Microsoft Supply Chain Strategy in Singapore: An In-Depth Analysis

This report analyzes Microsoft's strategic role within its supply chain, focusing on the distribution of laptops and tablets in Singapore. It validates the efficiency and effectiveness of Microsoft's strategic role, identifies best supply chain practices and weak aspects, and recommends solutions for improvement. The analysis covers the company's strategic role, its effectiveness, relationship management, and a scrutiny of the current supply chain network's best practices, supported by theoretical and literature contributions. The report delves into Microsoft's closed-loop supply chain, distribution strategies involving OEMs and 3PL, and the company's strategic role in production, distribution, and customer engagement, highlighting the importance of monitoring, supplier relationships, and customer relationship management to improve supply chain network.

Running Head: SUPPLY CHAIN OF MICROSOFT
Supply Chain of Microsoft
Name of the Student
Name of the University
Author Note

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Executive Summary
The purpose of this report is to analyze the strategic role of Microsoft within its supply chain.
The paper assesses its operations in selling and distribution of Laptops and Tablets in Singapore
and also validates the efficiency and effectiveness of the strategic role. The next focus of the
report is on the identification of the best supply chain practices and weak aspects too. The report
finally concludes after recommending solutions for improvement. The structure of the report
covers the strategic role of the company along with examining its effectiveness. The relationship
management of the company is assessed and the best supply chain practice of the current supply
chain network is scrutinized too. The report is supported with extensive and appropriate
theoretical and literature contribution with adequate theories and strategies.

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Table of Contents
Introduction......................................................................................................................................4
Discussion........................................................................................................................................4
1.1Introduction to the case company.......................................................................................4
Launch of hybrid tablets and hybrid products.........................................................................5
Microsoft’s Singapore operations............................................................................................5
2.0 Current Supply Chain/ network.........................................................................................6
2.1 Microsoft Supply Chain – Closed Loop Supply Chain.....................................................6
2.2 The Distribution strategy used /Outsourcing and 3PL management.................................8
2.3 Strategic Role of the Company..........................................................................................9
Possible challenges................................................................................................................11
2.4 Effectiveness of the Strategic Role..................................................................................12
The Monitoring and controlling of the supply chain management........................................13
3.0 Relationship Management...............................................................................................14
The Supplier relationship management.................................................................................14
Possible challenges................................................................................................................14
The customer relationship management................................................................................15

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Possible challenges................................................................................................................15
4.0 Best Supply Chain practices of the current supply chain network..................................16
4.1 Weak Aspects..................................................................................................................17
4.2 Proposed Solutions to the weaknesses.............................................................................18
4.3 Recommendation for improved supply chain network....................................................18
Conclusion.....................................................................................................................................19
Reference.......................................................................................................................................20

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Introduction
The purpose of this report is to analyze the strategic role of Microsoft within its supply
chain. The paper will further assess its operations in selling and distribution of Laptops and
Tablets in Singapore and also validate the efficiency and effectiveness of the strategic role. The
next focus of the report will be on the identification of the best supply chain practices ad weak
aspects too. The report will finally conclude after recommending solutions for improvement. The
structure of the report will cover the strategic role of the company along with examining its
effectiveness. The relationship management of the company will be assessed and the best supply
chain practice of the current supply chain network will be scrutinized too. The report will be
supported with extensive and appropriate theoretical and literature contribution with adequate
theories and strategies.
Discussion
1.1Introduction to the case company
Microsoft Corporation is the biggest multinational technology company based in America
with their headquarters in Washington, Redmond. The company manufactures, develops,
supports and licenses the consumer electronics, computer software and personal computers too
along with other related services. Few of the most popular software products of the company are
Microsoft windows operating system, the office suite, edge web browsers and internet explorer.
The other flagship hardware products of the company are the touchscreen personal computers
and the Xbox video game consolers. The company began 43 year ago on 4th April, 1975 in New
Mexico. The founder of the company were Bill Gates and Paul Allen reached the company to the

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position of possessing almost US$258.84 billion by as per the reports of 2018. The total equity of
the company is US$82.71 billion by the year 2018 (Microsoft.com, 2019).
There are almost 134,944 employees working in the company as per the count of 2018.
Now the company has reached to the position of being world’s most valuable companies. The
word “Microsoft” is the combination “microcomputer” and “software” and the company has
earned the position of world’s 30th largest corporations based in United States by the total
revenues. The mission of the company is to prove themselves as a responsible partner to those
who have trust in them (Digitaljournal.com, 2019).
Launch of hybrid tablets and hybrid products
The hybrid laptops are the tablets which also functions as a laptop computer. The tablet is
connected with a keyboard which can be removed easily. It is often called a “2-in- 1” or “
detachable”. The difference between a convertible and a hybrid is that the screen of the laptop
can be removed to become tablet but the scree of the convertible remains connected with the
unit. Microsoft has announced the launch of new Surface Pro 6 in the New York City last year
(2018). The new surface pro has stark resemblance with the previous surface pro models. The
new model has up to 1 TB of storage and 16 GB of RAM. The new hybrid laptop/tablet
comprises of 8th generation processor that is 67% more effective than the previous one.
Microsoft’s Singapore operations
The company started operating in Singapore in the year 1990 with only three staffs.
Today the company has 930 staffs in the country and has invested almost US$3.4 billion in the
Singapore project. Singapore is also the Asia-Pacific headquarters of the company with more
than 13,500 employees. The operations in Singapore began with appointing the first local

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distributor and by the year 2003 it started partnering the In-learning program that is a 15-year
global commitment in order to increase the access to the technologies. In the year 2015, the
company completed its 25th year in the country (Edb.gov.sg, 2019). Through these years the
company has also created 80,000 above jobs by the Microsoft ecosystems having included 2,200
local resellers.
2.0 Current Supply Chain/ network
2.1 Microsoft Supply Chain – Closed Loop Supply Chain
The closed loop supply chain is basically the combination of the reverse logistics and the
traditional supply chain. It is the reversal of the wastes of a material when it is maximum usage
has been done. It is also often called the zero waste supply chain. After the manufacturing of an
item, its shipment, distribution and usage, the manufacturer concerns about the return of the item
when it is of no use (Liang, Chaovalitwongse & Shi, 2015). The function of reverse logistics is
either repair, resell the item or break it down for future use. The closed loop refers to the end of
the entire circle at a place where it had started from. It creates less or zero waste in the
environment.

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Image – Close loop supply chain
Source - (Liang, Chaovalitwongse & Shi, 2015)
Benefits: There are a number of benefits of using the closed loop supply chain. First of
all, it enables bigger profits to the manufacturer through the cheaper resourcing of the raw
materials. The manufacturer does not have to pay for new raw materials. The waste is not left
over at a landfill that is beneficial for the entire planet and showcasing the CSR values (Woods,
2015).
challenges: There are as many challenges as there are benefits of a closed loop supply
chain. There are some industries where it becomes impossible to implement this type of supply
chain because the start-up cost is high. The strategic issues in the Closed Loop supply chain
includes higher levels of decisions. The opportunity costs of the remanufacturing of the used

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products can create potential cannibalization of the sales for the new products in the firm
(Woods, 2015).
The Microsoft company has a well –structured supply chain and it benefits from that up
to greater extent. Their supply chain starts with the efficient warehousing and strong controls for
more effective and faster picking, packing services. They have less shrinkage along with greater
stock accuracy. The company also has intelligent purchasing and the electronic mode of order
creation. It occurs when the purchasing decisions are finalized so that cash flow is maximized
and backorder are minimized.
The visibility of the stock levels is accurate, fast and clear. they keep the other detailed
stock and the stock ETAs for serving the customers in a better way (Microsoft.com,2019). The
communication level with the suppliers are conducted through the standard electronic medium.
The communication with the customers as well as the third party logistics (3PL) are also done
properly. It helps them to streamline their operations and save their administrating time. The
Microsoft company also has stock importation process along with stock tracking which ensured
correct gross profit and the sales too.
2.2 The Distribution strategy used /Outsourcing and 3PL management
The Microsoft company distributes their software through the OEMs which pre-installs
their software on the new tablets, smartphones, PCs and servers. The operations of the OEMs
also include the pre –installation with the other Microsoft products, embedded operating systems
and other applications such as the Microsoft office suite. The OEMs have two broad categories
such as the direct OEMs. The Microsoft company has direct agreements on distribution with the
multinationals such as ASUS, Fujitsu, DELL, HTC, ACER and many others. Another broad
category is referred to as the ‘system builders’.

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Image – The 3PL industry worldwide
Source – (Woods, 2015).
These system builders locally distribute the Microsoft software through the distributor
channel of Microsoft rather than the direct relationship with the company. The products of
Microsoft are licensed primarily through the value –added resellers, the retailer and the large
account resellers too. The retail packaged products of the company are distributed through
authorized replicators, retail outlets, non-exclusive distributors. The hardware products pf the
company such as Xbox, Surface and the PC accessories by the third –party retailers and the
stores of Microsoft. The company also possesses the field sales representatives, the field support
personnel who provide sales support and product training after soliciting the orders from the
resellers and the distributors.
2.3 Strategic Role of the Company
The 5 main pillars of the company are the operations team, the contract manufacturer, the
distribution center and the logistics, the distributors and the customers. The strategy of Microsoft

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has few criterions. The company follows the dynamics and drives the margin revenue growth
through a global financial management solution which delivers robust financial intelligence
along with the embedded analytics. The company empowers the employees with the workspaces
which are role-based and prioritizes the task in order to optimize the efficiency of the business
outcomes. The company adapts quickly to the changes in requirements and adjusts with flexible
and rules-based chart of dimensions and accounts. The Microsoft company has an optimized
view of the manufacturing material flow and finished goods along with logistics management
and advanced warehousing. The focus is on the quality increase and fulfillment of the customer
satisfaction.
Image – The supply chain (distribution model) of Microsoft
Source – (Microsoft.com, 2019).

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The next focus of the company is on the modernization of the business logistics. It is
supposed to give the company an optimized fulfillment by reducing the costs at the same time
having synchronized the logistics across the sites, transportation modes and the warehouses. The
in –time delivery of the products with faster response to the expectations of the customers along
with a better coordination of the order –to-cash methods are specifically concentrated. The aim
of the finance department of the company is to reduce the costs of streamlining in order to gain
higher control by the automation processes of procure –to –pay.
The supply chain of Microsoft has three special segments such as the distribution to retail
and commercial segment. In this segment, the B2B ad retail customers place orders based on the
forecast. It is done through the web portal of the company. The orders reach the order processing
team via EDI and the order release to the distribution center via EDI. The distribution centers
receive the orders, process the PPS and dispatch to the third party logistics for the shipment to
the distributors through the Air Freight. The distribution to the online segment of Microsoft
starts by the placement of the orders by the online customers (MS online.com). The orders reach
the distribution centers for the fulfillment through the EDI. The distribution channels receive the
orders, process the PPS and dispatch to the third party logistics. The third party logistics help to
the sort out the orders and distribute to the end users via the local trucking. The forecasting to
manufacturing of the products of the company is done by the sales & channels Mgrs in order to
provide the bottom up forecasts (Digitaljournal.com, 2019). The forecasts are cascaded to the
planning team. The planning team next sends the build plan signals to the contract manufacturer
via the EDI. The raw material orders are fulfilled by the suppliers to the contract manufacturers.
Possible challenges