The Great Inventory Correction Essay example

772 Words4 Pages
The Great Inventory Correction
Cole Stripling
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November 8, 2012
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Summary
Flood of the century or not, tech companies are taking steps to limit their exposure to the next traumatic event. Some are revising their inventory models; others are implementing supply chain software and setting up Web supplier hubs. Everyone wants tighter collaboration with suppliers and timelier information from customers. Tech companies are trying, in short, to make their supply chains shorter, transparent, and as flexible as possible. Rethinking of supply chain management at large networking, telecom equipment, PC and chipmakers is the remedy in this unstable
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Additionally, about 85 percent of production is automatically scheduled by the system.

2. Do you think Altera’s new strategy will be successful? What are some advantages and disadvantages of the new strategy?

I feel that Altera’s new strategy is a good strategy moving forward. It is a good strategy in the respect that the exchange of information between Altera and its customers is much improved. Some advantages and disadvantages to the change include:

Advantages: * Reduction of inventory/carrying costs (improving the bottom-line) * Increase in customer value * Forecast improvement for supply and demand * Massive reduction in the risk of obsolete inventory.
Disadvantages:
* Lead time—long in the case of a sudden increase in demand * Customer’s readiness and ability (organization, finance, et cetera) * Adversity

3. How do you anticipate Altera’s customers will react to this new strategy? What are advantages and disadvantages for Altera’s customers?

Initially, Altera’s customers may be reluctant to some extent; however, once weighing the pros and cons I feel that the customers will find it easier to manage. Some advantages and disadvantages for Altera’s customers include:

Advantages: *
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