Avion Inc Essay

1353 Words6 Pages
Q1. What part of the value chain is most closely involved with the situation in the case? What is theresponsibility of each part in order to maintain a smooth flow of material?Answer: The following parts of the value chain are mostly involved with the situation in this case:-1. Procurement Department : The Procurement Department did not consider fully the demandthat needed to be fulfilled. They calculated the demand to be 2500 whereas the actual demandwas over 4000. The department was working in silo and had very little or no communicationwith the Marketing department. In a nutshell, they were interested in achieving LocalMaxima rather than achieving Global Optima . Moreover, they maintained an arm’s lengthdistance with vendors rather than considering them as strategic partners.2. Production Department: The production department didn’t provide the requisite data to thematerials management/procurement team. They required materials after ten days instead of 14days (which was planned). The change in operations plan was not informed. As such, therewas erratic supply of materials.3. Marketing Department : The Marketing Department knew that the demand was over 4000.As such, they should have informed the materials department regarding the demand andshould have proceeded accordingly.4. Forecasting : The demand forecasting was highly erroneous and had very little accuracy.Q2. What initially appears to be the problem? What really is the problem in this case?Answer: Initially the problem was supposed to be the under-performance of vendors who didn’tcommit themselves to the process. The problem was supposed to be the order fulfilling rate of Foster but later on it was revealed that Avion was the root cause of problems. The Materials department hadgiven Foster orders for only 2500 units and the lead time was supposed to be 14 days. But later on, asseen in the case,

More about Avion Inc Essay

Open Document