Supply Chain Management.
As firms become increasingly focused and specialized, the supply chain performance
grows in importance. Money spent with suppliers represents a huge portion of most
firms' revenues. This is the case at Regal Marine where suppliers are relied upon not
only for quality components delivered on time, but for up-to-date technology and
innovation. Regal expects members of its supply chain to be full partners. Suppliers are
expected to join Regal in providing the customer not just quality and on time delivery,
but performance and image. Luxury performance boats require no less. At the same
time, Regal expects value.
Vendors meet with Regal’s designers to discuss changes to be incorporated into new
product designs. Regal’s strategy of differentiating itself by building luxury
performance boats means that suppliers must participate in this ongoing effort. The
characteristics expected of suppliers when the strategy is one of differentiation include:
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Share market research; jointly develop products and options.
Select primarily for product development skills.
Use modular processes that lend themselves to mass customization.
Minimize inventory in the chain to avoid obsolescence.
Invest aggressively to reduce development lead time.
Use modular design to postpone product differentiation for as long as possible.
These characteristics are high on the list of issues between Regal and its suppliers and
lead to the concept of ‘partnering’. ‘Partnering’ extends from jointly developing
components, to modular designs at suppliers and at Regal, to rapid delivery and low
inventories. These techniques allow innovative products to be rapidly and economically
included in Regal’s boats.
Regal has also developed special arrangements with suppliers who maintain shop floor
components for Regal. In some instances title transfers when the item is used, and in
other cases title transfers when items are delivered to the property. Both approaches
help Regal reduce total inventory and the related costs.
Additionally, Regal’s membership in the American Boat Builders Association allows it
to participate in lower costs because of the combined purchase strength of the
association.
Finally, Regal works with an Orlando personnel agency to outsource part of the
recruiting and screening process for employees. In all of these cases, Regal is
demonstrating creative approaches to supply chain management that help Regal and the
end user.
Discussion Questions
1. What other techniques might be used by Regal to improve supply chain
management?
For us, many suppliers strategy would be the best for Regal marine, since it’s focused in
quality strategy, but due to the “additional inventory” needed, this strategy is not
suitable.
Vertical Integration is not suitable at all, because we need a complete control and
ownership in the supply chain, and Regal Marine would need a very high investment.
So that, Few Suppliers Strategy is the most adequate with constant and “safe” suppliers.
2. What kind of response might members of the supply chain expect from Regal in
response to their "partnering" in the supply chain?
Since Regal Marine requires high quality products. They expects a continuous
improvement process.
So the members of the supply chain would receive the following:
If a new product is being designed, they receive the next petition.
 development
Or they could be asked in order to improve the materials.
-> innovation
Or some techno. -> be a part on the process
3. Why is supply chain management important to Regal?
Because, Regal Marine take part on a large and competitive market and most of the
content of the sales is provided by the suppliers.
Supply Chain Managements allows you to:
Ask for quality in raw materials, since we can have commitments with suppliers.
(Specially in luxury yatch, and also in boats)
Control costs, try that the cost is exactly which we need, not more.
->example of control cost – inventory ->
among others, the inventory is a critical part on the production
(we spend 14 million dollar per year on engines…) and we have to reduce it.
14 day inventory reducing it to 1 day we save a lot of money.