DESIGNING &

MANAGING THE SUPPLY

CHAIN
Muhammad Aulia Rendy - 29117554
M. Reza Kusuma A. – 29117450
Faris Fathurahman - 29117427
 ADS’s
Supply Chain Process

Customers
Record Company ADS Inc. (Walmart, Bestbuy,
Kmart, etc)
1. Why are ADS’s customers’ customers
moving toward VMI arrangements?
■ They want to reduce inventory holding costs and expenses related to managing
inventory
■ Reduced bullwhip effect
■ Reduced forecast uncertainties & improve overall service level
■ Quick Response time
 2. How will this impact ADS’s business, and how can
ADS Management take advantage of this situation?
Impact of ADS’s Business:
1. Enhanced Cost  Transportation, Maintenance, Inventory holding
2. Other effects  Strong Incentives, Good Buyer-Supplier
Relationship, Upgraded Information System

ADS Management advantages in this situation are:

■ ADS can enhance their distribution & inventory management capabilities to prepare itself towards
general trend of VMI in industry
■ Strong customer relationship
■ Increased proximity with the customers will lead to better understanding of market demand
■ Increased market share
3. How Should ADS manage logistics?

Its better for ADS to hire a third-party logistics for management, because:
■ Logistics is not its core competency
■ Its responsibilities have enhanced
■ It will be able to focus on emerging trends and gain competitive advantage
■ Cost saving- Transportation, Technological & Inventory costs
4. Why are large retailers moving towards
direct shipment model?
There are several reasons that causing large retailers moving towards direct shipment
model, because it will give more advantages such as:
■ Reduced Complexity
■ Reduced Cost
■ Reduced Lead Time
■ Time-Saving
THANK YOU