Operations Management: An Integrated Approach, 5th Edition

CASE: Supply Chain Management at Durham International Manufacturing Company (DIMCO)

Lucille Jenkins, the CEO for the Durham International Manufacturing Company (DIMCO), believes that the company can significantly increase its operating profit by implementing supply chain management. DIMCO manufactures a variety of consumer electronic products, from hair dryers to humidifiers to massagers, for the world market.

Lucille believes that DIMCO has already integrated its internal processes and is ready to proceed with external integration. However, she is uncertain as to which direction to take. Should the company work on integrating the suppliers or the distributors first? Currently, DIMCO uses approximately 1350 different components and/or raw materials in manufacturing its product line. Those components and raw materials are purchased from approximately 375 different suppliers around the world. In terms of distribution, DIMCO currently sends its finished products to a central warehouse that supplies 10 regional distribution centers (RDC); 6 are domestic and 4 are located outside of the United States. Each RDC supplies an average of 12 local distributors that each supply an average of 35 retailers.

Lucille is looking for some advice.

1. Briefly describe DIMCO's supply chain.

2. What are the advantages that DIMCO can gain by implementing supply chain management?

3. What would you recommend DIMCO attempt next? Should it work on integrating the suppliers or the distributors first? Or should ...