternative Solutions and Benchmarking Validation

Benchmarking is a powerful management tool. It opens organizations to new methods, ideas and tools to improve their effectiveness. With benchmarking, companies can model their solution based on what their competitors or even other companies outside the industry have done in a similar situation.

Inventory Management

Inventory Management and Inventory Control must be designed to meet the demands of the marketplace and support the company's strategic plan. The many changes in market demand, new opportunities due to worldwide marketing, global sourcing of materials, and new manufacturing technology, means many companies need to change their Inventory Management approach and change the process for Inventory Control. With KLI, a new Inventory Management Plan must be developed to deal