Altera Essay

492 Words2 Pages
Please post your comments on the following questions. 1. How has Altera modified its strategy? Why? Altera is shifting its supply chain strategy from a push based supply chain strategy to a push-pull strategy in order to reduce inventories. Also, Altera is hoping that this new strategy will help them better plan with respect to supply and demand. This increased clarity into the actual demand will also help them to reduce the risk of their inventory becoming obsolete. 2. Do you think Altera’s new strategy will be successful? What are some advantages and disadvantages of the new strategy? Yes, I think their new strategy will be successful, because their new strategy offsets some of the risk associated with carrying too much inventory, since they only build finished products to customer orders and build die banks to stock. The intent of this strategy was to improve visibility into customer information, inventories and build plans, facilitate product development collaboration, and improve Altera’s inventory management. This allows them to reduce safety stock levels and inventory holding costs as well. Also, they will likely have more transparency into their supply chain which will reduce variability and the lower the impact of the bullwhip effect. However, there are some disadvantages to this new strategy as well. For instance, there may be less efficiencies with respect to economies of scale. 3. How do you anticipate Altera’s customers will react to this new strategy? What are advantages and disadvantages for Altera’s customers? I would think that Altera’s customers would embrace Altera’s new management strategy. This is because their new strategy will likely reduce lead time for most products and service levels will increase. Also, as mentioned previously, because there is increased transparency in the supply chain, variability in the system
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