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Case Study:

 GATEWAY

Presented By:

Ariq Rahman
         ID: B1001024
Sabrina Farah Kaisar
          ID: B1001026
Md. Mushfiq Alam Arko
         ID: B1001027
Mohammad Daulat Al Rashid
          ID: B1001039
Nisa Nur Majumder
          ID: B1001046
Case Overview
 GATEWAY:
Why Multiple Production
Facilities???
  Reach  the local markets
  Increase production facilities to meet
   the higher local demand
  Locate in low wage areas
  Near parts suppliers
  Avoid higher tax areas/states
Advantages of Increasing No
of Production Facilities
    Avoid production disruption due to
      Worker Agitation
      Supply Disruption
     
    Reach the local markets
    Increase production facilities to meet the
     higher local demand
    Locate in low wage areas
    Near parts suppliers
    Avoid higher tax areas/states
Disadvantages of Increasing
No of Production Facilities
How Gateway decides which
production facility will produce
and ship a customer order
  Primaryobjective: Reduce overall cost
   and increase maximum returns
    Whichever is near to the customer
    Whichever has less transportation cost
    Whichever has less response time
    Whichever can avoid taxation/Trade Barriers
Factors Considered When
Deciding Which Plant to Close
    Primary objective: Reduce overall cost and
     close loss making/costly production facilities
        When market demand reduces or shifts to other
         substitutes, whichever factory caters that market will
         be the first one to go
        Wherever raw material is least
         available/transportation is costly
        Whichever facility requires higher transportation cost
        Whichever factory has higher production cost
            Least available workforce/costly manpower
            Power/Energy costs
        Whichever factory goes through more trade barriers
         while catering to international market
Why not carry any finished
product inventory?
    Storage cost
        Accidents may lead to higher costs
    Maintenance cost
    Management/Operations cost in connection to
     the warehouse
    Be more competitive; can introduce new
     products in a short notice
        Intel’s new chips can be integrated as soon as they
         hit the market
    Avoid loss from cases where some products are
     not sold when the demand shift to substitutes
Should a firm with an investment in
retail stores carry any finished
goods inventory?
  For those products for which customers
   can wait for a few days there is no need
   to have finished goods inventory
  For those products for which customers
   cannot wait for the time required for the
   product to reach the customer from the
   production facility there needs to have
   a production facility
Characteristics of products that
are most suitable to be carried in
finished goods inventory
    Nonperishable goods can only be stored
    Goods that have least possible storage cost
    Goods that have fluctuating/seasonal demand
        Where SCM/CRM systems are not adequate to have
         knowledge of the market demand
    Retailers store goods that have stable demand
     in the local market in the local market
        Where there is a time gap between supply shipments
         from the manufacturer
        Where there is a chance of import tariffs to increase
    When there is a chance of the product price to
     increase
Characterizes products that are
best manufactured to order
     Where     there is a demand from the
      customers for product customization
     If it’s possible to manufacture as per the
      customer’s demand; the production
      process needs to be cost effective
Is the Dell model of selling directly without
retails stores always less expensive than a
supply chain with retail stores???
      Generally
        Incase of Customization; retail stores will incur
         higher cost for storage
      However,   it is not necessarily more
       profitable:
        If customer demand is higher for retails stores
         where they can check out the product first
         hand;
        If customer is satisfied with online shopping
What are the supply chain implications
of Gateway’s decision to offer fewer
configurations???
       Supplier
           Suppliers needs to send fewer varieties of
            components
           Management/Operational complexity/costs reduces
       Internal Supply Chain: Transport of components
        within the factory is much less complex
           Suppliers needs to send fewer varieties of
            components
           Management/Operational complexity/costs reduces
       Retailers/Dealers:
           Suppliers needs to send fewer varieties of
            components
           Management/Operational complexity/costs reduces
Thanks!!!

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Gateway Case Study Presentation

  • 1. Case Study: GATEWAY Presented By: Ariq Rahman ID: B1001024 Sabrina Farah Kaisar ID: B1001026 Md. Mushfiq Alam Arko ID: B1001027 Mohammad Daulat Al Rashid ID: B1001039 Nisa Nur Majumder ID: B1001046
  • 3. Why Multiple Production Facilities???  Reach the local markets  Increase production facilities to meet the higher local demand  Locate in low wage areas  Near parts suppliers  Avoid higher tax areas/states
  • 4. Advantages of Increasing No of Production Facilities  Avoid production disruption due to  Worker Agitation  Supply Disruption   Reach the local markets  Increase production facilities to meet the higher local demand  Locate in low wage areas  Near parts suppliers  Avoid higher tax areas/states
  • 5. Disadvantages of Increasing No of Production Facilities
  • 6. How Gateway decides which production facility will produce and ship a customer order  Primaryobjective: Reduce overall cost and increase maximum returns  Whichever is near to the customer  Whichever has less transportation cost  Whichever has less response time  Whichever can avoid taxation/Trade Barriers
  • 7. Factors Considered When Deciding Which Plant to Close  Primary objective: Reduce overall cost and close loss making/costly production facilities  When market demand reduces or shifts to other substitutes, whichever factory caters that market will be the first one to go  Wherever raw material is least available/transportation is costly  Whichever facility requires higher transportation cost  Whichever factory has higher production cost  Least available workforce/costly manpower  Power/Energy costs  Whichever factory goes through more trade barriers while catering to international market
  • 8. Why not carry any finished product inventory?  Storage cost  Accidents may lead to higher costs  Maintenance cost  Management/Operations cost in connection to the warehouse  Be more competitive; can introduce new products in a short notice  Intel’s new chips can be integrated as soon as they hit the market  Avoid loss from cases where some products are not sold when the demand shift to substitutes
  • 9. Should a firm with an investment in retail stores carry any finished goods inventory?  For those products for which customers can wait for a few days there is no need to have finished goods inventory  For those products for which customers cannot wait for the time required for the product to reach the customer from the production facility there needs to have a production facility
  • 10. Characteristics of products that are most suitable to be carried in finished goods inventory  Nonperishable goods can only be stored  Goods that have least possible storage cost  Goods that have fluctuating/seasonal demand  Where SCM/CRM systems are not adequate to have knowledge of the market demand  Retailers store goods that have stable demand in the local market in the local market  Where there is a time gap between supply shipments from the manufacturer  Where there is a chance of import tariffs to increase  When there is a chance of the product price to increase
  • 11. Characterizes products that are best manufactured to order  Where there is a demand from the customers for product customization  If it’s possible to manufacture as per the customer’s demand; the production process needs to be cost effective
  • 12. Is the Dell model of selling directly without retails stores always less expensive than a supply chain with retail stores???  Generally  Incase of Customization; retail stores will incur higher cost for storage  However, it is not necessarily more profitable:  If customer demand is higher for retails stores where they can check out the product first hand;  If customer is satisfied with online shopping
  • 13. What are the supply chain implications of Gateway’s decision to offer fewer configurations???  Supplier  Suppliers needs to send fewer varieties of components  Management/Operational complexity/costs reduces  Internal Supply Chain: Transport of components within the factory is much less complex  Suppliers needs to send fewer varieties of components  Management/Operational complexity/costs reduces  Retailers/Dealers:  Suppliers needs to send fewer varieties of components  Management/Operational complexity/costs reduces