Base case study: identifying issues and providing recommendations

¶ … Pain in the (Supply) Chain" focuses on the Exceso company in its attempt to meet wildly ambitious sales goals at the end of the quarter through the integration of an extremely aggressive promotion strategy. The question that comes into play is simple: is this strategy worth following through with? In looking at the case study in detail, one can see that there are certain areas of strategy that could stand to be improved upon.

First, CEO R. Foley Vinton notes that the machines which are running for production have provided a 98% yield, but hesitates to mention the fact that the machines are only running at a 60% capacity. The machines are also dealing with unexplained breakdowns that can essentially halt or destroy production should another breakdown occur. In looking at this scenario there are at least two areas for improvement. First, a running of the machines despite faulty machinery leaves absolutely no room for error in terms of putting out the desired production. This issue must be remedied immediately, as an issue with the machinery is bound to occur again, and if promotion goes as planned, the machines could be forced to increase output to levels never seen within the company before.

The second improvement needed in the aforementioned scenario is the seemingly easy way that Vinton withholds information, such as the information about the capacity at which the machines are running. In terms of such a high-impact product promotion, which will hopefully up sales for the company, both employees in-house and outside analysts and shareholders need full and accurate information about the goings-on within Exceso to operate correctly. Without such, this specific promotion, and further operations within the company could implode.

Next, is an issue with discounts. The case study notes that Alice Dias, a manager at a local ValuMart has purchased 3,000 items at deeply discounted rates from Exceso. Dias' intern notes that 3,000 units seems a little strange considering that the ValuMart only sold 1,800 units in the last two quarters combined. It is then noted that Dias will sell off much of her order at a higher price and sell what she retains at a higher price than what she pain Exceso, turning a profit for herself and causing a loss for Exceso in sales.

This is only one example of what can happen should Exceso continue to offer deep discounts in order to reach their unrealistic sales goals. In doing so, retail outlets are given the opportunity to resale products for their personal gain, which only benefits these retail markets, not Exceso.