Jason Hwang

I S 300

Viro Automotive Company Case

1. Describe the supply chain of Viro Automotive Company
Viro Automotive Companys supply chain is currently based on the pull system
model; they manufacture and distribute the cars only after they have been ordered by
their customers, rather than by forecasting demand (push system). After having received
the orders from their customers, Viro then sends the orders to their own suppliers, or
members of the supply chain. In this case, the main client is the President of the United
States whom put in an order for his daughter, and expects the first car off of the assembly
line. From receiving the order from the customer to handing over the car are all parts of
the downstream portion of the supply chain. The upstream portion of the supply chain in
this case, however, begins with the speed controllers. The speed controllers are made
from Viros contract supplier, Oberfranken (tier 1 supplier). Oberfranken, a German
based company, and they originally source their voltage regulators from Malaysia.
However, because the factory was destroyed, Oberfranken had to find a new supplier for
their voltage regulators, and turned to Zamboni, a tier 2 supplier. The new voltage
regulators, unfortunately, used a higher voltage that needed to be recalibrated, so they
outsourced to Yamagata, a tier 3 supplier in Japan. Yamagata then needed sealant for the
circuits, so they outsourced to Consolidated Chemical, who then needed a valve for their
mixing equipment for their high viscosity sealant. They manage to find the valve from
Haskell Supplies, and then the supply chain is completed, relaying all the way back to
Oberfranken.

2. Please explain what outsourcing is and how it differs from offshoring. Identify three
specific challenges associated with outsourcing from the case that Viro has to
manage
Outsourcing is contracting a certain process of a business/product to a third party. In
this case, Viro outsources parts of its automobile to different parties, such as
Oberfranken for their speed controllers.
The difference between outsourcing and offshoring is that offshoring is done outside
of the home country; this often saves costs for labor and also allows work to be done
at different times. Outsourcing is contracting work to an external, third party
organization, usually to take advantage of specialized skills and labor flexibility.
There are several challenges that companies usually face when outsourcing. One
challenge that Viro has to manage is the inability to control the quality of the overall
automobiles, due to the supply chain. As the supply chain continues to grow, so does
their lack of control. Viro is unaware of all the workarounds that their suppliers had to
go through, which may cause potential problems in the future.
Another challenge that they may face is the fact that they now rely on multiple
parties, which are only temporary. Haskell Supplies only had two valves, so what will
happen if the one that Consolidated Chemical uses stops working? The entire supply
chain would be affected. Viro would have to find solutions quickly.
The last and most obvious outsourcing problem Viro faces is the inability to control
what goes on to their third party suppliers. Viro utilized offshore outsourcing, and in
this case, their Malaysian factory was destroyed. This caused the entire problem in the
first place. With outsourcing, it is difficult to know exactly what is going on with the
processes.
3. Given the current situation, adopting which enterprise application would benefit Viro
the most? Explain what each of them is using your own words and justify your
selection

The three ticketing systems are as follows: ERP (Enterprise Resource Planning), CRM
(Customer Relationship Management), and SCM (Supply Chain Management).
The ERP system consists of software that supports many business functions to improve
efficiency, save costs, and provides for better access of information to make faster and
informed decisions.
The CRM system allows for businesses to manage the relationships that they have with
customers, allowing the businesses to learn about their behaviors, values, and
perceptions.
The SCM system allows for businesses to manage the relationships that they have with
their suppliers, making sure that there is better understanding of all the processes.
Viro currently faces challenges in the supply chain of their business. Because of this, I
believe that they should adopt the Supply Chain Management (SCM), system. This would
support the suppliers, distributors, and purchasing parties of those involved with Viro.
Due to their issue with the Malaysian factory, their supply chain was disrupted, and now
they have to go through multiple tiers of suppliers in order to get the job done. With
SCM, they would know exactly what is going on, and if any problems were to come up,
theyd be able to take the necessary steps in order to solve it. As an automobile retailer,
manufacturer, and distributer, SCM would be the most beneficial system to Viro.