Smart Car Case Study Essay Example | Topics and Well Written Essays - 2000 words

Smart Car Case Study - Essay Example The most attractive feature of this car is that it effectively combines driver comfort, safety, and customer choice. The supply chain feature of the Smart Car also becomes the key factor in its market acceptance for it deviates from the conventional practices of manufacture and distribution. This paper will explore the innovative and strategic features of Smart Cars’ supply chain. I Smart Concept and Logistics at MCC The conventional volume car manufacture raised severe supply chain issues which adversely affected the brand reputation of car industries. To illustrate, in olden days, car manufacturers did not given much emphasis on customer preferences but developed car models according to their concepts. Evidently the car models did not match with customers’ actual interests. According to traditional market ideologies, supplier was the king of market who used to govern market trends. Even in modern time, car manufacturers and suppliers exceedingly emphasize on their eng ineering elegance rather than customer requirements. At this juncture, the MCC Management initiates a ‘customer oriented production concept’ that would enable customers to suggest how they want their products to be configured. The MCC management gives customers the opportunity to specify their car preference. For instance, they can combine two colors of the frame with various colors of the body panels. This way, the company can create an impression of a high level choice even though the product variation choices are kept to minimum. Since the company designs its products according to customers’ choice, to a large extent it can avoid risk elements associated with market demand. Similarly, in traditional car industry, manufacturers did not have a clear picture regarding the time required for the completion of a car manufacturing process (lead-time). In other words, they took comparatively long time to fix lead-time for cars. It was one of the major difficulties in car industries’ supply chain. Suppliers and dealers faced many challenges in the market because of this inaccuracy in production management, and it led to gradual decline in market demand. This paucity of lead-time awareness affected supply process; and it considerably decreased the profitability of both the manufacturers and suppliers. The MCC management recently developed certain strategies that can assist the organization to count lead-time for cars in two weeks. This provision would increase the effectiveness of Smart Cars’ supply chain once it enables the suppliers and other supply chain personnel to involve in production process. According to the Smart Car concept, the MCC management has maintained provisions for the suppliers to co-invest in the production location as well as to take a greater share in final assembling process. This provision would ensure the active supplier participation in the production process also. As a result, MCC can minimize different co nflicts in the supply chain and thereby carry out business activities smoothly. Traditional car manufactures did not maintain such practices and it reduced the inter-relation between manufacturers and suppliers. In addition, it is observed that the value added during final assembly in MCC is just ten percent of the production cost price. This practice would indirectly benefit the suppliers and customers since the low level value addition during the final assembly assists the company