Description
This case introduces you to the spare parts supply chain management division of Dockomo Heavy Machinery Equipment, Ltd. in India.
Dockomo (DHEL) is a multi-billion dollar Indian conglomerate that primarily focuses on construction projects. Their spare parts distribution business, even though it is a small division, enjoyed a monopoly and high-profit margin in the late 1990s and early 2000s. Since 2000, India witnessed a big boom in construction projects. This directly impacted the heavy construction equipment industries¾the demand for the equipment increased by almost twenty times in the course of a few years. Alongside the demand, the competition and the complexity of the business also increased. In 2010, Dockomo’s spare parts division was still a market leader with 52% market share, but other providers were catching up because of their better service and parts availability.
This case starts on April 15, 2010, two weeks before the annual review. Vinod Mehra’s (VP of the supply chain division) report showed that annual growth in the spare parts division decreased to 10%, at the same time both the canceled orders (due to parts unavailability) and the inventory level has increased significantly. At the meeting, Vinod was given three months’ time to conduct an analysis of the shortcomings and report the leading causes for unavailability of parts to customers. Apart from that, he was also asked to formulate a strategy to fix those problems. To aid him in this process, Vinod hired a supply chain consulting firm, Thomas Consulting, to analyze the shortcomings of their distribution network.
Read and review the case and briefly discuss the growth of the construction market, heavy machinery equipment, and the importance of spare parts in this business environment and how should the safety stock problem be approached? If they do not satisfy normal distribution conditions, what methodology should be used?
Your paper submission should be in APA format and be at least 1000 words or more in length. Include a rich source of references to support your positions.