Om Supply Chain Structure
Dated: 03/13/2018
1. Reasons an OEM uses several tiers of supplier and complexity of current supply chain structure
Supply Chain Structure
OEM is the company that produces bikes, cruising and produces the sport and the material that is required for the production is supplied by JCC, which is the first supplier of OEM that provides tires to OEM. OEM needs different components like motorbike structure frame, wheels, and all the types of equipment that are necessary for manufacturing the bikes are taken from the different other suppliers that giving the material for production. JCC provides the three different frames components to the OEM because OEM production process
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That is why JCC has the central position with the supply chain structure and JCC is the key supplier of OEM on which behalf OEM produces three types of bikes for three different markets. JCC will have the direct contact with suppliers that providing the components of tires and other components that is regarding same as the requirement and specification of OEM. JCC is responsible to provide the types of equipment to OEM because production process will never continue without the help of supply chain of JCC. In terms of late delivery, JCC will transfer $2000 per minute delay when the supply is not achieved on time and it is very costly. JCC provides the facility of components that are necessary for the production …show more content…
JCC is working on the minimum inventory that allows it to work with the operational services. JCC can avoid the penalty of late supply by the suppliers that charge $2000 per minute late delivery. As JCC has the contact with different suppliers, that is why it is easy for them to avoid this type of penalty. JCC can use the other suppliers to fulfill the requirement.
Tire manufacturers can provide the supply of tires according to the specification of OEM, which cause the problem for the quality of the product, but JCC has no right to charge form the supplier for the poor quality because the suppliers make the tires according to OEM requirement. JCC has no authority to deal with the suppliers for manufacturing the best quality of tires that causes no problems and free form the flaw of late delivery. That is why suppliers can produce according to their own choices, which cause the problems for JCC because; it is the supplier of OEM, which produces the types of equipment for the production
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