1) The YouTube video revealed part of the supply chain of the Viro Company, which is from the contract suppliers to the company itself. It belongs to the upstream of a complete supply chain. Speaking of specific suppliers, there are Haskell Supplies, Consolidated Chemicals, Yamagata Buhin and Zamboni. First of all, the company needs valves from Haskell Supplies, insulating sealant from Consolidated Chemicals and power management circuit from Yamagata Buhin to be able to accommodate for changing the voltage regulators from a Malaysian factory to Zamboni. The three firms comprise the first tier of the suppliers while Zamboni is the second tier. Moreover, after the voltage regulators have been re-engineered, the company can then move to the next tier of suppliers, which is the speed controller supplied from Oberfranken. After the Viro cars have been produced, the company starts to distribute the final products to its customers. In this case, the customers that the video mentioned are the President and his daughter as well as other 25,000 units of orders.
To make things clear, below is a diagram that shows how the supply chain looks like:
2) Outsourcing is the contracting out of a business process to a third-party. Companies use outsourcing to reduce costs by transferring portions of work to outside suppliers rather than completing it internally. That is because in a more and more globalized business world, it is sometimes more affordable to purchase materials or labor from places with comparative advantages rather than to produce them within the company itself. Therefore, financial savings is the biggest motivation for outsourcing.
As for the differences between offshoring and outsourcing, offshoring means getting work done in a different country while outsourcing happens both domestically and internationally. Additionally, it is possible to outsource work but not offshore it. For example, instead of promoting a worker within, a company may outsource by hiring someone who has never worked for the company. It is also possible to offshore work but not outsource it.
However, outsourcing may still create challenges and problems. First of all, forecasts are uncertain. In this case, no one could accurately foresee the typhoon in Malaysia, causing the shipping date to delay. Actually, no company forecasts perfectly especially when dealing with this kind of unexpected natural disaster. In addition, the delay in communication is another challenge. Because the suppliers are world widely spread, the different time zone may cause time lapse when there is an emergency. The coordination of workers and materials will also be inefficient. Last but not least, the costs will go up if emergency happens. In this case specifically, because the Malaysian factory could no longer provide the speed controllers, Viro Company had to get new components from other suppliers to re-accommodate the change. This led the cost to double. Although eventually, they had the issued solved, it is highly possible that in the future, they will still run into similar problem.
3) The enterprise applications include Supply Chain Management System (SCM) and Customer Relationship Management System (CRM). SCM is the management of the flow of goods. It helps business manage relationships with their suppliers. The supply chain includes the movement of raw materials, work-in-process inventory and finished goods that customers consume. The key supply chain management process starts from plan, source, make, deliver and finally return. It is a relatively complete process that manages the flow of goods from the suppliers’ perspective.
On the other hand, CRM is a model