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Supply chain management is important to Regal Marine for a number of reasons. As a developer of luxury boats, one of the means of differentiation for Regal is innovative features. The tight lead-times for new product development enable Regal to have a sustainable competitive advantage in innovation. Supply chain management also allows Regal Marine to keep low inventory levels, which reduces cost. Further, because Regal Marine utilizes a multitude of suppliers on each one of its boats, supply chain management is vital to ensure timely delivery of all parts, to spec, at a reasonable price.
Other supply chain techniques that Regal Marine might wish to use to improve their supply chain management are just in time inventory, since reduction in inventories is considered important. Luxury boat production has sufficient lead time to allow for this. Another technique Regal Marine should consider is to undertake regular supply chain analyses. They have a handful of preferred suppliers with whom they have developed a special relationship, but this leaves other relationships up for evaluation. Regal utilizes the discount they enjoy with their membership in the American Boat Builder's Association, but they may yet be able to find better suppliers outside of the ones who have a relationship with the Boat Builders.
Another initiative Regal Marine should undertake is to develop exclusive relationships with their key suppliers. Their current supply chain management gives them a competitive advantage, but exclusive contracts would give them a sustainable competitive advantage. Lastly, Regal Marine should institute a system of inventory forecasting. Their current modular system seems demonstrates the importance of short lead times and a fear of obsolescence but they do not appear to engage in any serious forecasting of demand. To do so would help them gain a perspective on their needs, further reducing the need for inventories and easing their fears of obsolescence.
Because supply chain management is a source of competitive advantage for Regal Marine, their competitors can be expected to attempt to match Regal Marine's initiatives. All the advantages Regal Marine has - short lead times, modular design and supplier integration into product development - can be duplicated by competitors. In doing so, they will improve their operations and eliminate a strategic disadvantage. Moreover, the competitors can be expected to seek to exploit Regal's perceived weaknesses, for example their tying themselves to ABBA vendors.
No author. (2004). Tracking and Realizing Savings from Supply Chain Initiatives. DenaliUSA.com Retrieved May 16, 2008 http://www.denaliusa.com/pdfs/trackingsavings.pdf
Worthen, Ben. (2007). An Introduction to Supply Chain Management. CIO.com. Retrieved May 16, 2008 from http://www.cio.com/article/40940#scmabc[continue]
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