Damler Chrysler Case Study Solution

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The competitive global economy of the twenty first century requires an innovatively effective approach to buyer-seller relationships. Experts generally identify this type of relationship as separated into three distinct stages: adversarial, barometric and complimentary. It is the aim of organizations to address the relationships on all these levels in order to create a mutually profitable arrangement, which eventually becomes a more established model. As in the adversarial level, the partnership is merely beginning- trust levels are likely to be low in the case of both parties. The following- barometric stage- similarly contains some uncertainty, but at this level both sides are beginning to test the environment. The ultimate objective is…show more content…
During the creation of the new their new full size production line, which consists of cars and compact sedans, like the Dodge Intrepid, Eagle Vision, the Daimler-Chrysler Concorde and the Neon, Daimler-Chrysler outsourced more than 70% of their parts due to a lack of suppliers. The company held meetings with several important suppliers to cooperate with Daimler-Chrysler in the beginning phases of the development process. They did this in order to solidify supply chain partnerships. Before the design phase, Daimler-Chrysler pre-sourced 95% of the parts sold by vendors needed for their new line of cars and sedans (Kamath and Liker, 1994). Because of this system, there was no need for a bidding process for vendors. Many supply chain partners, like the Pacific Rim competitors, took full responsibility for creating the parts and facilitating operations with subcontractors to finish the development phases. The full size production line only took 39 months to create, instead of five to six years, like that had been done in the past. The Neon sedan line only took 31 months to create. Between 1991 and 1993, there were over 10,000 new ideas facilitated because of Daimler-Chrysler’s supplier cost decrease. This eventually resulted in $2.3 billion saved in the supply…show more content…
The massive computer manufacturing company Apple, for example, must rely on the newest chip design for their models. The design and engineering procedures are performed in the United States, but the manufacturing and assembly is accomplished in China; consequently, any updated chip, case or monitor designs made in the department of product development must be partnered with manufacturers and suppliers in order to have the raw- and eventually manufactured- materials prepared for assembly. For utmost effectiveness and speed, this collaborative process must be as seamless as possible. An another example of an organization whose success relies on effective buyer-seller relationships is Ford and General Motors, which must progressively cut costs while continuing to provide sustained innovations to the market. It must be kept in mind that innovations of this type rely on suppliers of electronic products, and the preliminary planning procedure for new vehicles falls between five and eight years. This amounts to a massive amount of time in the realm of electronics- and it is therefore absolutely necessary for the organizations to involve the suppliers; this way, the supplier is able to ensure that the product produced will adhere to the new model while still remaining, imperatively,

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