Essay about Case 8-3 Isol -Global Value Chain Logistics Case Analysis

1039 Words Jul 17th, 2012 5 Pages
Global Value Chain Logistics Case Analysis
University of Phoenix
Global Value Chain Management
ISCOM/383
June 25, 2012

Global Value Chain Logistics Case Analysis ISOL + Group produces and sells a variety of products within France, Spain, and Italy. The general manager Mr. Dupont has initiated a thorough rethinking of logistics matter for the group. Based on his recommendations, the management team must identify, analyzed, discuss, and recommend the most appropriated solutions for the recommendations made by Mr. Dupont. Identify Based on the global value chain strategies, it would be best for ISOL to “build a new manufacturing facility with one production line in France close to the firm’s southern European
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However, if ISOL delivery time were to be reduced to “48 hours then there would have to be an increase in inventory, and the production-per-order would no longer be possible given the manufacturing time required” (Dornier, Ernst, and Fender, 1998). Both of Mr. Dupont’s proposals would cause an increase in ISOL’s logistic budget. With the increasing of ISOL’s logistics budget, it would be in the best interest of ISOL to put both of Mr. Dupont’s proposals on hold. After evaluating the situation of logistics, to meet the increase in production, it will be best for ISOL to set up a new manufacturing facility in southern France because both markets are relatively close to the southern markets. “Reducing the quantities that a customer can order will increase ISOL costs because 98% of ISOL customers throughout the countries make orders for at least a full truckload, which are eight pallets” (Dornier, Ernst, and Fender, 1998). However, if ISOL implements Mr. Dupont’s recommendations, its customers will start ordering smaller sizes, and this will increase the logistics cost. With the idea of cutting the delivery time to 48 hours, this will increase its inventory cost because ISOL will need more inventory on hand. With the current delivery time between one or two weeks, allows the plant to not have

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