Supply Chain Integration

| February 4, 2014

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Adoption of the Keiretsu Network in the Supply Chain Of the many strategies available for this company, I would recommend the adoption of the Keiretsu network. The reason for this approach is because, the strategy allows manufacturers and suppliers to achieve long-term purchasing relationships, cross-shareholding, intense collaboration, and the exchange of technology and personnel. Literature studies show that the Japanese auto industry is able to share costs and responsibilities between the assemblers and suppliers, thereby reducing costs, having quick response time to the fluctuating demand of the market (Ahmadjian and Lincoln, 2001). In this method, the manufacturers become major financial supporters of suppliers through the share ownership of loans, while the supplier becomes an important part of the company’s keiretsu. The goal of this relationship is that the members of the network enjoy the benefits of being partners and provide the company with expertise on how to achieve quality production in manufacturing. The same network can be applied down the supply chain by involving the second and third suppliers in the coalition. In the case simulation, the investor group will own the manufacturing and production facilities along with the first tire of the supplier chain that is the distributors..
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