Question.847 - In your role as a Business Process Consultant at Bryce-Kingston, you are writing an analysis for JBH Electronics who just received approval to acquire one of their competitors. The Board of Directors wants to ensure that the acquisition will be profitable and wants your perspective on how JBH can use a supply chain strategy to make the acquisition profitable. You will need to research the best practices in the industry for supply chain strategies. Instructions Find supplemental articles and prepare an analysis outlining JBH’s profitability and sustainability strategy. Include the following in writing your analysis of the acquisition. Using your supplemental articles, analyze a supply chain strategy for JBH Electronics. Identify any potential issues and threats to resources that JBH may face. Outline any potential areas to increase sustainability practices for JBH Electronics. Based on your analysis and research, make a recommendation on JBH’s acquisition. Provide attribution for credible sources.
Answer Below:
Using your supplemental articles, analyze a supply chain strategy for JBH Electronics In order to analyze the supply chain strategies, the JBH company needs to be studied in the light of what makes them exceed the customer expectations in terms of having a consistent flow of goods. Only when there is a consistent flow of goods towards the catering market industry will the customers have a positive brand reputation over the company since JBH operates in a very competitive space with big players like Samsung, Wipro, and Sony, who possess robust product life cycle and supply chain that is adaptive to the dynamic market trends of the target population. However, it is important to notice that the competitors cater to consumer electronic goods. In order to fit in the well-established competitive space, JBH needs to understand its core strength and how they stand unique, such that it can diversify its core products and services to various core business segments. Considering the reports from Wipro, some of the leading autonomous mobile robots-driven companies that operate in the consumer electronic industry, similar to JBH, are focusing their supply chain on implementing contract manufacturing to reduce the cost, and these services include a non-core operation to give more emphasis to design and ensuring timely delivery to meet the demand trends (“Supply Chain Strategy for the growth of Consumer Electronics Industry”, n.d.). One of the examples from the report of Wipro shows that Lenovo has increased its outsourcing strategy; this depicts how the productivity of supply chain collaboration tends to benefit the electronic industry. Considering a Taiwanese electronic company named Foxconn turned its focus on manufacturing, assembly, and sales of its core products and service while outsourcing its non-core operations (“Supply Chain Strategy for the growth of Consumer Electronics Industry”, n.d.). Another electronic firm Apple acquired the intrinsity to improvise on their existing devices in terms of increasing performance while working towards implementing vertical competencies to build a sustainable model (“Supply Chain Strategy for the growth of Consumer Electronics Industry”, n.d.). Considering the success rate achieved by the competitors, JBH electronics can work on certain supply chain strategies like integration in order to eliminate excess expenditure, such as vertically integrating internal divisions to develop a sequential flow of supply chain operations and outsourcing the non-core competencies to save some money. Considering supply chain collaborations in the electronic industry, JBH is subjected to a drastic change in the demand cycle since the research is vividly spread. From the reports of Wipro, Panasonic, an electronic competitor to JBH, has adapted to the demand cycle to meet the dynamic change in the market by collaborating with the top e-commerce platform and retailers through shelf connected supply chain; it is important to shelf connect the JBH electronics with retailers like Walmart to shape the demand curve as desired, in addition to outsourcing certain parts from cheaper geographic locations without compromising the quality of the product (“Supply Chain Strategy for the growth of Consumer Electronics Industry”, n.d.). Considering demand and supply risk management of supply chain operations, Apple in the year 2004 went through a delay phase in raw material from IBM and suffered an estimated loss of $32 million because it could not launch a particular product on time (“Supply Chain Strategy for the growth of Consumer Electronics Industry”, n.d.). JBH, which is driven by consumer electronic goods, emphasizes discipline in the flow of manufacturing in order to address the demand and supply chain risk addressed in accordance with the emerging technological advancement that supports the dynamic shift in the operational industry. In addition to vendor selection criteria, to insulate the supply side flexibility to meet a wide range of product segments. The supply chain of the electronic industry tends to be modeled after demand trends. Lenovo has reported around a 17% increase in sales, summing to an approximate average of $16 billion and a boost in the gross margin of about 30%; the demand-driven consumer electronic model enables Lenovo to meet the demand in eight days (“Supply Chain Strategy for the growth of Consumer Electronics Industry”, n.d.). Identify any potential issues and threats to resources that JBH may face. Some of the possible threats to the JBH supply chain could be a shortage in raw materials; considering the survey conducted in 2022 that included multiple manufacturing hubs that catered to the electronic industry, over 60% of the participants showed that the electronic industry faced a shortage of materials, some of the reasons where due to the flux in the market caused by the recent pandemic. The participants also reported around 52% of the electronic manufacturing industries were suffering from the unreliable logistical source; with bleak transportation flow, the accuracy of the inflow of materials is not assured, and in addition, 38.6% of participants claimed to not meet the demands of the market due to capacity issues (Newton, 2017). At the same time, 41% of the participants reported that the supply chain is not able to meet the demands and sustain a more smooth operational flow due to the energy rate fluctuation (Newton, 2017). Despite the issues that were discussed above some of the other unpredictable supply chain threats are data breaches and inappropriate IT tools to regulate the flow of data, increased dependence on third-party suppliers who serve the industries with a vulnerable operational model that makes it less resilient, poor flexibility in the supply chain structure that does not allow the company to adapt to the global demand trends that comes varying regulations on the trades and logistics. Considering the reports from supplyframe (2022) that assess the geopolitical factors in terms of tech-nationalism implies that China and the United States are increasingly resilient on near-shore chip production to match the dynamic market demand rate. Based on the report from CHIPS for America from 2021, America has allocated over $50 billion to semiconductor R&D to locally manufacture the semiconductors (Seeley, 2022). Based on the research conducted by Alex Capri from the Hinrich Foundation Research that implies due to the increasing market dominance by China deploying the 5G technology using Huawei and ZTE pushed the other markets to foster strategic partnerships with Asia in order to meet the supply trends (Seeley, 2022). One such example could be Apple outsourcing iPhone manufacturing to India in order to reduce its reliance on Chinese manufacturers (Seeley, 2022). Outline any potential areas to increase sustainability practices for JBH Electronics Sustainable sourcing: Electronic firms may improve their sustainability policies by purchasing from suppliers who promote environmental and social responsibility. Companies, for instance, can employ recycled materials in their goods and get resources from suppliers who follow ethical and sustainable sourcing standards (Yao et al., 2020). Energy efficiency: Electronic firms may improve their sustainability practices by making their products and processes more energy efficient. This might involve lowering energy use during the manufacturing process and creating energy-efficient goods (Mamut et al., 2020). Trash reduction is another possible area for sustainability development. Electronic firms may collaborate with suppliers to decrease waste in the manufacturing process and apply waste-reduction initiatives in the usage and disposal of their goods (Vachon & Klassen, 2008). Supply chain transparency: By encouraging supply chain openness, electronic enterprises may improve their sustainability policies. This might include collaborating with suppliers to publish information about their environmental and social practices, while also disclosing information about the company's own sustainability efforts (Zhu et al., 2018). Lastly, electronic enterprises may emphasize social responsibility by ensuring that workers across the supply chain have fair labor standards and safe working conditions. This might include collaborating with manufacturers to enhance employment conditions and ensure that workers are compensated fairly (Quarshie & Nixon, 2010). Recommendations Supply chain compatibility: Businesses should determine whether the target company's supply chain is compatible with their own. This may entail assessing both organizations' supplier bases, logistical networks, and distribution routes in order to discover possible synergies and areas for development (Chakraborty & Ray, 2017). Cost savings: Businesses should evaluate the possible cost reductions that may be realized through acquisition. This might include assessing the possibilities for economies of scale, cost reductions in procurement, and increased supply chain efficiencies (Wagner, Eggert, & Lindemann, 2014). Risk assessment: Businesses should evaluate the possible risks connected with the purchase, such as supply chain interruptions, regulatory compliance, and reputational harm. This might include performing due diligence to assess the risk profile of the target firm and implementing risk management measures to reduce any hazards (Liu, Xie, & Qu, 2017). Technology and innovation: Businesses should evaluate the possibilities of technology and innovation to improve supply chain operations. This may entail assessing the target firm's technological and innovation skills and identifying places where these capabilities may be incorporated into the supply chain of the acquiring company (Wagner et al., 2014). Sustainability: Businesses should consider the acquisition's possible influence on sustainability. This might include reviewing the target company's sustainability practices and devising initiatives to enhance supply chain sustainability (Mamut et al., 2020). References Chakraborty, S., & Ray, S. (2017). Supply chain compatibility and merger and acquisition performance: Empirical evidence from India. International Journal of Logistics Research and Applications, 20(1), 44–60. Liu, C., Xie, L., & Qu, W. (2017). The impact of supply chain integration on mergers and acquisitions. Journal of Business Research, pp. 71, 51–58. Mamut, R., Zhang, Y., & Ruan, H. (2020). An exploratory study on the implementation of green supply chain management practices in the electronic industry. Journal of Cleaner Production, 276, 124236. Newton, E. (2023, January 17). Why the electronics supply chain remains in Flux. EPS News. Retrieved from https://epsnews.com/2023/01/11/why-the-electronics-supply-chain-remains-in-flux/#:~:text=Those%20include%20locating%20raw%20materials,compared%20with%20a%20year%20earlier. Quarshie, A. M., & Nixon, J. (2010). The dynamics of sustainability in the supply chain: insights from a case study of a UK manufacturer. Supply Chain Management: An International Journal, 15(2), 179–188. Seeley, R. (2022, September 26). 2022 supply chain risks for electronics manufacturers. Supplyframe. Retrieved February 21, 2023, from https://supplyframe.com/resources/2022-supply-chain-risks-for-electronics-manufacturers/ Supply Chain Strategy for the growth of Consumer Electronics Industry. Wipro. (n.d.). Retrieved from https://www.wipro.com/consumer-electronics/supply-chain-strategy-for-the-consumer-electronics-industry/ Vachon, S., & Klassen, R. D. (2008). Environmental management and manufacturing performance: the role of collaboration in the supply chain. International Journal of Production Economics, 111(2), 299-315. Wagner, D., Eggert, A., & Lindemann, E. (2014). Creating and appropriating value in collaborative relationships involving technology-intensive products: Evidence from the electronics industry. Journal of Product Innovation Management, 31(3), 508-525. Yao, L., Tang, O., Li, L., & Li, D. (2020). Sustainable sourcing and supply chain social responsibility: An exploratory study of Chinese manufacturers of electronic products. Journal of Business Research, 106, 211-220. Zhu, Q., Geng, Y., Fujita, T., & Hashimoto, S. (2018). Implementing sustainable supply chain management in China: State of the art and future research. Journal of Cleaner Production, pp. 172, 2214d–2234.More Articles From Business Management
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