Supply Chain Management Analysis Report for Gaming Console Company

This report provides a comprehensive analysis of the supply chain management functions of a gaming console manufacturing company. It examines transport modalities, forecasting methods, and supply chain strategies, including upstream and downstream considerations. The report evaluates supplier selection for raw materials and explores value-adding techniques, such as packaging and timely delivery. Recommendations for quality assurance, performance monitoring, and supply chain code setting are also provided, along with a discussion of supply chain audits and packaging methods to prevent damage. The analysis highlights the importance of ethical practices, efficient procurement, and effective distribution in meeting global customer demands and maintaining the integrity of the supply chain. The report also includes financial forecasting and budget considerations to support the proposed strategies. The report aims to improve the efficiency and effectiveness of the company's supply chain operations.

Running head: SUPPLY CHAIN MANAGEMENT
Supply Chain Management
Name of the Student
Name of the University
Author note

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Table of Contents
Introduction:....................................................................................................................................2
Transport modality:.........................................................................................................................2
Forecasting:......................................................................................................................................3
Supply chain strategy:......................................................................................................................5
Upstream supply chain:...................................................................................................................5
Downstream supply chain:..........................................................................................................6
Evaluation of suppliers for buying raw materials:.......................................................................6
Adding Value:..................................................................................................................................7
Recommendations for quality assurance and monitoring performance suppliers:......................8
Setting of supply chain codes:.....................................................................................................8
Supply chain audit:......................................................................................................................9
Proper packaging methods to avoid thefts and damage:.................................................................9
Conclusion:......................................................................................................................................9
References:....................................................................................................................................11

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Introduction:
The study focuses on the supply chain functions of a given company in a case study. The
supply chain procurement options are to be evaluated through the report for the company. The
company in focus wants to increase its demand functions effectively to significantly cater to the
demands of the customer base. At the same time the company would also like to maintain the
essential integrity of their supply chain. The company is involved in the manufacture of gaming
consoles. The supply chain functions ultimately aim towards supplying gaming consoles to retail
gaming store outlets across the globe. The supply chain of the company is systematically
analyzed through the study. The functional aspects of supply chain need to be essentially
discussed. Hence, the essential challenges have to be identified in regards to the supply chain
functions and the subsequent procurement functions. The most important aspects related to the
supply chain functions involving procurement and distribution need to be effectively analyzed.
Transport modality:
Transport modality refers to the various modes of transport that can be used for safely
procuring and distributing the sales items. Since, the gaming consoles are to be distributed at a
global level, more than one mode of transport has to be utilized. Hence, deciding the means of
transport becomes very difficult and important at the same time. The major challenge is deciding
what form of transport will be fit for specific areas where the retail stores are located (De Araújo,
Alencar and de Miranda Mota 2017). Inland surface transportation has to be the most used
transport modality given the situation. However, at the same time since the supply and
distribution areas are globally located it is also important to judiciously consider sea transport.
The main challenges that can arise in case of surface transport are distance factors, quality of
available roads, road safety, traffic aspects and other ground level issues that can affect the

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transport functions. It is important to consider that the management of the company wants to
adhere to ethical principles during the implementation of the transport systems
(Theodorakopoulos, Ram and Kakabadse 2015). Hence, it also becomes quite necessary that by
no means unethical practices are utilized towards enhancing the procurement and distribution
functions.
In regards to the onshore distribution of the gaming consoles, the transport that can be
utilized can be smaller. As an example- large number of smaller vehicles can be used to
distribute gaming consoles to the retail outlets. The procurement and distribution can be divided
among zones. This will ensure that effective procurement and distribution happens in each
specific zones. The zones can have specific zonal warehouses. The consoles can be distributed
via larger transport vehicles to these specific warehouses. Smaller vehicles like small trucks can
then procure the items from these warehouses located at specific zones and transport it to zonal
stores subsequently (Brandenburg et al. 2014). In order to ship the consoles to international
locations both air and sea routes can be utilized. Air routes will be for countries that are located
far (Jacobs, Chase and Lummus 2014). However for neighboring countries sea routes can be
utilized. Country specific transport mechanisms then need to be formed. It is better to locate
warehouses only in the larger cities with better connectivity. Thus, the company can avoid risks
of transport challenges in offshore locations.
Forecasting:
The directors have to forecast the expenditures and sources of income that the logistics
firm in the case study in order to form an appropriate transportation strategy to transport games
consoles they manufacture. The case study remains silent on the global markets which the firm is
aiming and does not reveal any detail about the suppliers. The forecast would hence be divided

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into two parts namely, upstream and downstream supply chains. The supply chain at the while
forecasting its upstream supply would take into account the different procurement options. The
procurement strategy would be broadly be divided into two portions, namely, the making the
components in-house and procurement them from suppliers. The budget forecasting would also
take into account the expenditure the transportation firm would bear for quality assurance,
monitoring and control of the performances of the suppliers. The aim of the procurement
would be meeting the global demands for goods, maintaining an integrated supply chain, retain
leadership in the market and provide high levels of services to customers. It would also be
assumed that the global demand would be 100 units. The case study mentions that the company
is an existing company and thus, it can be assumed that the account department would allocate
$1000000 in the first year and increase it by 10 percent in the coming two years. It would also be
assumed that company would take a loan of $10000 from bank in the year 1, thereby increasing
it by 10 percent each year. It would also be assumed that the firm would allocate $ 100000 from
returns on investments each year towards the new transportation strategy. It also be assumed that
total cost of production would increase by 10 percent. It has been assumed that the port of origin
would be Sydney and the destination port is San Francisco, the US. It has also been assumed that
the size of container would be 40 feet and according to the World Freight rates, the cost is
coming to $ 3024.36 exclusive of all taxes and duties (Worldfreightrates.com. 2018).
Findings from the budget:
The financial estimation shows that in-house manufacturing of goods would be cheaper
compared to procurement of finished goods from third party firms. Thus, in response to this
finding the management of the company should allocate funds to procure raw materials,
technology and manpower required to produce gaming consuls. The in-house manufacturing

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facilities would also allow the firm keep the cost of production low compared to the procurement
of finished goods from third party firms. The same has been found out by raising the expenditure
by similar rate of 10 percent as the sources of funds.
Shortcomings of the budget:
The forecast conducted above suffers the several shortcomings in the light of the case
study provided. First, the case study mentions global retail destinations but does not specify any
destination names nor does it mention any domicile country of the firm. Thus, for estimation
purpose, the destination and domicile countries have been taken as Australia and the US
respectively. Secondly, the sources and expenditures of funds have been increased by 10 percent
to keep parity. However, the budget and the amounts are just estimations and it is not to estimate
exact value of currencies.
Supply chain strategy:
The supply chain strategy of the transportation company should consist of both upstream
and downstream supply chain. The company should acquire materials to make all the essential
components for its product, gaming consoles. The forecast emphasizes to a great extent on the
upstream supply chain and gives very little attention to the downstream supply chain. Since it has
already been proposed that the firm should opt for in-house manufacturing of gaming consuls,
the following are the two pillars on which its supply chain should be based:
Upstream supply chain:
The upstream supply chain of the gaming consul manufacturing firm should include
suppliers of raw materials which it would it use in manufacturing of gaming consuls. The supply
chain should also include suppliers of manpower and technology. The firm should conduct a

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market analysis of different markets of raw materials as well as technology like Japan and the
European Union. This would enable it to locate suppliers of high quality raw materials and
technology which would enable it to procure raw materials as well as technology at economic
rates. The firm should use inventory management software to ensure that it does not procure
heavy bulk of raw materials, thus locking its funds. Similarly, the firm should also ensure
procurement of manpower from regional or local market to the extent possible in order to keep
the cost of expenditure low.
Downstream supply chain:
The downstream supply chain of the company should consist of distributors and retailers
in each of global target markets. This would enable it to get more penetration into the markets.
As a part of its downstream supply chain, should use ecommerce to sell its products in the global
market. The firm should also aim to enter to agreements with selected retailers to sell its gaming
consuls exclusively. This would allow it to keep its competitor companies away from its own
customer base. The downstream supply chain should be strengthened with a strong promotion
strategies consisting of discounts and offers. The firm in the long run can acquire some its
important distributors and retailers, either partially or entirely to minimize competition. This
would enable it to earn high profits and maintain its cost of distribution low, thus increasing its
profit percentage.
Evaluation of suppliers for buying raw materials:
The firm should strict evaluate the suppliers supplying it with components for its finished
products. The evaluation of the suppliers should consist of both financial and non-financial
strategies. The financial strategies should consist of measurement of quality of the components
against the expenditure borne to acquire the raw materials. The firm should ensure that its

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suppliers do not indulge into illegal sourcing of components and offer the same at inflated rates.
The firm should also ensure that the suppliers are able to supply the exact components according
to its requirement.
The non-financial parameters which the firm in the case study should take into account to
evaluate suppliers are legal and ethical compliance levels. The suppliers should not indulge into
malpractices and illegal activities of any sort. They should not be involved with unethical
practices like exploitation of workers and child labour directly or even indirectly.
Adding Value:
Adding value becomes very much important as procurement and distributions are
essential functional requirements in any industry. In this case the supplied items are gaming
consoles. Thus, the entertainment factor becomes much important. In order to add value the
transport systems can be enhanced to add promotional value to the consoles. The vehicles can be
effectively designed in a way to promote the gaming consoles. However, the most important
value to the customers will still be to get the gaming consoles on time. Gaming consoles share
significant fan base. Customers often queue up in lines to get the consoles. Moreover, consoles
are also pre-booked or pre-registered by many customers this means that time management will
definitely add greater value for the customer than the other value adding techniques that might be
implemented. This is also an important scope to uphold the ethical principles of the company.
The company can project that the consoles are being provided to the customers in time without
breaching any ethical limits.
The consoles also have to be effectively packaged. Packaging is bound to provide extra
value to the customers. However, the actual significance of packaging functions is that it helps to

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reduce the chances for damage (Genovese et al. 2017). It’s a great responsibility of the entire
supply-chain operation management to provide the consoles to the customers without any
damage being caused (Christopher, 2016). The retail stores would also not like to have damaged
products as this can negatively affect both sales and reputation of the company. Hence,
packaging need to done in an effective way shock reducing packaging have to be used. For
distribution to overseas areas or far off places the packaging can be further optimized
considering the great amount of time and distance the packages would have to cover (Touboulic
and Walker 2015). Adding value also means on time delivery, hence the packages need to be
supplied to the retail outlets in the least possible timeframe. In order to enhance this the
organization has to employ time management techniques and utilize times that are the safest for
quick transportation of items. Providing an undamaged item on time to the customers will be the
greatest value the company can add for the customers (Martínez-Jurado and Moyano-Fuentes
2014).
Recommendations for quality assurance and monitoring performance suppliers:
The following are the recommendations which can be made to the transportation
company about quality assurance and monitoring performances of the suppliers:
Setting of supply chain codes:
The firm must form codes which the suppliers should comply with. The supply
management codes should set parameters of performance which the suppliers have to satisfy.
The parameters should be both quantitative and qualitative in nature. The quantitative parameters
should be minimum amount of raw materials or components which each supplier has to
accomplish while supply the same to the company. The qualitative measures should consist of
ethical and legal parameters like avoiding indulging into illegal acts which the suppliers have to

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ensure during their business operations. The firm must ensure that its suppliers have high levels
of ethical credentials and abstain from engaging into unethical activities.
Supply chain audit:
The firm must conduct a supply chain audit half yearly and annually. This would ensure
strict monitoring the business conduct of suppliers. The firm should ensure high performance of
its suppliers based on the audit. It should revamp its supply chain by terminating relationship
with low performing suppliers based on the audit report. Similarly, based on the recommendation
of the auditors, it should acquire new suppliers. This would ensure strict monitoring on the
performance of the suppliers.
Proper packaging methods to avoid thefts and damage:
The firm should adopt strategy to make its packaging stronger and durable to prevent or
at least minimize damage. Similarly, all the packages should be kept in warehouses with
facilities like barcoding and CCTV camera surveillance to minimize thefts.
Conclusion:
The systematic analysis of the procurement and distribution options available for the
company and the various ways in which procurement can be made effective have pointed
towards greater opportunities for production maximization. The production of the gaming
consoles have been found to be good and it can be further optimized through the usage of
materials that can be locally sourced and provide the same value. The demand of the consoles
can be effectively realized if the procurement of goods and services can be done as far as
possible from the local areas. It becomes important that the procurement and distribution
essentially integrates in-house modes of production. The company can use its own factories to

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produce the items. This means that the scope for any production discrepancies can be effectively
reduced. It is very important that all the services are effectively integrated and focused towards
distributing high value end product to the customers.
References:
Brandenburg, M., Govindan, K., Sarkis, J. and Seuring, S., 2014. Quantitative models for
sustainable supply chain management: Developments and directions. European journal of
operational research, 233(2), pp.299-312.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
De Araújo, M.C.B., Alencar, L.H. and de Miranda Mota, C.M., 2017. Project procurement
management: A structured literature review. International Journal of Project
Management, 35(3), pp.353-377.
Genovese, A., Acquaye, A.A., Figueroa, A. and Koh, S.L., 2017. Sustainable supply chain
management and the transition towards a circular economy: Evidence and some
applications. Omega, 66, pp.344-357.
Jacobs, F.R., Chase, R.B. and Lummus, R.R., 2014. Operations and supply chain
management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.
Martínez-Jurado, P.J. and Moyano-Fuentes, J., 2014. Lean management, supply chain
management and sustainability: a literature review. Journal of Cleaner Production, 85, pp.134-
150.

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Theodorakopoulos, N., Ram, M. and Kakabadse, N., 2015. Procedural justice in procurement
management and inclusive interorganizational relations: An institutional perspective. British
Journal of Management, 26(2), pp.237-254.
Touboulic, A. and Walker, H., 2015. Theories in sustainable supply chain management: a
structured literature review. International Journal of Physical Distribution & Logistics
Management, 45(1/2), pp.16-42.
Worldfreightrates.com. 2018. Worldfreightrates.com. [online] Available at:
http://www.worldfreightrates.com/freight [Accessed 13 Nov. 2018].