INVENTORY MANAGEMENT

CASE STUDY : 

It is learnt that Ford & General Motors have both established large internal-based market places named Auto xchange & Trade xchange respectively. They want to create an online market place to achieve greater economics of scale and to give their suppliers access to more business globally, allowing suppliers and manufacturers to slash costs.

Toyota, however, does not want to collaborate with them. Their philosophy is that supplier’s are their partners. They believe in helping suppliers cut costs through a guarantee of long term contract. Putting these parts in the open market would pit them against other suppliers, causing an adversarial relationship.

For Toyota to agree to join in the market place, they suggested that they could start with some “standardized” components. Differences arose in the definition of a ‘Standardised component. GM feels that steering wheels and wire connectors can be begun with but Toyota considers that these components are competitive.

Q1) How do you think suppliers would view these sites?

Q2) Discuss the advantages and disadvantages of these two approaches?

Q3) All the components together help to create a competitive vehicle, so is the idea of a market place incorrect?

Q4) Discuss the pros and cons of such market places?