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MBA-IB 2003-5 Please come prepared for the discussion on case mentioned below- Section A on 6th.Nov and Section B on 4th.Nov. Case The scene was conference from at a the Anaheim Marriott booked byconsulting firm Technology Forecasters Inc. Seated around a square of longtables, thirty-three executives from across the electronics industry ? big telecom networking companies, distributors, components makers, softwareproviders, contract manufacturers big and small ? gathered in early 2001 tomull the once-again hot topic of supply-chain management. But in no time, the sparks were flying. At issue: Why, in thissupposed age of just-in-time delivery and razzle-dazzle E-business technology, is the U.S. electronics industry sitting on an inventorypile-up that could take at least six months to flush out? Moreover, whowill end up footing the bill for carrying all that stuff now that the linebetween buyer and seller has been blurred by outsourcing and virtualalliances? I'm alarmed about the lack of ownership of the massive build-up of inventories," said Harriet Green, and executive at distribution giantArrow Electronics Inc., which saw its own inventory double last year to $8billion. "Everyone says it's yours." It's undeniable that the revolution in information technology andmanagement practices over the past decade has made US industry vastly moreefficient. But beneath all the boasts of flexible manufacturing andtransparent supply chain, a lot needs to be done to improve the working ofthe New Economy. The problems include flawed flows of information,software tools that are too difficult and costly to use, and confused lines of responsibility. Yet, just year ago, Wall Street was intoxicated by the idea thattechnological advances would help companies achieve the nirvana of businessmanagement: zero inventory. But today, with warehouses starting to bulge despite millions spent on inventory management efforts, investors and CEOsalike are left with a bitter taste in their mouths. The theory contended that technologically driven improvements ininventory management ? like "just-in-time" production, direct online sales,and supply-chain management software ? would prompt increased efficiencyand allow managers to tailor output to match demand exactly. That, inturn, would increase working capital, boost margins, and help companies smooth out the ups and downs in the business cycle.
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