Running head: QUIK CHIPS CASE STUDY Quik Chips Case Study Michael J. Broyles Embry-Riddle Aeronautical University ASCI644 Integrated Logistics in Aviation 21-January-2017 1 QUIK CHIPS CASE STUDY 2 Abstract Collaboration engenders a synergistic business environment in which companies leverage one another to increase performance. Through shared risks and investments, contribution to the overall performance is achieved through the realization that the sum of the parts is greater than the whole. Collaborative relationships increase supply chain efficiency and improve customer service (effectiveness). Quik Chips' joint venture demonstrates how competitors can come together to simultaneously achieve reduced expenses and increased services offered. The purpose of this paper is to provide an analysis of Quik Chips collaborative strategy and how relationships may lead to greater profitability. Keywords: Logistics, Supply Chain, Globalization, Relationships, Collaboration QUIK CHIPS CASE STUDY 3 Supply chain management requires agility to remain responsive to the needs of customers. The ideal relationship is one where customers and suppliers work together strategically and creatively to meet the overall objectives. An enterprise wide strategy requires examination of potential relationships along the supply chain (SC) and examination of the degree of involvement. Collaboration is one relationship that must be examined and is listed as one of the six drivers of supply chain excellence, allowing both vendors and customers to achieve SC efficiencies (Coyle, et. al., 2016). Collaboration enhances an organization's abilities by allowing it to leverage those of its partners. The relationship is a mutually beneficial one. A joint venture (JV) is one method of collaboration where resources are pooled for the purpose of accomplishing a specific task. Each of the participants is responsible for profits, losses and associated costs; however, the venture is its own entity, separate and apart from the participants' other business interests (Investopedia, n.d.). Scope Quik Chips (QC) is a joint venture arrangement between five competing companies, and maintains the option of additional collaboration. This option helps ensure protection against anti-trust threats (Federal Trade Commission, 2000). The JV arrangement consorts competitors to produce that which is beyond the productive capacity or inclination of its individual members (Marth, 2009). QC's mainline thrusts are e-commerce and logistics and supply chain management (LSCM). The increased demand of chip types and potential for obsolescence has shifted the focus from inventory to faster shipping. The turnkey fulfillment service offered by QC makes it essentially a self-developed third-party logistics (3PL) provider. QUIK CHIPS CASE STUDY 4 Differences Global operations require a different mindset from a solely domestic one. QC's LSCM services are strategically positioned in free-trade zones (FTZ), in order to further reduce costs. The use of FTZ's improves global market competiveness (Bordner, 2014). Logistical order fulfillment with an increasing emphasis on faster delivery times demands little variability throughout the SC. Adopting appropriate LSCM strategies is the difference in market dominance and extinction (Turpin, et. al., 2016). Success in the global marketplace requires cohesive organizational SC strategies (Coyle, et. al., 2016). Relationships An organizations' understanding of relationships is directly proportionate to its long-term sustainability. Relationships drive the SC, and information sharing is the key. QC's standardized data sharing among collaborators makes the venture worth the investment. The power of information sharing cannot be overstated (Coyle et. al., 2016). An organization must recognize its strengths and weaknesses and develop relationships that contribute to fulfilling organizational goals while meeting customer demands. QC is essentially a 3PL, borderline 4PL provider that was birthed through the joint venture. The major benefit of the JV is the information is transmitted both vertically and horizontally and the alleviation of duplication. Conclusion Quik Chips strength lies in the collaboration of information among competitors, demonstrating the importance of relationships. The 3PL that has been formed will continue to grow, contributing to each individual company's overall efficiency and effectiveness though cost savings and increased customer service. The joint venture affords customer service anticipation and the flexibility to adapt to new challenges without duplication. QUIK CHIPS CASE STUDY 5 References: Bordner, T. (March, 2014). The benefits of using a foreign trade zone. Retrieved from http://www.inboundlogistics.com/cms/article/the-benefits-of-using-a-foreign-trade-zone/ Coyle, J., Langley, C., Novack, R., Gibson, B. (2016). Supply chain management: a logistics perspective (10th edition). South-Western College Pub. Federal Trade Commission. (April, 2000). Antitrust guidelines for collaborations among competitors. Retrieved from https://www.ftc.gov/sites/default/files/documents/ public_events/joint-venture-hearings-antitrust-guidelines-collaboration-amongcompetitors/ftcdojguidelines-2.pdf Investopedia. (n.d.). Joint venture. Retrieved from http://www.investopedia.com/ terms/j/jointventure.asp Marth, R. (May, 2009). Antitrust treatment of joint ventures: analyzing competitor collaborations. Retrieved from http://www.robinskaplan.com/resources/articles/antitrusttreatment-of-joint-ventures-analyzing-competitor-collaborations Turpin, D., Narasimhan, A., and Cording, M. (August, 2016). Challenges in going global. Retrieved from https://www.imd.org/publications/articles/challenges-in-going-global/
